TRADE NEWS BULLETIN Volume 2 Number 180 Monday, October 11, 1993 Headlines: TRAVELER TAX MAY RISE TO PAY FOR NAFTA CONGRESS MEMBERS TOUR MEXICO FRANCE CLOSE TO APPROVING BLAIR HOUSE COMPANIES URGE GATT ACCORD FOR ENVIRONMENT'S SAKE STEEL TALKS FAIL, ANOTHER BLOW TO URUGUAY ROUND ________________________________________________________ NAFTA News Summary ________________________________________________________ TRAVELER TAX MAY RISE TO PAY FOR NAFTA The Clinton administration will propose raising fees on travelers entering the United States to help offset some of the costs of the North American Free Trade Agreement. NAFTA would reduce federal revenues by at least $2.4 billion over the next five years as tariffs are phased out. U.S. Trade Representative Mickey Kantor said Friday that White House officials and members of Congress were in the final stages of drafting a plan that could raise as much as $500 million a year. The plan would probably increase customs, immigration and agricultural inspection fees now charged to airline and ship passengers arriving from outside North America. For the first time, travelers from Mexico and Canada would be required to pay many of the fees as well. Already, the U.S. airline industry is beginning to criticize the proposal and is considering opposing the entire NAFTA package because of it. "The industry has been suffering from a tremendous burden of taxes and users fees," said Edward A. Merlis, senior vice president for external affairs of the Air Transport Association, an industry trade group in Washington, D.C. So far the group has taken no position on NAFTA. Source: Keith Bradsher, "Traveler Fees May Rise to Pay for Trade Accord," NEW YORK TIMES, October 9, 1993. ________________________________________________________ CONGRESS MEMBERS TOUR MEXICO Six members of the U.S. House Government Operations Committee heard from a few of the 70,000 people who work in the 620 foreign- owned maquiladora manufacturing plants in Tijuana, Mexico. "It's one thing to be aware of the squalid conditions from reading," said Representative Bernard Sanders (I-Vermont). "It's another thing to see people living in these kinds of huts." The congress people began a four-day tour of Mexico Friday with a meeting with President Carlos Salinas de Gortari. "This visit leaves a very different impression from my meeting with (Mexican) government officials. Here's the real world, and I don't find people living in conditions that we would want them to live in," said Representative John Conyers Jr. (D-Michigan). Salinas said Friday that delaying or trying to change the text of NAFTA would effectively kill the treaty. "Neither reopening negotiation of the treaty nor postponement of its implementation date are viable options at this stage," Salinas said in a statement to the WASHINGTON POST. "Both avenues would, in effect, represent a cancellation of the treaty perhaps for many generations." U.S. Trade Representative Mickey Kantor agreed with Salinas. "It's something we've been saying for months ... We have to get it done. We have to get it done this year. ... We need it for jobs in this country," Kantor said. Meanwhile, at a closing-day news conference of the Democratic National Committee, party chair David Wilhelm announced that promoting President Clinton's health care plan would be the party's top priority. Wilhelm acknowledged the deep disagreements within the party over NAFTA. "The focus of the (Democratic) meeting is on national health care and the focus of this meeting is on things which unite us," he said. Sources: "Mexico-Tour," AP, October 10, 1993; Michael Posner, "U.S. Democrats Promote Health Care Over NAFTA," REUTER, October 9, 1993; "Mexico Puts Jan. 1 Deadline on NAFTA," UPI, October 8, 1993; "Salinas-NAFTA," AP, October 8, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ FRANCE CLOSE TO APPROVING BLAIR HOUSE German Agriculture Minister Jochen Borchert said he believed France was close to approving the EC-U.S. Blair House agriculture agreement. "The possibility of France approving the Blair House compromise and the GATT negotiations has, I believe, improved considerably," he told journalists in Bonn. French Trade Minister Gerard Longuet has begun a public-relations drive that emphasizes the benefits of GATT. "It must be recognized that our country, with one percent of the world's population and six percent of world trade, cannot by itself paralyze world trade negotiations," Longuet told members of parliament. Longuet called the U.S.-EC dispute over Blair House a "technical battle." Longuet added, "It's ants' work." Sources: Richard Murphy, "France Closer to Approving Blair House, Bonn Says," REUTER, October 8, 1993; Nelson Graves, "France Braces Itself for a GATT Agreement," REUTER, October 8, 1993. ________________________________________________________ COMPANIES URGE GATT ACCORD FOR ENVIRONMENT'S SAKE More than 90 of the world's largest corporations urged governments to complete the Uruguay Round of GATT for the sake of the environment and economic well-being. "Without economic growth, societies cannot tackle poverty, improve the welfare of their peoples or protect the environment," the World Industry Council for the Environment said in a statement after its first board meeting in Paris. Source: "World Companies Urge GATT Accord to Save Environment," REUTER, October 8, 1993. ________________________________________________________ STEEL TALKS FAIL, ANOTHER BLOW TO URUGUAY ROUND Major steel-producing nations failed to reach a multilateral steel agreement (MSA) during talks in Geneva last week, leaving another obstacle to concluding GATT talks. Although 30 countries participate in the talks, U.S. and EC squabbles are seen as the main reason agreement has not been reached. The United States continues to protest EC subsidies to steel makers, while the EC is critical of U.S. tariffs. Sources: Stephanie Nebehay, "Failure of Steel Talks New Blow to Uruguay Round," REUTER, October 8, 1993; "Unbending Steel," FINANCIAL TIMES, October 11, 1993. ________________________________________________________ Editor: 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 ________________________________________________________