TRADE NEWS BULLETIN Volume 2 Number 208 Thursday, November 18, 1993 NAFTA/Economic News from the Mexican Press Nov. 10-18, 1993 Headlines: U.S. HOUSE PASSES NAFTA MEXICA SENATE PREPARES TO RATIFY NAFTA PRI ACCUSES OPPOSITION OF LEAKING INFORMATION TO U.S. MEXICO MUST IMPROVE EDUCATION BECAUSE OF NAFTA MEXICAN GOVERNMENT PLANS TO SELL SOME PEMEX PLANTS MEXICO'S POSITION ON ENERGY IS UNCHANGED ________________________________________________________ NAFTA/Mexican Economic News Summary ________________________________________________________ U.S. HOUSE PASSES NAFTA The U.S. House of Representatives last night passed the North American Free Trade Agreement by a vote of 234 to 200. Voting in favor of the agreement were 102 Democrats and 132 Republicans. Voting against were 156 Democrats, 43 Republicans and one Independent. Supporters and opponents argued passionately during over nine hours of debate. Pro-NAFTA Ways and Means Committee head Dan Rostenkowski (D-Illinois) stated, "We are debating whether America is a confident country, eager to face the future, ready to take on all competitors, or a nation in decline clinging to memories of our past." House Majority Whip David Bonior (D-Michigan), a NAFTA opponent, asked members of the House: "Are you on the side of the Fortune 500? Or are you on the side of the unfortunate 500,000 who will lose their job if NAFTA passes?" GATT Director-General Peter Sutherland said NAFTA's passage would give momentum to the long-stalled global trade talks. "There is no negotiator in Geneva today who isn't breathing a sigh of relief as a result of the outcome of the vote on NAFTA," he said. Several Southeast Asian nations and developing countries welcomed the House decision but questioned whether NAFTA would be used to exclude other nations from North American markets. A number of citizen and environmental groups charged that the Clinton administration had cut deals costing taxpayers billions of dollars and undermining environmental protection promises in order to pass NAFTA. NAFTA now moves to the Senate for a vote before Thanksgiving. An AP poll shows 49 senators committed to a "yes" vote, three leaning toward "yes", 31 leaning or committed to vote "no" and 17 undecided. If NAFTA passes both the U.S. and Mexican Senate, and receives final approval from Canada's prime minister, about one-half to one-third of U.S., Mexican and Canadian tariffs will be removed January 1, 1994. The remaining duties would be phased out over a 15-year period. Sources: David E. Rosenbaum, "Passionate Debate," NEW YORK TIMES, November 18, 1993; Rich Miller, "Asia-Pacific Nations Warily Welcome NAFTA," REUTER, November 18, 1993; Bob Davis, "Some Questions and the Answers Concerning NAFTA," WALL STREET JOURNAL, November 17, 1993; Nelson Graves, "GATT Head Says Global Deal Eased by NAFTA Vote," REUTER, November 18, 1993; Ellyn Ferguson, "Sanders a 'No' Vote to the End," GANNETT NEWS SERVICE, November 18, 1993; ________________________________________________________ MEXICAN SENATE PREPARES TO RATIFY NAFTA The Mexican Senate's PRI majority will prepare the dictum for NAFTA ratification and present it to the Senate next week for approval. A dozen committees are working to outline details of the 50-page document, which will include analysis on the constitutionality of NAFTA. The Mexican Action Network on Free Trade (RMALC) argues that NAFTA is unconstitutional and urges senators to vote against the trade pact. Meanwhile, PRD leader Porfirio Munoz Ledo has called for a referendum in Mexico, the U.S., and Canada to allow the citizens of the three countries to decide NAFTA's future. Opposition party leaders argue that NAFTA was negotiated behind closed doors and does not represent the interests of the majority in each population. Sources: LA JORNADA, November 16, 1993; EL FINANCIERO, November 13, 1993; LA JORNADA, November 16, 1993; EL FINANCIERO, November 12, 1993. ________________________________________________________ PRI ACCUSES OPPOSITION OF LEAKING INFORMATION TO U.S. PRI Senators accused NAFTA opponents from other parties of giving the U.S. information on areas under NAFTA in which Mexico had the advantage. PRI Senators said leaked information on citrus, sugar cane, glass, and domestic electrical products led more than 20 California Representatives to demand reforms to NAFTA before they would agree to vote for its ratification. Mexico agreed to the changes. Sources: EL FINANCIERO, November 11 and 12, 1993. ________________________________________________________ MEXICO MUST IMPROVE EDUCATION BECAUSE OF NAFTA The rector of the Autonomous Metropolitan University (UAM) said NAFTA obliges Mexico to elevate its general level of education to compete with countries with higher levels of scholarship. He mentioned Mexico's need to find a way to increase the number of students of university age that pursue higher education. He said that it is the responsibility of existing educational institutions to promote the betterment of the services offered. He maintained that only with a solid structure of research and higher education can Mexico compete with other societies. Source: LA JORNADA, November 11, 1993. ________________________________________________________ MEXICAN GOVERNMENT PLANS TO SELL SOME PEMEX PLANTS RMALC representatives announced last week that the Mexican government will carry out two economic plans over the next few months: the sale of several petro-chemical plants that are property of Pemex and the ratification of the new Foreign Investment Law granting the right of "national treatment" to foreign capital from the U.S. and Canada. RMALC's Alberto Arroyo said the government will sell some national petro-chemical plants, which, once untouchable, are no longer considered strategic since the basic petro-chemical industry was reclassified. Under-secretary of Energy, Alfredo Elias Ayub, says Mexico has not modified its position with respect to the energy sector in the framework of NAFTA. However, he also says that it is essential for Mexico to modernize its petroleum sector in order to take advantage of the country's natural resources and that self-sufficiency in the national supply is not essential. Sources: LA JORNADA, November 11, 1993; EL FINANCIERO, November 10, 1993. ________________________________________________________ MEXICO'S POSITION ON ENERGY IS UNCHANGED According to Under-secretary of Energy, Alfredo Elias Ayub, Mexico has not modified its position with respect to the energy sector in the framework of NAFTA. Concessions in hydrocarbon extraction within national territory and permitting risky contracts remain prohibited and all activities from exploration to product commercialization of petroleum, gas, and petro-chemicals will be handled exlusively by the Mexican government, he said. He reiterated that negotiators rigorously preserved the words and spirit of the constitution in order to guarantee the integrity of the petroleum industry. However, he also said that it is essential for Mexico to modernize its petroleum sector in order to be able to take advantage of the country's natural resources. Elias Ayub indicated that, contrary to the means adopted a few years ago, presently they are no longer looking for self-sufficiency in the national supply. With the approval of the Pemex Organic Law, he added, they are hoping to become more competitive in internal and external markets, and to incorporate strong criteria of excellence in all negotiation directed toward re-structuring the industry. Source: EL FINANCIERO, November 10, 1993. ________________________________________________________ The Thursday edition of Trade News is co-produced by: Equipo PUEBLO and RMALC. Equipo PUEBLO, Francisco Field Jurado 51, Col. Independencia 03630, Mexico DF, MEXICO Tel: 011-525-539- 0015 Fax: 011-525-672-7453 E-mail: pueblo@laneta.igc.apc.org Red Mexicana de Accion Frente al Libre Comercio (RMALC) Address: RMALC, Godard 20, 07790 Mexico DF, MEXICO Tel: 011-525-556-0642 Fax: 011-525-556-9316 E-mail: pueblo@laneta.igc.apc.org The Institute for Agriculture and Trade Policy (IATP), 1313 5th Street, SE, #303, Minneapolis, MN, 55414- 1546. Tel: 612-379-5980 Fax: 612-379-5982 E-mail: iatp@igc.apc.org ________________________________________________________