>From iatp@igc.apc.org Tue Oct 5 20:38:42 1993 TRADE NEWS BULLETIN Volume 2 Number 176 Tuesday, October 5, 1993 ________________________________________________________ HEADLINES: Clinton Tries To Convince AFL-CIO of Long-Term NAFTA Benefits Salinas Renews Economic Package, Hopes To Reverse NAFTA Foes Canadian TResidents Blame Free Trade For EconomicWoes Portugal Supports France Over Farm Accord ________________________________________________________ NAFTA News Summary ________________________________________________________ CLINTON TRIES TO CONVINCE AFL-CIO OF LONG-TERM NAFTA BENEFITS President Bill Clinton called the North American Free Trade Agreement "better" than the current economic situation for jobs and asked members of the AFL-CIO, America's largest labor union, to reconsider opposition to the free trade accord. "I understand what the American working people don't like about the present system," Clinton said during the AFL-CIO's annual convention in San Francisco. "The real issue is: does the trade agreement make it worse or better? You think it will make it worse. I think it will make it better." The AFL-CIO as well as other citizen groups believe NAFTA will cost them jobs, particularly in the manufacturing sector which is highly labor intensive. "People are scared to death," said David Mitchell of Greer, Margolis, Mitchel, Burns & Associates, a media firm coordinating advertising for an anti-NAFTA coalition. "They see their standard of living slipping away." Sources: William D. Murray, "Clinton Urges Labor to Consider Trade Pact," UPI, October 4, 1993; Frank Swoboda, "President Woos Labor on NAFTA; Unions Tap Job Fears in Leading Opposition," WASHINGTON POST, October 4, 1993. ________________________________________________________ SALINAS RENEWS ECONOMIC PACKAGE, HOPES TO REVERSE NAFTA FOES Mexican President Carlos Salinas de Gortari Sunday announced plans to renew a number of economic measures aimed at lowering inflation and raising the minimum wage. Under the Pact for Economic Stability, Competitiveness and Employment, originally introduced by former President Miguel de la Madrid in 1987, wages will be increased up to 9.5 percent based on productivity levels, income taxes will be eliminated or reduced, periodic increases in gasoline and electricity prices will be reduced by 50 percent and tax deductions will be made available to those firms which invest in anti-pollution devices for industry and vehicles. The reforms will take place beginning January 1, 1994, the target date set for NAFTA implementation. Various news reports suggest that Salinas introduced the pact as a means to convince leery U.S. congressional members that Mexico is committed to reform under NAFTA. "While Salinas has taken steps in recent weeks to lower Mexican expectations about the congressional NAFTA vote, even senior Mexican officials acknowledge the accord's ongoing influence on policy and planning decisions," reports the WASHINGTON POST. "The higher wages were a promise Mr. Salinas made to President Clinton as side agreements on the North American Free Trade Agreement were being negotiated," points out the NEW YORK TIMES. Finally, the ASSOCIATED PRESS reported, "Higher wages, lower taxes and a veiled message to members of the U.S. Congress who are wavering on the NAFTA accord were on the agenda Sunday as the government renewed a key agreement with business and labor." Sources: Tod Robberson, "Mexico Put on Hold By Fate of Trade Pact; U.S. Debate Filters Into Domestic Politics," WASHINGTON POST, October 3, 1993; Lawrence Kootnikoff, "Mexico-Free Trade," AP, October 3, 1993; Anthony DePalma, "Salinas Offers Plan to Aid Mexican Economy," NEW YORK TIMES, October 4, 1993. ________________________________________________________ CANADIAN RESIDENTS BLAME FREE TRADE FOR ECONOMIC WOES According to several national polls and independent interviews, most Canadian residents believe NAFTA would exacerbate unemployment conditions and other economic problems which already exist in Canada. "Free trade is killing Canada," said Debbie Annis, a former real estate agent interviewed by Michael Smith, a New Democratic Party candidate in parliamentary elections later this month. Many residents share Annis' concern and argue that the jump in unemployment from about seven percent in 1989 to more than 11 percent today is largely due to the impact of the 1989 U.S.-Canada Free Trade Agreement (CFTA). C.D. Howe Institute, a policy research group, recently conducted a study which found that free trade with the United States has cost Canada more jobs than it has gained. However, the Howe study also predicted that Canada will soon begin to experience the positive impact of free trade with the United States. "In the first couple of years the employment impact was very negative," said Daniel Schwanen, an analyst with Howe. "Now we're close to seeing a turnaround because of exports." Canada's Liberal Party, which leads the ruling Conservative Party by seven percent in the latest opinion polls, has reportedly softened its stance on NAFTA during election debates. The party originally vowed to renegotiate the CFTA and NAFTA if elected, however it is now calling for a tri-party working group to study concerns over NAFTA without actually rejecting the accord, should it win the October 25 elections. Sources: Jeffrey Ulbrich, "Canada-Election," AP, October 5, 1993; Clyde H. Farnsworth, "Canada's U.S. Trade Experience Fuels Opposition to the New Pact," NEW YORK TIMES, October 3, 1993; "Liberals Back Off >From Vote to Block NAFTA," NEWSCAN, October 1, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ PORTUGAL SUPPORTS FRANCE OVER FARM ACCORD Portugal will back France in opposition to the Blair House farm accord in the General Agreement on Tariffs and Trade. "Portugal expressed its solidarity with France on farm trade and France assured us of its solidarity on textiles," said Anibal Cavaco Silva, Portugal's prime minister. "We are going to work together on the GATT and the difficult negotiations in progress with our American friends." Silva met with French President Francois Mitterrand and Prime Minister Edouard Balladur Monday in Paris. Several members of the European Community, including Ireland and Spain, have voiced support for France during the GATT farm debate, saying the Blair House accord would go to far in trade liberalization and hurt EC farmers. Members of the Rio Group as well as Canada, have called for a more liberal farm policy under GATT. The Rio Group includes Argentina, Bolivia, Brazil, Colombia, Chile, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela. Source: "Portugal Backs France on GATT Farm Trade," REUTER, October 4, 1993. ________________________________________________________ Editor: Gigi DiGiacomo 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 ________________________________________________________