TRADE NEWS BULLETIN Volume 2 Number 155 Tuesday, August 31, 1993 ________________________________________________________ HEADLINES: Majority Of House Opposed, Clinton Takes Steps To Win NAFTA Favor TRADE Magazine Predicts NAFTA Will Level U.S./Mexican Wages Canadians Remain Opposed to NAFTA Sutherland Outlines GATT Conclusion Schedule ________________________________________________________ NAFTA News Summary ________________________________________________________ MAJORITY OF HOUSE OPPOSED, CLINTON TAKES STEPS TO WIN NAFTA FAVOR A growing number of House democrats oppose the North American Free Trade Agreement, according to Representative David Bonior (D- Michigan). Bonior warned President Clinton Sunday that "two thirds to maybe 75 percent of the Democratic caucus in the House is opposed to this treaty." In an effort to combat House opposition, President Clinton, backed by Senate Republicans, may offer NAFTA in the Senate for a vote before passing it on to the House. "Our intent is to have the vote in the Senate first to show the strength we have," said Senator Phil Gramm (R-Texas). "I believe with an all-out effort by the president and the best effort we can put forth by Republican leaders in the House and Senate, that we can and will win on NAFTA." Trade measures are traditionally voted on by the House first, however Clinton said he was willing to accept the unusual procedure of a Senate vote first in order to pass NAFTA. The free trade accord is expected to reach Congress by mid-September. "When Congress returns (for its next session), NAFTA is the first thing they will have on their plate," said U.S. Trade Representative Mickey Kantor. Kantor also announced administration plans to begin a pro-NAFTA campaign next week. As part of the campaign, Clinton has taken steps to recruit a high-profile Republican to help pass the free trade accord. Analysts expect former Minnesota Representative Bill Frenzel will be the choice. Frenzel, who currently works at the Brookings Institution, a Washington-based think-tank, was a member of the House Ways and Means Committee and an articulate leader in Congress on trade matters. In addition, Clinton told reporters that he is working on a worker- training bill that would accompany NAFTA legislation. Many labor groups and House members fear the trade pact will lead to a displacement of U.S. workers as American firms relocate to Mexico where cheaper labor is available. Sources: Bill Cormier, "Mexico-NAFTA," AP, August 31, 1993; Jeffrey H. Birnbaum, "Clinton May Attempt to Aid Trade Pact by Having Senate Vote Before the House," WALL STREET JOURNAL, August 31, 1993; Donna Smith, "Clinton Optimistic on NAFTA Despite Opposition," REUTER, August 30, 1993; Jim Abrams, "NAFTA," AP, August 30, 1993; "Clinton Optimistic on NAFTA Despite Opposition," REUTER, August 30, 1993; "Dole Says Still Time to Reverse NAFTA Opposition," REUTER, August 30, 1993; "Espy Says Congress Will Get NAFTA by Mid-September," REUTER, August 30, 1993; "Clinton Prefers Senate Consider NAFTA First," UPI, August 30, 1993; "Two-Thirds of House Demos Oppose NAFTA, Whip Says," REUTER, August 29, 1993. ________________________________________________________ WORLD TRADE MAGAZINE PREDICTS NAFTA WILL LEVEL U.S./MEXICAN WAGES WORLD TRADE Magazine predicted that NAFTA will eventually level Mexican and U.S. wages. WORLD TRADE argues that U.S. companies will most likely remain in the United States rather than relocating to Mexico under NAFTA because tariff barriers will have been removed. "In the five to 10 years it would take to recoup your expenses in opening a new factory, Mexican wages will have equaled those in the U.S.," states WORLD TRADE. Mexican workers currently earn approximately $4 per day, one eighth the U.S. minimum wage rate. Source: "I Know World Trade Readers Are Pro-NAFTA," WORLD TRADE, September, 1993. ________________________________________________________ CANADIANS REMAIN OPPOSED TO NAFTA The most recent Gallup poll conducted in mid-August reveals that 58 percent of those Canadians surveyed oppose NAFTA, up 2 percentage points from the April poll. Sixty-nine percent of Ontario residents, in Canada's highly industrialized province, expressed concern and opposition to the free trade pact, while 44 percent of Quebec residents remain opposed. Canada's Parliament passed the three- nation deal in June, however final approval must still be granted by Canada's Prime Minister, the United States and Mexico for the accord to take effect. Source: "Poll Shows Canadian Opposition to Free-Trade Pacts," UPI, August 30, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ SUTHERLAND OUTLINES GATT CONCLUSION SCHEDULE Peter Sutherland, director-general of the General Agreement on Tariffs and Trade, called for a 116-nation ministerial conference in Geneva next April to sign the proposed global trade accord. Sutherland told members of the Trade Negotiations Committee (TNC), the Uruguay Round's steering body, that a GATT deal should be complete by December 15, 1993. A three-month review period to make "final adjustments" and to conduct a legal review would follow. "I propose to conclude these two processes by mid-March so that there will be sufficient time for printing and circulation of the complete Uruguay Round documents prior to the formal signing of the agreements at the Ministerial conference in April 1994," Sutherland said. Sutherland vowed to overcome obstacles and trade disputes among GATTlster Edouard Balladur. France has consistently opposed the U.S.-EC farm deal, causing one of many stumbling blocks in the Uruguay Round of GATT talks. Sutherland is scheduled to meet in Paris with Balladur September 8. Sources: "GATT Calls For Signing of Uruguay Round Next April," REUTER, August 31, 1993, "GATT Director Warns of Protectionist Pressures," UPI, August 31, 1993; Stephanie Nebehay, "GATT Calls April Ministers' Meeting on Trade Round," REUTER, August 31, 1993. ________________________________________________________ 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 ________________________________________________________