TRADE NEWS BULLETIN Volume 2 Number 137 Thursday, July 29, 1993 Headlines: U.S. MAY ISSUE BONDS TO FUND BORDER CLEANUP TRADE REPRESENTATIVES MEET ON SIDE ACCORDS NAFTA SUPPORT WEAKENS IN MEXICO GATT MEMBERS AGREE TO TIMETABLE FOR COMPLETION ARGENTINA TO ALLOW U.S. DRUG PATENT PROTECTION UNDER GATT ________________________________________________________ NAFTA News Summary ________________________________________________________ U.S. MAY ISSUE BONDS TO FUND BORDER CLEANUP The United States will propose creating a joint agency with the Mexican Government that would issue as much as $8 billion worth of bonds to fund the cleanup of the U.S.-Mexico border. The money would be used to build treatment centers for sewage and drinking water along the Rio Grande and other border-area rivers. Sewage and water fees from local residents on both sides of the border would be used to repay the bonds. One official compared the agency to the New York Port Authority, saying it "would be able to go into the market and float bonds paid for by user fees." Deputy Cabinet secretaries and other senior officials from federal agencies met with New York investment bankers during a National Economic Council meeting to discuss legal issues and backing of the bonds. Although negotiators have already begun discussing the plan with Mexican officials, a detailed proposal is not expected soon. American companies have been largely blamed for polluting the U.S.- Mexican border area over the past few years Studies reveal that toxic wastes are being dumped into Mexican rivers at rates thousands of times higher than allowable U.S. levels. Representative Marcy Kaptur (D-Ohio) called a Capitol Hill news conference yesterday to report on her recent trip to the Texas-Mexico border region. Kaptur took water samples from industrial cites which revealed the presence of mercury, lead, benzene, toluene, xylene and fecal coliform. Environmental groups estimate border cleanup could cost as much as $30 billion. In an effort to win environmental and congressional support of the free trade pact, the U.S. administration has called on private sources to fund the additional cleanup costs. Sources: Keith Bradsher, "Trade Accord at Stake, U.S. Weighs a Border Bond Issue," NEW YORK TIMES, July 29, 1993; Martin Crutsinger, "Free Trade," AP, July 29, 1993. ________________________________________________________ TRADE REPRESENTATIVES MEET ON SIDE ACCORDS Top trade representatives from the United States, Canada and Mexico will meet today and tomorrow to work out details of NAFTA supplemental accords. U.S. Trade Representative Mickey Kantor, Canadian Trade Minister Thomas Hockin and Mexican Commerce Minister Jaime Serra Puche are expected to focus on enforcement mechanisms. "This is the nut of the talks," said a Canadian Embassy official. "We are not in favor of sanctions to ensure compliance. The Mexicans are somewhat of the same view." Mexico has proposed fines as a means of enforcing labor and environmental standards under NAFTA. Serra Puche vowed that supplemental accords "will not become non-tariff barriers to what has already been negotiated." The officials hope to meet again next week to finalize the pact. Sources: Lyndsay Griffiths, "North American Ministers Meet on Troubled Trade Pact," REUTER, July 28, 1993; "Commerce Minister Says Sanctions Out in NAFTA Talks," UPI, July 28, 1993. ________________________________________________________ NAFTA SUPPORT WEAKENS IN MEXICO A recent survey indicates that support for NAFTA has dropped sharply in Mexico over the past two years. One third of Mexican respondents said they think NAFTA would be beneficial to the economy, 43% said it wouldn't make a difference, and 24% said it would hurt Mexico. The survey was conducted by the Banamex Department of Social Studies. In a November 1990 Banamex survey, 67% of the respondents expected NAFTA to benefit the economy, 25% said it would not make a significant difference, and only 8% thought it would be harmful. Source: "Support for NAFTA Falls Drastically in Mexico City," RMALC, July 28, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ GATT MEMBERS AGREE TO TIMETABLE FOR COMPLETION Trade envoys from more than 100 General Agreement on Tariffs and Trade members agreed to a working timetable aimed at concluding global trade talks. John Schmitt, U.S. coordinator of the Uruguay Round, said, "Everyone agreed on the work program. It is sensible and carefully thought through. It didn't set unrealistic goals." GATT Director-General Peter Sutherland called on members to negotiate new concessions by mid-October. "If we are to succeed in December, the eleventh hour is now," Sutherland said. "If the main players want this round to happen, they can make it happen." Trade envoys met for the second time since the Group of Seven summit in Japan at which the United States, Canada, Japan and the European Community agreed to cut certain tariffs. Source: Stephanie Nebehey, "Envoys Agree Tight World Trade Talks Timetable," REUTER, July 28, 1993. ________________________________________________________ ARGENTINA TO ALLOW U.S. DRUG PATENT PROTECTION UNDER GATT Argentina could pass a law this year protecting foreign industrial property if the Uruguay Round of global trade talks is concluded. According to Argentine Foreign Minister Guido Di Tella, the government could recall a bill, initially proposed in 1991 but shelved by Argentina's Congress, to enforce patent rights. "If we have a solution in GATT, we could have the patents bill voted into law by the end of the year," said di Tella. Argentina's present industrial property laws allow local pharmaceutical companies to copy formulas devised by foreign drug companies without paying royalties. Di Tella said the new law would not grant monopolies and would measure up to international standards. The U.S. has said patent and copyright protection are fundamental to improving relations with Argentina. Source: "Argentina Sees New Patent Law Possible by Year-End," REUTER, July 28, 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 ________________________________________________________