TRADE NEWS BULLETIN Volume 2 Number 168 Wednesday, September 22, 1993 Headlines: SALINAS SAYS NAFTA WILL HELP CUT ILLEGAL IMMIGRATION CATERPILLAR EXPECTS INCREASE IN PROFITS IF NAFTA PASSES LATIN AMERICAN LEADERS SAY BLAIR HOUSE NOT STRONG ENOUGH ________________________________________________________ NAFTA News Summary ________________________________________________________ SALINAS SAYS NAFTA WILL HELP CUT ILLEGAL IMMIGRATION Mexican President Carlos Salinas de Gortari said the North American Free Trade Agreement would help halt the flow of illegal immigrants from Mexico to the United States. "The Mexicans who come to the United States are looking for jobs at great risk," Salinas told businessmen from more than 50 countries during the International Industrial Conference in San Francisco Monday. "I have been saying for some time what we want to do is export products and not people." Salinas said the exodus of Mexican workers has placed a strain on his own country as well because talented people are leaving. "We need their courage and risk-taking abilities to benefit Mexico and not another country," he said. Salinas added that workers from Central America move to Mexico for the same reasons Mexicans flee to the United States. Last month, California Governor Pete Wilson called for an end to illegal immigration. Wilson contended that Mexican immigrants move to the United States in part for work, but also to take advantage of California's welfare and social security services. Wilson proposed a bill which would deny illegal immigrants access to public health care and education. Sources: William D. Murray, "Salinas: NAFTA Will Curb Illegal Immigrants," UPI, September 20, 1993; Adrian Croft, "Salinas Promotes NAFTA, Draws Mixed Reception," REUTER, September 20, 1993. ________________________________________________________ CATERPILLAR EXPECTS INCREASE IN PROFITS IF NAFTA PASSES Caterpillar, the world's largest construction equipment maker, expects sales and profits to boom under NAFTA, as do many other corporations campaigning for the trade pact. Caterpillar, which reported $10.2 billion in total revenues last year, estimates an additional $45 million worth of bulldozer and tractor sales to Mexico each year if NAFTA is ratified. "Mexico needs infrastructure and that plays to our strength," said Timothy L. Elder, director of government affairs for Caterpillar. Caterpillar executives hope to promote the trade accord to employees, 1,300 of whom, they claim, owe their jobs to Caterpillar's exports to Mexico. The company has distributed pro-NAFTA literature to employees, suppliers and customers, but most workers have not responded favorably out of fear the company will use the threat of relocation to Mexico as a bargaining tool in future wage negotiations. "This is as much of a threat to a Caterpillar worker as any other," said James B. O'Conner, a U.A.W. official. Asked about the financial implications of labor side accords, Caterpillar's Elder said, "We haven't had a good chance to analyze the side agreements yet but the reassuring thing is that organized labor thinks they are horrible." Sources: Barnaby J. Feder, "Caterpillar Sees Free-Trade Boon," NEW YORK TIMES, September 21, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ LATIN AMERICAN LEADERS SAY BLAIR HOUSE NOT STRONG ENOUGH Latin American leaders criticized the Blair House farm accord for being more protectionist than the original draft GATT proposal. "The Blair House accord represents a weakening of the Final Draft Act and takes us further from the agricultural liberalization that our nations seek," said the so-called Group of Rio in a position paper issued Friday after two-days of talks with Peter Sutherland, director-general of GATT. The Final Draft Act, proposed by former GATT chief Arthur Dunkel, calls for farm subsidy cuts above levels outlined in the Blair House farm accord, which the U.S. and EC negotiated last November. Uruguayan Foreign Minister Sergio Abreu plans to travel to Japan, Europe and the United States to convey Latin American opposition to GATT unless further liberalization takes place in the agricultural sector. The Group of Rio includes: Argentina, Bolivia, Brazil, Colombia, Chile, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela. Meanwhile, U.S. Trade Representative Mickey Kantor denied EC claims that the controversial Blair House farm accord would be on his agenda during meetings next week with his EC counterpart, Leon Brittan. "Reopening the Blair House will not be on our agenda," Kantor said yesterday. German, British and EC officials said yesterday that Brittan was under orders, as a result of Monday's compromise among EC foreign and farm ministers, to raise EC concerns with Kantor when they meet September 27. "He only has to discuss these matters," said one German official. "If he does not return with results, he does not have to keep going back and forth to Washington." French Foreign Minister Alain Juppe warned that if the United States was unwilling to discuss the Blair House, then "the GATT accord will no longer figure on the Community's agenda." Sources: "Latin American Nations to Convey Disagreement With GATT Accord," UPI, September 18, 1993. David Buchan, Lionel Barber, Nancy Dunne, "U.S. Refuses to Modify Farm Trade Pact," FINANCIAL TIMES, September 22, 1993; Lionel Barber, "French Coaxed Back Into Farm Trade Fold," FINANCIAL TIMES, September 22, 1993; "Balladur Says U.S. Must Reopen EC Farm Deal," REUTER, September 21, 1993. ________________________________________________________ Other Trade News ________________________________________________________ GERMAN STEEL ORGANIZATION FILES SUIT AGAINST U.S. The German Steel Federation filed a complaint last week with the Court of International Trade in New York, challenging U.S. duties on German steel exports worth $300 million. The federation's president, Ruprecht Vondran, argued that the U.S. duties, finalized last July, were unfairly imposed on privately owned German companies while highly subsidized producers in other countries were not penalized. The U.S. Department of Commerce, responding to numerous complaints from U.S. steel producers, determined that some steel imports, from 16 countries, were being heavily subsidized and dumped on the U.S. market. The federation said Germany was the hardest hit by U.S. duties. Source: "U.S. Steel Duties Challenged," NEW YORK TIMES, September 22, 1993. ________________________________________________________ Editors: Gigi DiGiacomo 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 ________________________________________________________