TRADE NEWS BULLETIN Volume 2 Number 198 Thursday, November 4, 1993 Headlines: MEXICO UNLIKELY TO FORM ACCORDS WITH JAPAN, EC NAFTA BILL SENT TO CONGRESS -- SUGAR, CITRUS DEALS SIGNED U.S. MAY BACK DOWN ON THREATS TO LIMIT CANADIAN WHEAT FRANCE WANTS TO LIMIT COMMISSION'S POWER IN GATT ________________________________________________________ NAFTA News Summary ________________________________________________________ MEXICO UNLIKELY TO FORM ACCORDS WITH JAPAN, EC Japanese and Mexican business officials, diplomats and trade experts deny U.S. President Bill Clinton's claim that Japan would try to negotiate its own free trade accord with Mexico should Congress reject the North American Free Trade Agreement. "I don't think that a discussion about a free trade agreement between Japan and Mexico has ever taken place here," said Masakazu Toyoda, director of the Americas division of Japan's Ministry for International Trade and Industry. "He's joking right?" asked one senior Japanese government official. "Japan and Mexico? Does that sound like a big alliance?" Japan would be more likely to increase investment in Mexico if NAFTA passes, said U.S. Representative Sander Levin (D-Michigan) and Professor Harley Shaiken in Tuesday's WASHINGTON POST. "Japanese companies would like to use a Mexican production base to supply the U.S. market if investment security and low tariffs are guaranteed," said Levin and Shaiken. "NAFTA provides those guarantees." However, Mexico warned that it would try to boost Japanese and European investment if NAFTA is rejected. "It is conceivable that in the absence of NAFTA, we would go ahead and negotiate trade agreements with the European Community and Japan," said Mexican Trade Secretary Jaime Serra Puche. Sources: Tim Golden, "Mexican Trade Accord: Japanese Role Is Doubted," NEW YORK TIMES, November 4, 1993; "Japan Bashing: The Pro-NAFTA Team Tries a 'Hail Mary' Pass," NAFTA NOtes, November 3, 1993. ________________________________________________________ NAFTA BILL SENT TO CONGRESS -- SUGAR, CITRUS DEALS SIGNED As White House officials presented Congress with NAFTA implementing legislation yesterday, they also announced they had reached new sugar and citrus accords with Mexico. "We think frankly that the sugar and citrus agreement last night was a very important step," said House Speaker Thomas S. Foley (D-Washington). An administration official said the accords could win 18 to 20 congressional votes for NAFTA, mostly from the Florida delegation which for months has been pressing the White House to produce the deals. U.S. Trade Representative Mickey Kantor reportedly warned Mexican negotiators that NAFTA ratification would not be possible without safeguards for the sugar and citrus industries. The sugar agreement would consider corn syrup as sugar in determining whether Mexico was a net exporter of sugar. It would limit Mexican sugar exports to 150,000 tons for the first seven years under NAFTA, and raise the quota to 250,000 tons thereafter. The citrus deal would automatically impose tariffs on frozen concentrated orange juice imported from Mexico if the price falls below a specified level for several days in a row. Kantor indicated there would be more agreements to come if NAFTA was passed. He said the United States and Mexico agreed to discuss new trade tariffs on wine, flat glass and appliances. "The Mexican government has agreed to engage in negotiations starting on day one of the NAFTA to accelerate tariff decreases in all of those three items," Kantor said yesterday. Implementing legislation would require a study of NAFTA's impact on U.S. jobs every three years. The Clinton administration indicated last week that it would not feel obligated to use a clause to withdraw from the trade pact even if Canada and Mexico failed to comply with labor and environmental side accords. Legislation reportedly does not include a proposal to extend temporary NAFTA parity to Caribbean countries. Sources: Peter Behr, "Mexico Yields on NAFTA to Gain Votes," WASHINGTON POST, November 4, 1993; "International Trade, NAFTA Legislation to Exclude Super 301, Include Provision for Three-Year Review," BUREAU OF NATIONAL AFFAIRS, November 3, 1993; David E. Rosenbaum, "Clinton Sweetens Trade Agreement," NEW YORK TIMES, November 4, 1993; Donna Smith, "Clinton Formally Sends NAFTA Bill to Congress," REUTER, November 3, 1993; "Mexico Sugar Export Quota to Rise Under NAFTA Deal," REUTER, November 3, 1993; "NAFTA Deals Cut as Administration Sees More Votes," CONGRESS DAILY, November 3, 1993; "Clinton Concedes Point on NAFTA Side Pacts," October 29, 1993. ________________________________________________________ U.S. MAY BACK DOWN ON THREATS TO LIMIT CANADIAN WHEAT The Clinton administration may postpone or cancel import restrictions on Canadian wheat in hopes of winning support for NAFTA from the new Canadian government. The fear is "if we initiate a Section 22 it would further inflame the situation and perhaps push" the Canadian government into a more aggressive stance on NAFTA, speculated Senator Kent Conrad (D-North Dakota). Midwestern lawmakers have complained in recent months that loopholes in the 1989 Canada-U.S. Free Trade Agreement (CUSTA) allow Canadian farmers to export subsidized durum at unfair prices. Many of the lawmakers have conditioned NAFTA support on U.S. retaliation against cheap Canadian wheat imports. Canadian wheat shipments to the United States have tripled since CUSTA was negotiated. Source: Robert Greene, "U.S.-Canada-Wheat," AP, November 3, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ FRANCE WANTS TO LIMIT COMMISSION'S POWER IN GATT France is seeking support from other EC members to limit the negotiating powers of the European Commission in the Uruguay Round of GATT trade talks. France is reportedly concerned that the Commission would secretly agree to certain trade liberalization proposals before consulting all members of the European Community. "France thinks that the Commission at this point needs a new mandate," said an unnamed source. Spain, Italy and Greece have offered some support for France's proposal. The French government is still calling for protection of its agriculture and culture industries in GATT. Source: "France Seeks New EC Mandate on GATT," REUTER, November 4, 1993. ________________________________________________ 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 ________________________________________________________