TRADE NEWS BULLETIN Volume 2 Number 113 Thursday, June 24, 1993 Headlines: CANADIAN SENATE APPROVES NAFTA, ROYAL ASSENT GRANTED SENATE ATTACKS SIDE ACCORD NEGOTIATING PROCESS CAIRNS GROUP WANTS GLOBAL FARM DEAL TEXTILE PACKAGE THREATENS G-7, GATT TALKS ________________________________________________________ NAFTA News Summary ________________________________________________________ CANADIAN SENATE APPROVES NAFTA, ROYAL ASSENT GRANTED The Canadian Senate passed the North American Free Trade Agreement yesterday by a 47 to 30 vote. A few hours later the free trade accord was granted royal assent, the final stage needed to convert a bill to law. However, Canadian law requires that the United States and Mexico ratify NAFTA before Canada formally approves the trade pact. Canada's House of Commons approved the trade pact on May 27. NAFTA opponents expect the accord to dominate this fall's elections. "It will take a new government after the election to actually take action to move it," said Maude Barlow, a spokesperson for the lobby group Action Canada. "They can decide to delay this for six months, a year, two years, whatever they decide to do, so we will have a very clear battle on our hands." Canada's Liberal Party, which is leading election polls, has promised to alter or reject NAFTA if put into power. Sources: "NAFTA Clears Final Canadian Legislative Hurdle," UPI, June 23, 1993; "NAFTA Gets Canadian Approval, Opponents Attack," REUTER, June 23, 1993; Robert Kozak, "Canada's Senate Approves NAFTA Legislation," REUTER, June 23, 1993. ________________________________________________________ SENATE ATTACKS SIDE ACCORD NEGOTIATING PROCESS U.S. senators criticized the Clinton Administration's handling of negotiations on side accords to NAFTA. During a Senate Banking, Housing and Urban Affairs Committee hearing, Senator Christopher Dodd (D-Connecticut) said he suspected that "a lot of these agreements are being negotiated without talking to people who have a deep interest in what is to be included in them." Dodd warned Commerce Secretary Ron Brown, who testified before the committee, that Congress might reject NAFTA if opposition concerns are not satisfied. Brown told senators, "We are going to have a strong treaty that will be worthy not of acceptance but strong support." Supplemental accords on labor and the environment are currently being negotiated by phone. Brown called Mexico a "tremendously growing marketplace for our goods," and said NAFTA would have to be completed by January 1, 1994 in order for the United States to remain competitive internationally. Senator Don Riegle (D-Michigan), the panel's chairperson, challenged Brown, saying Mexico "will not be a booming market for us soon." Wage rates in Mexico average $1.25 per hour, which Riegle says isn't enough to enable Mexicans to purchase American products. The United States exported $40 billion worth of goods to Mexico last year. Source: James Rowley, "Trade," AP, June 23, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ CAIRNS GROUP WANTS GLOBAL FARM DEAL The Cairns Group of agricultural exporting countries said a U.S.-EC farm accord should not used as a basis for negotiating an agriculture agreement in GATT. Thailand Prime Minister Supachai Panitchakdi, whose country is a member of the 14-nation group, said the U.S-EC accord "is a kind of modification of the GATT talks to serve the United States and European countries" and that it "did not cover the agricultural products" of the Cairns Group. More than 100 representatives from the Cairns Groups will attend a two-day conference this weekend in Bangkok to draft a framework under which the Uruguay Round can be completed this year. Supachai said Canada, which is a member of Cairns and the Group of Seven industrialized nations, will present the Cairns proposal during the G-7 summit July 7-9. "We want to let the world know that we will bargain with developed countries with our agricultural products," Supachai said. Meanwhile, Belgian Farm Minister Andre Bourgeois announced that Belgium will seek changes to the U.S.-EC farm accord. Bourgeois told reporters that a growing number of countries are beginning to find problems with the farm deal. "Belgium will continue to insist that the agreement should be improved," Bourgeois said. A recent study by Belgium's ministry of agriculture concluded that the European Commission did not respect its negotiating mandate by agreeing to changes beyond the Common Agriculture Policy (CAP). The study found that Belgian farmers' incomes would fall 17.6 percent if the U.S.-EC accord is implemented. Sources: "Cairns Group to Appeal to G-7 Over GATT," UPI, June 23, 1993; "Belgium to Seek Changes to Blair House Deal," REUTER, June 23, 1993. ________________________________________________________ TEXTILE PACKAGE THREATENS G-7, GATT TALKS A U.S.-EC dispute over textiles may further impede the chances the G- 7 countries will make significant progress at next month's summit. At preliminary talks this week, the European Community rejected a U.S. textiles offer. The package proposed cutting current U.S. tariffs, which range from 20 to 40 percent, by one third. EC officials said the cuts fell far short of expectations. Trade ministers from the United States, Canada, the European Community and Japan began talks in Tokyo yesterday to discuss market access proposals aimed at concluding the Uruguay Round of GATT talks. Most participants agreed that the proposed tariff cuts for all sectors could not be resolved before the G-7 meeting July 7-9. "It is difficult to believe that anything can be salvaged, and that throws into jeopardy the entire Uruguay Round," said an official attending the talks. Source: David Dodwell, Michiyo Nakamoto, "Tariff Row Threatens Free Trade Hopes of G-7," FINANCIAL TIMES, June 24, 1993. ________________________________________________________ Editors: 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 ________________________________________________________