Trade Week in Review and Recent Publications October 23-29, 1993 Volume 2 Number 194 Headlines: Liberals Win in Canada, Chretien Promises to Make NAFTA Changes Bonior Predicts NAFTA Defeat Traveler Tax Increase Reduced, Wins Tentative Approval Creation of Development Bank Wins NAFTA Support Clinton Threatens to "Repudiate" Anti-NAFTA Candidates Lawmaker Says NAFTA Studies Flawed Sutherland Pushes ASEAN to Take Lead in GATT Japanese Parliament Expected to Vote Down Rice Imports French Farmers Meet With Government Over Farm Accord ___________________________________________________________ NAFTA News Summary ___________________________________________________________ -Liberals Win in Canada, Chretien Promises to Make NAFTA Changes- Canadian Prime Minister Jean Chretien, whose Liberal Party won a landslide victory in Monday's national elections, pledged to renegotiate the North American Free Trade Agreement. "In our program ... we were asking for changes to NAFTA," Chretien said. "Two have been dealt with, labor and the environment." But he mentioned problems concerning the exact definitions of subsidies and dumping, and NAFTA's energy provisions. Polls show 46-58 percent of Canadians oppose the free trade accord. A senior White House official hinted that Canadian suggestions may be addressed in side letters to NAFTA. Clinton and Chretien are scheduled to meet in Seattle November 19. -Bonior Predicts NAFTA Defeat- House Whip David Bonior (D-Michigan) said NAFTA opponents are within 10 "solid votes" of the 218 needed to defeat the accord in the House, and predicted that opponents would have enough strength to halt the pact's ratification. House members are scheduled to vote on NAFTA November 17. -Traveler Tax Increase Reduced, Wins Tentative Approval- The Clinton administration will push ahead with plans to raise international traveler taxes to recover tariff revenue lost under NAFTA. The proposal, which will raise $1 billion over five years, won the tentative approval of the Senate Finance Committee Thursday. International ship and air travelers, except those from Canada, Mexico and the Caribbean, currently pay a $5.00 tax per ticket. Under the new plan, travelers from all countries, including the currently-exempt countries, would be required to pay $6.50 per ticket. Unlike Clinton's original proposal, which drew strong opposition from Republicans and transport companies, the new plan will not raise the fee charged to trains and trucks carrying cargo. -Creation of Development Bank Wins NAFTA Support- The Clinton administration's decision to establish a North American Regional Development Bank has convinced at least one Hispanic lawmaker to endorse NAFTA. The Development Bank will provide nearly $7 billion in financing for environmental and infrastructure projects in border communities, and expand retraining programs to include seasonal workers who lose their jobs because of NAFTA. "I am convinced that, with these important additions to the NAFTA, I have made the right decision," said Representative Esteban Torres (D- California) after announcing his support. He estimated that "perhaps a dozen" members of Congress would support NAFTA because of the bank. -Clinton Threatens to "Repudiate" Anti-NAFTA Candidates- President Clinton promised he would "personally repudiate" Democratic candidates who try to attack incumbent lawmakers for supporting NAFTA. Representative Peter King (R-New York) had asked Clinton for political protection against anti-NAFTA candidates in next year's elections. "Democrats in my district are going to go after me if I vote for the NAFTA, and Perot people will also," King told Clinton. "What kind of assurances can you give about protecting me?" Clinton's response has reportedly infuriated Democrats. "How can the president, the head of the party, dictate what's going to be in a campaign?" questioned Vic Fazio, chairperson of the Democratic Congressional Campaign Committee. -Lawmaker Says NAFTA Studies Flawed- Representative David Obey (D-Wisconsin) released a report Monday claiming that 16 major NAFTA studies are "either flawed in design, limited in scope or unable to accurately predict the future or economic consequences of NAFTA." The Joint Economic Committee (JEC), which reviewed studies cited by NAFTA supporters and opponents, found that the agreement would in fact have more negative than positive impacts on the economy. Specifically, the JEC found that NAFTA could lead to the loss of 500,000 jobs, rather than the creation of 200,000 jobs as the Clinton administration claims. Sources: "Chretien Appears to Place Conditions on NAFTA," CONGRESSDAILY, October 27, 1993; J. Ulbrich, "Canada-NAFTA," AP, October 27, 1993; C. H. Farnsworth, "Chretien Says He Will Insist on Changes in Trade Pact," NEW YORK TIMES, October 28, 1993; J. Geddes, P.Morton, "Chretien Firm on NAFTA," FINANCIAL POST, October 28, 1993; J. Sallot, "Chretien May Play Waiting Game With NAFTA Law," GLOBE AND MAIL, October 28, 1993; "Development Bank Deal Sways Torres on NAFTA," CONGRESSDAILY, October 27, 1993; "NAFTA," AP, October 28, 1993; A. Q. Nomani, "U.S., Mexico to Set Up Bank to Fund Environmental Cleanups at the Border," WALL STREET JOURNAL, October 19, 1993; J. Maggs, "Clinton Pledge on NAFTA Angers Democratic Leaders," JOURNAL OF COMMERCE, October 25, 1993; "RPT- US Congressman Says Votes Near to Defeat NAFTA," REUTER, October 26, 1993; "New Joint Economic Committee Report Concludes That Economic Studies Used to Evaluate Economic Impact of NAFTA Are Largely Flawed," JEC PRESS RELEASE, October 25, 1993. ___________________________________________________________ GATT News Summary ___________________________________________________________ -Sutherland Pushes ASEAN to Take Lead in GATT- GATT Director-General Peter Sutherland earlier this month urged members of the Southeast Asian Nations (ASEAN) to take the lead in global trade talks. "I've been asking that further conditional offers be made by the ASEAN countries and that they should not wait until after others have moved," Sutherland said, hinting that the U.S.-EC debate on agriculture would remain stalled. But ASEAN officials said they "have already made their best efforts to offer tariff reductions ... in agricultural and industrial products." -Japanese Parliament Expected to Vote Down Rice Imports- Japan's lower house of parliament is expected to pass a resolution against replacing Japan's ban on foreign rice imports with tariffs. According to KYODO news agency, the resolution, created by the Liberal Democratic Party, was submitted to House Speaker Takako Doi Thursday. Japan's eight-party ruling coalition government is expected to support the resolution despite rumors last week that Japan would be willing to open its rice market. Agriculture Minister Eijiro Hata is scheduled to meet EC officials next week to discuss the 45-year-old ban. Japan did announce plans to open its construction market to competitive bidding and enforce anti-monopoly laws currently in place. The United States temporarily postponed implementing trade sanctions that were due to go into effect Monday. U.S. construction companies have been prohibited from entering the Japanese market because of Japanese construction monopolies and limited access to government procurement contracts. -French Farmers Meet With Government Over Farm Accord- French farm cooperatives say they may be forced to compromise on a GATT farm deal. "We have our backs against the wall," said Christian Duval, deputy director general of the Federation of Farm Cooperatives (FFCAT). "We are told we cannot have everything, so we are fixing our priorities." Members of the FFCAT, the French Farmers' Federation (FNSEA) and the CNJA cooperative attended the private meeting. Farm leaders agreed to hold a series of confidential meetings with the French government before the December 15 GATT completion deadline. Sources: G.P. Goad, "GATT Chief Presses ASEAN to Take Lead," ASIAN WALL STREET JOURNAL, October 11, 1993; "Japan Parliament May Resolve Not to Import Rice," REUTER, October 28, 1993; "Japan Farm Minister to Meet EC Officials," REUTER, October 27, 1993; "French Government, Farmers Meet Discreetly on GATT," REUTER, October 28, 1993; Juliette Rouillon, "French Farmers Scale Down Resistance to GATT," REUTER, October 27, 1993; Keith Bradsher, "U.S. Cancels a Plan to Begin Sanctions After Japan Acts," NEW YORK TIMES, October 27, 1993. ___________________________________________________________ Recent Publications on International Trade ___________________________________________________________ For copies of the following, contact the authors or organizations listed. "Potential Job Loss for Sixteen States Under NAFTA," Marion Anderson, EMPLOYMENT RESEARCH ASSOCIATES, October 1993. 32 pages. 968 Roxburgh Ave., E. Lansing, MI 48823. (517) 485-7655. $3 for each state. The author studies potential job loss for Arkansas, California, Georgia, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Virginia. "Down the NAFTA Drain: Michigan Jobs and Great Lakes Water," Marion Anderson, EMPLOYMENT RESEARCH ASSOCIATES, October 1993. 968 Roxburgh Ave., E. Lansing, MI 48823. (517) 485-7655. $5. "NAFTA In the Homestretch: The View From Mexico," FRIENDS OF THE EARTH, Vol. 23, No. 9, October 1993. 16 pages. 218 D St., SE, Washington, DC 20003. (202) 544-2600. Fax: (202) 543-4710. E-Mail: foedc@igc.apc.org. $4. "NAFTA: What Is It, Why We're Fighting It, How We Can Stop It," Student Environmental Action Coalition, THRESHOLD, Vol. 6, No. 1, October 1993. 31 pages. P.O. Box 1168, Chapel Hill, NC 27514-1168. (919) 9647-4600. Fax: (919) 967-4648. E-mail: seac@igc.apc.org. $2. "The NAFTA Decision and Beyond," ECONOMIC POLICY INSTITUTE, October 14, 1993. 1730 Rhode Island Ave., NW, Suite 200, Washington, DC 20036. (202) 775-8810. Fax: (202) 775-0819. $5. Limited quantities available. "Global Shift: The Internalization of Economic Activity," Peter Dicken, GUILFORD PRESS, 1992. 492 pages. 72 Spring St., New York, NY 10012. (212) 431-9800. $30. This book provides information on the market expansion of transnational corporations (TNCs), their impact on host economies, and national regulation of TNCs. "State Captains to Promote NAFTA," Jim Hightower, HIGHTOWER AND ASSOCIATES, August 12, 1993. 7 pages. P.O. Box 13516, Austin, TX 78711. (512) 477-5588. Fax: (512) 478-8536. Free. "Annual Symposium: The North American Free Trade Agreement," THE INTERNATIONAL LAWYER, Vol. 27, No. 3, Fall 1993. 273 pages. Order Fulfillment Dept., ABA, 750 N. Lake Shore Dr., Chicago, IL 60611-4497. (312) 988-5555. Fax: (312) 988-5568. $10. This journal contains ten articles regarding legal issues and the NAFTA such as dispute resolution, intellectual property protection, and investor-state dispute settlement. "Poverty Alleviation is Essential for Environmental Sustainability," Robert Goodland and Herman Daly, THE WORLD BANK, April 1993. 34 pages. Environmental Economics and Pollution Division, 1818 H St. NW, Washington, DC 20433. S Building 5055. (202) 473-6736. Free. Anti-NAFTA Hotline, operated by PUBLIC CITIZEN. CALL: 1-900- STOPS-IT, $3.00 per call. PUBLIC CITIZEN will mail a postcard to your member of Congress in your name when you call. They will also send you a NAFTA action kit outlining how you can join the fight against NAFTA. ___________________________________________________________ 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 ___________________________________________________________