TRADE NEWS BULLETIN Volume 2 Number 116 Tuesday, June 29, 1993 Headlines: MEXICO REMAINS FIRMLY OPPOSED TO SANCTIONS U.S. CUSTOMS BROKERS FILE SUIT AGAINST MEXICAN FIRMS U.S. TEXTILE INDUSTRY SAYS NO TO EC 'ZERO TARIFF' PROPOSAL BALLADUR THREATENS TO STALL G-7 PROGRESS OVER STEEL DUTIES SAUDI ARABIA GATT APPLICATION QUESTIONED ________________________________________________________ NAFTA News Summary ________________________________________________________ MEXICO REMAINS FIRMLY OPPOSED TO SANCTIONS The Mexican government will not accept the use of sanctions to enforce the North American Free Trade Agreement, reaffirmed Herminio Blanco, Mexico's top trade negotiator. "We don't believe in trade sanctions," Blanco said Friday. "That is not the appropriate way to better the environment in North America or to improve labor conditions in North America." Blanco agreed that side accords need to be "serious, credible and enforceable," but rejected trade sanctions, as proposed by the United States, as a way to enforce labor and environmental standards. Blanco would not comment on details of the supplemental negotiations, currently underway by phone. He said he expected Mexico, the United States and Canada to complete the accords within the next few weeks. Source: "Mexico Dead-Set Against NAFTA Sanctions," INVESTOR'S BUSINESS DAILY, June 28, 1993. ________________________________________________________ U.S. CUSTOMS BROKERS FILE SUIT AGAINST MEXICAN FIRMS U.S. customs brokers from four border states have asked the U.S. Justice Department to investigate alleged antitrust violations by Mexican brokers. Members of the National Alliance for Fair Trade claim they are at a competitive disadvantage because they must comply with ownership restrictions, whereas Mexican brokerages are able to set up freight forwarding operations and customs brokerage firms in the United States. The Mexican constitution states that all customs work must be done by Mexican nationals, making it impossible for U.S. companies to set up brokerage firms in Mexico. Susan K. Ross, a Los Angeles lawyer and member of the NAFTA customs implementation advisory panel, hinted that additional negotiations on the free trade pact will be needed to address the customs issues. Ross also said that U.S. brokers will have a shot at the Mexican market by establishing business alliances with their Mexican counterparts. Current Mexican law allows U.S. firms to invest up to $100 million in a partner brokerage. Source: Kevin G. Hall, "Mexico Rebuts U.S. Brokers' Charges," JOURNAL OF COMMERCE, June 28, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ U.S. TEXTILE INDUSTRY SAYS NO TO EC 'ZERO TARIFF' PROPOSAL The U.S. textile industry balked at a recent EC proposal to eliminate all U.S. and EC textile tariffs. Industry representatives said the U.S. would not gain from the elimination of already low EC tariffs. Carlos Moore, executive director of the American Textile Manufacturers Institute, said he is confident that U.S. Trade Representative Mickey Kantor will not agree to the proposal. "Kantor is very concerned about the damage to this economy if an enormous number of textile jobs are lost," Moore said. "I don't think he finds enormous employment benefits in reducing already low tariffs in Europe." Moore estimates that more than one million U.S. textile jobs could be lost if tariffs are eliminated. "Does the U.S. gain one million jobs in semiconductors and pharmaceuticals? Not hardly," Moore said. Moore argued that the U.S. and EC textile industries have already made significant contributions to trade liberalization by cutting tariffs 50 percent and by phasing out quotas on goods from developing countries. The Senate Finance Committee sent President Clinton a letter last week reminding him of Congress' negotiating objective for the Uruguay Round of GATT. This included a request to negotiate tariff cuts only "where our private sector favors such an action and significant trading partners concur." Source: Nancy Dunne, "Textile Industry Attacks 'Cynical' Tariff Plan," FINANCIAL TIMES, June 29, 1993. ________________________________________________________ BALLADUR THREATENS TO STALL G-7 PROGRESS OVER STEEL DUTIES French Prime Minister Edouard Balladur told the Clinton Administration that France would not accept a Group of Seven (G-7) agreement on market access issues unless the United States lifts recently announced steel duties. Balladur said he will ensure "that there is no accord of any kind in Tokyo if the sanctions on steel imports, notably French ones, aren't lifted." Balladur said he will not attend the G-7 summit in Tokyo July 7-9 and announced that President Francois Mitterrand would represent France at the trade talks. The United States accused 19 countries of dumping steel imports at below-market prices last week and slapped tough duties on all the alleged violators. International reaction has been very negative with many countries vowing to submit their objections to a GATT council for review. Sources: Nelson Graves, "France Says U.S. Steel Duties Prevent G-7 Trade Pact," REUTER, June 29, 1993; "France-GATT," AP, June 28, 1993. ________________________________________________________ SAUDI ARABIA GATT APPLICATION QUESTIONED Some trade analysts are saying Saudi Arabia's strong involvement in the Organization of Petroleum Exporting Countries (OPEC) may conflict with its ability to eliminate trade barriers as required to join GATT. "OPEC is a cartel," said a trade official. "It has quotas and tries to control prices, but GATT is opposed to managed trade." Although GATT does not set rules for global oil trade at present, some members contend that Saudi Arabia's role in OPEC could create conflicts if OPEC's most important member is admitted. Five other OPEC members already belong to GATT: Kuwait, Indonesia, Nigeria, Gabon and Venezuela. Source: Simon Hall, "Saudi Arabia's Application to GATT Raises Economic, Political Issues," JOURNAL OF COMMERCE, June 28, 1993. ________________________________________________________ Resource: "Free Trade Vs. Fair Trade: Do We Want Just a Market or a Just Market?" 4 pgs. GLOBAL EXCHANGE, 2017 Mission St., Room 303, San Francisco, CA 94110. Tel: (415) 255-7296. Addresses the impact of global trade decisions on the environment, human health and developing economies. Included is a discussion of "economic alternatives" to free trade. ________________________________________________________ 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 ________________________________________________________