TRADE NEWS BULLETIN Volume 2 Number 195 Monday, November 1, 1993 ________________________________________________________ Headlines: MAJOR NAFTA STUDIES IGNORE INVESTMENT-RELATED JOB LOSS U.S. NAFTA AMENDMENTS OPPOSED BY CANADIAN BUSINESS REPRESENTATIVE CITES LOWER PRICES FOR FARMERS UNDER NAFTA JAPAN STILL FIRM ON RICE POLICY ________________________________________________________ NAFTA News Summary ________________________________________________________ MAJOR NAFTA STUDIES IGNORE INVESTMENT-RELATED JOB LOSS Only one of 19 major studies on the North American Free Trade Agreement addressed the accord's impact on U.S. investment and potential job loss, said BUSINESS WEEK. Robert K. McCleery, an economist at Kobe University in Japan, predicts NAFTA would displace almost $2.5 billion of investment annually from the U.S. to Mexico. McCleery's study does not address job loss implications as a result of reduced investment, but Georgia State University economist Donald Ratajczak figures that $1 billion of U.S. investment generates approximately 30,000 jobs. "Assuming a $2.5 billion annual capital outflow, that would mean 375,000 potential new jobs lost over five years -- more than wiping out the 170,000 gain that Gary Clyde Hufbauer and Jeffrey J. Schott of the Institute for International Economics in Washington predict will occur in five years if NAFTA passes," concludes BUSINESS WEEK. Source: Aaron Bernstein, "An Anti-NAFTA Argument You Haven't Heard," BUSINESS WEEK, November 8, 1993. ________________________________________________________ U.S. NAFTA AMENDMENTS OPPOSED BY CANADIAN BUSINESS LEADERS U.S. Senate members are expected soon to complete NAFTA amendments which will dictate how the accord is implemented. The Senate has proposed changes that would "clarify" U.S. law on countervailing duties and would allow NAFTA panel decisions to be appealed in U.S. domestic courts. Under U.S. law, congressional members of the House and Senate can propose changes to the accord before President Clinton introduces the pact to Congress for a vote. Clinton said he hopes to formally introduce NAFTA legislation by Tuesday. Once NAFTA legislation is announced, it cannot be altered. Leaders of the Canadian business sector threatened to withdraw NAFTA support if amendments are made to the pact. "Failure to persuade the administration and the Congress to abandon the ... proposals will force the Canadian business community to reconsider its support for Canadian participation in NAFTA," said Thomas d'Aquino, president of the Business Council on National Issues. Meanwhile, the Mexican government has refused requests made by Canada's new prime minister to reopen NAFTA negotiations. "We are not going to renegotiate anything," said Jaime Serra Puche, Mexico's Secretary of Trade and Industry. "All the negotiations are over." Serra said Chretien's concerns about the agreement should be resolved between Ottawa and Washington only. "I understand that the issues that are being raised by the Canadians are related to issues in the FTA (free trade agreement) between Canada and the U.S. that are already in place," Serra said during a WALL STREET JOURNAL conference on the Americas. Sources: Eric Reguly, "Mexico Rejects Call to Reopen NAFTA Talks," FINANCIAL POST, October 29, 1993; Kelly McParland, "Ottawa Rushes to Block U.S. Changes to NAFTA," October 29, 1993. ________________________________________________________ REPRESENTATIVE CITES LOWER PRICES FOR FARMERS UNDER NAFTA Representative David Minge (D-Minnesota) today announced formal opposition to NAFTA, saying the accord poses a number of unnecessary risks to U.S. farmers. Minge said that the agreement would likely lead to lower prices for corn farmers under a number of different scenarios. First, if corn prices actually were to rise by $.06 per bushel as the Clinton administration predicts, corn farmers would not enjoy the small gain over the long run as producers of other commodities would shift production to corn. Minge also cited NAFTA's accession clause as a potential source of reduced farm prices for U.S. producers. South American countries, such as Brazil and Argentina, could join NAFTA under the accession clause, bringing cheap commodities with them. "The bottom line is that we simply do not know what the effect will be in terms of increased exports and improved prices," Minge said during his announcement. "We do know that while NAFTA may provide some benefits to agriculture, it does so at the expense of other sectors of the agriculture community and at the expense of one to three million Mexican farmers who are expected to leave their land as a result of changes occurring in Mexico as a part of NAFTA." Source: "Statement of Congressman David Minge Regarding His Position on the North American Free Trade Agreement," PRESS RELEASE, November 1, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ JAPAN STILL FIRM ON RICE POLICY Japan plans to import 1.5 million to two million tons of table rice by March 1994 , but remains opposed to any permanent opening of its rice market under the General Agreement on Tariffs and Trade. Due to poor crop conditions, Japan has been forced to make emergency rice imports, despite a 45-year ban on foreign rice imports. Japanese newspapers last month indicated that Japan was willing to end the ban if a GATT conclusion was near, but the Japanese government denied the reports. Agriculture Minister Eijiro Hata leaves Japan today to meet GATT Director-General Peter Sutherland in Geneva to discuss rice trade. Hata is scheduled to meet with EC Farm Commissioner Rene Steichen November 3. Sources: "Japan's Farm Minister Says Will Import Table Rice," REUTER, October 29, 1993; "Japan's Rice Harvest Index Worsens Further," AGENCE FRANCE PRESSE, October 29, 1993. ________________________________________________________ Event: "The North American Free Trade Agreement: Impact and Technology Assessment and Other Trade Issues," INTERNATIONAL ASSOCIATION FOR IMPACT ASSESSMENT, December 2-3, Battelle Conference Center, Seattle, Washington. $195.00. To register contact: Maurice E. Voland, Ph. D., Executive Director, IAIA, P.O. Box 70, Belhaven, NC 27810. The conference will focus workshops and presentations on the formulation and evaluation of environmental impact assesments (EIS). In addition, IAIA hopes to establish a research agenda for impact assesment of NAFTA and international trade agreements. ________________________________________________________ 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 ________________________________________________________