TRADE NEWS BULLETIN Volume 2 Number 126 Wednesday, July 14, 1993 Headlines: CLINTON TO APPOINT NAFTA CZAR THIS WEEK NAFTA WILL BE MAJOR ISSUE IN 1994, 1996 ELECTIONS FAILURE TO PRODUCE U.S.-JAPAN DEAL MAY SPARK PROTECTIONISM GATT URGED TO ADOPT ENVIRONMENTAL POLICIES ________________________________________________________ NAFTA News Summary ________________________________________________________ CLINTON TO APPOINT NAFTA CZAR THIS WEEK President Bill Clinton is expected to appoint a NAFTA coordinator this week to guide the North American Free Trade Agreement successfully through Congress. Bowman Cutter, deputy at the National Economic Council, told reporters that two or three candidates are under consideration for the NAFTA post. "My guess is (we will announce the appointment) at the end of the week," Cutter said. The new appointee will be expected to overcome a number of political and legal obstacles blocking NAFTA's ratification. Over half of Congress is reportedly opposed to the free trade accord. Source: "U.S. Expects to Name NAFTA Czar This Week," REUTER, July 13, 1993. ________________________________________________________ NAFTA WILL BE MAJOR ISSUE IN 1994, 1996 ELECTIONS The North American Free Trade Agreement is on the verge of becoming a major 1994-96 election issue, according to THE AMERICAN POLITICAL REPORT. The bi-weekly publication says certain senators and congresspeople face defeat in 1994 while President Bill Clinton and GOP Senate Leader Bob Dole are at risk in 1996 because of their pro-NAFTA positions. The report says NAFTA's unpopularity in the polls and anti-NAFTA statements from major political figures including Ralph Nader, Jesse Jackson, Ross Perot and Pat Buchanan will make it a high-profile issue in elections. Source: "The Politics of NAFTA: Judicial Surprises and Populist Perils," THE AMERICAN POLITICAL REPORT, July 2, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ FAILURE TO PRODUCE U.S.-JAPAN DEAL MAY SPARK PROTECTIONISM Trade officials cautioned that failure to secure a working, detailed trade agreement between the United States and Japan could spark protectionism and block the General Agreement on Tariffs and Trade. U.S. Representative Robert Matsui (D-CA) warned that a lack of results in the newly created trade pact with Japan would spark "significant protectionist sentiment in the House and Senate." President Bill Clinton and Japanese Prime Minister Kiichi Miyazawa forged a loose agreement last weekend, promising to work out a trade plan over the next few years. In the agreement, Clinton pledged to cut the U.S. budget deficit, a long-time demand of global trade partners, and Miyazawa promised "a highly significant" reduction in Japan's $50 billion trade surplus with the U.S. U.S. Treasury Secretary Lloyd Bentsen told business leaders that he wants a deal with Japan on autos, insurance, government procurement, supercomputers, satellites, medical technology and telecommunications in six months. Without progress in these areas, Bentsen warned, "You will see growing, growing protectionism around the world." U.S. Trade Representative Mickey Kantor reflected, "We hope that a new relationship has been established and we will have an agreement based upon practicality and reality and not sheer hope." However, a number of obstacles remain in the way of a successful agreement. Japan holds a general election this weekend and the new government may not share Miyazawa's commitment. In addition, Japanese officials sent a letter to the U.S. trade team on Monday, asserting Japan's right to withdraw from areas where the United States had invoked its Super 301 retaliatory trade law. Sources: William Scally, "Kantor Says Hard Bargaining Ahead With Japan," REUTER, July 13, 1993; Lyndsay Griffiths, "Government Sells Japan Trade to Business," REUTER, July 13, 1993. ________________________________________________________ GATT URGED TO ADOPT ENVIRONMENTAL POLICIES Environmental organizations criticized Group of Seven (G-7) leaders last week for failing to address environmental regulation in global trade talks. A coalition of 64 environmental groups submitted a set of proposals to G-7 leaders asking that trade policy incorporate the environmental standards decided by 150 heads of state at the Rio "Earth Summit" last year. "The G-7 leaders' celebration of the ... 'breakthrough' in the Uruguay Round hides their failure to meet their Rio commitment to integrate trade and environment policies," said Charles Arden-Clarke, a policy analyst for the World Wildlife Fund for Nature (WWF). Some individual countries have adopted stronger environmental codes on a national level as a result of the Earth Summit. The European Community, for example, agreed in March to implement an ecomanagement audit scheme. The scheme requires companies to establish environment management systems with policies and goals, and to audit the system to ensure that it works. Audit findings must be submitted to a third party to verify conclusions, and then made available to the public. Arden-Clarke argues that GATT regulations must be amended to include the environmental costs of producing goods and commodities, while enabling countries to take unilateral trade measures to protect the environment and conserve natural resources. "GATT's focus on trade liberalization promotes minimum cost productions, encouraging industry to use the air, soil and water as a free dumping area for pollution," said Arden-Clarke. "It also encourages wasteful use of natural resources." Sources: "G-7 Still Haven't Caught the Train From Rio, Environmentalists Say," NGO PRESS CENTER RELEASE, July 9, 1993; "GATT Policies Seen Giving Environment Short Shrift," JAPAN TIMES, July 6, 1993; "G-7 Urged to Discuss the Environment," JAPAN TIMES, July 3, 1993; Asako Murakami, "Toronto Green Meeting Sparks Japan's Interest," JAPAN TIMES, June 2, 1993. ________________________________________________________ Event: The Institute on International Economy, a course offered by the Center for Popular Economics. August 8-14, Northfield, MA. $475.00. Application deadline July 16. Morning sessions will provide an overview of the international economy. Afternoon workshops focus on: The International Debt Crisis; Women in the International Economy; Protectionism and Trade; The Failure of Capitalism in Eastern Europe; The Economics of the Global Environmental Crisis and others. Contact: Center for Popular Economics, P.O. Box 785, Amherst, MA 01004. Tel: (413) 545-0743. ________________________________________________________ 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 ________________________________________________________