From iatp@igc.apc.orgSat Aug 19 18:48:38 1995
Date: Fri, 18 Aug 1995 15:03:33 -0700 (PDT)
From: IATP <iatp@igc.apc.org>
To: Recipients of conference <trade-news@igc.apc.org>
Subject: NAFTA & Inter-Am Trade Monitor 8-18

NAFTA & Inter-American Trade Monitor
Produced by the Institute for Agriculture and Trade 
Policy
August 18, 1995
Volume 2, Number 23
__________________________________________
Headlines:
- MAQUILAS AND LABOR
- CHILE MAY WAIT ON NAFTA
- CAMPESINOS KILLED IN BRAZIL PROTESTS
- FORECLOSED MEXICAN PROPERTY SET FOR AUCTION IN TEXAS
- MEXICAN DROUGHT INCREASES GRAIN IMPORTS
- COFFEE PRODUCERS RESTRICT EXPORTS
__________________________________________

The next issue of the NAFTA & Inter-American Trade 
Monitor will appear on September 8.  There will be no 
issue on September 1.
__________________________________________

MAQUILAS AND LABOR

Labor rights continue to be a major area of dispute in 
international trade discussions.  Complaints to the 
United States Trade Representative (USTR) this year 
charged Guatemala and Colombia with failure to protect 
workers' rights, and asked the USTR to withdraw the 
benefits given the two countries under the generalized 
system of preferences (GSP).  The complaints against 
Guatemala, filed by the AFL-CIO, cite increasing violence 
and recent killings of several union members.  The AFL-
CIO, Human Rights Watch, and the International Labor 
Rights and Education Research Fund (ILSRERF) all
Colombia lacks freedom of association and the right 
to organize and bargain collectively.  Despite 
constitutional guarantees, workers' rights are violated 
by widespread violence in Colombia.  The AFL-CIO also 
complained of child labor in Colombia.

In May, the Central American Parliament unanimously 
resolved "to take action against the interference of 
U.S. labor unions in the Central American maquila 
industry."  Maquila proponents object to U.S. union 
pressure to raise wages and environmental standards.  

Some U.S. companies have responded to consumer concerns 
about foreign labor practices by instituting codes of 
conduct for contractors.  J.C. Penney Company requires 
apparel makers to sign a code of conduct forbidding any 
violation of local labor law, but the agreements are 
routinely ignored.  A maquila owner in Guatemala reports 
that his business has "never had any request from Penney 
about how we pay or treat workers -- just the quality of 
our production."  Visits to factories supplying Penney 
find workers under the legal age of 14 and others paid 
less than the minimum wage of $2.80 per day and forced 
to put in unpaid overtime.  Penney's Guatemalan buying 
office director concedes that he has never reported any 
supplier violation of the company code.  The Guatemalan 
Labor Ministry's child-worker protection chief says her 
office does not have the personnel to investigate an 
estimated 300,000 illegally employed child workers.

Levi Strauss employs inspectors to police working 
conditions in developing world factories, but concedes 
that they don't dig deeply for fear of offending factory 
owners.  The director of imports for the Target chain 
says policing is impossible: "I don't want to sound 
callous, but we probably have 150 major contractors, and 
sometimes we don't know which factory something is 
coming from."  Target has a code, but does not monitor 
compliance.  

The Caribbean Basin Trade Security Act (CBTSA), 
currently before the U.S. Congress, would end U.S. 
duties for exports from 24 Central American and 
Caribbean maquiladoras.  The bill, also known as the CBI 
parity bill, would provide trade benefits roughly 
equivalent to those received by Mexico under NAFTA, but 
does not include equivalent workers' rights provisions.  
Central American countries complain that textile 
companies are moving to Mexico because of NAFTA.  The 
Federation of Private Entities of Central America and 
Panama says that 74 companies moved from Guatemala to 
Mexico in the last year, leaving 20,000 Guatemalans 
unemployed.  Overall, however, CBI textile exports 
continued to increase in 1994.  

"Maquila Industry Opposes U.S. Unions' Claims," CENTRAL 
AMERICA REPORT, June 23, 1995; Bob Ortega, "Broken 
Rules: Conduct Codes Garner Goodwill for Retailers, But 
Violations Go On," WALL STREET JOURNAL, July 3, 1995; 
"Latin Nations Charged With Failure to Protect Worker 
Rights, Patents," WASHINGTON REPORT ON LATIN AMERICA AND 
THE CARIBBEAN, July 7, 1995; "Congress Considering 
Millions in New Tax Breaks for Central American 
Maquiladoras But Ignores Need to Respect Worker Rights," 
US-GUATEMALA LABOR EDUCATION PROJECT, July 27, 1995; 
Peter Brennan, "Costa Rica Sees Textile Jobs Begin to 
Move to Lower-Cost Countries," JOURNAL OF COMMERCE, 
August 10, 1995.

CHILE MAY WAIT ON NAFTA

After a first round of talks between Chile and current 
NAFTA members in Mexico City, Chilean chief negotiator 
Juan Gabriel Valdés reiterated that Chile will not enter 
into substantive negotiations unless the United States 
has fast track negotiating authority in place.  The U.S. 
Congress has not reached agreement on fast track, and 
will not vote until some time in October. Republicans 
are generally in favor of trade pacts but reluctant to 
give President Bill Clinton negotiating authority, while some 
Democrats are reluctant to see any widening of NAFTA.  
Even those Democrats who favor NAFTA and Chilean 
accession disagree with Republican demands to exclude 
labor and environmental provisions from a trade 
agreement with Chile.  

U.S. Representative Marcy Kaptur (D-OH) said she will 
introduce a bill to force renegotiation of all of NAFTA, 
which she has consistently opposed.  "NAFTA was supposed 
to create jobs in the United States.  It has done 
exactly the opposite." said Kaptur.  She also faulted 
NAFTA for increasing illegal immigration, increasing 
uncertainty in currency markets, and creating what is 
projected to be the largest-ever U.S. trade deficit this 
year.  

Rep. Charles Rangel (D-NY) said in early August that 
drug interdiction should also be part of trade 
negotiations, and that trade agreements should leave 
open the possibility of using tariffs to punish 
countries that tolerate drug production and trafficking.  
House Trade Subcommittee chair Rep. Phil Crane (R-IL) 
flatly rejected Rangel's proposal, saying it would "open 
a Pandora's box" of non-trade issues and protectionism.

Valdés said that Chile will evaluate the situation in 
late September.  Meanwhile, negotiations for Chilean 
association with Mercosur, the Southern Common Market of 
Argentina, Brazil, Paraguay, and Uruguay, will continue 
in Uruguay on August 21 with discussion of lists of 
exceptions to the common external tariff.  Chile and 
Mercosur have agreed to speed up the negotiations, 
hoping to reach an agreement by the end of this year.  
Chile's possible entry into NAFTA complicates the talks, 
as Mercosur wants the same preferential tariffs that 
Chile will offer NAFTA.  The Chilean business and 
agricultural sectors are reluctant to see this 
concession.

Kevin G. Hall, "Chile Will Wait Until September to 
Decide on Substantive Nafta Talks," JOURNAL OF COMMERCE, 
July 27, 1995; John Maggs, "GOP Bill on Chile, Nafta 
Derailed," JOURNAL OF COMMERCE, August 2, 1995; Kevin G. 
Hall, "US: Nafta Negotiations Too Slow; Chile: Talks Are 
Learning Experience," JOURNAL OF COMMERCE, August 2, 
1995; David Bennett, SAN ANTONIO EXPRESS-NEWS, July 26, 
1995; John Maggs, "Key House Democrat Wants to Add Drug 
Interdiction to Nafta Talks," JOURNAL OF COMMERCE, 
August 3, 1995; Gustavo Gutierrez, "Mercosur: Chile 
Races Against the Clock Towards Association Pact," 
INTERPRESS SERVICE, August 9, 1995; Gustavo Gutierrez, 
"Will Asuncion Meet Chile's Needs?" INTERPRESS SERVICE, 
August 3, 1995.

BRAZIL: AGRARIAN PROTESTS TURN BLOODY

On August 9, at least 32 people were killed when 200 
heavily-armed anti-riot police troops violently evicted 
hundreds of campesinos from farmland they had been occupying 
in the northern Brazilian state of Rondonia.  At least 
53 more people were arrested, 11 police officers were 
injured, and 355 people were arrested in a nearby town, 
according to government spokespersons.  Non-governmental 
sources such as the Rondonia Rural Workers Federation, 
the Landless Peasant Movement and the Catholic Church's 
Pastoral Land Commission said the number of people 
killed is more likely to be around 70.  The squatters 
were armed with machetes, sticks, and knives when police 
came to burn their houses and drive them out of the 
absentee-owned, 40,000-acre Santa Helena farm.

On July 25, more than 5,000 campesinos had gathered at 
the third annual congress of the Landless Peasant 
Movement (MST) in Brasilia.  The MST advocated continued 
land occupations until Brazil implements agrarian 
reform, and its members have taken over at least 87 
farms.  The MST says that only 60 million hectares of 
400 million suitable for farming are currently 
cultivated, and that 56 million of the cultivated acres 
belong to just 2,000 owners while 4.8 million families 
are landless.  During the past decade, 100,000 families 
have been given land rights, 700 campesinos working for 
land reform have been murdered, 370 have been tortured, 
13 cases have been tried, and four people have been 
found guilty.  

Brazilian law provides that the government can 
appropriate unproductive land and distribute it to 
landless campesinos.  President  Fernando Henrique 
Cardoso promised to settle 40,000 families this year and 
a total of 280,000 during his four-year term.  His 
agriculture minister, Jose Andrade Vieira, himself a 
large landowner, has tried to lower the targets 
announced by Cardoso during the presidential campaign.  

On July 19, farmers from 16 Brazilian states blocked 
traffic in Brasilia with a caravan of 1,000 trucks and 
tractors, demanding that the government stop adjusting 
their debts under the monetary index (TR) that measures 
inflation, and give farmers a 10-year period to pay 
their debts.  Farmers who are in default on their debts 
cannot obtain new loans.  

Farm protesters said that the agricultural sector's old 
debts total more than $4.5 billion, more than one 
billion of which is due to the TR surcharge.  The 
surcharge has raised agricultural debt by 1,200 percent 
over the past 18 months, with corn and soy prices going 
up by only 407 percent and 289 percent.  Protesters also 
pointed to competition from Mercosur imports and to the 
government's failure to guarantee minimum prices while 
over-valuing the national currency as causes of their 
difficulties.  Despite a grain harvest expected to be 
six million tons greater than last year's, farm income 
will drop by $5.6 billion this year.

Agriculture Minister Vieira said that the TR index is 
used for all other industries, and it would not be 
possible to stop its use for past agricultural debts.  
President Cardoso has promised lower interest rates for 
future production loans for basic products.  

"Landless Peasants Massacred in Brazil," WEEKLY NEWS 
UPDATE ON THE AMERICAS, 8/13/95; "Brazilian Peasants 
Committed to Land Takeovers," WEEKLY NEWS UPDATE ON THE 
AMERICAS, 7/30/95; Mario Osava, "Brasilia Awakens to 
Protesters' Horns," INTERPRESS SERVICE, July 19, 1995; 
"Farmers Protest in Brazil," WEEKLY NEWS UPDATE ON THE 
AMERICAS, 7/23/95; Angus Foster, "Land Battle Turns 
Bloody in Brazil," FINANCIAL TIMES, August 12, 1995.

FORECLOSED MEXICAN PROPERTY AUCTION IN TEXAS

Homes, residential and industrial properties, hotels and 
condominiums, and commercial centers from nine Mexican 
states will be auctioned in San Antonio, Texas by 
Lasalle Partners.  The properties to be auctioned in 
Texas have been seized by Banamex, Serfin, Zaverlat, 
Banorte and Bancentro for non-payment of loans.  The 
auction, originally scheduled for August 11 but now 
postponed until the end of the month, has been met with 
angry opposition within Mexico, where debtor 
organizations refuse to pay what they call usurious 
interest rates.  

"Mexican Properties to be Auctioned Off in Texas," 
Statement of Victor Quintana, Federal Representative 
from Chihuahua, July, 1995.  

MEXICAN DROUGHT INCREASES GRAIN IMPORTS

In northern Mexico, one of the worst droughts in history 
has reduced yields and forced small farmers off their 
land.  Fall planting may not be possible in Chihuahua, 
Durango, Nuevo Leon and Tamaulipas, where rainfalls as 
of April 30 were 40 percent below normal.  Wheat 
harvests are expected to fall from four million metric 
tons last year to 2.5 million metric tons in 1995-96.  
The Mexican agriculture ministry estimates that grain 
imports will be at least nine million tons this year, 
two million higher than anticipated.  The Confederacion 
Nacional de Propietarios Rurales estimates that grain 
imports will reach 17 million tons.  

Mexican water reservoirs have dropped so far that 
irrigation has been stopped in the northern agricultural 
region, in order to conserve water for domestic use.  
Dropping water volumes have increased salt content, 
making water unsuitable for consumption or irrigation.  
The International Boundary and Water Commission, which 
governs water allocations from the Rio Bravo/Rio Grande 
and several of its tributaries, reported that on July 1 
Mexico had only 6.77 percent of stored water capacity 
available, while Texas had 47.11 percent of its stored 
water capacity available.  Under the terms of a 1944 
treaty, Texas can use all the flow from tributaries on 
the U.S. side of the river, while Mexico has to share 
the flow from its tributaries with Texas.  Texas 
Governor George Bush and the U.S. State Department 
earlier this year denied a Mexican request for water for 
irrigation, but may consider giving Mexico water for 
human consumption.  

Marcelo Morichi and Jan Gilbreath, ³Drought Brings 
Severe Crop Reductions and Cattle Losses in Northern 
Mexico,² U.S.-MEXICAN POLICY STUDIES PROGRAM, July 21, 
1995; Kim Archer, "Big Drop Forecast for Production of 
Mexican Wheat as Plantings Fall," JOURNAL OF COMMERCE, 
August 14, 1995.

COFFEE PRODUCERS RESTRICT EXPORTS

Meeting in Bogota, Colombia in early July, 
representatives from Brazil, Colombia, Costa Rica, El 
Salvador, Honduras, and Nicaragua agreed to strictly 
limit coffee exports in order to bolster falling 
international prices for coffee.  The agreement reached 
by the six countries sets quarterly quotas for each 
country for the next year, consistent with the 
Association of Coffee Producing Countries (ACPC) 
agreement reached in London in March.  The ACPC plan 
calls for worldwide exports of 60.376 million 132-pound 
bags during the next year, down from an expected 69 
million bags.   Coffee prices have dropped drastically 
from $1.80 per pound to $1.22 per pound since the 
beginning of 1995.  

The Mexican National Coordinator of Coffee Organizations 
(CNOC), which represents more than 60,000 producers,  
supports the agreements to limit exports and has 
petitioned the Mexican government to join the ACPC.  
Mexico is the only leading coffee producer to remain 
outside the ACPC plan.

Colombia's National Coffee Union held a 24-hour strike 
on July 19, demanding government aid to increase prices, 
to replace disease-killed plants and to forgive $200 
million in coffee-growers' debts.

"Coffee Retention Agreement Reached," U.S. STATE 
DEPARTMENT REPORT, July 12, 1995; Erin Brummett, "Costa 
Rica/Coffee," VOICE OF AMERICA, July 6, 1995; "Coffee 
Growers Strike in Colombia," WEEKLY NEWS UPDATE ON THE 
AMERICAS, July 23, 1995; "Mexico Supports Latam Coffee 
Export Limits," REUTERS, July 14, 1995; "Coffee Prices 
Retreat as Doubts Rise Concerning Export Limits," NEW 
YORK TIMES, July 28, 1995; "Mexico Alone as Guatemala 
Joins Coffee Export Plan," REUTERS, August 7, 1995.


RESOURCES/EVENTS

LATIN AMERICAN LABOR NEWS, a publication of the Center 
for Labor Research and Studies, Florida International 
University.  Journal includes reporting on Latin 
American trade unions and their struggles, news on 
inter-American labor solidarity, academic research, 
calls for papers.  (Articles are published in original 
languages of English, Spanish, Portuguese in 1994 double 
issue.) Back issues available for $7.50-$30 include 
1992, 1993, 1994, and 1995 issues focusing on labor and 
free trade.  Published once or twice annually.  
Subscription is $15 individual, $30 institutional.  

Zoned for Slavery: The Child Behind the Label, a video 
report on maquila manufacturing produced by the National 
Labor Committee in Support of Worker and Human Rights in 
Central America.  $12.  This 23-minute video focuses on 
the conditions of maquila workers in Honduras.  National 
Labor Committee, 15 Union Square, New York, NY 10033.  
Telephone 212/242-0700, fax 212/255-7230.  
___________________________________________
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
