TRADE NEWS BULLETIN Volume 2 Number 29 Tuesday, February 16, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ CANADIAN, MEXICAN MINISTERS MEET TO DISCUSS NAFTA Canadian and Mexican officials met Monday to determine priorities for the North American Free Trade Agreement (NAFTA). The one- day meeting focused on ways to boost trade and investment in agriculture, fishing, housing, mining, transport and communications. Leaders hoped to "strengthen an already healthy bilateral trading relationship and build on existing and potential opportunities throughout the North American marketplace," said Canadian Trade Minister Michael Wilson. The ministers also discussed creating side labor and environmental accords to the NAFTA. "It is in Mexico's interest to have a clean environment and an increasingly high standard of living," said Mexican Foreign Minister Fernando Solana. Wilson added," We are prepared to work closely with the U.S. and Mexico in making parallel initiatives in these areas a reality." NAFTA must be ratified by legislatures of all three nations before it can take effect on January 1, 1994. "The ball is more in the Americans' court than in Mexico's or Canada's," said Wilson. "We are ready to move whenever they are." Sources: "Canada and Mexico to Stay on Course on Trade Pact," Anthony Broadle, REUTER, February 15, 1993; "Mexico Asks More Canadian Investment," UPI, February 15, 1993; "Mexican, Canadian Ministers Talk Trade, Economic Cooperation," UPI, February 15, 1993; "Canada to Seek NAFTA Ratification in a Few Weeks," REUTER, February 15, 1993. _________________________________________________________ NAFTA DISCUSSED AT TRADE CONFERENCE The Eleventh International Monetary and Trade Conference took place November 23-24, 1992 at the Federal Reserve Bank of Philadelphia. In discussing the economic implications of the NAFTA, F. Gerard Adams, an economics professor at the University of Pennsylvania, predicted financial gains for Mexico and the United States overall, but added U.S. labor could suffer "some wage loss because of outsourcing to Mexico." Adams said he thought it "entirely possible" that NAFTA would lure foreign direct investment that otherwise would have gone to East Asian countries. Adams said NAFTA is different from other free trade areas because of the sharp differences in the economic conditions of the countries involved. "NAFTA is really about capital movements, transfer of technology, and location of production," Adams said. Source: "Prospects for EMU and Impact of NAFTA Examined at Conference," IMF SURVEY, January 25, 1993. _________________________________________________________ GATT News Summary _________________________________________________________ JAPAN THREATENS RETALIATION IF U.S. PURSUES SUPER 301 After returning from his first meeting with U.S. President Bill Clinton, Japanese Foreign Minister Michio Watanabe told Parliament on Monday that Japan must consider countermeasures should Clinton revive the "Super 301" as part of the Trade Expansion Act. The rule, which expired in 1991, would permit the U.S. government to impose sanctions on countries found guilty of illegal trading. Japan was cited in 1989 under "Super 301" for its allegedly closed markets of supercomputers, wood products and satellites. "Japan regards Super 301 as a violation of the General Agreement on Tariffs and Trade (GATT)," said a Foreign Ministry spokesperson. Japan also announced that it will further retaliate if the U.S. increases duties on Japanese minivans. "Japan will protest to the GATT if the U.S. raises tariffs on minivans to 25 percent from the current 2.5 percent," said Noboru Hatakeyama, vice-minister of International Trade and Industry. Japan and other East Asian countries are concerned the Clinton Administration will impose more restrictive trade policies in response to Congressional pressure. Malaysia has initiated efforts to form an East Asian Economic Caucus built around Japan, which would act as a single trading entity similar to the proposed North American Free Trade Agreement. It is backed by Brunei, Indonesia, the Philippines, Singapore and Thailand. Sources: "Japan Would Protest If Minivan Tariffs Raised-MITI," REUTER, February 16, 1993; "Japan Considering Countermeasures Against U.S. Trade Bill," REUTER, February 15, 1993; "Protectionism Could Prompt A Trade Bloc Led By Tokyo," Michael Richardson, HERALD TRIBUNE, February 9, 1993. _________________________________________________________ KOREAN LEADER VOWS TO KEEP RICE BAN AS FARMERS PROTEST As 10,000 South Koreans protested GATT demands to end rice import bans, Prime Minister Hyun Soong-jong promised lawmakers and farmers he would oppose free trade in rice. A top Japanese official echoed the pledge. "Major countries face agricultural issues such as the rice issue in Japan. We will try to complete the Uruguay Round while sticking to our policy (of continuing a ban on rice imports)," said Yoshiro Mori, Japan's minister of foreign trade. About 500 farm leaders from around the world met last week in Seoul to protest the GATT plan, which would replace all farm import barriers with tariffs. Sources: "Japan/US Agree On Farm Issues Except Rice-Minister," REUTER, February 16, 1993; "Japan To Maintain Ban On Rice Imports," REUTER, February 16, 1993; "Asian Rice Growers Protest," THE WALL STREET JOURNAL, February 16, 1993; B.J. Lee, "South Korea-Rice Protest," THE ASSOCIATED PRESS, February 15, 1993. _________________________________________________________ Produced by: Kai Mander The Institute for Agriculture and Trade Policy (IATP) 1313 Fifth Street SE, Suite #303 Minneapolis, MN 55414-1546 USA Telephone:(612)379-5980 Fax:(612)379-5982 E-Mail:kmander@igc.apc.org _________________________________________________________