TRADE NEWS BULLETIN Volume 2 Number 147 Monday, August 16, 1993 Headlines: GEPHARDT CALLS NAFTA SIDE DEALS "DEFICIENT" SALINAS PROMISES TO RAISE MEXICAN WAGES CANADIANS MIXED ON NAFTA ________________________________________________________ NAFTA News Summary ________________________________________________________ GEPHARDT CALLS NAFTA SIDE DEALS "DEFICIENT" U.S. House Majority Leader Richard Gephardt (D-Missouri) called NAFTA side agreements "deficient" and said he would not support the free trade pact in its current form. U.S., Canadian and Mexican negotiators announced Friday they had completed NAFTA's supplemental environmental and labor accords. "The announced side agreements fall short in important respects, and I am not optimistic that these defects can be successfully resolved," Gephardt said. "I cannot support the agreement as it stands." NAFTA supporters had hoped the side agreements would shore up support from some members of Congress who had expressed concern the free trade pact would adversely affect workers and the environment. But it appears NAFTA still faces a tough battle. "Putting side agreements on NAFTA is like putting earrings on a hog. It's a bad trade agreement and side agreements will dress it up a little, but won't change it," said Senator Byron Dorgan (D-North Dakota). Under the agreement, the three countries would set up commissions to determine whether countries were complying with environmental and labor agreements. If disputes cannot be solved through negotiations, a panel would evaluate the complaint. If a complaint is upheld, a country would be given 60 days to comply with a law, after which the country would face fines of as much as $20 million. The panel could also impose sanctions, such as duties or quotas, against the United States or Mexico. In Canada, fines would be enforced by a Canadian federal court. Republican Whip Newt Gingrich, a strong NAFTA supporter, criticized the Clinton administration for not selling NAFTA to the American people. "They've allowed NAFTA to slide all year. They've now gotten themselves into a deep hole," he said. Clinton promised to convince the American people and Congress that NAFTA is in the interests of the United States. "Today I pledge my strongest commitment to a major effort this fall to secure NAFTA's passage," Clinton said Friday. "All I know is that in all of trade history this is the first agreement that ever really got any teeth," Clinton added. The actual text of the side agreements will not be available until next month. Sources: Asra Q. Nomani, Dianne Solis, "NAFTA Is Facing Difficult Trial in the Congress," WALL STREET JOURNAL, August 16, 1993; Lyndsay Griffiths, "Clinton Promises All-Out Fight for NAFTA," REUTER, August 13, 1993; Keith Bradsher, "3 Nations Resolve Issues Holding Up Trade Pact Vote," NEW YORK TIMES, August 14, 1993. ________________________________________________________ SALINAS PROMISES TO RAISE MEXICAN WAGES Soon after the announcement of NAFTA side agreements, a relieved Mexican President Carlos Salinas de Gortari appeared on national television and said the trade package would benefit Mexican workers and the environment. "Today, fellow countrymen, we have successfully concluded negotiations which many said were impossible, that others worked to make impossible, but which a group of responsible and dedicated Mexicans who recognized the feelings of our society worked to make a reality." Salinas announced he would raise Mexico's current minimum wage of $4.21 a day to reflect increases in productivity. "I've instructed the Labor Minister to introduce to the National Commission of Minimum Wages a resolution that would establish that minimum salaries grow in real terms in a manner directly proportional to the average growth of the economy's productivity," Salinas said. The move would only affect the 16 percent of Mexican workers who receive the minimum wage. Labor advocates in the U.S. and Mexico criticized the side agreement for not guaranteeing labor rights, such as the right to form free unions. Sources: Anthony DePalma, "Law Protects Mexico's Workers But Its Enforcement Is Often Lax," NEW YORK TIMES, August 15, 1993; Edwin Vidal, "Mexican President Jubilant Over NAFTA Side Accord Agreements," UPI, August 13, 1993. ________________________________________________________ CANADIANS MIXED ON NAFTA As is the case in the U.S and Mexico, Canadians are divided over NAFTA side agreements. Conservatives and business officials welcomed the announcement while socialists and labor leaders said the side deals do nothing to fix NAFTA's shortcomings. Manitoba's Progressive Conservative Premier Gary Filmon said NAFTA's advantages outweigh its disadvantages and that the trade pact will help his province export more goods to Mexico. Ontario's Socialist Premier Bob Rae denounced the side agreements for doing nothing to stop job losses. Canadian Trade Minister Tom Hockin claimed the agreements would help protect workers' rights and the environment. "What these agreements will do is enhance the protection of the North American environment and contribute to the maintenance and improvement of working conditions in the North American work place," Hockin said. Sources: "Canadians Split on NAFTA Side Deal Agreements," UPI, August 13, 1993; "Canadian Business Welcome Sanction-Free NAFTA Deal," REUTER, August 13, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ JAPAN MAY IMPORT RICE DUE TO WET SUMMER Due to an unseasonably cold and wet summer, Japan is likely to fall short by 50,000 to 250,000 tons of rice and may need to import that amount by the end of the year. Japan last imported rice in 1984 when, due to similar circumstances, the government allowed in 150,000 tons of South Korean rice. Japan is rejecting a General Agreement on Tariffs and Trade proposal to permanently remove its ban on foreign rice imports. Source: Risa Maeda, "Japan May Import Rice for First Time in 10 Years," REUTER, August 16, 1993. ________________________________________________________ Editor: 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 ________________________________________________________