(In reality this is v2n93 -- pauls@umich.edu) TRADE NEWS BULLETIN Volume 2 Number 92 Wednesday, May 26, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ AFL-CIO CAMPAIGNS AGAINST NAFTA The AFL-CIO says the labor movement is bringing a unified message to Congress and President Clinton that the North American Free Trade Agreement would be detrimental to labor, living and environmental standards. The federation has launched a campaign to gather signatures against the current text of NAFTA. The petition asks Congress and Clinton to "dump" NAFTA because it "ignores basic human, environmental and worker rights." AFL-CIO President Lane Kirkland says the federation will continue to oppose NAFTA if numerous issues are not addressed through side agreements or a renegotiation of the text. In testimony before a Senate subcommittee earlier this month, Thomas Donahue, AFL-CIO secretary-treasurer, said the current NAFTA text "would be ruinous for the U.S. economy." Donahue said more than 500,000 U.S. jobs have moved to Mexico's 2,000 maquiladora plants over the past two decades and that economic projections estimate more than half a million additional U.S. jobs would be displaced by the trade pact. "Unless steps are taken to ensure equalization upward, this agreement will force wages, working conditions and environmental standards to be equalized downward," Donahue said. The federation has submitted a proposal to Congress detailing necessary components of a new NAFTA text. The proposal demands: the right to enforce labor rights and living standards through sanction powers; the right to bargain collectively in Mexico; the establishment of health and safety regulations in plants; an appropriate minimum wage; elimination of child labor; and guarantees of non-discrimination in employment. Source: John Oravec, "Donahue: Bush's NAFTA Deal Perils U.S.," AFL- CIO NEWS, May 17, 1993. ________________________________________________________ GREENSPAN STILL BACKS NAFTA Federal Reserve Chairman Alan Greenspan said Tuesday that NAFTA will have short and long-term benefits for the United States. He told a Southern Methodist University forum in Dallas that he would be "most concerned" if Congress defeated the trade pact. Greenspan has been a firm backer of NAFTA, claiming it will not result in a net loss of American jobs. He has said U.S. businesses will not move to Mexico to take advantage of lower wages because Mexican productivity levels are commensurately lower. Source: Harihar Krishnan, "Greenspan-NAFTA," UPI, May 25, 1993. ________________________________________________________ CHILD LABOR LAWS IN MEXICO NOT ENFORCED Senator Ernest Hollings (D-South Carolina) said the Mexican government has been advertising 12-year-old children as an important part of its labor force. The Mexican Investment Board, a joint government-business group organized to attract foreign investment, is distributing recent government survey information to U.S. businesses describing the unemployment rate in Mexico. The report says the unemployment rate "includes population 12-years and over that didn't have a job a week before the survey and have been looking." Mexico's constitution prohibits labor by children under 14. A Mexican official said the data probably undercounts the number of 12- and 13-year-olds in the labor force. Government employment statistics count only the 10 million full-time, salaried laborers out of a total population of 85 million. More than half of Mexico's population is under 25 and millions of those who work hold part- time factory or street vending jobs. A Mexican official defended the statistics saying that the survey used internationally recognized definitions of a labor force. He said Mexico strictly prohibits work by children under the age of 14, and restricts the number of hours worked by 14- and 15-year-old laborers. The official admitted that the government does not try to estimate the numbers of people employed in Mexico's underground economy, which is not regulated by government policy. Meanwhile, India deemed child labor a "necessary evil," but vowed to eventually end its use of child workers. At an International Labor Organization conference in New Delhi, the government said it would hold talks with employers and state governments to coordinate a national program to eliminate child labor. India law prohibits children under the age of 14 from holding jobs, but the government estimates that 17 million children work. Private reports estimate that as many as 55 million children work illegally. Sources: John Maggs, "Child Labor Rampant in Mexico, Senator Says," JOURNAL OF COMMERCE, May 21, 1993; "India Defends Child Labor," WALL STREET JOURNAL, May 18, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ DUNKEL WARNS AGAINST BILATERAL TRADE DEALS Arthur Dunkel, director-general of the General Agreement on Tariffs and Trade, warned members of the Pacific Basin Economic Council that bilateral trade agreements threaten global trade liberalization. Dunkel hinted that the United States was using bilateral arrangements to mask protectionist policies. "This bilateralism is a threat to open regional arrangements as much as it is to the open multilateral system," he said. Dunkel urged participants to reflect seriously on the ramifications of negative trade policy, such as traditional positions taken in agriculture. He said political leaders need more encouragement to act in line with multilateral trade rules and to renounce bilateral offers. Members of the Pacific Basin council include Australia, Canada, Chile, Fiji, Hong Kong, Japan, Malaysia, Mexico, New Zealand, Peru, the Philippines, South Korea, Taiwan and the United States. Pacific Rim nations argued the need for regional trade agreements. Malaysian Prime Minister Mahathir Mohamad said the regional effort of East Asian countries, the East Asian Economic Caucus, would contribute to global trade liberalization. "The world can only gain from the formation of the open East Asian economic grouping," Mahathir said. Source: Sohn Jie-Ae, "Dunkel Warns Bilateralism is Breeding Protectionism," JOURNAL OF COMMERCE, May 25, 1993. ________________________________________________________ Produced by: Kai Mander and Gigi Boivin The Institute for Agriculture and Trade Policy (IATP) 1313 Fifth Street SE, Suite #303, Minneapolis, MN 55414-1546 USA Telephone:(612)379-5980 Fax:(612)379-5982 E-Mail:kmander@igc.apc.org ________________________________________________________