From iatp@igc.apc.orgThu Jul 27 19:11:20 1995 Date: Fri, 21 Jul 1995 14:37:21 -0700 (PDT) From: IATP To: Recipients of conference Subject: NAFTA & Inter-Am Trade Monitor 7/21 NAFTA & Inter-AMerican Trade Monitor Produced by the Institute for Agriculture and Trade Policy July 21, 1995 Volume 2, Number 21 _________________________________________________ Headlines: - DENVER MEETING AND HEMISPHERIC INTEGRATION - UPS CUTS MEXICO SERVICES - NAFTA OPPONENTS CONTINUE TO ORGANIZE - CARIBBEAN NATIONS TO SEEK NAFTA MEMBERSHIP - MEXICO FACING CONTINUING CRISES, TURMOIL _________________________________________________ DENVER MEETING AND HEMISPHERIC INTEGRATION Trade ministers representing 34 nations of the hemisphere met in Denver in late June to continue negotiations toward the eventual establishment of the Free Trade Area of the Americas (FTAA). Brazil's cautious approach prevailed, delaying establishment of four working groups on intellectual property protection, services, government procurement, and competition policy until the next round of ministerial meetings in March 1996 in Colombia. Seven working groups on market access; customs procedures and rules of origin; investment standards and technical barriers to trade; sanitary and phytosanitary measures; subsidies, anti-dumping and countervailing duties; and challenges facing smaller economies were approved. Conferees also agreed to use World Trade Organization commitments as a basis for hemispheric negotiations, to base integration on the subregional blocs already existing in the hemisphere; and to take into account varying levels of development and the interests and aspirations of all nations in relation to creation of the FTAA. The Organization of American States (OAS) was also strengthened by the decision to name the OAS special committee on trade as a key staff organization to help the working groups collect and analyze data. The Inter-American Development Bank and the Economic Commission for Latin America and the Caribbean will also work with the OAS in handling important technical issues. Meanwhile, Mercosur (Argentina, Brazil, Paraguay and Uruguay) has scheduled an August meeting in Brazil to discuss links with the Andean Pact and Chile. According to Domingo Cavallo, Argentina's minister of the economy, "We think, to help hemispheric integration, all the programs must advance subregionally." Chile hopes to reach timetables for tariff reductions with Mercosur by the end of 1995, while continuing to pursue entrance to NAFTA. The next Chile- NAFTA talks are set for July 25-August 1 in Mexico City, the likely permanent venue for technical talks. Kevin G. Hall, "South American Trading Blocs to Consider Links," JOURNAL OF COMMERCE, July 5, 1995; Kevin G. Hall, "Chile to Talk Tariffs With Mercosur, Continue Discussing Nafta Membership," JOURNAL OF COMMERCE, July 5, 1995; Kevin G. Hall, "Brazil's Call to 'Go Slow' Holds Sway at Summit," JOURNAL OF COMMERCE, July 3, 1995; "Talks to Resume on Chile's NAFTA Entry," STAR TRIBUNE, July 4, 1995; Gustavo Gonzalez, "Chile: Government Optimism Regarding NAFTA Has Grown Since Denver," INTERPRESS SERVICE, July 5, 1995; Office of the United States Trade Representative, "1995 Western Hemisphere Trade Ministerial Final Joint Declaration," July 5, 1995; Kevin G. Hall, "OAS Trade Unit Meets Key Role in Hemispheric Integration Efforts," July 7, 1995; Ximena Souza, "Denver, Algo Mas Que La Integracion Hemisferica," SUCESOS, June 29, 1995. UPS CUTS MEXICO SERVICES After a series of disputes with Mexican regulators about customs inspections and about the use of 18-wheel tractor-trailers on intra- Mexico delivery runs, United Parcel Service announced that it will end cross-border deliveries by ground transportation on July 31. Only more-expensive air deliveries will be available to U.S.-Mexico shippers. UPS officials acted despite continuing negotiations between U.S. Trade Representative Mickey Kantor and Mexican officials under NAFTA's dispute resolution process. The U.S. negotiators agreed with the UPS position that Mexico's refusal to issue permits for large trucks violated NAFTA provisions. Mexican officials said that they were surprised by the UPS move because they had just sent the U.S. negotiators a draft of new truck-size regulations that should resolve the problem. Negotiations will continue because other delivery services, such as DHL and Federal Express, are still interested in resolving the issue. UPS is also concerned about proposed Mexican regulations limiting the weight of parcels carried by non-Mexican delivery services and the number of packages that may be contained in a single delivery. Julia Preston, "U.P.S. Cancels Some Mexican Services in a Setback for Trade Pact," NEW YORK TIMES, July 13, 1995; Martha Brannigan, "UPS Cancels Land Service to Mexico," WALL STREET JOURNAL, July 12, 1995. NAFTA OPPONENTS CONTINUE TO ORGANIZE On June 16-17, the Chilean Network for a Peoples Initiative (RECHIP) convened an international gathering of representatives of 200 social organizations. Objectives of the conference were: informing people of their countries on the social, economic, environmental and cultural transformations that accompany free trade treaties; integrating the social, labor, economic, political, environmental, cultural and indigenous sectors that oppose Chile's entrance into NAFTA; and gathering and exchange experiences and strategies with other organizations. Delegates from the current NAFTA members described the contrast between promised benefits and the actual negative impacts of NAFTA on workers, and NAFTA's influence in increasing the power of transnational corporations at the expense of a weakening of citizens' rights. Conference delegates agreed to continue work already underway on a Continental Social Charter that will respond to NAFTA and neo- liberalism, and to continue educational activities and political opposition to NAFTA. Meanwhile, in the United States, the Citizens Trade Campaign (CTC), which worked to defeat both NAFTA and GATT, is trying to shift its focus from lobbying to creation of a broad-based, international movement for fair trade and sustainable development. While CTC continues lobbying against Chile's admission to NAFTA, other organizations are moving forward on movement-building. The Alliance for Responsible Trade (ART) circulated a letter calling for inclusion of protections in any new trade agreement, including enforcement of worker rights and environmental standards, strengthening indigenous rights, and protecting national sovereignty. Opposition to Chilean entry into NAFTA has also focused on the threat to democracy possibly posed by the Chilean military, which has been highlighted by the recent refusal of a retired general to surrender and serve a jail sentence for the 1976 assassination of Orlando Letelier in Washington, DC. Development Gap, "Final Declaration from Chile Conference," June 18, 1995; "Transition Trouble for Citizens Trade Campaign," BORDERLINES, June , 1995; Ximena Souza, "Denver, Algo Mas Que La Integracion Hemisferica," SUCESOS, June 29, 1995. CARIBBEAN NATIONS TO SEEK NAFTA MEMBERSHIP Jamaica and Trinidad and Tobago plan to seek individual memberships in NAFTA, while other Caricom (Caribbean Community) countries are less ready to make the move. Caricom is a customs union on its way to becoming a common market, with members including 13 English-speaking countries of the region, and a new member, Dutch-speaking Suriname. Together with the Spanish- speaking Caribbean Basin countries, they have been adversely affected by NAFTA, as textile and apparel companies have moved operations to Mexico to take advantage of more-favorable trade terms accruing under NAFTA. A report from the Commonwealth Secretariat in London on the impact of NAFTA on Caricom warns that if Caribbean countries fail to gain NAFTA membership, "they will be denied tariff and non-tariff free access to the regional bloc as it expands and deepens. ... The most important function of Caricom may be as a single regional organization for negotiating membership of an expanded Nafta." Other trade arrangements benefiting the Caricom nations may be in jeopardy in the near future. The Lome Convention, a trade and aid pact between the European Union and the African, Caribbean and Pacific Group, expires in 2000, and its renewal is in doubt. Caribcan, a Canadian trade facility giving duty-free access to some Caribbean nations, can also be unilaterally altered. The Caribbean Basin Initiative (CBI) is a U.S. grant of duty-free access for specific products, and can be unilaterally withdrawn or changed by the United States. While the CBI provisions exclude textiles, apparel and footwear, leather goods, and petroleum products, textiles and apparel had been covered under a parallel program. With NAFTA, growth in Caribbean textile exports to the United States dropped dramatically, paralleling an increase in Mexican exports to the United States. Proposals to grant CBI countries a "parity" with Mexico for 10 years are now before the U.S. Congress. While the Commonwealth Secretariat report noted a "clear tendency towards the division of the world into large trading blocs," some Caribbean countries remain wary of NAFTA. They fear that the required deregulation of trade and opening of their markets would harm domestic industries and increase unemployment. Under the CBI, trade grew and the trade balance shifted to give the U.S. a trade surplus, with U.S. exports growing from $5.87 billion in 1983 to $12.3 billion in 1993. At the same time that Caricom members discuss joining NAFTA, some expressed caution over OAS proposals to eliminate all trade barriers among the 34 member states by the year 2005, saying that smaller, less-developed countries would need some form of special protection. At the Caricom summit in early July, the group called on the United States to end its challenges to Caricom's preferential access to the European Union banana market. The summit also resulted in agreement on privatization of the regional airline, LIAT, and in another agreement allowing graduates of universities within Caricom to live and work in any one of the member countries without having to obtain work permits. "Nafta and the Caribbean," JOURNAL OF COMMERCE, June 27, 1995; Canute James, ""Caribbean's Best Economic Hope Said to be a Link With the Nafta," JOURNAL OF COMMERCE, June 15, 1995; Canute James, "Move to Join Nafta Raises Fears for Caricom," FINANCIAL TIMES, June 21, 1995; Scott West, "Caricom Countries Urged to Go With NAFTA," INTERPRESS SERVICE, June 15, 1995; Scott West, "Integration Movement to Benefit From New Leaders," INTERPRESS SERVICE, June 28, 1995; Sandra Marquez, "Caribbean Nations Want Free Trade Protection," REUTER, June 10, 1995; Jim Teeple, "Caricom/LIAT," VOICE OF AMERICA, July 6, 1995; Jim Teeple, "Caricom Agenda," VOICE OF AMERICA, July 5, 1995. MEXICO FACING CONTINUING CRISES, TURMOIL A series of high-profile assassinations, three massacres in the state of Guerrero and complaints of police violence in other rural areas, and continuing political scandals ranging from drug involvement to campaign spending have contributed to lack of confidence in government attempts to stabilize the country, both economically and politically. The resignation of Zedillo ally and Interior Minister Esteban Moctezuma Barragan and his replacement by PRI hardliner Emilio Chuayffet Chemor and the abandonment or restructuring of Solidarity, the government's main anti-poverty program, further reinforce a picture of a government in trouble. While the stock market and peso show some stability and international loans continue to bolster shaky banks, workers still suffer from rising prices and unemployment. In the capital city, the investigator responsible for gathering evidence against Ruta-100 union leaders was shot and killed outside his home on June 20. On June 22, Magistrate Abraham Polo Uscanga was found shot to death in an office building. Polo Uscanga had retired from his post, after protesting imprisonment of Ruta-100 leaders, and said before his death that he had been threatened by the Supreme Court President Saturnino Aguero Aguirre. Aguero subsequently resigned his post and is under investigation for possible involvement in Polo Uscango's death. Both the PRD (Democratic Revolutionary Party) and the PAN (National Action Party) have withdrawn from electoral reform negotiations with the ruling PRI (Institutional Revolutionary Party). The PRD has accused the PRI of spending approximately $80 million on the recent campaign in Tabasco, where the legal limit was $4 million. The EZLN (Zapatista National Liberation Army) has called for a national dialogue and plebiscite on its thirteen basic demands -- land, homes, jobs, food, health, education, culture, information, independence, democracy, liberty, justice, and peace-- and on whether the EZLN should become an independent political force or enter into a coalition. Little progress was made during the EZLN- government negotiation session on July 4-6, and the next round is set for July 24. On June 28, at least 70 police officers armed with semiautomatic weapons stopped a group of campesinos from the Southern Sierra Campesino Organization (OCSS), who were heading for a political rally in Atoyac in Guerrero. The campesinos say the police ambushed them and opened fire, killing 17 and wounding about two dozen others. While police officials claim that the campesinos attacked them, first with a machete and then with gunfire, no witnesses support this story and ten state judicial police were eventually arrested for abuse of authority. PRD mayor Maria de la Luz Nunez Ramos, of the nearby town of Atoyac, reported that Guerrero state governor Ruben Figueroa Alcocer had told her before the massacre that he planned to stop OCSS "any which way," and told her after the incident: "They came for war and war is what they got." On July 5 in Guerrero, 12 members of a single family were attacked on a dirt road, forced to lie in a ditch and killed. The youngest victim was two years old. The 14-year-old sole survivor says that the attackers were police officers, but authorities claim the killings stemmed from a family feud or drug trafficking. On July 7, a convoy of police traveling back roads near the town of Cualac in Guerrero were ambushed and five officers were killed. In other incidents in the states of Oaxaca and Chiapas, a bishop was shot at by masked men, demonstrators were attacked by police, and campesinos were forcibly removed from land they were occupying. Leslie Crawford, "Zedillo Faces Funding Scandal in Tabasco Poll," FINANCIAL TIMES, June 15, 1995; Paul B. Carroll, "Former President of Mexico Faces Cover-Up Inquiry," WALL STREET JOURNAL, June 15, 1995; Elizabeth Malkin, "La Muerte Comes for a Poverty Program," BUSINESS WEEK, July 3, 1995; Maribel Gutierrez, "Son Ya 17 los Muertos por la Balacera en Guerrero, Informan los Campesinos," LA JORNADA, June 30, 1995; José Gil Olmos, "Tambien Se Indico al Hospital de Atoyac Prepararse Para un 'Acontecimiento' Ese Martes," LA JORNADA, July 1, 1995; "Mexico: Police Arrested for Guerrero Massacre," "Mexican Rebels Push National 'Consultation,'" WEEKLY NEWS UPDATE ON THE AMERICAS, July 9, 1995; Anthony DePalma, "Spasm of Violence is Shaking a Poor Mexican State," NEW YORK TIMES, July 11, 1995; "Massacre in Guerrero," MEXPAZ #29, July 5, 1995; "Chiapas," Mexico Update, June 21, 1995; Paul B. Carroll and Dianne Solis, "Zedillo Appoints Veteran Politician to Interior Post," WALL STREET JOURNAL, June 30, 1995; "Violence in Tabasco," "More Violence in Guerrero," MEXPAZ #30, July 12, 1995; "Mexican Massacre Survivor Says 3 Gunmen Dressed as Police," AP, July 8, 1995; "Murdered Judge Left Accusatory Letter," INTERPRESS SERVICE, June 22, 1995; Osvaldo Leon, "Mexico: Nuevas Sorpresas," ALAI, July 7, 1995. RESOURCES/EVENTS "Give Credit Where Credit is Due," an economic development delegation to Nicaragua on August 26-September 2, sponsored by Nicaraguan Conference of Churches (CEPAD) and Wisconsin Coordinating Council on Nicaragua (WCCN). Participants will meet with borrowers and staff of the Nicaraguan Community Development Loan Fund (NCDLF), which has provided $2.75 million-plus in loans to agricultural cooperatives, worker-owned and women-owned businesses, and non-profit organizations in Nicaragua since 1992. $760 plus airfare. WCCN, P.O. Box 1534, Madison, WI 53701; phone (608) 257-7230; fax (608)- 257-7904; email wccn@igc.apc.org. Rebellion from the Roots: Indian Uprising in Chiapas by John Ross, 1995, 424 pp. Order from Common Courage Press, P.O. Box 702, Corner Jackson Rd & 139, Monroe, NE 04951. Telephone 207/525- 0900; Fax 202/525-3068. $14.95. Journalist John Ross has written an impassioned and highly readable chronicle of the Zapatista revolution, placing it in the context of indigenous and agrarian popular movements of the Mexican poor. ___________________________________________ 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