TRADE NEWS BULLETIN Volume 2 Number 207 Wednesday, November 17, 1993 Headlines: HOUSE VOTES ON NAFTA FOLLOWING EIGHT HOURS OF DEBATE HOUSE EXPECTED TO APPROVE NAFTA NAFTA DEALS MAY BLOCK GATT PROGRESS ________________________________________________________ NAFTA News Summary ________________________________________________________ HOUSE VOTES ON NAFTA FOLLOWING EIGHT HOURS OF DEBATE The House Rules Committee agreed yesterday to limit today's debate on the North American Free Trade Agreement to eight hours. Four equal sessions of two hours will be controlled by Ways and Means Chair Dan Rostenkowski (D-Illinois), Majority Leader Richard Gephardt (D-Missouri), Minority Leader Robert Michel (R-Illinois), and Rules ranking member Gerald Solomon (R-New York). Gephardt and Solomon oppose the accord; Rostenkowski and Michel favor it. Solomon suggested NAFTA has constitutionality problems and predicted there would be court action if NAFTA is approved. Solomon objects to the inclusion of supplemental agreements under fast-track rules, which force Congress to vote "yes" or "no" on the NAFTA package without making amendments. Solomon argues fast-track rules should not apply to labor, environmental and import surge side accords because they were negotiated after fast-track authority had expired. Meanwhile, NAFTA opposition groups are considering an immediate and total boycott of Florida fruits and vegetables because of Clinton's promise not to restrict the manufacture or use of the pesticide methyl bromide until the year 2000. The deal, which also includes an administration commitment to fund research into alternative soil and post harvest fumigation materials, reportedly convinced many of Florida's 23-member delegation to vote for NAFTA. Source: "Rule Approved for NAFTA Floor Debate Wednesday," CONGRESS DAILY, November 16, 1993. ________________________________________________________ HOUSE EXPECTED TO APPROVE NAFTA The latest ASSOCIATED PRESS poll predicts NAFTA will pass by a close margin. A large number of lawmakers yesterday declared support for the pact. CONGRESS DAILY reported this morning that 204 House members are either publicly committed to vote for NAFTA or are leaning for it, while another 204 members are publicly opposed or leaning against it. But several of the 26 undecided members have reportedly assured Clinton they would vote for NAFTA if the vote looks close. Polls reveal an almost even split among U.S. residents as well. In a November 11 NEW YORK TIMES/CBS poll, 41 percent of those surveyed said they opposed NAFTA, while 37 percent favored the pact. The latest WALL STREET JOURNAL /NBC poll finds 31 percent of those polled oppose NAFTA and 36 percent are in favor. Sources: "Sawyer Adds His Name to Pro-NAFTA List," CONGRESS DAILY, November 16, 1993; G. Ifill, "Americans Are Split on Trade Accord, Poll Finds," NEW YORK TIMES, November 16, 1993; B. Davis, J. Calms, "NAFTA's Odds Improve, But U.S. May Reduce Its Trade Leadership," WALL STREET JOURNAL, November 17, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ NAFTA DEALS MAY BLOCK GATT PROGRESS If NAFTA passes, its side deals and letters negotiated by the Clinton administration are expected to further stall progress in the Uruguay Round of GATT talks. President Bill Clinton offered U.S. lawmakers a number of agricultural and textiles deals, including the following provisions to lock in specified tariff rates for the next 15 years: Citrus and Vegetable Products: The U.S. Trade Representative's office promised one Florida lawmaker that the U.S. wouldn't agree in the Uruguay Round to cut tariffs by more than 15 percent for tomatoes, bell peppers, head lettuce, cucumbers, celery and sweet corn. Latin American nations, such as Brazil, have been counting on much larger agricultural concessions and tariff cuts ranging from at least 15 percent to 100 percent. INVESTOR'S DAILY notes that Clinton's renegotiation of agricultural deals with Mexico "undermines his trade representative, Mickey Kantor, who has steadfastly refused to reopen the U.S.-EC Blair House agreement." Textiles: The American Textile Manufacturers Institute agreed to support NAFTA after the Clinton administration promised to seek a prolonged phase-out of the international textile quota system which shields U.S. producers from low-wage competitors. "If you want support for NAFTA from members from textile constituencies, extend the phase-out of the Multifibre Arrangement from 10 to 15 years," ten lawmakers wrote in a letter to Clinton last week. The measure, which contradicts the 10-year phase-out for textile products outlined in GATT's Dunkel Draft, could prompt India and Pakistan to walk away from the GATT negotiating table. The EC is also counting on improved texitle access. EC negotiators offered market access concessions for fish, electronics and non-ferrous metals in exchange for significant U.S. textile tariff reductions. Implications of No NAFTA: "If the North American Free Trade Agreement dies in Congress Wednesday, analysts expect a chilling fallout on trade talks from Brussels to Beijing," reports REUTERS. Some say a NAFTA rejection would make it more difficult for U.S. trade negotiators to extract deals from other GATT partners. "It certainly would be a blow to GATT ... and (it) raises questions about whether the (Clinton administration) can deliver," said Richard Benzie, currency economist for UBS Ltd. in London. GATT Negotiators Remain Optimistic: GATT negotiators remain publicly optimistic that progress can be reached in the Uruguay Round, despite their failure to meet the November 15 market access deadline. Confidence has been "buoyed" by the completion of draft texts on a proposed Multilateral Trade Organization (MTO) to succeed GATT and improved disputes settlement, reports the FINANCIAL TIMES. Sources: Bob Davis, Jackie Calmes, "NAFTA's Odds Improve, But U.S. May Reduce Its Trade Leadership," WALL STREET JOURNAL , November 17, 1993; Chuck Freadhoff, "Horsetrading Could Pass NAFTA But Cause Trouble Down the Line," INVESTOR'S DAILY, November 17, 1993; Nancy Dunne, "U.S. Textiles Caucus Urges Tougher Stance in Trade Talks," FINANCIAL TIMES, November 16, 1993; "EC Parliament Calls for GATT Agreement on Textiles With Stronger Sanctions," BUREAU OF NATIONAL AFFAIRS, November 16, 1993; David Dodwell, Frances Williams, "Optimism Over Uruguay Round Accord," FINANCIAL TIMES, November 17, 1993; "NAFTA Failure Would Harm U.S. in GATT Talks, Analysts Say," UPI, November 16, 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 ________________________________________________________