TRADE NEWS BULLETIN Volume II Number 2 Tuesday, January 5, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ MIXED VIEWS ON NAFTA TRUCKING PROVISIONS U.S. trucking companies are scrambling to prepare for the easing of restrictions under the North American Free Trade Agreement. While some are eager to increase their operations in Mexico, other companies -- and their drivers -- fear they will be unable to compete with the stiff competition from Mexico. Many U.S. trucking companies feel they are at a disadvantage because Mexican carriers do not have to pay worker's compensation and unemployment benefits, nor must they meet the same safety requirements. "They gained a lot of things; we gained nothing," said Stephen P. Murphy, a lobbyist and retired general counsel for Yellow Freight System Inc. "We didn't get a fair deal." U.S. carriers object to NAFTA's provision prohibiting American companies from buying control of Mexican trucking companies until the year 2000. Mexican companies are already allowed to buy U.S. carriers. U.S. carriers are also disappointed NAFTA does not overrule Mexico's ban on extra-long trucks, which U.S. corporations use frequently. U.S. truck drivers fear NAFTA's honoring of Mexican commercial drivers' licenses in the U.S. will lead to many job losses as companies hire Mexican drivers at lower wages. "If these companies can get them to work for nothing, and they don't have to meet our requirements, then a lot of Americans are going to lose their jobs," said Keith B. Green, a driver for Yellow Freight. A recent International Brotherhood of Teamsters' study found that U.S. truck drivers earn an average $140 a day in total compensation, compared to $7 a day for their Mexican counterparts. Towns along the U.S.-Mexico border have benefited from the two countries' respective ban on foreign drivers. Currently, trailers must be exchanged at the border. But because NAFTA eliminates the ban on foreign drivers, border towns are likely to suffer a sharp decline in activity as transportation companies choose to do their consolidating and warehousing in other, larger cities further from the border. James Giermanski, director of the international trade division of Laredo State University, says the towns should expect long-term employment and distribution changes from NAFTA. "I don't think border cities are making traffic assumptions. I don't think they even understand the agreement," Giermanski said. Source: Keith Bradsher, "North-South Route to Trucking Profit," NEW YORK TIMES, January 5, 1993, p. C1; "NAFTA Leaves Texas Truckers Singing the Blues," JOURNAL OF COMMERCE, August 18, 1992, p. 3B; Kevin G. Hall, "US-Mexican Trade Agreement Will Cut Role of Border Truck Hub," JOURNAL OF COMMERCE, December 23, 1992, p. 1. _________________________________________________________ SALINAS PROMOTES THREE POSSIBLE SUCCESSORS Mexican President Carlos Salinas de Gortari promoted three members of his Institutional Revolutionary Party (PRI) to cabinet rank. Salinas, who is prohibited under the Mexican constitution from seeking a second term, is expected to follow tradition this year and choose a PRI cabinet minister to succeed him when his six-year term expires in July 1994. Several analysts were surprised at the selection of Jose Patrocinio Gonzalez, governor of the southern state of Chiapas, as interior minister. Chiapas is known as one of the worst states for human rights abuses. Salinas also named Jorge Carpizo MacGregor, head of the government's National Commission on Human Rights, as the new attorney general. Emilio Lozoya Thalmann, director of the Institute for Social Security and Services for State Employees, was named minister of energy, mines and state firms. Source: Janet Duncan, "Mexico Shuffles Cabinet with Eye to Presidential Race," REUTER, January 4, 1993; _________________________________________________________ GATT News Summary _________________________________________________________ GATT PROBLEMS CONTINUE; US WILL SUBMIT TARIFF LIST U.S. President George Bush and French President Francois Mitterand failed to make progress toward completing the General Agreement on Tariffs and Trade during talks Sunday. "I reiterated the U.S. position, which is that we'd like to see a successful conclusion of the GATT round," Bush told reporters. "There are known differences. We did not eliminate those differences." As the January 20 inauguration date approaches and a GATT does not appear imminent, it seems virtually certain that President-elect Bill Clinton will inherit the negotiations. But Bush is still gunning for a deal. In addition to the Bush-Mitterand talks, U.S. Trade Representative Carla Hills and new EC Trade Commissioner Leon Brittan held secret talks at an undisclosed location, according to one top trade official. The EC's previous top trade negotiator, Frans Andriessen, has left the European Commission. GATT Director-General Arthur Dunkel is also expected to use the top- level Trade Negotiations Committee (TNC) meeting in Geneva on January 15 to encourage a conclusion of the Round. In related news, a trade official said the United States would submit a new draft list of tariff cuts for industrial products in GATT this week. The list is a response to the European Community list issued December 17. Details of the U.S. list were not available, but one official said, "It will continue to reflect our willingness to go to zero- for-zero (tariff levels) in certain sectors." Source: "Bush, Mitterand Make No Progress on GATT," REUTER, January 3, 1993; Stephanie Nebehay, "GATT Negotiators Await Signals from U.S. and EC," REUTER, January 5, 1993; "US to Submit Tariff List on Industrial Goods," REUTER, Jan. 5, 1993. _________________________________________________________ IRAN EAGER TO JOIN GATT Iran expressed interest in joining GATT, and asked for the world trade body's cooperation in speeding up the application process, the Iranian news agency reported. Sirous Nasseri, ambassador to the United Nation's European office in Geneva, told GATT chief Arthur Dunkel last week that Iran had implemented measures to "change tariffs, step up non-oil exports and create free trade and economic zones with other countries" as part of Iran's new economic policies. Source: "Iran Plans to Join GATT," REUTER, December 28, 1992. ___________________________________________ Events: "Free Trade in North America: The Occupational and Environmental Impact" is the theme of the annual conference of The Society for Occupational and Environmental Health (SOEH). The conference will be held at Rutgers University, Piscataway, New Jersey, March 18-20, 1993. For more information about SOEH and the conference, contact: SOEH, 6728 Old McLean Village Drive, McLean, VA 22101. Tel: (703) 556-9222. _________________________________________________________ Resources: 1. THE ECONOMIST is now offering: NAFTA: MEXICO PLANNER, "a package of six articles drawn from the Economist Intelligence Unit newsletters and research reports." The magazine says the articles are intended to provide management guidelines, strategies and opportunities for conducting business within the NAFTA treaty. The package sells for US$49. For more information, call 1-800-342-4220. _________________________________________________________ Other On-line Conferences: trade.strategy - a discussion of trade issues trade.library - a repository of trade information eai.news - a news summary of Latin American trade topics susag.news - a news summary of sustainable agriculture issues 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 _________________________________________________________