TRADE NEWS BULLETIN Volume 2 Number 163 Wednesday, September 15, 1993 Headlines: SALINAS DOWNPLAYS NAFTA IN SIGNING CEREMONY SOME U.S. COMPANIES MOVING PLANTS BACK TO U.S. POLL REVEALS HIGHEST LEVEL OF NAFTA OPPOSITION YET BRITTAN CALLS FOR GATT FARM CONDITIONS ________________________________________________________ NAFTA News Summary ________________________________________________________ SALINAS DOWNPLAYS NAFTA IN SIGNING CEREMONY After months of hailing the North American Free Trade Agreement for its potential to help Mexico's troubled economy, Mexican President Carlos Salinas de Gortari is now downplaying NAFTA's significance. Apparently concerned about NAFTA's future in the U.S. Congress, Salinas said during a signing ceremony yesterday for NAFTA's side accords that the trade pact is not a "panacea" for Mexican economic development and that he was taking other steps to ensure economic prosperity. Salinas said Mexico will press forward with plans to form other trade pacts and join the Organization for Economic Cooperation and Development regardless of the outcome of NAFTA. "Mexicans are not waiting for the day that the treaty comes into force to redouble our efforts," Salinas said. "We have already been working so that Mexico integrates more intensely with the world economy." Mexico is expected to sign a trade treaty with Venezuela, Colombia and Bolivia in the near future, and another with Central America thereafter. Sources: Damian Fraser, "Salinas Plays Down NAFTA Deal," FINANCIAL TIMES, September 15, 1993; Tim Golden, "Mexican Shifts Tone on Trade Accord," NEW YORK TIMES, September 15, 1993. ________________________________________________________ SOME U.S. COMPANIES MOVING PLANTS BACK TO U.S. Some American manufacturers who moved operations south of the border during the past few years say any gains achieved by paying lower wages have been more than offset by other production costs. Keith Gibson, who runs Quality Coils Inc., shut down his plant in Connecticut four years ago and moved operations to Mexico expecting to "make a killing." Instead, Gibson says he "nearly got killed," losing money regularly due to a number of economic constraints, including low productivity among Mexican workers. "I can hire one person in Connecticut for what three were doing in Juarez," Gibson said. He moved operations back to Connecticut last April. A number of manufacturers also cite high absenteeism, problems with long-distance management, outdated machinery, poor education among workers and traffic congestion as major economic constraints to production. "If you chase cheap labor, you may regret it," said Richard Bereth, vice president of Haworth Inc., a large furniture manufacturer based in Michigan. Haworth estimates that it can produce office furniture 25 percent cheaper in Michigan, despite $1.00 per hour wage rates in Mexico. Source: Bob Davis, "Some U.S. Companies Find Mexican Workers Not So Cheap After All," WALL STREET JOURNAL, September 15, 1993. ________________________________________________________ POLL REVEALS HIGHEST LEVEL OF NAFTA OPPOSITION YET A new WALL STREET JOURNAL/NBC News poll indicates that 36 percent of Americans surveyed oppose NAFTA, the highest level of disapproval registered this year. Only 25 percent of U.S. citizens reportedly support the free trade pact, the lowest level of approval this year. The majority of those surveyed believe: U.S. manufacturing jobs will move to Mexico; large corporations will be the winners; and Mexico won't follow labor and environmental laws. Thirty-four percent of those surveyed said they remain undecided because they do not know enough about the trade pact. Source: Gerald F. Seib, "Clinton Needs to Sway the Public on NAFTA Issues as Poll Shows That Many Oppose the Agreement," WALL STREET JOURNAL, September 15, 1993; "NAFTA: Seedbed of a United Populism?" THE AMERICAN POLITICAL REPORT, September 10, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ BRITTAN CALLS FOR GATT FARM CONDITIONS EC Trade Commissioner Leon Brittan said the European Community cannot formally approve the U.S.-EC farm accord until a more broad agreement on agricultural issues is discussed by all members of the General Agreement on Tariffs and Trade. "It is part of an ongoing process," Brittan said. "Nobody is asked to take a position until the whole deal is available." France has vigorously opposed the U.S.-EC farm deal, also called the Blair House accord, prompting the European Community to call a meeting of foreign and farm ministers next week. Other EC members have reportedly joined France in opposition to the deal. GATT Director-General Peter Sutherland said negotiators in Geneva must base a GATT farm accord on the U.S.-EC farm deal. "Blair House took almost 12 months to negotiate and we have only three months left in which to complete all issues in the round," Sutherland told a group of Irish farmers. December 15 has been set as a deadline date for conclusion of the Uruguay Round. "If the round fails, there is every likelihood that the foundations of agricultural policies in many countries would be challenged and subject to attack in the GATT," Sutherland warned. Brittan told the European Chamber of Commerce, however, that the United States and European Community have "sufficient will and sufficient determination to proceed" with talks to conclude the Uruguay Round of GATT talks. Source: Nancy Dunne, Lisa Bransten, "Brittan in Uruguay Round Plea," FINANCIAL TIMES, September 15, 1993; Robert Evans, "GATT Chief Says Farmers Would Gain From Trade Treaty," REUTER, September 15, 1993. ________________________________________________________ Event: Meeting on activity and campaign work in the Maquiladoras, THE COALITION FOR JUSTICE IN THE MAQUILADORAS, October 8-11, 1993. Elizabeth, New Jersey. Donations welcome. Contact Susan Mika to register: BENEDICTINE RESOURCE CENTER, 3120 W. Ashby, San Antonio, Texas 78228. Tel: (210)732-8957 Fax: (210) 732-8324. ________________________________________________________ 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 ________________________________________________________