>From iatp@igc.apc.org Fri Oct 8 19:29:14 1993 TRADE WEEK IN REVIEW AND PUBLICATIONS, OCTOBER 2-8, 1993 Volume 2 Number 179 ___________________________________________________________ HEADLINES: --Clinton Praises Long-Term NAFTA Benefits to AFL-CIO, Congress-- --Salinas Announces Economic Package, Agriculture Reforms-- --Canadian, U.S., Mexican Groups Maintain that NAFTA Will Cost Jobs- --Japan May Import Rice, GATT Implications Still Unclear-- --U.S. Semiconductor Industry Not Satisfied With GATT Terms-- --EC Launches GATT Campaign, Culture Debate Put on EC Agenda-- ___________________________________________________________ NAFTA News Summary ___________________________________________________________ In an attempt to win more congressional votes in favor of the North American Free Trade Agreement, the Clinton administration last week requested further negotiations with the Mexican government over the import surge side accord. However, Herminio Blanco, Mexico's sub-secretary of International Trade Negotiations, said neither the Mexican government nor the industrial sector would re- open discussions "even if the future of NAFTA depends on it." Presidents Bill Clinton and Carlos Salinas de Gortari carried on with independent campaigns to steer congressional and citizen debate over NAFTA. --Clinton Praises Long-Term NAFTA Benefits to AFL-CIO, Congress-- President Clinton told members of the AFL-CIO and Congress, during separate briefings, that NAFTA would provide a "better" economic future than other current policy initiatives. "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." Clinton offered the same argument to undecided congressional members Wednesday. "The president was very persuasive on NAFTA," said Representative Peter Blute (R-Massachusetts). According to Blute, Clinton acknowledged that there would be some job loss in the short-term, but also argued that NAFTA "would be a tremendous gain for the United States" in the long run. "I thought he made a very compelling presentation to the effect that we are better off with it than without it," said Representative John Bryant (D- Texas). --Salinas Announces Economic Package, Agriculture Reforms-- President Salinas re-introduced a number of economic reforms and unveiled new agriculture programs early this week, which analysts expect will help convince undecided U.S. congressional members that Mexico is committed to reform under NAFTA. The Pact for Economic Stability, Competitiveness and Employment will allow for wage increases up to 9.5 percent based on productivity levels, eliminate or reduce corporate income taxes, reduce periodic increases in gasoline and electricity prices and make tax-deductions available to those firms which invest in anti-pollution devices for industry and vehicles. Under Salinas' new agriculture program, which affects more than 3.3 million small farmers, some crop subsidies will be phased out over a two-year period, rather than over a 15-year period as called for in NAFTA. Approximately $100 for every 2.5 acres of land will be paid to each farmer who has grown corn, beans, grain, rice, sorghum, soy or cotton during the past three years. --Canadian, U.S., Mexican Groups Maintain that NAFTA Will Cost Jobs- The unemployment rate in Canada has jumped from 7.5 percent in 1989 to over 11 percent presently. Many Canadians blame the 1989 U.S.-Canada Free Trade Agreement for this rise in unemployment and argue that NAFTA would only make the situation worse. The C.D. Howe Institute, a policy research group, recently found that free trade with the United States has cost Canada more jobs than it has gained, but also concluded that jobs should be on the rise soon as export trade has begun to grow for Canada. Members of the AFL-CIO also worry that the proposed free trade accord will cost Americans their jobs. AFL-CIO President Lane Kirkland called NAFTA a "poison pill" left over by the Bush administration and said the accord would hurt the American economy, particularly the manufacturing sector, in both the short and long run through permanent job loss. Some Mexican vendors agree that NAFTA will lead to the dislocation of many small domestic businesses as large foreign companies enter the market. "We've already got McDonald's, Taco Bell and Arby's, so this is making it a little tougher for me," said Juan Carlos Lopez who owns a sidewalk tortilla kiosk. "I'm just counting on my customers to remain loyal to their own food, not those plastic hamburgers." Sources: "Clinton Makes Another Case for NAFTA," UPI, October 6, 1993; Gwen Ifill, "Clinton Defends NAFTA to AFL-CIO," NEW YORK TIMES, October 5, 1993; "Mexico Rejects U.S. Proposal for New NAFTA Talks," RMALC BULLETIN, October 7, 1993; Jeff Franks, "Mexico to Cut Taxes, Raise Wages to Fight Inflation," JOURNAL OF COMMERCE, October 5, 1993; Damian Fraser, "Mexico Divorces Farm Subsidies >From Output," FINANCIAL TIMES, October 5, 1993; "U.N. Official Says Mexican Agriculture Program Will Help Rural Areas," UPI, October 5, 1993; Anthony Harrup, "Mexican Economic Plan Generates Optimism," UPI, October 4, 1993; Clyde H. Farnsworth, "Canada's U.S. Trade Experience Fuels Opposition to the New Pact," NEW YORK TIMES, October 3, 1993. ___________________________________________________________ GATT News Summary ___________________________________________________________ --Japan May Import Rice, GATT Implications Still Unclear-- Japan is expected to import at least 200,000 tons of rice this year and may agree to a minimum access arrangement under the General Agreement on Tariffs and Trade, according to a Japanese daily newspaper, SANKEI SHIMBUN. Japan has imposed a ban on all rice imports for the past 45 years despite GATT demands for a more open market. The current GATT proposal calls for a conversion of all non- tariff farm trade barriers to tariffs, which would be eventually phased out. Japanese Prime Minister Morihiro Hosokawa is expected to decide within the next few months whether to allow emergency rice imports this year only or to end the ban and proceed with Uruguay Round negotiations. --U.S. Semiconductor Industry Not Satisfied With GATT Terms-- The U.S. Semiconductor Industry Association (SIA) complained to members of Congress that the current GATT draft does not achieve "necessary" changes in the global chip production sector. The group of 60 semiconductor companies outlined four areas which it says need to be addressed in present GATT negotiations. SIA charges that Europe and Korea, which impose tariffs of 14 percent and 9 percent respectively on imports of semiconductor chips, will not be required to phase out those duties under the GATT trade pact. The U.S. eliminated its 4.2 percent tariff on semiconductor chips in 1985. SIA has written to members of Congress asking them to vote against the global trade accord if it is completed. --EC Launches GATT Campaign, Culture Debate Moves Up on EC Trade Agenda-- EC ministers met Monday to discuss trade concessions on services and textiles as promised by other GATT members during previous negotiations. "We want to push the other partners to put their offers on the table," said an EC diplomat. "We are trying to avoid any new split over agriculture and to show the EC is working together on all other areas." Ministers instructed the European Commission to insist that other GATT members match Community goals for reducing trade barriers in financial and shipping services and textiles. The EC also decided to defend its current television and film rules in the Uruguay Round of trade talks, as demanded by more than 4,000 European artists and producers last week. Sources: "Japan May Partly Open Rice Market in November- Newspaper," REUTER, October 5, 1993; T.R. Reid, "Japan Rice Crisis May Mean Import Ban Ends," WASHINGTON POST, October 5, 1993; Nelson Graves, "European Community Launches GATT Trade Campaign," REUTER, October 5, 1993; Mary Hayes, "Semiconductor Industry Not Happy With GATT Treaty Terms," THE BUSINESS JOURNAL, October 4, 1993. ___________________________________________________________ Recent Publications on International Trade _____________________________________________________________ __________ For copies of the following, contact the authors or organizations listed. "NAFTA, Animal Health and Consumer Safety: Bovine Tuberculosis and U.S. Importation of Mexican Feeder Cattle," Steve Suppan, INSTITUTE FOR AGRICULTURE AND TRADE POLICY, October 1993. 19 pages. $3. The author concludes it will be difficult for the Mexican cattle industry to comply with U.S. Animal Health Association standards, and argues Mexican cattle producers could challenge U.S. rules and regulatory enforcement as trade barriers. "NAFTA's Dispute Settlement Provisions: An Analysis," Kristin Dawkins, INSTITUTE FOR AGRICULTURE AND TRADE POLICY, September 1993. 4 pages. $1.50. "Why Not Fair Trade Agreements?" David Morris, INSTITUTE FOR LOCAL SELF-RELIANCE, July 1993. 1 page. Institute for Agriculture and Trade Policy. $.50. "Latino Consensus on NAFTA," Antonio Gonzalez and Marie Cobian, SOUTHWEST VOTER RESEARCH INSTITUTE, 1993. 4 pages. 1712 W. Beverly Blvd., Suite 203, Montebellow, CA 90640. (213) 728-2706. Free. "The GATT Negotiations on Agriculture: What Are the Implications for Developing Countries," CAP TALES, September 1993. 8 pages. Farmers' Link, 38-40 Exchange St., Norwich, NR2 1AX. (0603) 765670. Fax: (0603) 761645. $3. "Testimony of Leland Swenson, President of the National Farmers Union, on NAFTA to the Senate Committee on Agriculture," NATIONAL FARMERS UNION, September 1993. 10 pages. 10065 E Harvard Ave., Denver, CO 80231. (303) 337-5500. $3. "Freedom From Debt Coalition 1993-1995 Strategy for Debt Reduction," PEOPLE AGAINST IMMORAL DEBT, Vol. 3, No. 5, September 1993. 12 pages. UP School of Labor and Industrial Relations, UP Diliman, Quezon City 1101, Philippines. (632) 869-1111. Fax: (632) 96-2656. Contact organization for prices. "Free Trade, NAFTA and the Friction Over Infrastructure," The Public's Capital, GOVERNING, October 1993. 2300 N St. NW, Suite 760, Washington, DC 20037. (202) 862-8802. Fax: (202) 862-0032. $4.50. "Free Trade Winds," THE TEXAS OBSERVER, October 1993. 24 pages. 307 W. Seventh St., Austin, TX 78701. (512) 477-0746. $3. This journal features several articles regarding NAFTA and its probable impact on the environment. "Impact of NAFTA on the Great Lakes, Video Report From Conference in Chicago," INSTITUTE FOR AGRICULTURE AND TRADE POLICY, July 1993. 15 minutes. $10. A research study prepared for this conference by analysts Paul Muldoon and Bruce Lourie is also available. Limited number of video copies are available. _____________________________________________________________ __________ Editors: Gigi DiGiacomo, Chirag Mehta 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 _____________________________________________________________ _________