TRADE NEWS BULLETIN Volume 2 Number 196 Tuesday, November 2, 1993 Headlines: NFU SAYS INCREASED TRADE WON'T HELP RURAL ECONOMY WHITE HOUSE ON CAMPAIGN TOUR BEFORE NAFTA VOTE ENVIRONMENTAL FIRMS SAY NAFTA DEFEAT WON'T HURT BUSINESS U.S. MAY APPROVE FINANCIAL SERVICES BILL UNDER GATT QUAD LEADERS NEED OFFER ON MARKET ACCESS ________________________________________________________ NAFTA News Summary ________________________________________________________ NFU SAYS INCREASED TRADE WON'T HELP RURAL ECONOMY National Farmers' Union President Leland Swenson said the North American Free Trade Agreement may lead to increased trade, but it won't raise real incomes or opportunities for U.S. farmers. "Either they (USDA) just don't get it or they don't care what happens to our country's family farm operators and rural community businesses," Swenson said. U.S. agricultural exports to Mexico increased by 12 percent between 1984 and 1992, while corn and soybean prices declined 23 and eight percent respectively during the same period. "If those touting NAFTA as a solution to our nation's rural economic problems are basing their optimism merely on a greater volume of agricultural exports ... they'd better look at history," Swenson asserted. Source: "NFU Says USDA Doesn't Get It on NAFTA," NATIONAL FARMERS UNION NEWS RELEASE, October 25, 1993. ________________________________________________________ WHITE HOUSE ON CAMPAIGN TOUR BEFORE NAFTA VOTE President Bill Clinton warned that failure to ratify NAFTA would send Europe and Japan "like flies on a June bug" to Mexico seeking their own trade deal. Speaking via satellite to more than 240 business forums nationwide, Clinton asked, "If we walk away from this and Mexico decides to pursue its development strategy, what must it do? It must make this deal with Europe or Japan." Clinton and members of his administration will make similar speeches throughout the U.S. this week in hopes of winning citizen and congressional support for the free trade accord. Sources: "Clinton Plugs NAFTA by Satellite," UPI, November 1, 1993; Thomas L. Friedman, "Clinton Steps Up Campaign for Trade Accord," NEW YORK TIMES, November 2, 1993; Tom Raum, "NAFTA," AP, November 1, 1993. ________________________________________________________ ENVIRONMENTAL FIRMS SAY NAFTA DEFEAT WON'T HURT BUSINESS Some U.S. environmental companies say there is enough business in Mexico to keep them occupied with or without NAFTA. "The environmental movement in Mexico has already begun and environmental issues drive our business," said John Mobley, chief executive of the Texas-based Mobley Environmental Services Inc. "Trade agreements help but their passage is not a life or death issue for us." The Mexican government this year has allocated $2.5 billion toward public spending and investment on environmental concerns. "We've been working with the market directly," said Aliza Chelminsky, vice president of the Mexican Investment Board. "Companies now have resources allocated to them by the government directly to help them compete in the environmental market." However, some executives say current environmental business opportunities may not exist if the pact is derailed. "I don't see NAFTA as the driver, (but) if it doesn't go through, it is a hindrance to us," said John Crowser, CEO of Hart Crowser, an environmental consulting firm in Washington. The Clinton administration claims environmental sales to Mexico will triple to $3 billion by 1998 if NAFTA is implemented. Source: Brian Johns, "'Green' Firms Say Business Booms in Mexico Without NAFTA," JOURNAL OF COMMERCE, November 1, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ U.S. MAY APPROVE FINANCIAL SERVICES BILL UNDER GATT Members of the U.S. Senate Banking Committee and Clinton administration voiced near unanimous support for quick passage of a bill that would encourage open financial services markets under the General Agreement on Tariffs and Trade. The Fair Trade in Financial Services Act is designed to give U.S. GATT negotiators more leverage to open foreign markets currently closed to U.S. financial firms. Under the bill, the U.S. Treasury Department would have the ability to impose sanctions and to repeal Most Favored Nation (MFN) status in financial services for countries that fail to open their financial services markets to U.S. firms. "Our negotiating efforts would be reinforced by adopting discretionary authority that enables us to deny, under carefully defined circumstances, certain benefits to countries that discriminate against foreign financial institutions," said Laura D'Andrea Tyson, chair of the Council of Economic Advisors. Both the House and Senate are expected to mark up identical bills soon. The Treasury plans to send a team of negotiators to several emerging markets this week in an effort to help establish the new principles and clear the path for a conclusion of the Uruguay Round of GATT negotiations. Source: "Administration, Senate Panel Signal Push for Fair Trade in Financial Services Bill," BUREAU OF NATIONAL AFFAIRS BANKING REPORT, November 1, 1993. ________________________________________________________ QUAD LEADERS NEED OFFER ON MARKET ACCESS Market access negotiations among the Quad Group -- the United States, Canada, Japan and the European Community -- remain deadlocked, according to Hugo Paeman, an EC trade negotiator. Delegates of the Quad Group were told last Friday that they must have "comprehensive and updated offers" by November 15 for increasing market access in farm, industrial goods and services sectors under GATT. Quad negotiators met to discuss technical issues based on the latest EC tariff-cutting proposal. Paeman said a lack of consensus on reducing tariff peaks was the major issue stalling quad talks. Sources: John Zarocostas, "EC Trade Negotiator: Quad Talks Deadlocked," JOURNAL OF COMMERCE, November 1, 1993; "GATT Chief Sutherland Calls Meeting of TNC as Signs of Deadlock Increase," BUREAU OF NATIONAL AFFAIRS BANKING REPORT, November 1, 1993. ________________________________________________________ Event: "Say No to NAFTA" day, Saturday, November 13, 12:00pm (local time), nationwide. UNITED WE STAND is encouraging U.S. residents to visit their local congressional district office with a note stating why they oppose NAFTA. For more information, contact: UNITED WE STAND, 7616 LBJ Freeway, Suite 727, Dallas, TX 75251. Tel: (214) 450-8800. Fax: (214) 450-8821. ________________________________________________________ Editors: Gigi DiGiacomo 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 ________________________________________________________