TRADE NEWS BULLETIN Volume 2 Number 201 Tuesday, November 9, 1993 Headlines: CANADA SAYS NAFTA CONCERNS MAY BE HANDLED IN GATT U.S. BUSINESS LEADERS TESTIFY ON CORRUPTION IN MEXICO U.S. FARM GROUPS DEMAND CHANGES IN GATT ACCORD PANEL SUGGESTS END TO RICE BAN IN JAPAN ________________________________________________________ NAFTA News Summary ________________________________________________________ CANADA SAYS NAFTA CONCERNS MAY BE HANDLED IN GATT Canadian Prime Minister Jean Chretien has criticized a number of aspects of NAFTA, including the lack of a code governing subsidies. Chretien, who says such a code would help prevent future trade disputes between the two countries, has promised to make changes to NAFTA. But Trade Minister Roy MacLaren suggested in a Canadian Broadcasting Corporation interview Friday that Canadian concerns could be addressed without changing the NAFTA text itself. "There are a lot of dimensions to pursue, and we are quite confident that we will get the sort of agreement that we've been seeking," MacLaren said. He suggested that side agreements, similar to those covering labor and environmental issues, were a "possible route" in pursuing changes to NAFTA. He also noted that the General Agreement on Tariffs and Trade "may well deliver us a subsidies code which would apply to the North American Free Trade Agreement as well as globally." Canada and the United States failed to complete rules on subsidy laws when negotiating 1989's Canada-U.S. Free Trade Agreement. Canada has since accused the United States of leading the countries into a subsidy war. Source: Clyde H. Farnsworth, "Canada Links Trade Pact to an Accord on Subsidies," NEW YORK TIMES, November 9, 1993. ________________________________________________________ U.S. BUSINESS LEADERS TESTIFY ON CORRUPTION IN MEXICO U.S. business representatives testified yesterday before the House Banking Committee on allegedly corrupt business dealings in Mexico. Kaveh Moussavi, an IBM business consultant, said the Mexican government awarded a public contract to another company after IBM refused to make a $1 million "donation" to the government's antipoverty fund. Moussavi said he has become "public enemy No. 1 in Mexico" after going public with his allegation. Alex Argueta, an Arizona developer, testified that he was jailed for 16 months on phony charges after he became involved in a financial dispute. Lucia Duncan, who acts as a coordinator for American investors in Mexico, said she is "concerned that if the NAFTA agreement is ratified Americans will go to Mexico and purchase property thinking that they have the same legal rights as they do in the U.S." Source: Jeff Bater, "Congressional Panel Hears Testimony on Mexico," UPI, November 8, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ U.S. FARM GROUPS DEMAND CHANGES IN GATT ACCORD Family farm, commodity and rural organizations expressed concern about GATT agriculture provisions, especially those contained in the Dunkel Draft text and the Blair House accord. In a letter to U.S. Trade Representative Mickey Kantor, the groups say current farm proposals would: %eliminate the Section 22 import control law through tariffication; %fail to control export dumping; %replace market-driven domestic farm policy in the United States with a decoupling system of "government handouts"; %lower domestic sanitary and health provisions; %fail to balance supply management costs of the world's food reserves. "These are very serious concerns that need to be addressed before we can support any final outcome of this round. We are supporters of the GATT system and multilateral approaches to trade rules, and fear that if these concerns are not dealt with it will lead to the rejection of the entire Uruguay Round package by Congress," states the letter. The letter was signed by the American Corngrowers Association, Farmers Union Milk Marketing Cooperative, Georgia Peanut Commission, the Institute for Agriculture and Trade Policy, the League of Rural Voters, the National Farmers Organization, the National Farmers Union, the National Family Farm Coalition and the Rural Coalition. Source: Letter to USTR Mickey Kantor, November 4, 1993. ________________________________________________________ PANEL SUGGESTS END TO RICE BAN IN JAPAN A government advisory panel recommended that the Japanese government deregulate a number of its public and trade policies, including the 45-year old ban on rice imports. "Public regulations have contributed to the development of Japanese industries and the stability of the people's lives," prefaced the panel. "Today, however, regulations add to the rigidity of Japan's socioeconomic structure." Analysts, however, are skeptical of any immediate changes as Japanese Prime Minister Morihiro Hosokawa is preoccupied with number of domestic issues. "I don't expect much from deregulation until we get a stronger government," said Peter Morgan, chief economist with Merrill Lynch Japan Inc. Japanese Agriculture Minister Eijiro Hata said it would be difficult for Japan and many other GATT members to meet the November 15 deadline for submitting tariff-cutting proposals to GATT. GATT Director-General Peter Sutherland set the date in hopes that participating countries could complete the Uruguay Round by December 15. Sources: Jathon Sapsford, "Japanese Panel Urges Easing of Rules That Hurt Consumers, Such as Rice Ban," WALL STREET JOURNAL, November 9, 1993; "GATT Nov 15 Proposal Hard to Meet -- Japan's Hata," REUTER, November 8, 1993. ________________________________________________________ Event: Anti-NAFTA Rally, Thursday, November 11, 1:00pm, Washington, D.C. Organized by the COALITION AGAINST NAFTA, 2011 Lemoine Avenue, Fort Lee, NJ 07024. Tel: (201) 947-4779. Fax: (908) 542-7311. ________________________________________________ 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 ________________________________________________________