TRADE NEWS BULLETIN Volume 2 Number 203 Thursday, November 11, 1993 Headlines: PROBLEMS WITH DEVELOPMENT BANK PROPOSAL CLINTON PREDICTS NAFTA VICTORY NAFTA WOULD EXACERBATE BORDER INSPECTION PROBLEMS FRANCE NO LONGER ISOLATED IN GATT TALKS, EC SAYS ________________________________________________________ NAFTA News Summary ________________________________________________________ PROBLEMS WITH DEVELOPMENT BANK PROPOSAL The House Banking Committee reported unfavorably on the proposal to create a North American Development Bank (NADBank) as part of NAFTA implementing legislation. "There are too many questions," said International Development Subcommittee Chair Barney Frank (D- Massachusetts). Frank acknowledged that under fast-track rules, nothing within the NAFTA legislation, including the NADBank, could be changed. However, he said the subcommittee would examine the proposal further. "It really depends whether NAFTA wins or loses," Frank said. If NAFTA succeeds, he said the Banking Committee would have to make adjustments to the NADBank through amendments to other laws. If NAFTA fails, he said the committee could write a new bill re-creating the bank. Frank said the legislation fails to spell out where the bank's $65 million a year over four years would come from, and that the amount might not be enough to "do the job they're talking about." Source: "Panel Reports NAFTA NADBank Unfavorably," CONGRESS DAILY, November 10, 1993. ________________________________________________________ CLINTON PREDICTS NAFTA VICTORY At a news conference in which he announced he had picked up votes from an additional four House members, President Bill Clinton predicted NAFTA would pass Congress. "I believe the House will do the right thing," he said. "I'll be surprised if we don't win it." But Clinton is reportedly 20-25 votes short of winning NAFTA approval in the House. Ross Perot said he had received commitments from several lawmakers to vote against the accord, but he refused to disclose their names. "I don't think it's smart to hand the other side your cards," he said. Sources: "Clinton Claims 4 More Converts in Effort to Pass Trade Accord," INVESTOR'S BUSINESS DAILY, November 11, 1993; Lori Santos, "Clinton Picks Up More House Votes, Predicts NAFTA Victory," UPI, November 10, 1993; Gwen Ifill, "Both Sides Assert Gain After Debate Over Trade Accord," NEW YORK TIMES, November 11, 1993. ________________________________________________________ NAFTA WOULD EXACERBATE BORDER INSPECTION PROBLEMS The heavy cross-border traffic resulting from NAFTA would increase the already large number of unsanitary products entering the United States from Mexico. Unsafe fruits, vegetables and cattle enter the United States because import inspection standards and staff are insufficient. Analysts suggest the problems will worsen under NAFTA as border traffic increases and agents struggle to regulate and inspect shipments. Last year, during tests of green peppers exported from Mexico, the Food and Drug Administration (FDA) found: two forms of DDT, a chemical banned in the United States for 15 years; two more prohibited insecticides; a fifth pesticide that can't be used on peppers in the United States; and a sixth chemical that reportedly resembles hydrochloric acid. The peppers were one of more than 400 shipments of fruits and vegetables from Latin America between November 1991 and August 1993 that the FDA found to be tainted with illegal pesticides. The FDA inspects only one percent of the 1.2 million shipments of food entering the United States every year. "They can't stop every truck, but the FDA ought to be inspecting more produce, not less, and getting ready for a lot more pesticide residues from Mexico coming back at us under NAFTA," said Dr. Antonio Velasco, a pesticides authority from California. The U.S. Department of Agriculture (USDA) also found that 83 percent of the 535 cases of bovine tuberculosis in the United States came from imported Mexican beef. Since 1982, the number of Mexican steers imported annually to the United States has quadrupled, as have the cases of bovine TB. Joanne Royce, a lawyer with the D.C.-based Government Accountability Project, warns that unless border inspection services are improved "the increase of meat traffic as a consequence of NAFTA will strain both Mexican and U.S. inspection resources, resulting in a deluge of unsanitary and infected beef being approved for consumption by an unsuspecting U.S. public." Humans catch bovine TB either through contact with infected carcasses or through consuming improperly cooked contaminated meat. Sources: Bill Lambrecht, "Tainted Produce Slips Into U.S. Markets; FDA Short on Workers, Clout," ST. LOUIS POST DISPATCH, October 31, 1993; Joanne Royce, "Where's the Beef Going?" EL FINANCIERO INTERNATIONAL, November 8-14, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ FRANCE NO LONGER ISOLATED IN GATT TALKS, EC SAYS EC foreign ministers issued a joint statement Monday urging the United States and Japan to move ahead with trade talks in the Uruguay Round of the General Agreement on Tariffs and Trade. EC Trade Commissioner Leon Brittan said in a report that Europe was ready to reduce certain demands in exchange for concessions in other indispensable areas. Brittan also indicated that a completed GATT accord would need the approval of all EC members, including France. "Even if the negotiations have not progressed, it's very important for France and Europe in general to see that ... European solidarity has been strengthened," French Foreign Minister Alain Juppe said. "Today no one is talking about France's isolation any more." Meanwhile, EC officials, backed by Japan, Mexico and Australia, told a GATT panel that the United States had imposed unfair anti-dumping and countervailing duties on specialty steel from six member states. The community can now call for dispute panels on these issues. The U.S. imposed duties on steel imports from 19 countries late last year after complaining that foreign producers were illegally dumping steel. Sources: Nelson Graves, "France Says EC Strengthens Stance at Trade Talks," REUTER, November 10, 1993; "Europe Complains to GATT," NEW YORK TIMES, November 11, 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 ________________________________________________