TRADE NEWS BULLETIN Volume 2 Number 136 Wednesday, July 28, 1993 Headlines: REPORT TARGETS PRO-NAFTA COMPANIES OVER HALF OF U.S. STEEL DUTIES REPEALED BRITAIN, FRANCE FAIL TO AGREE ON FARM DEAL ________________________________________________________ NAFTA News Summary ________________________________________________________ REPORT TARGETS PRO-NAFTA COMPANIES The Institute for Policy Studies (IPS) released a report today accusing several of the North American Free Trade Agreement's largest corporate backers of transferring thousands of U.S. jobs to Mexico, violating Mexican labor rights and dumping chemical waste into rivers. The study finds that the 35 most active members of USA*NAFTA, a pro-NAFTA lobbying group, laid off a total of 177,639 U.S. workers between 1990 and 1992. At least nine of the companies transferred some jobs to Mexico. General Motors Corporation (GM) alone relocated or is planning to relocate more than 10,000 American jobs south of the border. GM representatives claimed that jobs were cut because of corporate reorganization, not because of the proposed NAFTA. IPS alleged that many of the USA*NAFTA corporations dump toxic chemicals into Mexican rivers at levels thousands of times higher than those allowed in the United States. GM's plant in Matamoros, Mexico was charged with dumping a chemical called methylene chloride at more than 216,000 times the American standard, and another chemical, xylene, at a rate 6,400 times higher than U.S. rates. GM denied the allegation. "After that charge first appeared, GM went out and did its own studies and was never able to find anything but a trace of xylene," said Marilyn Y. Grant, a GM spokesperson in El Paso, Texas. Grant said methylene chromide is not used at the Matamoros plant. The study also concludes that some U.S. corporations operating in Mexico blacklist Mexican employees who try to organize independent unions. Several Mexican workers, including one from General Electric (GE), made the charge before a Congressional committee last month. A GE spokesperson in Connecticut denied there was a blacklist. The Du Pont Company is accused of switching production of the dangerous chemical, tetraethyl lead, from New Jersey to a plant in Mexico after the U.S. government banned its use. John H. Cavanagh, one of the study's authors, said more corporate abuses of labor and the environment are sure to occur unless strong supplemental accords are negotiated for NAFTA. "What you see in there," Cavanagh said describing the report, "is an example of the kind of corporate behavior that's encouraged if you don't have strong provisions in the treaty around labor and the environment." Source: Anthony DePalma, "Report on Trade Treaty Is Critical of Companies," NEW YORK TIMES, July 28, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ OVER HALF OF U.S. STEEL DUTIES REPEALED The U.S. International Trade Commission (ITC) rejected over half of U.S. steel producers' complaints concerning foreign steel imports. The six-member ITC, an independent federal agency, ruled that in most cases the imports did not represent a large enough portion of the American market to seriously hurt American steel companies. The ITC repealed all duties on steel used for construction and machinery. U.S. producers say they will lose $4 billion per year as a result of the ITC decision. Major U.S. steel companies complained earlier this year that foreign manufacturers were selling steel in the U.S. at below market prices. The U.S. administration responded by imposing temporary tariffs worth $3.2 billion on steel imports from 19 countries. European, Japanese and South American producers were hit hard by the duties and threatened to take complaints to GATT. France, which had threatened to reject the current GATT draft unless the United States revoked steel duties, welcomed yesterday's ruling. Leon Brittan, EC trade chief, praised the ITC decision. "It is already clear that the ITC determinations ... will do much to improve the atmosphere, not only in discussions on steel, but with regard to the Uruguay Round itself," Brittan said. Japan and Britain, however, were angered by the ruling. Duties on high-valued corrosion resistant steel products, which account for 75 percent of Japanese steel exports, were left in place. Britain faces duties ranging from 10 percent to 109 percent. Sources: Keith Bradsher, "U.S. Rules Out Many Tariffs on Imported Steel," NEW YORK TIMES, July 28, 1993; Nancy Dunne, "U.S. Ruling on Dumped Steel Boost to World Trade Talks," FINANCIAL TIMES, July 28, 1993; Asra Q. Nomani, Dana Milbank, "Trade Panel Backs Foreign Steel Concerns," WALL STREET JOURNAL, July 28, 1993; Lyndsay Griffiths, "U.S. Issues Split Ruling in 'Mammoth' Steel Row," REUTER, July 27, 1993; "U.S. Agency Confirms Duties on 16 Nations," REUTER, July 27, 1993. ________________________________________________________ BRITAIN, FRANCE FAIL TO AGREE ON FARM DEAL During a meeting yesterday, British and French leaders failed to resolve differences over the U.S.-EC farm accord. French President Francois Mitterand and Prime Minister Edouard Balladur met with British Prime Minister John Major to discuss a wide range of issues, including a proposed summit to examine the EC's negotiating position in the Uruguay Round of GATT talks. Britain gave backing to the French summit proposal but failed to win French approval of the U.S.-EC farm deal in exchange. After the meeting yesterday, Major said that Britain remains committed to the farm accord, but that more agriculture negotiations will be needed before the Uruguay Round can come to a conclusion. "No matter how hard we push them on this thing," said Major in reference to the strong French position, "they are not going to move just because we want them to. They have their position and we have ours, and there is a very big difference on agriculture." Source: Keith M. Rockwell, "UK, France Fail to Break Farm Subsidy Impasse," JOURNAL OF COMMERCE, July 27, 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 ________________________________________________________