Volume 2 Number 119 ___________________________________________________________ Headlines: COURT RULING DAMPENS PROSPECTS OF TRADE ACCORD URUGUAY ROUND HINGES ON G-7 TALKS ___________________________________________________________ NAFTA News Summary ___________________________________________________________ COURT RULING DAMPENS PROSPECTS OF TRADE ACCORD The North American Free Trade Agreement was effectively blocked this week by a U.S. District Court ruling in favor of citizen and environmental groups. Judge Charles R. Richey ruled Wednesday that the National Environmental Policy Act requires a detailed review of NAFTA's environmental impact before Congress can approve it. U.S. business leaders and NAFTA proponents worry the trade pact will be stalled for months or even years while the U.S. prepares an environmental impact statement. "Given the complexity of the agreement it could take more than a year, maybe 18 months or even two years," said Bernhard Metzger, who manages environmental impact assessments for an international consulting firm. -- Clinton Administration Plans to Appeal -- The U.S. Justice Department filed an appeal of the court's ruling Thursday and proposed a schedule for filing briefs that calls for a court decision on the appeal sometime after August 10. U.S. Trade Representative Mickey Kantor remained optimistic in light of NAFTA's potential setback, saying the court's decision is "not a problem overall." The Clinton administration intends to submit NAFTA to Congress as planned. "The judge did not say we could not continue on," Kantor said. -- U.S. Groups Applaud the Decision -- Environmental and labor groups applauded Wednesday's ruling. The Sierra Club, one of three groups who filed the suit, called the court's ruling an historic achievement. "This critical decision means trade agreements can never be negotiated again without a conscious consideration of the environmental law," said Michael McCloskey, chairman of the Sierra Club. United Auto Workers President Owen Bieber was pleased with the ruling. "We've said all along that NAFTA will cause further job loss as well as damaging the environment ... We agree with Judge Richey that the American people are entitled to know a lot more about the impact of the deal," Bieber said. -- Canadian NAFTA Opponents Welcome the Court's Ruling -- Members of Canadian opposition parties welcomed the U.S. court ruling as an opportunity to reopen the NAFTA debate in elections this fall. Dave Barrett, a federal-level New Democrat, said the ruling, whether it is appealed or not "ensures that NAFTA is a big issue in the fall election because Clinton won't even have submitted it to Congress before the Canadian vote." The free trade accord has been passed by both Canadian legislative branches but will not become law until after side agreements are concluded. British Columbia's New Democrat Premier, Mike Harcourt, said he hopes the agreement is "derailed for a long time so we can get on with helping the poor workers and their families," who have already been hurt by the 1989 U.S.-Canada Free Trade Agreement. -- Mexican Economy Hit Hard By NAFTA Blow -- Analysts and business leaders in Mexico say President Carlos Salinas de Gortari will have to "start selling Mexico, not NAFTA," to ensure that companies continue to invest despite the potential derailment of the free trade pact. Mexico has attracted more foreign investment during the past three years than it had in the previous 20 by marketing NAFTA. After Judge Richey's ruling on Wednesday, Mexico's stock market dropped 2 percent, and continued to fall Thursday, opening another 1.2 percent or 26.53 points lower. However, Jaime Serra Puche, Mexico's commerce secretary, said he expects the accord to proceed as scheduled. "There will be absolutely no interruption in negotiations for the parallel accords," Puche said. "Everything is moving forward with full rigor." Sources: "Mexico Falls 1.6% at Opening," FINANCIAL TIMES, July 2, 1993; M. Moffett, "Mexico May Abide by Terms, Accord or No," WALL STREET JOURNAL, July 2, 1993; A. Nomani, "Appeal Mill Is Likely to Grind Slowly," WALL STREET JOURNAL, July 2, 1993; "Free Trade," AP, July 1, 1993; "NAFTA Knocked Off Track by Unlikely Coalition," REUTER, July 1, 1993; "U.S. Files Formal Notice of Appeal in NAFTA Case," REUTER, July 1, 1993; "NAFTA Environmental Ruling Cheered by Pact Critics," UPI, July 1, 1993; B. Cormier, "Free-Trade-Mexico," AP, July 1, 1993; "Environmental Group Praises Judge's NAFTA Ruling," REUTER, June 30, 1993; "UAW President Welcomes Judge's NAFTA Ruling," REUTER, June 30, 1993; "Mexico's Serra Says U.S. Court Won't Delay NAFTA," REUTER, June 30, 1993. ___________________________________________________________ GATT News Summary ___________________________________________________________ URUGUAY ROUND HINGES ON G-7 TALKS The Group of Seven leading industrial nations will meet in Tokyo July 7-9 in an attempt to secure a market access deal, breaking an impasse in the Uruguay Round of the General Agreement on Tariffs and Trade. Leaders agree the upcoming summit is crucial to conclude a GATT deal by December 15, 1993. -- New GATT Chief Says Concessions Needed at G-7 Summit -- New GATT trade chief Peter Sutherland said a global trade pact would not be possible unless concessions are made at the G-7 summit in Tokyo next week. "I don't see any point in fooling ourselves about the seriousness of the situation," Sutherland said. "It will be extremely difficult -- even utopian -- to deliver the Uruguay Round by the end of the year if the G-7 fails." Sutherland told reporters on his first day as director-general that the United States, Japan, the European Community and Canada will need to "provide the launching pad for the takeoff of negotiations in Tokyo." Sutherland replaced Arthur Dunkel, who retired Wednesday after serving as GATT chief for 13 years. -- Negotiators in Toronto, Last Market Access Meeting Before G-7 -- Top negotiators from the United States, the European Community, Canada and Japan began talks in Toronto yesterday in an attempt to break the stalemate over market access issues before the G-7 summit. Trade officials said they hope to draft a market-access package by today, so that they can submit it for approval from G-7 leaders next week. The meeting was scheduled after talks in Tokyo failed last month. The United States and Japan, in particular, have been unable to reach a new trade framework. The United States insists that Japan adopt numerical targets to reduce its growing trade surplus. -- France Takes Hard-Line on Eve of G-7 -- French Prime Minister Edouard Balladur said France would not accept any agreement to lower tariffs on goods and services unless the United States eliminates sanctions on European steel. Balladur, who announced this week that he will not attend the G-7 summit, said, "There is no question of our negotiating or of our accepting any agreement whatsoever while submitting to a national law that does not conform to international rules." The United States imposed steel duties on imports from 19 countries last week in an attempt to curb alleged "dumping" of steel at below-market prices. French President Francois Mitterrand will represent France at the summit. Sources: David Dodwell, "G-7 Summit 'Crucial' to Uruguay Round," FINANCIAL TIMES, July 2, 1993; Roger Cohen, "New GATT Chief Turns Up Heat," NEW YORK TIMES, July 2, 1993; "Officials Say New Trade Framework Unlikely By Summit," UPI, July 1, 1993; "New GATT Chief Calls on G-7 to Act on Trade, Warns EC," REUTER, July 1, 1993; John Zarocostas, "'Quad' Negotiators Seek to End Stalemate on Textile Tariffs," JOURNAL OF COMMERCE, June 30, 1993; "France Warns U.S. Steel Duties Prevent Any G-7 Agreement," JOURNAL OF COMMERCE, June 30, 1993. Recent Publications on International Trade ___________________________________________________________ For copies of the following resources, contact the authors or organizations listed. All prices in U.S. dollars unless otherwise indicated. "Ineffective Suffrage: The Denial of Political Rights in Mexico," Luis Santos de la Garza, WORLD POLICY INSTITUTE, 1993. 29 pages. Dooley Adcroft, 65 Fifth Ave., Suite 413, New York, NY 10003. (212) 229-5808. $5. "The Impact of Trade Liberalization on Industrial Sector and Labor Market Performance in Developing Countries," C. Kirkpatrick, B. Evers, ASIAN REGIONAL TEAM FOR EMPLOYMENT PROMOTION, May 1992. 72 pages. International Labor Organization, P.O. Box 643, New Delhi 110 001, India. $25. "Six Months After the U.N. Verdict: An Update on Impunity in the Mexican Federal Judicial Police," Alicia Ely-Yamin, WORLD POLICY INSTITUTE, 1993. 21 pages. Dooley Adcroft, 65 Fifth Ave., Suite 413, New York, NY 10003. (212) 229-5808. $5. "The Failed Case for NAFTA: The Ten Most Common Claims for the North American Free Trade Agreement and Why They Don't Make Sense," Jeff Faux, ECONOMIC POLICY INSTITUTE, June 1993. 15 pages. 1730 Rhode Island Ave., NW, Suite 200, Washington, DC 20036. (202) 775-8810. Fax: (202) 775-0819. $5. "Statement of Carlos Heredia, Director of International Programs, Equipo Pueblo, Before the Committee on Small Business, U.S. House of Representatives," DEVELOPMENT GAP, May 1993. 7 pages. 927 Fifteenth St., NW, Fourth Floor, Washington, DC 20005. (202) 898- 1566. Fax: (202) 898-1612. Free. Carlos Heredia offers testimony describing the high cost that the current model of economic liberalization has imposed on small business and small farmers in Mexico. "The NAFTA, Democracy, and Economic Development: Continental Economic Integration as if Democracy Mattered," Ian Robinson, Institute of Industrial and Labor Relations, University of Michigan, April 1993. 57 pages. Institute for Agriculture and Trade Policy. $6. "Analysis of the U.S. Proposal for an Environmental Side Agreement: Omissions and Ambiguities," SIERRA CLUB, GREENPEACE USA, FRIENDS OF THE EARTH, June 1993. 6 pages. Greenpeace, 1436 U St., NW, Washington, DC 20009. (202) 462-1177. $5. "Sustainable Rural Development in Latin America: Building From the Bottom Up," Miguel A. Altieri and Omar Masera, ECOLOGICAL ECONOMICS, Vol. 7, No. 2, April 1993. 28 pages. Elsevier Science Publishers B.V., P.O. Box 1527, 1000 BM Amsterdam, The Netherlands. Fax: (+31-20) 5803258. $10 per back issue. WORKER RIGHTS NEWS, International Labor Rights Education and Research Fund, No. 5, Spring 1993. 12 pages. 100 Maryland Ave., NE, Box 74, Washington, DC 20002. (202) 544-7198. Fax: (202) 543- 5999. $25/organization, $15/individual subscription. This issue contains articles regarding labor organizing in the Maquiladoras and a critique of workers' rights in Mexico. ________________________________________________________ Produced by: Gigi Boivin and Chirag Mehta 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 ________________________________________________________