Trade Week and Recent Publications October 30 - November 5, 1993 Volume 2 Number 199 Headlines: Sugar, Citrus and Other Deals Reached Kantor Says NAFTA Amendments Possible Canadian Businesses Ask Government to Consider Dropping NAFTA Wheat Retaliation on Hold Clinton Still Short Votes Needed to Ratify NAFTA Market Access Offers Urged France Says Commission Power Should Be Limited Under GATT Poll Shows Majority of Japanese Favor Opening Rice Trade U.S. Seeks Opening Financial Services Under GATT ___________________________________________________________ NAFTA News Summary ___________________________________________________________ Congressional members and White House staff completed language dictating how the North American Free Trade Agreement will be implemented. Under fast-track rules, no further amendments to the bill or the NAFTA text are allowed. President Bill Clinton offered deals to undecided lawmakers in a last-ditch effort to persuade them to vote "yes" on the trade pact. "There's been a lot of horse-trading and head-counting going on," said White House Press Secretary Dee Dee Myers. The House of Representatives is scheduled to vote on NAFTA November 17. -Sugar, Citrus and Other Deals Reached- A number of deals were reached in hopes of appeasing some industry concerns about the effects of NAFTA. The sugar deal with Mexico would limit Mexican sugar exports to 150,000 tons during the first seven years of NAFTA. U.S. sugar producers worry that under NAFTA Mexican soft drink manufacturers would begin using corn syrup as a sweetener, freeing Mexican sugar production for tariff-free export to the United States. Mexican negotiators also agreed to a citrus deal which would automatically impose tariffs on Mexican frozen orange juice concentrate if prices fall below a specified level. Administration officials hope the deals will gain 18-20 House votes for NAFTA. NAFTA's implementing language would require the government to perform a study of NAFTA's impact on U.S. jobs every three years and provide $10 million to create a Texas-based Center for the Study of Trade in the Western Hemisphere. The bill does not extend temporary NAFTA parity to Caribbean countries nor does it renew the Super 301 trade law. -Kantor Says NAFTA Amendments Possible- U.S. Trade Representative Mickey Kantor indicated there would be amendments to NAFTA for wine, flat glass and appliances if the accord is passed. "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 Wednesday. -Canadian Businesses Ask Government to Consider Dropping NAFTA- Canadian business leaders have asked their government to reconsider signing NAFTA because of the amendments hammered out by the U.S. and Mexico. The Business Council on National Issues said the changes are so "far-reaching, we believe Canada must consider not proceeding with NAFTA." Canadian Prime Minister Jean Chretien continues to demand changes to the Canada-U.S. Free Trade Agreement (CUSTA) and NAFTA. -Wheat Retaliation on Hold- The Clinton administration appears to be backing away from an informal commitment to impose wheat quotas on Canadian imports. Senator Kent Conrad (D-North Dakota) speculated that the Clinton administration was worried sanctions against Canadian wheat would push the Canadian government into a more aggressive anti-NAFTA stance. Several Midwestern lawmakers who have complained throughout the NAFTA debate that loopholes in the 1989 CUSTA allow Canadian farmers to export subsidized durum at unfair prices have conditioned their NAFTA votes on U.S. retaliation against the cheap Canadian wheat imports. -Clinton Still Short Votes Needed to Ratify NAFTA- Despite "horse-trading" carried out by the White House this week, recent polls by the BUREAU OF NATIONAL AFFAIRS and CONGRESS DAILY suggest that NAFTA is still some 50 votes short of approval. The sugar and citrus deals could secure at least 14 more House votes for NAFTA, but CONGRESS DAILY predicted that revenue-raising provisions in the NAFTA implementation bill could encourage as many as six to 12 House Republicans to vote against the pact. The BNA projects that if the110 still undecided House members follow the lead of recently committed members, NAFTA will be rejected by a 278 to 156 margin. Sources: "Clinton-NAFTA," AP, November 3, 1993; "Ways and Means and Senate Finance Staff Reach Agreement on NAFTA Recommendations," BUREAU OF NATIONAL AFFAIRS, November 2, 1993; 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; Donna Smith, "Clinton Formally Sends NAFTA Bill to Congress," REUTER, November 3, 1993; Leo Ryan, "Lobby Group Calls for Canada to Withdraw Support for NAFTA," JOURNAL OF COMMERCE, November 1, 1993; "Legislators Losing Hope On NAFTA Wheat Deal," CONGRESS DAILY, November 4, 1993; "Projections From BNA Poll Suggest NAFTA Will Fail in House by Wide Margin," BUREAU OF NATIONAL AFFAIRS, November 2, 1993; "NAFTA Bill on Way, GOP Support Wanes," CONGRESS DAILY, November 3, 1993; "As NAFTA Picks Up Two More House Votes," CONGRESS DAILY, November 4, 1993; "Agricultural Statistics," USDA, 1991. ___________________________________________________________ GATT News Summary ___________________________________________________________ -Market Access Offers Urged- 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. -France Says Commission Power Should Be Limited Under GATT- France is concerned that the European Commission would secretly agree to trade liberalization proposals under the General Agreement in Tariffs and Trade 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. France continues to call for the protection of its agriculture and culture industries in the global trade pact. -Poll Shows Majority of Japanese Favor Opening Rice Trade- A poll of 3,000 Japanese citizens by the ASAHI SHIMBUN newspaper found 62 percent in favor of lifting Japan's 45-year old ban on foreign rice imports. But Japanese Agriculture Minister Eijiro Hata said Japan was not ready to permanently open its rice market, despite rumors that the coalition government was willing to lift the ban if a GATT conclusion was near. However, Motoo Abe, a senior legislator in Japan's ruling coalition party, said, "We have to prepare for the fact that it might not be possible to exempt rice from the GATT tariff plan." -U.S. Seeks Opening Financial Services Under GATT- Members of the Senate Banking Committee and Clinton administration are seeking quick passage of a bill that would encourage open financial services markets under GATT. 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 status in financial services for countries that fail to open their services to U.S. financial firms. 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; "France Seeks New EC Mandate on GATT," REUTER, November 3, 1993; "Most Japanese Favor Open Rice Markets - Poll," REUTER, November 2, 1993; "Japan Seen Moving to Accept GATT Rice Import Ban," REUTER, November 1, 1993; "Administration, Senate Panel Signal Push for Fair Trade in Financial Services Bill," BUREAU OF NATIONAL AFFAIRS BANKING REPORT, November 1, 1993. ___________________________________________________________ Recent Publications on International Trade ___________________________________________________________ For the following publications, contact the authors or organizations listed. "Multinational Corporations and the North American Free Trade Agreement," Michael J. Twomey, PRAEGER PUBLISHERS, 1993. 88 Post Road West, Westport, CT 06881. (203) 226-3571. $55. "Paper Tigers and Minotaurs: The Politics of Venezuela's Economic Reforms," Moises Naim, THE CARNEGIE ENDOWMENT, 1993. 180 pages. The Brookings Institution, Department 029, Washington, DC 20042. (800) 275-1447. $8.95. "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. "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. "Agricultural Policy and Sustainability: Case Studies From India, Chile, The Philippines and the United States," Paul Faeth ed., WORLD RESOURCES INSTITUTE, September 1993. 113 pages. WRI Publications - Dept. APS, P.O. Box 4852, Hampden Station, Baltimore, MD 21211. (202) 638-6300. $14.95. "The Secret Side of Free Trade," Maria Gilardin, producer, TUC RADIO, 1993. 116 minutes. P.O. Box 410009, San Francisco, CA 94141. (415) 861-6962. $15 per tape. $10 for each printed transcript. A four-part, audio series on the history, effect on U.S. law and international impact of the General Agreement on Tariffs and Trade. "Intellectual Property Rights and Foreign Direct Investment," TRANSNATIONAL CORPORATIONS AND MANAGEMENT DIVISION, UNITED NATIONS, 1993. 108 pages. UN Publications, Room DC2-0853, Dept. 600, New York, NY 10017. (212) 963-8302. Fax: (212) 963- 4116. $20. This report reviews recent developments in intellectual property legislation in developing countries and their impact on transnational corporations' strategies and decisions. "Now It's a Two-Way Street: The Porous U.S.-Mexican Border," Arturo Santamaria Gomez, THE NATION, October 25, 1993. 4 pages. 72 Fifth Ave., New York, NY 10011. (212) 242-8400. $4. "Restoring the Balance: Why Canada Should Reject the North American Free Trade Agreement, Terminate the Canada-U.S. Free Trade Agreement and Return to GATT," Mel Clark, COUNCIL OF CANADIANS, September 1993. 106 pages. 904-251 Laurier Ave. West, Ottawa, Ontario K1P 5J6. (613) 233-2773. Fax: (613) 233-6776. Free. ___________________________________________________________ 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 ___________________________________________________________