TRADE NEWS BULLETIN Volume 2 Number 108 Thursday, June 17, 1993 Headlines: WILSON'S DECISION TO STEP DOWN JEOPARDIZES NAFTA MEXICO BEGINS LAW ENFORCEMENT CAMPAIGN GATT ADMITS PARAGUAY, WILL CONSIDER SAUDI ARABIA PRESIDENT OF FRENCH NATIONAL ASSEMBLY CRITICIZES FREE TRADE ________________________________________________________ NAFTA News Summary ________________________________________________________ WILSON'S DECISION TO STEP DOWN JEOPARDIZES NAFTA Canadian Trade Minister Michael Wilson announced Tuesday that he will not run in the next election. It is not clear whether Prime Minister-designate Kim Campbell will seek to retain Wilson until the election or replace him immediately after she assumes office later this month. "We'll see what happens," Wilson said. "That's something Kim Campbell will have to decide." Wilson's decision may seriously jeopardize Tory plans to ratify NAFTA this month. "The prospect of Wilson out of the picture before NAFTA side deals are negotiated and the Americans begin their ratification process will hardly reassure the senators," said a source close to the Tory Senate caucus. Tory Senate leaders were surprised by Wilson's announcement and hinted that NAFTA could face opposition when the Senate votes on it next week. "We thought he would hold off on that announcement until sometime next week, after the Senate vote," officials said. The Tory government had hoped to push NAFTA through the Senate before Prime Minister Brian Mulroney leaves, but now some conservative senators say they want to wait until trinational side accords are completed. Sources: Drew Fagan, "Wilson Departure Clouds Trade Deal," GLOBE AND MAIL, June 16, 1993; Jonathan Ferguson, "Loss of Wilson a Blow to NAFTA, Tories Fear," TORONTO STAR, June 16, 1993. ________________________________________________________ MEXICO BEGINS LAW ENFORCEMENT CAMPAIGN Mexican President Carlos Salinas de Gortari began cracking down on drug traffickers last week and recently announced long-term plans to restore the environment. Critics of the North American Free Trade Agreement claim the moves reveal Salinas' eagerness to get U.S. approval of the controversial trade pact. "There's no question that the Mexican government's motivation is getting the North American Free Trade Agreement through Congress," said Jorge Castaneda, a political scientist at Princeton University. U.S. opposition to the trade pact has intensified recently over reports of Mexico's failure to enforce drug and environmental laws. Salinas fired 67 members of Mexico's federal anti-drug squad who may have been colluding with drug traffickers. The government began investigating Mexican drug traffic last month after a Roman Catholic cardinal was killed in crossfire between two rival drug gangs in Guadalajara. But a spokeswoman for the Democratic Revolutionary Party (PRD) said Salinas' new enforcement campaign is "just talk" and not intended to change anything. "The president knows very well where the drug traffickers' landing strips are, when they come and go and who they are, and they haven't acted until now," said Laura Castillo. In addition to the drug crackdown, Salinas announced Friday that Mexico will spend $25 million on a program to plant 100 million trees throughout Mexico over the next two years. Salinas said his goals for the remaining 18 months of his presidency are to encourage sustainable development, enhance urban environments through the delivery of clean water and other services, and to reduce industrial pollution. The Clinton Administration denies that Mexico's surge of law enforcement and environmental clean-up initiatives are related to NAFTA. "These commitments are in response to the demands of Mexican society," said an official at the White House. Sources: Lucy Conger, "Mexico Fires Agents in Drugs Purge," FINANCIAL TIMES, June 17, 1993; Christine Tierney, "NAFTA Drives Mexican Law Enforcement Spree," REUTER, June 16, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ GATT ADMITS PARAGUAY, WILL CONSIDER SAUDI ARABIA The General Agreement on Tariffs and Trade has admitted Paraguay into the global trade body. Paraguay's membership was approved by a unanimous vote Tuesday, after nearly 20 years of waiting. Paraguay applied to GATT in 1973 but had reportedly only pursued the matter seriously since 1989. "It was a success," said Paraguay's foreign minister, Alexis Frutos Vaesken. "Our entry was passed by a unanimous vote and now we have only to wait for our Congress to approve that admission." Paraguay estimates that half of its exports are purchased by GATT countries. Meanwhile, Saudi Arabia has decided to seek full membership in GATT, according to a Saudi finance ministry official. Saudi Arabia, the world's largest oil producer, currently has observer status. The GATT council also established a panel to review Russia's application. Despite requests from Russian President Boris Yeltsin to approve Russia's application by the end of 1993, officials in Moscow and Geneva believe the process will take as long as three years. Serbia and Montenegro were expelled from GATT yesterday after the council ruled that they should no longer occupy the seat held by former Yugoslavia. The two republics, forming the Yugoslav Federation, will have to apply for accession. Sources: Frances Williams, "GATT Acts on Russian Application," FINANCIAL TIMES, June 17, 1993; "Yugoslavia No Longer to Attend GATT Council," REUTER, June 16, 1993; "Paraguay Admitted Into GATT, Government Says," REUTER, June 16, 1993; "Saudi Arabia to Join GATT," REUTER, June 16, 1993. ________________________________________________________ PRESIDENT OF FRENCH NATIONAL ASSEMBLY CRITICIZES FREE TRADE Philippe Seguin, president of the French National Assembly, criticized the government's preoccupation with GATT negotiations and called for a "complete reversal of our values and fundamental choices." Seguin said more attention is needed to fight the growing problem of unemployment throughout France and Europe. "I regret to say that concern for employment comes second in the choices being made, relegated behind defending the currency, reducing public deficits, increasing productivity and promoting free trade," Seguin said in Paris this week. He urged for the "pure and simple dissolution" of GATT, which he ridiculed as a "thundering God dispensing the lightening of free trade on the bowed heads of peoples." Unemployment in the European Community could reach 20 million this year. Sources: Paul Taylor, "Maverick Seguin Sets Alternative Agenda for France," REUTER, June 17, 1993; "European Community Officials Predicted That ... ," WASHINGTON POST, June 17, 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 ________________________________________________________