TRADE NEWS BULLETIN Volume 2 Number 142 Monday, August 9, 1993 ________________________________________________________ HEADLINES: Trade Ministers Deny Reports of Agreement Congressional NAFTA Debate Heats Up U.S. Eases Stance on Textiles; Deals May Jeopardize GATT ________________________________________________________ NAFTA News Summary ________________________________________________________ TRADE MINISTERS DENY REPORTS OF AGREEMENT Trade ministers denied reports that supplemental accords to the North American Free Trade Agreement had been reached over the weekend. "Quotes in today's press characterizing an alleged weekend agreement and the positions of the three countries on compliance in the NAFTA side deals are inaccurate, misleading and false," said top trade ministers from the Unites States, Canada and Mexico in a joint statement this afternoon. The TORONTO STAR reported earlier today that Canadian negotiators had won a key concession over enforcement mechanisms. Under the alleged agreement, Canada would be exempt from trade sanctions, while Mexico would not. Canadian negotiators have consistently opposed trade sanctions, which they say would "hand the United States a new protectionist weapon." Trade consultant Bill Merkin said in reference to the alleged agreement, "It doesn't strike me as being necessarily counter-productive to the agreement to have only Mexico participate, since the problem is really Mexican-oriented." Mexico has also rejected U.S. proposals to impose sanctions, but was said to have relaxed its resistance over the weekend. "The Americans appear to have convinced the Mexicans that trade sanctions are the bottom-line price they have to pay to get the NAFTA through Congress," said one Canadian official. U.S. and Canadian officials said a new set of talks could begin Thursday in Washington, D.C. Sources: "NAFTA Ministers Deny Report of Weekend Agreement," REUTER, August 9, 1993; Jonathan Ferguson, "Canada Wins Key Concession at Trade Talks," TORONTO STAR, August 9, 1993; "NAFTA Talks Seen Continuing for 1 or 2 More Days," REUTER, August 8, 1993; "Ministers in Third Day of Bid to Push NAFTA Ahead," REUTER, August 6, 1993. ________________________________________________________ CONGRESSIONAL NAFTA DEBATE HEATS UP Congress is divided roughly fifty-fifty over NAFTA, according to a congressional head count taken by NAFTA supporters. The majority of anti-NAFTA congressional members are said to be Democrats, while Republicans registered most of the support. Of the still-undecided 100 Congressmen, most are Democrats, which House Speaker Tom Foley (D-Washington) expects will pose a serious threat to NAFTA. "NAFTA is going to be a bipartisan, tough, tough fight," said Foley. House Majority Whip David Bonior (D-Michigan) is strongly opposed to the proposed free trade accord, arguing that it will cost America thousands of jobs in the auto industry and other related trades. House Majority Leader Richard Gephardt (D-Missouri), who originally fought against NAFTA, has now agreed to support the pact if side accords on labor and the environment are strong enough. House Ways and Means Committee Chairperson Dan Rostenkowski (D- Illinois) is an enthusiastic supporter of the trade agreement. Many supporters of the trade pact say NAFTA ratification hinges on President Clinton's position. Members of Congress have reportedly been unclear as to where Clinton stands on key side accords. "Without him," said a pro-NAFTA congressional leader, "we're dead." Sources: Hobart Rowen, "NAFTA's Fate Is in Hands of Clinton," WASHINGTON POST, August 8, 1993; "Bipartisan U.S. Support Vital for NAFTA-Bentsen," REUTER, August 8, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ U.S. EASES STANCE ON TEXTILES; DEALS MAY JEOPARDIZE GATT ACCORD U.S. negotiators have offered some concessions in the Uruguay Round of the General Agreement on Tariffs and Trade during recent weeks, dropping some complaints altogether and suggesting that other concerns be addressed in the draft stages of an agreement. On textiles, the U.S. has repealed original demands that the 10-year phase-out for textile import quotas be lengthened, and would reportedly agree to the proposed timetable if textile-importing nations such as Pakistan, Egypt and Turkey open their markets to U.S. textiles and clothing. The Clinton administration also proposed the lowering of dumping margins and volumes, making it easier for the Unites States to impose anti-dumping penalties. U.S. negotiators have hinted that "third- country dumping" should be included in the global trade text. Third- country dumping occurs when a foreign producer exports goods to a third country at below fair market value, which the Clinton administration argues would deprive the U.S. of export market shares. Meanwhile, Jacques Toubon, France's new conservative culture minister, criticized the United States over demands to include film and television in a new free trade pact. European film-makers and theater directors worry that an invasion of American films and television shows would seriously threaten their arts community. "As soon as the Berlin Wall fell," said Toubon, "Coca-Cola and McDonald's took root on Red Square and at Tiananmen. Should we not offer a pluralist alternative through our European cultural identity?" he asked. GATT Director-General Peter Sutherland warned that too many demands, by the United States or European Community could jeopardize the Uruguay Round. "If the rest of the draft final act is to be opened up, you can forget about the round," Sutherland said. Sources: "Non! To Coca-Cola Culture, French Minister Says," REUTER, August 8, 1993; Keith M. Rockwell, "U.S. Negotiators Soften Stance on GATT Draft," JOURNAL OF COMMERCE, August 5, 1993. ________________________________________________________ Editors: Kate Hoff and Gigi Boivin 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 ________________________________________________________