TRADE NEWS BULLETIN Volume 2 Number 97 Wednesday, June 2, 1993 HEADLINES: MULRONEY PUSHES NAFTA DURING VISIT TO WASHINGTON WSJ: NAFTA DEFEAT WILL HURT U.S. AND MEXICO OECD MEETING FOCUSES ON URUGUAY ROUND GATT REPORT ON SOUTH AFRICA ________________________________________________________ NAFTA News Summary ________________________________________________________ MULRONEY PUSHES NAFTA DURING VISIT TO WASHINGTON Canadian Prime Minister Brian Mulroney is making an appeal for U.S. approval of the North American Free Trade Agreement during a trip to Washington this week. Mulroney said Mexico deserves a chance to participate in the world's largest trading bloc. "(Mexican President Carlos) Salinas does not want checks and he does not want foreign aid from Canada or the United States," Mulroney said. "Salinas wants a chance to build his country by trading with an industrialized market ... He does not want a handout, he wants a hand up." Mulroney is scheduled to meet with President Bill Clinton today. Source: "Canada's Mulroney Says Clinton Treading Carefully," REUTER, June 1, 1993. ________________________________________________________ WSJ: NAFTA DEFEAT WILL HURT U.S. AND MEXICO If NAFTA is defeated, the United States will suffer negative social and economic impacts from a devastated Mexican economy, reports the WALL STREET JOURNAL. "What NAFTA really means for Mexico is social stability and sustained growth," said Mauro Leos of Ciemex- WEFA, an economic forecasting agency. "And both are crucial to the United States." Leos estimates that U.S. exports to Mexico would expand at least 10 to 15 percent per year if NAFTA is ratified. Mexico would enjoy an annual growth of over 10 percent, which analysts say will create a demand for U.S. goods worth at least $40.6 billion per year. The JOURNAL contends that NAFTA's defeat would send more than 500,000 Mexican immigrants to the United States each year and jeopardize U.S.-Mexican and Latin American political ties. Source: Robert Keatley, "If Free-Trade Accord Fails the Impact on Mexico Could Quickly Spread North," WALL STREET JOURNAL, May 28, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ OECD MEETING FOCUSES ON URUGUAY ROUND Ministers from the United States, Canada, Japan and the European Community agreed yesterday during a meeting at the Organization of Economic Cooperation (OECD) that a plan to reduce global trade barriers could be ready for presentation at the Group of Seven (G-7) summit in July. European Commission Vice-President Leon Brittan said, "It is realistic to aim for an outline of an ambitious market access package by the time of the G-7 summit in early July." But Brittan said there is still a substantial amount of work to be done on trade in goods and services, which he expects will be resolved through bilateral contacts and the Quadrilateral meeting in Tokyo June 23-24. U.S. Treasury Secretary Lloyd Bentsen singled out Japan for its large global trade surpluses during the two days of OECD talks. "These surpluses are a problem," Bentsen said. "They are hurting world growth. That must change." Last year Japan accounted for $50 billion of the $84.5 billion U.S. trade deficit. OECD officials agreed that a conclusion to the Uruguay Round would help revive global growth and resolve unemployment problems plaguing Europe, Japan and the United States. The unemployment rate for the 24 industrialized countries is projected to rise from 8.5 percent this year to 8.6 percent in 1994. GATT Director-General Arthur Dunkel attended the meeting in Paris reportedly to emphasize the need to include more countries in global trade negotiations. The Uruguay Round of GATT has been stalled largely because the United States, Japan and the European Community have disagreed over agriculture, steel, pharmaceuticals, public procurement contracts and other market access issues. Sources: Sally Jacobson, "France-Trade Talks," AP, June 2, 1993; "Bentsen Vows U.S. Trade Policy of 'Export Activism'," REUTER, June 2, 1993; "Brittan Sees Trade Package by Early July," REUTER, June 2, 1993; Keith M. Rockwell, "Uruguay Round to Take Center Stage at OECD Meet," JOURNAL OF COMMERCE, May 27, 1993. ________________________________________________________ GATT REPORT ON SOUTH AFRICA A new GATT report says political stability is the key to reviving economic growth in South Africa. The removal of international trade and financial sanctions combined with political stability should create conditions for building a globally competitive economy, the report said. "The potential of South Africa as a market, a supplier and a host for new investments -- given political stability -- is considerable and the stakes are, therefore, high," it said. The world trade body was debating its first staff report on South Africa's trade policies at a two-day meeting which opened Tuesday. South Africa is in its worst recession ever, having lost nearly one million jobs from 1989 to 1992, according to the report. International sanctions, imposed by GATT members in protest of South Africa's apartheid policies, have reduced South Africa's export earnings by seven percent between 1985 and 1989. South Africa's rank among world exporters, in value terms, fell from 16th place in 1980 to 30th place in 1991, GATT said. "International sanctions in the second half of the 1980's are likely to have contributed to inhibiting the pace of economic reforms," the 189-page report stated. "A smooth transition to a new government, accompanied by stable and transparent market-oriented policy measures, will give positive signals to the local and foreign investors and the international trading community." Source: "GATT Says Stability Key to Pretoria's Growth," REUTER, June 2, 1993. ________________________________________________________ Event: "Free Trade and Economic Justice: Developing the Churches' Response to the Proposed North American Free Trade Agreement," Saturday, June 26, 1993, Des Moines, IA. $10 advance registration, $12 at the door; Plymouth Congregational United Church of Christ. For more information, contact: Ben O'Meara, PrairieFire Rural Action, 550 11th St., Des Moines, IA 50309; Tel: (515) 244-5671. ________________________________________________________ Produced by: Gigi Boivin and Kai Mander 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 ________________________________________________________