From iatp@igc.apc.orgSat Dec 16 10:44:04 1995
Date: Mon, 26 Jun 1995 15:11:33 -0700 (PDT)
From: IATP <iatp@igc.apc.org>
To: Recipients of conference <trade-news@igc.apc.org>
Subject: NAFTA & Inter-Am Trade Monitor 6/23

NAFTA & Inter-American Trade Monitor
Produced by the Institute for Agriculture and Trade Policy
June 23, 1995
Volume 2, Number 19
_________________________________________
Headlines:
- CHILE, NAFTA, AND MERCOSUR
- GOVERNMENT-ZAPATISTA TALKS CONTINUE
- NAFTA ENVIRONMENTAL COMMISSION TO INVESTIGATE BIRD 
DEATHS
- MEXICO NAFTA OFFICE FAULTS US LABOR PRACTICES
- 50,000 U.S. WORKERS CLAIM JOB LOSS DUE TO NAFTA
- BRAZIL, ARGENTINA CLASH OVER AUTO IMPORTS
- WHEAT TRADE
- INTER-AMERICAN DRUG TRADE
_________________________________________
CHILE, NAFTA, AND MERCOSUR

Formal negotiations for Chile's entrance to NAFTA began on June 7 in 
Canada, as about 100 organizations from the four countries (Chile, 
United States, Mexico, Canada) voiced their opposition to any 
agreement that fails to reflect labor, environmental and indigenous 
concerns in Chile and to protect its national sovereignty.  Both U.S. 
President Clinton and House Speaker Newt Gingrich, the leader of the 
opposition, have voiced support for fast-track legislation to authorize 
Chile's entry to NAFTA by year's end. Republican opposition to 
inclusion of labor and environmental side agreements and some 
Democratic insistence on those provisions are expected to delay 
passage of the fast-track legislation.

Chilean finance minister Eduardo Aninat warned that Chile is not 
willing to wait indefinitely.  "If we don't have fast-track by early 
February, the whole process is probably doomed," said Aninat.  Chile 
is also negotiating associate membership with the Mercosur free-
trade area that includes Brazil, Argentina, Uruguay, and Paraguay, 
and has begun discussions for agreements with the European Union 
and with the Asian Pacific trade group.

According to Chilean foreign minister Jos Miguel Insulza, Chile gives 
higher priority to joining Mercosur than to NAFTA membership.  
Insulza pointed out that Mercosur negotiations include "issues of 
physical integration," such as infrastructure development, opening 
Chile's Pacific ports to regional products, and circulation of 
individuals, especially skilled laborers.  Chile's 1994 trade with 
Mercosur totaled $5.2 billion.  

The U.S.-based AFL-CIO and the Chilean CUT labor federations have 
joined forces to demand  that worker rights be included in any trade 
pact reached.  Chilean unions were smashed in the U.S.-backed 1973 
military coup, with members and leaders suffering firing, jail, and 
execution.  Although a civilian government replaced the military in 
1990, Chile's labor code still bans any regional or national union 
organizations and strictly limits collective bargaining.  Chilean 
business associations say that the labor law works fine and that 
collective bargaining, which currently covers only about 10 percent 
of Chilean workers, is not needed.  The Chilean government would 
like to see union organization extended to seasonal workers in 
building, farming, and forestry, and advocates legalization of cross-
company unions, a legal change adamantly opposed by business.

Nancy Dunne, "Chile's Patience Wearing Thin Over NAFTA," 
FINANCIAL TIMES, June 13, 1995; Yvette Collymore, "NAFTA Entry 
Could Mean Another Star on U.S. Flag," INTERPRESS SERVICE, June 6, 
1995; "Chile Juega Sus Cartas," SUCESOS, June 8, 1995; Fred J. 
Solowey, "A 'Chile' Reception to NAFTA's Extension," SOLIDARITY, 
May, 1995; "Unions, Who Needs Them?" THE ECONOMIST, May 13, 
1995; Saul Ronzoni, "Minister Confirms Mercosur Priority Over 
NAFTA," INTERPRESS SERVICE, June 16, 1995; Ximena Souza, "Sin 
Fast Track No Se Concretara el Ingreso de Chile al TLC," SUCESOS, June 
15, 1995.

GOVERNMENT-ZAPATISTA TALKS CONTINUE

In a five-day meeting that began on June 7, the Mexican government 
and EZLN (Zapatista National Liberation Army) continued discussions 
and agreed to meet again on July 4.  The tentative agreement 
reached in May regarding creation of seven corridors for Zapatista 
settlement has not been approved in full by the EZLN after 
chad previously agreed to do.  

Government representatives continued to refuse to discuss national 
issues.  The EZLN representatives insisted that poverty is a national 
problem, asked unsuccessfully for special attention to the status and 
problems of women, and called for inclusion of popular sectors in the 
dialogue.  Clashes between the army and local protesters continued 
in Chiapas, with one dead and six wounded in a June 6 march, which 
followed four arrests in a June 4 protest.

CONAI PRESS RELEASE, June 13, 1995; CHIAPAS BULLETIN NO. 13, 
June 20, 1995; Hermann Bellinghausen, "Las Diferencias Entre 
Gobierno y EZ Siguen Siendo Muchas: Tacho," LA JORNADA, 6/13/95.

NAFTA ENVIRONMENTAL COMMISSION TO INVESTIGATE BIRD 
DEATHS

More than 40,000 sandpipers, ducks, coots, and other migratory 
birds mysteriously died at the Silva Reservoir in the Mexican state of 
Guanajuato.  The Mexican government first attributed the deaths to 
dumping of a pesticide called endosulfin, but ecologists said that 
many of the birds show no sign of endosulfan poisoning.  Later, 
government environmental officials said that the cause was a large 
one-time dumping of red-dye colorants.

Environmentalists suspect that the poisoning is due to chromium 
discharges into rivers feeding the reservoir by local industries, 
especially tanneries.  After petitions by the U.S. National Audubon 
Society, the Mexican Center of Environmental Rights, and the Group 
of 100, the Montreal-based North American Commission for 
Environmental Cooperation (NACEC) agreed to investigate.  This will 
bcerns.

Anthony DePalma, "Deaths of Birds in Mexico Lake Test Trade Pact," 
NEW YORK TIMES, June 8, 1995; "NAFTA Board to Probe Deaths of 
Birds in Mexico," CHICAGO TRIBUNE, June 11, 1995; Kevin G. Hall, 
"NAFTA Group Seeks Swift Answers in Bird Kill," JOURNAL OF 
COMMERCE, June 20, 1995.

MEXICO NAFTA OFFICE FAULTS US LABOR PRACTICES

On June 2, the Mexican National Administrative Office (NAO), issued 
findings that Sprint probably violated the National Labor Relations 
Act when it terminated 177 Spanish-speaking employees at the 
telephone company's "La Conexin Familiar" in San Francisco last 
year.  The Mexican NAO asked the U.S. government to review the 
case, and called for ministerial consultation under the provisions of 
the NAFTA labor side agreement.  The NAO was constituted under 
NAFTA, as were its counterparts in Canada and the U.S., in order to 
review the application of labor laws in all three countries.  

The Mexican Telephone Workers Union (TWU) brought the case 
against Sprint, alleging that the employees were fired as the 
culmination of an anti-union campaign, including numerous unfair 
labor practices.  TWU charged that the firings were part of Sprint's 
response to its workers' efforts to obtain representation by the 
Communication Workers of America.  The Mexican NAO report 
follows the April 11 U.S. NAO report that concluded that the Mexican 
government had mishandled an unfair dismissal complaint by 45 
workers of Sony Corporation in Mexico.

Jerry Morales, Esq., "Mexican Board Says SPRINT Likely Violated 
Labor Act," "INTER-AMERICAN TRADE AND INVESTMENT LAW," June 
9, 1995.

50,000 U.S. WORKERS CLAIM JOB LOSS DUE TO NAFTA

More than 50,000 U.S. workers have petitioned the U.S. Department 
of Labor for special NAFTA unemployment assistance.  The workers 
come from 457 firms located in 46 states, including Allied Signal, 
Sara Lee, Smith Corona, Eveready Battery, Zenith, and Proctor and 
Gamble, all of which belong to a pro-NAFTA lobbying group.  Public 
Citizen Director Lori Wallach said that "real life job losses are 
NAFTA's reality," and that the petitions represent only a fraction of 
NAFTA's actual impact on U.S. workers.

The NAFTA Trade Adjustment Assistance (NAFTA TAA) program 
provides job training and income support to workers who are 
certified to have lost jobs because of imports from Mexico or Canada 
or company production shifts to Mexico or Canada.  NAFTA TAA  
statistics include only workers who petition the Department of Labor 
under that program, not others who may apply under the generic 
Trade Adjustment Assistance program, which has fewer 
administrative requirements.  

"Over 50,000 U.S. Workers Have Filed for NAFTA Unemployment 
Benefits," PUBLIC CITIZEN, June 7, 1995.

BRAZIL, ARGENTINA CLASH OVER AUTO IMPORTS

On June 13,  the Brazilian government announced stringent 
limitations on the number of automobiles to be imported, in an 
attempt to deal with Brazil's continuing trade deficit and to attract 
foreign investment.  On June 16, after strong protests from 
Argentina, Brazil's largest trading partner and a fellow member of 
Mercosur, Brazil suspended the quotas for 30 days.  

Argentine auto makers are already suffering from a recession, with 
domestic sales down by 38 percent.  Together with household 
appliance manufacturers, they export heavily to Brazil, particularly 
from factories in the southern Argentine province of Tierra del 
Fuego, a duty-free zone.  The automobile quota imposed by Brazil 
would allow only 110,000 vehicles to be imported during the rest of 
the year, virtually freezing imports since 70,000 have been unloaded 
in Brazilian ports and 30,000 more are on order.  

Argentine cars enter Brazil duty-free, while Brazilian-made cars are 
subject to domestic taxes of up to 50 percent.  During January-March 
of this year, 200,000 vehicles were imported.  New vehicle sales in 
Brazil are expected to total 1.5 million during the year.  

"Preocupa Que el Brasil Tome Ms Medidas Contra la Argentina," 
CLARIN, June 14, 1995; Oscar Florman, "Same Time Next Month - 
Row Over Auto Imports Postponed," INTERPRESS SERVICE, June 16, 
1995; "Menem Peeved at Brazil's Decision to Cut Auto Imports," 
INTERPRESS SERVICE, June 14, 1995; Arnaldo Cesar, "Curbing of Auto 
Imports is Protectionist Move," INTERPRESS SERVICE, June 15, 1995; 
Ricardo de Bittencourt, "Continuing Trade Deficit Pressures Against 
Liberalization," INTERPRESS SERVICE, June 16, 1995.

WHEAT TRADE

A U.S.-Canadian panel announced a consensus on disputed wheat 
issues that threatened to affect the $210 billion in annual trade 
between the world's biggest trading partners.  Canadian exports of 
wheat, particularly durum wheat, have sharply increased in recent 
years, leading to complaints of dumping by United States farmers.  
The new agreement will limit Canadian wheat exports to the United 
States to 1.5 million metric tons for one year. A new, non-
governmental United States-Canada Joint Commission on Grains will 
study each country's grain marketing and support systems and make 
recommendations on longer-term solutions.  In related news, U.S-
based General Mills and the Alberta Wheat Pool, a farmer-owned 
cooperative based in Canada, announced that they will build a $1 
million grain terminal in Sweetgrass, Montana to handle the 
increasing cross-border grain trade.

Canada recently dropped an import ban on Italian pasta after a 
month of protests from Canada's Italian community and from small 
retailers.  The Canadian Pasta Manufacturers Association continues to 
maintain that Italian pasta is being dumped in Canada at prices 
below Italian market levels.  Italian pasta doubled its market share 
in Canada to 14 percent last year.  

The United Nations Food and Agriculture Organization (FAO) reported 
that Latin American wheat production rose to 15.4 tons in 1994, nine 
percent higher than the 1993 yield.  Brazilian wheat production is 
expected to fall to a bare minimum of 1.5-2 million tons, far below 
the record production of six million tons in 1987.  The dramatic fall 
in production is linked to decreased government support for wheat 
production and a preference for cheap wheat, much of which is 
imported from Argentina.

Brazil consumes about 8.5 million tons yearly, according to the 
Brazilian Wheat Industry Association.  The FAO predicts South 
American imports of 10.6 million tons of wheat in 1994-95, up 
slightly from the 10.5 million tons imported in 1993-94.  

"U.S.-Canada Trade Commission Reaches Consensus on Grain," NEW 
YORK TIMES; "General Mills to Build $1 Million Grain Terminal," 
ASSOCIATED PRESS (via STAR TRIBUNE), June 8, 1995; Maria Osava, 
"Commodities-Brazil: Wheat Production Down to Bare Minimum," 
INTERPRESS SERVICE, May 12, 1995; "Latin America: FAO Reports 
Rise in Wheat Production," INTERPRESS SERVICE, May 11, 1995; May 
27, 1995; "Canada Drops Curbs on Pasta from Italy," JOURNAL OF 
COMMERCE, June 1, 1995.

INTER-AMERICAN DRUG TRADE

Cocaine and other drugs represent a large segment of agricultural 
production in the Americas and a significant aspect of international 
commerce.  In 1993, in Colombia alone, coca planting was estimated 
at 42,000 hectares, with an additional 20,000 hectares in poppies 
and 6-8,000 hectares in marijuana.  The Colombian government 
claims that coca and other drug production has doubled since 1993, 
due to defense of producers by guerrillas, who charge a tax for 
protecting growers, laboratories, and air fields.  

As officially reported Colombian export income shot up by 29.8 
percent (from $1.1 billion to $1.4 billion) in the first two months of 
1995, compared to the same period in 1994, many experts say that 
the sharp increase is due in part to fraudulent invoicing to hide drug 
profits.  Colombian drug profits are estimated at $800 million to $3 
billion annually.  

While drug cartels make large amounts of money, drug couriers 
receive relatively low pay and are at relatively high risk.  Producers, 
too, receive far less money than those controlling marketing and 
distribution, and are frequently the targets of international action to 
destroy their fields. In the face of U.S. demands that the Bolivian 
government eradicate their fields, Bolivian coca producers joined 
with teachers and labor unions in national protests over neoliberal 
government policies and low wages.  In April, the government 
responded to the strikes and protests by declaring a state of siege. 

Tarahumara Indians in remote villages of northern Mexico have been 
brought into marijuana and opium poppy production by Mexican 
cartels.  Initially, the relatively high returns on drug cultivation 
attracted some farmers.  Drug cartels later used violence and threats 
of violence to consolidate and maintain their hold on production.  
Mexican  police and government officials frequently collaborate with 
the cartels, removing any avenue of appeal for campesinos who 
would prefer not to cooperate.  Drug trafficking allegedly involves 
such high officials as the sons of billionaire Carlos Hank Gonzalez and 
the brother of ex-president Carlos Salinas.  

Although the United States and Europe are still the primary markets 
for cocaine exports from Latin America, Argentina and Chile have 
also increased domestic consumption in recent years. Argentina is a 
transit country for cocaine from Peru and Colombia, some of which is 
processed into hydrochloride by Bolivian-Argentine joint ventures. 
Most cocaine consumed in or passing through Chile comes from 
Bolivia.  The cocaine trade has fueled a real estate boom in some 
Chilean cities, and benefits from banking secrecy in Chile.  

Nor is government corruption by drug money limited to Mexico and 
Latin American countries.  In early June, a former senior official in 
the U.S. Justice Department's "war on drugs," two other former Justice 
Department officials, and two former federal prosecutors in Florida 
were indicted in Miami on charges of participating in a cocaine 
smuggling conspiracy.  According to the New York Times, "So many 
Miami lawyers are under indictment at any one time that courts 
have been obliged to hold special hearings to inform their clients that 
their lawyers may have conflicts in representing them because the 
lawyers may also be bargaining with the prosecution for 
themselves."

"Mexico: Narcos at the Heart of the State;" "Argentina: "White Coffee" 
Boom;" "Chile: Cocaine Enters Politics;" THE GEOPOLITICAL DRUG 
DISPATCH, May, 1995; Anthony DePalma, "Mexico's Indians Face New 
Conquistador: Drugs," NEW YORK TIMES, 6/2/95; Neil A. Lewis, "U.S. 
Charging Ex-Prosecutors in a Drug Case," NEW YORK TIMES, 6/6/95; 
Monica Iturralde Andrade, "Colombian Traffickers Use Ecuadorians to 
Smuggle Narcotics," INTERPRESS SERVICE, May, 1995; "Coca Growers 
Ready for Dialogue," COCA PRESS, April 26-May 2, 1995; Yadira 
Ferrer, "Narcoguerrillas Said Raking in Money," INTERPRESS SERVICE, 
May 8, 1995; "Bolivia: Strikes End, But State of Siege Continues," 
NOTISUR, May 12, 1995; Yadira Ferrer, "Drugs and Exports," 
INTERPRESS SERVICE, June 5, 1995.
___________________________________________
Produced by the Institute for Agriculture and Trade Policy, Mark 
Ritchie, President.  Edited by Mary C. Turck.  The NAFTA & Inter-
American Trade Monitor is available free of charge to Econet and 
IATPNet subscribers.  For information about fax or mail 
subscriptions, or other IATP publications, contact: The Institute for 
Agriculture and Trade Policy, 1313 5th Street SE, Suite 303, 
Minneapolis, MN 55414. Phone: 612-379-5980; fax: 612-379-5982; 
e-mail: iatp@iatp.org.  For information about IATP's contract research 
services, contact Dale Wiehoff at 612-379-5980, or e-mail: 
dwiehoff@iatp.org

