TRADE NEWS BULLETIN Volume 2 Number 110 Monday, June 21, 1993 Headlines: LATIN COUNTRIES WATCHING NAFTA'S FATE LABOR MAY SUPPORT NAFTA WITH STRONG SIDE ACCORDS ILLINOIS COALITION FIGHTING FOR NAFTA MAJOR TRADE NATIONS SEEK GOVERNMENT CONTRACTS RULES TAIWAN, VIETNAM PUSH AHEAD WITH GATT PLANS ________________________________________________________ NAFTA News Summary ________________________________________________________ LATIN COUNTRIES WATCHING NAFTA'S FATE Over the past few years, many Latin American countries have reduced trade barriers, introduced economic reforms and increased efforts to form regional trading blocs in hopes of joining North American countries in an hemisphere-wide free trade pact. But with the future of the North American Free Trade Agreement in doubt, these countries are keeping a watchful eye on the negotiations. While environmental and human rights groups are generally critical of expanding free trade, many industry representatives had been banking on an hemispheric pact and are worried it will fail. "It would be a terrific setback for all of us who believe in the free market," said Moises Naim, a former minister of industry in Venezuela, now at the Carnegie Endowment for International Peace in Washington, D.C. Recently President Clinton has spoken publicly on behalf of NAFTA, but he has also suggested that invitations to join the pact would be offered to individual countries instead of entire trading blocs as former President Bush had wanted. Clinton mentioned Venezuela and Argentina as likely candidates to join NAFTA after Chile. Some U.S. trade officials are encouraging Clinton to focus his free-trade attention on Asia instead of Latin America. Source: Carla Anne Robbins, "Concerns About NAFTA's Fate Extend to Latin Nations Who Hope to Join," WALL STREET JOURNAL, June 21, 1993. ________________________________________________________ LABOR MAY SUPPORT NAFTA WITH STRONG SIDE ACCORDS A key union leader said organized labor will support the North American Free Trade Agreement if the Clinton Administration negotiates strong side agreements on labor and the environment. Morton Bahr, president of the 650,000-member Communications Workers of America (CWA), said President Clinton had promised AFL- CIO leaders he would insist on tough enforcement of labor and environmental protection standards. Bahr said the AFL-CIO, whose affiliates count more than 14 million members, will support NAFTA if the side labor and environmental deals "are as strong as the President indicated to us that he wants them." Bahr acknowledged that even with strong enforcement standards some unions will continue to reject NAFTA. The Canadian and Mexican governments continue to oppose the use of trade sanctions to enforce labor and environmental standards as part of NAFTA. Canadian Trade Minister Michael Wilson told U.S. business representatives Friday the sanctions defeat the purpose of NAFTA. "Canada is fundamentally opposed to this use of trade sanctions," he told an Americas Society luncheon in Ottawa. "Trade sanctions create barriers to trade that the NAFTA was designed to eliminate," Wilson said. "We did not negotiate the removal of trade barriers only to reintroduce them the next day." Sources: Richard Walker, "US Labor Won't Fight NAFTA With Side Pacts - CWA," REUTER, June 20, 1993; "Canada Adamantly Against U.S. NAFTA Sanctions Plan," REUTER, June 18, 1993. ________________________________________________________ ILLINOIS COALITION FIGHTING FOR NAFTA Caterpillar Inc., Deere and Co., the Illinois Farm Bureau, the Illinois Retail Merchants Association and others have formed a 220-member Illinois NAFTA Coalition to lobby the Illinois congressional delegation to support the North American Free Trade Agreement. Illinois Farm Bureau President John White Jr. said Midwest grain farmers will benefit from increased demand in Mexico if tariffs and quotas are removed under NAFTA. "American farmers are in somewhat the same situation as they were at the end of World War II," White said. "That was when we developed big markets with Europe and Japan. Now we need another big market, and Mexico represents that opportunity." Source: "Caterpillar, Others Join Group to Lobby for NAFTA," UPI, June 19, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ MAJOR TRADE NATIONS SEEK GOVERNMENT CONTRACTS RULES Japan, the United States and the European Community are among a group of major trading nations pushing for an accord in GATT to open up government contracts to international bidding. Trade officials recently completed two days of talks aimed at extending an existing pact to cover procurement of services, utilities, and contracts awarded by local and state governments. "They intend to intensify negotiations and reach agreement on a text and coverage by December 15," said David Woods, a spokesperson for GATT. Woods estimated that one trillion dollars worth of government contracts could be opened up through the accord. Source: Stephanie Nebehay, "GATT Seeks New Government Procurement Rules," REUTER, June 18, 1993. ________________________________________________________ TAIWAN, VIETNAM PUSH AHEAD WITH GATT PLANS Taiwan announced it will consider cutting its import tariffs to improve its chances of gaining entry into the General Agreement on Tariffs and Trade. A Foreign Ministry spokesperson said Taiwanese negotiators will discuss the cuts with officials from the United States and other GATT members in coming months. Taiwan hopes to join the world trade body this year. Vietnam announced today it would seek observer status in GATT, followed by full membership. In Hanoi, GATT Director-General Arthur Dunkel predicted the United States would not block Vietnam's entry into GATT. Dunkel said since GATT makes decisions by consensus it is unlikely the U.S. would block Vietnam's entry if other nations are not opposed to it. The United States has banned U.S. trade and economic ties with Vietnam since 1964. Sources: "Taiwan to Consider Tariff Cuts for GATT Entry," REUTER, June 20, 1993; "John Rogers, "U.S. May Not Block Vietnam GATT Entry - Dunkel," REUTER, June 21, 1993. ________________________________________________________ Produced by: 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 ________________________________________________________