TRADE NEWS BULLETIN Volume 2 Number 148 Tuesday, August 17, 1993 ________________________________________________________ HEADLINES: Congressional NAFTA Opposition Grows, Weak Labor Accord Former Customs Official Says NAFTA Will "Free Drug Trade" Sutherland Says Consumers To Benefit From GATT Conclusion ________________________________________________________ NAFTA News Summary ________________________________________________________ CONGRESSIONAL NAFTA OPPOSITION GROWS, WEAK LABOR ACCORD Congressional opposition to the North American Free Trade Agreement has been growing since side accords were completed Friday. Many formerly undecided congressional Democrats, led by Representative Sander Levin (D-Michigan), are "disappointed" with supplemental accords and say they plan to reject NAFTA. Levin said the side accords "fail to address the gut issue -- potential economic dislocation." House Majority Whip David Bonior (D-Michigan), who has consistently opposed NAFTA, criticized the accords, saying, "All the fanfare about the completion of the side agreements can't hide this simple fact: NAFTA still threatens to make American jobs our number one export." House Majority Leader Richard Gephardt (D- Missouri), who had vowed to oppose NAFTA if supplementals, particularly the labor accord, were not strong enough, recently announced opposition to the pact. Supplemental accords "fall short in important respects ... I cannot support the agreement as it stands," Gephardt said Friday in a press release. "Gephardt focused hard on the labor agreement so his stance is not surprising," said a congressional aide. "The labor agreement is not as sweeping as the environmental deal. It's just not as strong." Critics say the NAFTA labor accord is not only weaker than the environmental accord, but the labor commission, charged with overseeing business and country compliance with the trade pact, does not have as much power as the environmental commission. "The environmental side covers virtually all environmental laws," said Thea Lee of the Economic Policy Institute. "But the labor side deal covers only a very small subsection: health and safety, child labor and minimum wage. Industrial relations are entirely absent." Workers will not be protected if fired for collective bargaining or organizing, as is already happening in the border region. Sources: Lyndsay Griffiths, "New NAFTA Kinder to Earth Than to Workers," REUTER, August 17, 1993; "Former Undecided Democrats Digging in Against NAFTA," CONGRESS DAILY, August 16, 1993; Stuart Auerbach, "Key Hill Democrats Wary of NAFTA Side Agreements; Tough Fight Expected on Trade Accord," WASHINGTON POST, August 14, 1993; "As Gephardt Rejects, Danforth Backs New Pacts," CONGRESS DAILY, August 13, 1993. ________________________________________________________ FORMER CUSTOMS OFFICIAL SAYS NAFTA WILL "FREE DRUG TRADE" A former U.S. customs commissioner said drug trafficking and violence are expected to increase dramatically under NAFTA. Trade lawyer and former U.S. Customs Commissioner William von Raab and F. Andy Messing, an executive director of the National Defense Council Foundation wrote in Sunday's WASHINGTON POST that national security concerns have been neglected in NAFTA negotiations. According to Raab and Messing, U.S. customs officials refer to NAFTA as the "North American Drug Trade Agreement" since more than 70% of cocaine entering the United States is smuggled easily across the Mexican border. Alleged drug lords have already begun buying up legitimate businesses along the border region to use as fronts for drug trafficking. "When NAFTA's provisions are fully implemented, the trucks operated by these firms will be able to ship goods virtually unimpeded to any point in the United States," write Raab and Messing. U.S. law enforcement officials estimate that seized drugs along the border represent only 10% of what is actually shipped. Raab, Messing and Representatives Dan Burton (R-Indiana) and John Duncan (R-Tennessee) reported after a recent trip to Mexico that Mexican anti-drug agencies were using "soft enforcement" measures -- the seizure of drugs without arrests. "Nothing we saw or heard, however, led us to believe that Mexico had tackled 'hard- enforcement,' i.e. arresting significant drug figures, cracking down on money-laundering or disrupting drug enterprises," said Raab and Messing. "More disturbing though, is the fact that the increased flow of drugs will probably be accompanied by a surge in uncontrolled violence." Source: William von Raab, F. Andy Messing, "Will NAFTA Free the Drug Trade? Cocaine Businessmen Too Will Exploit Open Borders," WASHINGTON POST, August 15, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ SUTHERLAND SAYS CONSUMERS TO BENEFIT FROM GATT CONCLUSION Peter Sutherland, director-general of the General Agreement on Tariffs and Trade, said consumers would benefit from a concluded global trade accord. Sutherland criticized protectionist measures adopted by GATT's major industrialized members. "Virtually all protection means higher prices," Sutherland wrote in a report released yesterday. "It is high time governments made clear to consumers just how much they pay, in the shops and as taxpayers, for decisions to protect domestic industries from import competition." Sutherland called on grass-roots consumer groups to lobby for a GATT deal aimed at cutting import tariffs by 33 percent. "The Uruguay Round will mean significant improvements in prices, choice and quality for consumer products across the board," Sutherland wrote in the report's preface. The 11-page GATT report, based on government data and independent research, cited food, electronic products, textiles and automobiles as the most costly examples of protectionism. "Protection tends to be loaded towards the products which are essential for any family," reported GATT. "Consequently, since the essentials command the biggest proportion of the household budgets of poor families, protection acts as a regressive tax." The National Consumers Council of the United Kingdom, for example, has estimated that protected industries cost UK consumer almost $1.3 billion per year. _ Tel: (612) 227- 8266. The symposium will include presentations on the international legal frameworks of trade and the environment. Speakers, including Canadian Trade Minister Tom Hockin and GATT Secretariat Richard Blackhurst, will report on GATT and NAFTA, sustainable development and a number of specific legal and economic problem areas. ________________________________________________________ Editor: 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