From iatp@igc.apc.org Date: 23 Oct 94 18:15 PDT From: IATP To: "Recipients of conference trade.news" Newsgroups: trade.news Subject: NAFTA & Inter-Am Monitor 10/24/94 Produced by the Institute for Agriculture and Trade Policy - - - - - - - - - - - - - - - - - - NAFTA and Inter-American Trade Monitor, vol. 1, #22 October 24, 1994 - - - - - - - - - - - - - - - - - - HEADLINES NAFTA TRADE NOTES EFFORTS TO EASE NAFTA TRADE CONTINUE ALADI REDEFINING ROLE AS TRADE GROWS CENTRAL AMERICAN PRESIDENTS PROPOSE NAFTA ENTRY MERCOSUR DOCKWORKERS UNITE EUROPEAN UNION, MERCOSUR, ANDEAN PACT DEVELOPMENTS RESOURCES/EVENTS - - - - - - - - - - - - - - - - - - NAFTA TRADE NOTES % Blue jeans are big business in El Paso, despite the vulnerability of the industry to competition from cheaper Mexican labor. The prestige of the "Made in the USA" jeans label has helped to maintain 20,500 jobs in El Paso's apparel industry, as have low-wage shops stitching up designer jeans. While some manufacturers, such as Wrangler, boast of state-of- the-art computerized plants, others skimp on tax payments and close their doors without paying workers, leaving El Paso one of the country's poorest metropolitan areas, with personal incomes at 59 percent of the US national average. Overall US employment in the apparel industry has fallen from 1,075,700 in 1989 to 959,000 in August 1994. % Xerox Corporation, which last year announced plans to slash 10,000 of its 97,000 jobs by 1996, may consolidate or close a plant in Oak Brook, Illinois. Employees said that Xerox officials plan to move the work to a huge refurbishing facility in Aguascalientes, Mexico, but company officials declined to comment. Both plants refurbish used Xerox copiers for lease or sale, and the Oak Brook plant makes some parts as well. % California's U.S. Electricar Inc. and Mexico's Grupo Industrial Casa signed an agreement to manufacture electrical industrial vehicles for North, Central and South America. Grupo Industrial Casa is the largest manufacturer of bus bodies in Mexico. The two hope to take advantage of anti-pollution needs and NAFTA trade benefits. California's Taylor-Dunn also purchased a 10 percent share in Industrias Murrell, with plans to make electric vehicles for urban areas, including delivery vans for package express companies. % A Canadian firm, White Bear Water L.T.D., recently advertised in Mexico's El Financiero that it has approval to export 7.2 million metric tons of water annually. % Texas grapefruit growers expect to begin shipments to Mexico soon, as Mexican officials have approved US precautions to prevent spread of Mexican fruit fly. % Grupo Industrial Bimbo canceled its planned acquisition of 50 percent of Mrs. Baird's Bakeries, saying talks about commercial agreements between the two companies would continue. % Villa Sana Industries complained that Mexican health administration regulations on prior registration and approval have effectively eliminated most US medical exports from sale in Mexico, since US exporters are not prepared to deal with the complex registration procedures. Source: Allen R. Myerson, "Jeans Makers Flourish on Border," NEW YORK TIMES, 9/29/94; Frederick H. Lowe, "Xerox May Close Oak Brook Site," CHICAGO SUN-TIMES, 9/22/94; Kevin G. Hall, "Electric Vehicle Maker Inks Mexico Pact; Calif., Mexican Firms Form Venture to Make Electric Industrial Vehicles," JOURNAL OF COMMERCE, 10/11/94; "Canadian Water," EL FINANCIERO, 9/19-25/94; "Shippers Eye Mexico Markets for Grapefruit," THE PACKER, 9/26/94; "Bakery Acquisition Off," NEW YORK TIMES, 10/10/94; "Rule on Medical Sales to Mexico Criticized," JOURNAL OF COMMERCE, 10/5/94. - - - - - - - - - - - - - - - - - - EFFORTS TO EASE NAFTA TRADE CONTINUE Representatives from standards groups in Mexico, Canada, and the United States met in Mexico City in early October to work on formulating common standards for a wide variety of products. Substantial progress has been made in telecommunications and electrical standards since the beginning of discussion in 1991. NAFTA imposes a four year limit for intra-NAFTA recognition of companies accredited by governments to certify that a product meets a country's standards. NAFTA-wide standards may have the added benefit of shutting out cheaply made Asian imports that Mexican trade officials want to bar. Meanwhile, US customs brokers along the Mexican border are consolidating and expanding to offer services at all commercial crossings along the 2,000-mile US-Mexico border. Large shippers prefer to deal with a single company, which allows them to file all the customs documents in a single location. Mexus Ro-Ro Line offers a roll-on, roll-off service from Houston to the Mexican port of Tuxpan. Other cargo lines are also working on combined rail-barge transportation. NAFTA trade is not without risks, particularly for small and medium-sized companies, according to the US Commerce Department, which advises that businesses should seek special insurance to protect themselves. Such insurance may make it easier to get lines or letters of credit for accounts receivable. Source: Kevin G. Hall, "Nafta Groups Meet to Set Common Product Standards," JOURNAL OF COMMERCE, 10/11/94; Kevin G. Hall, "US Brokers Consolidating for 1-Stop Border Service," JOURNAL OF COMMERCE, 10/5/94; Kevin G. Hall, "Roll-On, Roll- Off Line Offers Route to Mexico without Border Hassles," JOURNAL OF COMMERCE, 10/5/94; Kevin G. Hall, "Small Exporters to Mexico Urged to Seek Insurance," JOURNAL OF COMMERCE, 10/7/94. - - - - - - - - - - - - - - - - - - ALADI REDEFINING ROLE AS TRADE GROWS The vice-ministers of foreign relations of the 11 member countries of the Latin American Integration Association (ALADI) will meet on November 17-18 in Montevideo, Uruguay to discuss the future of ALADI and its contribution to regional integration. All of ALADI's members -- Argentina, Bolivia, Brazil, Colombia, Chile, Ecuador, Mexico, Paraguay, Peru, Venezuela, and Uruguay -- participate in various other trade and commercial pacts, such as Mercosur, the Andean Pact, G-3, and NAFTA. Since its creation in 1980, ALADI has been overtaken by a proliferation of bi-lateral and multi-lateral trade pacts in the Americas. A recent SELA (Latin American Economic System) report showed trade within Latin America and the Caribbean growing rapidly over the past four years. Intra-regional trade rose from 13 percent of the region's commerce in 1990 to 18 percent in 1993. Exports within the region grew by nearly 25 percent per year. ALADI's secretary general, Brazilian Antonio Antunes, has proposed a two-part role for ALADI: to create, for all of the region's trade pacts, legal norms that facilitate trade, such as rules of origin and common nomenclature, and to promote the convergence of the various pacts. "We all have wanted to say that Mercosur should advance, that G-3 should advance, as much as the Andean Pact, but this has not advanced the regional aspect of integration," said Antunes. "The great characteristic of this proposal is the flexibility that will permit the coexistence of subregional systems with a project of integration of global dimension." Source: "Aladi Redefine Su Papel en el Proceso de Integracion," SUCESOS, 10/13/94; "Report Shows Intra-Regional Trade Growth," IPS, 10/7/94. - - - - - - - - - - - - - - - - - - CENTRAL AMERICAN PRESIDENTS PROPOSE NAFTA ENTRY Meeting with US Vice President Al Gore in Managua during the "Ecological Summit," presidents Carlos Roberto Reina (Honduras), Armando Calderon Sol (El Salvador), Ramiro Leon Carpio (Guatemala), Ernesto Perez Balladares (Panama), Jose Maria Figueres (Costa Rica), and Violeta Chamorro (Nicaragua) united in a proposal for conditional and temporary membership in NAFTA. The presidents proposed that Central America, as a region, be accepted as a "temporary and special" member in NAFTA for a certain period of time, with each country to use this time to fulfill the conditions imposed for full membership. The Central American presidents also called on the United States to fulfill the promise made by Vice President Gore in May to open its market for the import of textiles and clothing from the region. The Clinton Administration recently removed the Interim Trade Program (ITP) provisions, which implemented this promise, from GATT legislation. Source: "Centroamerica Aspira a Ser "Miembro Temporal" del TLC," SUCESOS, 10/13/94; "U-turn by US Hits Caribbean Exporters," FINANCIAL TIMES, 10/11/94. - - - - - - - - - - - - - - - - - - MERCOSUR DOCKWORKERS UNITE The dockworkers' unions of three of the four Mercosur countries announced the joint scheduling of a two-hour work stoppage on October 11 to protest plans for privatization of ports in Argentina, Brazil, and Uruguay. According to the secretary general of the Uruguayan union, "the tendency in Latin America is for the state to abandon the tasks in the ports so that they fall into the hands of transnational agencies." Source: "Portuarios Haran Paro Contra Privatizaciones," IPS, 10/8/94 - - - - - - - - - - - - - - - - - - EUROPEAN UNION, MERCOSUR, ANDEAN PACT DEVELOPMENTS Speaking in Brazil, European Commission Farm Commissioner Rene Steichen expressed hopes of liberalizing agricultural trade and opening up free trade in industrial products with Mercosur, though he rejected the idea of free trade in farm products as unrealistic. According to Steichen, the European Union (EU) may make changes that favor the less-developed nations, while withholding benefits from more developed nations, such as Brazil and Argentina. The EU is Mercosur's main trading partner, with a balance of trade of $46 billion in favor of Mercosur between 1985 and 1992. The EU bought 45 percent of agricultural and food products exported by Mercosur countries during the same years. In early October, Venezuelan Finance Minister, Werner Corrales, asked the EU to support development of Small and Medium Enterprises (SMEs) and telecommunications networks and social projects for poor communities in Venezuela. Emphasizing the request for SME development, Corrales called for "solidarity programs" to help poor communities, citing Mexico, Chile, and the Toscana region of Italy as examples of successful use of SMEs. The EU will renew trade benefits under the Generalized System of Preferences to the four Andean Pact members currently covered (Bolivia, Colombia, Ecuador, Peru) as part of its economic reform and drug fighting efforts, and is expected to extend the benefits to Venezuela for the first time. Despite open access to EU markets, Andean Pact members have a trade deficit with the EU in 1993. The Andean Pact represents less than one percent of the 12 EU countries' trade. The EU is also considering a suggestion that Cuba should be included in the GSP, but the proposal has met with opposition from Germany, Denmark, and Greece. Source: "Steichen Promises Freer Trade with Mercosur Countries," REUTER, 10/11/94; "EU/Latin America: Plans to Boost EU Ties with Mercosur, Andean Pact and Cuba," EUROPEAN INFORMATION SERVICE, 10/8/94; Debra Percival, "Caracas Finance Minister Lobbies EU for Support," IPS, 10/10/94; Raymond Colitt, "EU to Renew Andean Pact Trade Benefits," FINANCIAL TIMES, 10/4/94; Diego Cevallos, "Andean Pact-E.U.: A Tense and Asymmetrical Relationship," IPS, 10/94 ---------------------- RESOURCES/EVENTS "Border Right-to-Know Project: The 1993 Northeastern Sonora Pilot Inventories," Gildardo Acosta-Ruz, et al. ARIZONA TOXICS INFORMATION, INC./ENLACE ECOLOGICO, A.C., August 1994. About 200 pages. Arizona Toxics Information, Inc., Post Office Box 1896, Bisbee, AZ 85603. (602) 432-5374. Available in Spanish or English. $20. Advertised as "the first systematic public collection and analysis of hard data on toxics use by small farmers and US- owned maquiladoras in three communities of Mexico's northern border zone" and "a low-cost, easily replicable model for future local, state and national inventories in Mexico." - - - - - - - - - - - - - - - - - - The NAFTA and Inter-American Trade Monitor is available in both English and Spanish on Association for Progressive Communications (APC) computer networks on the conference eai.news. It can also be faxed or sent via mail on request. We welcome your comments and contributions. - - - - - - - - - - - - - - - - - - For more information about the Institute for Agriculture and Trade Policy, send email to iatp-info@igc.apc.org. - - - - - - - - - - - - - - - - - - Produced by: Mary C. Turck, Institute for Agriculture & Trade Policy, 1313 Fifth St. SE, Suite #303, Minneapolis, MN 55414- 1546 USA Tel: (612) 379-5980, Fax: (612) 379-5982, email: mturck@igc.apc.org