TRADE NEWS BULLETIN Volume 2 Number 36 Thursday, February 25, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ MULRONEY VOWS TO PASS NAFTA BEFORE LEAVING Canadian Prime Minister Brian Mulroney said his resignation will not affect the passage of the North American Free Trade Agreement (NAFTA). "We are proceeding with NAFTA legislation," Mulroney said. "We have a large majority in Parliament and so we will have no difficulty in passing it." Mulroney, who has served as Prime Minister and Progressive Conservative Party leader for eight and a half years, announced yesterday he would step down in mid-June. Despite growing opposition to the agreement, Mulroney is expected to press for quick side labor and environmental accords so that NAFTA can be ratified and implemented by January of next year. Liberal Party leaders say Mulroney's resignation will at least delay the implementation of NAFTA. The Liberals lead the Conservatives in the latest Gallup poll 49 to 21 percent and have urged that NAFTA be delayed until after federal elections this fall. "The Conservative Party needs to call an early leadership convention and an early election. This puts all current pieces of legislation up in the air, including NAFTA," said Liberal Deputy Leader, Sheila Copps. NAFTA proponents in Canada, the U.S. and Mexico are concerned that Mulroney's resignation reveals just how unpopular the Conservatives are right now in Canada. They worry the Liberal Party's popularity and strong Canadian opposition to NAFTA could threaten the pact. "The resignation of Mulroney is quite negative and makes the NAFTA look less and less probable," said Felix Boni of Interacciones, an investment firm. "I think it is still likely to pass, but every day the chances of its approval and going into effect by January become smaller." Sources: Bernard Simon, "Mulroney Quits to Lift Party's Hopes," FINANCIAL TIMES, February 25, 1993; John Urquhart, "Mulroney Quits As Canadian Prime Minister," WALL STREET JOURNAL, February 25, 1993; Clyde Farnsworth, "Mulroney Quits Post in Canada Urges 'Renewal'," NEW YORK TIMES, February 25, 1993; Anthony Boadle, "Mulroney Says Canada Will Ratify NAFTA by June," February 24, 1993; "Canada Says Mulroney Resignation Won't Affect NAFTA," UPI, February 24, 1993. _________________________________________________________ GATT News Summary _________________________________________________________ CLINTON AND MAJOR TALK TRADE AND FOREIGN POLICY During their first meeting yesterday, U.S. President Bill Clinton and Britain's Prime Minister John Major focused on trade issues and foreign policy. Major stressed the importance of a quick completion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations. He urged Clinton not to extend "fast-track" negotiating authority for more than nine months so as not to hinder progress. Clinton reassured Major that the U.S. is committed to GATT. Major also expressed European fears over U.S. tariffs on steel imports, and warned that a "tit-for-tat" retaliation was possible. Sources: Philip Stephens, "Major in First Talks With Clinton," FINANCIAL TIMES, February 25, 1993; "Clinton Hopeful For GATT Accord, Seeks Fast-track," REUTER, February 24, 1993; "John Maggs, "Clinton Nears Decision On Deadline For Trade Talks," JOURNAL OF COMMERCE, February 23, 1993. _____________________________________________________________ BRITAIN, GERMANY CRITICIZE FRANCE FOR OPPOSITION Germany joined Britain in criticizing France for threatening to veto the U.S.-EC farm deal. German Foreign Minister Klaus Kinkel said France should show more "solidarity" with Germany's export- oriented interests, and called French demands for a completely new GATT accord "unacceptable." Nestle UK Ltd. has called for reforms of the U.S.-EC agricultural pact. "The agreement ignores the effects it'll have on the total economic activity of the EC," said Nestle's Alec McClumpha after a speech on the effects of the GATT trade deal. "EC food processors can compete with anybody in the world and they do but take away export restitutions without reducing raw material prices and they're dead," said McClumpha. Nestle and other food-processing companies are concerned about the volume control on processed products. Sources: "Germany Joins UK Criticism of France Over GATT," REUTER, February 24, 1993; "Hurd Warns France Not to Scupper Oilseeds Deal," REUTER, February 24, 1993; "European Food Producer Attacks EC-U.S. Farm Accord," REUTER, February 24, 1993. _________________________________________________________ Events: "International Trade and Michigan Agriculture - What Are the Opportunities?" March 4, 1993. An educational program featuring former U.S. Agriculture Secretary and U.S. Trade Representative Clayton Yeutter and other experts. Kellogg Center Auditorium, Michigan State University. For more information, contact: John Ferris, Agricultural Economics Department. Tel: (517) 355-0144. _________________________________________________________ Produced by: Kai Mander and Gigi Boivin 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 _________________________________________________________