TRADE NEWS BULLETIN Volume II Number 17 Thursday, January 28, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ MEXICO WILL NOT ACCEPT BINDING ENVIRONMENTAL PANEL The United States and Mexico appear headed for a battle over the establishment of environmental accords in conjunction with the North American Free Trade Agreement. A senior Mexican official said Mexico would not accept a North American environmental commission if it has enforcement powers. Such a panel would create "an artificial barrier to commerce" and "violate national sovereignty," said the official. U.S. President Bill Clinton has hinged his support for NAFTA on the creation of binding side agreements. "If we don't have the power to enforce laws that are on the books, what good is the agreement?" Clinton said during a campaign speech in October. The Clinton Administration did not make an official statement on the matter yesterday. The Mexican official, who works with environmental issues, said the commission should study complaints and make recommendations, but have no binding powers. Shortly before Clinton took office, Deputy Trade Coordinator Amanda DeBusk said the panel should set minimum environmental standards and be responsible for enforcement of those standards. Source: Bob Davis, "Clash Looms Over Scope of NAFTA Panel," WALL STREET JOURNAL, January 28, 1993, p. A10. _________________________________________________________ GATT News Summary _________________________________________________________ EC, CANADA DENOUNCE US STEEL TARIFFS The United States recently announced temporary anti-dumping tariffs of as much as 109 percent on steel exports from 19 nations, including seven European Community countries and Canada. Leon Brittan, the EC's trade minister, said the action was "unwarranted and wholly disproportionate," and he called for immediate discussion with the U.S. in GATT. At a news conference in Geneva, Brittan also called for a speedy conclusion to GATT negotiations. "I believe it is possible to reach an agreement on the Uruguay Round within the American fast-track procedure and therefore it is vitally necessary to do so," Brittan said. Following the U.S. steel announcement, the United Steelworkers of America, which represents about 160,000 workers in Canada, called for the formation of a Canada-U.S. steel trade pact. The Canadian steel industry and the Canadian Steel Trade and Employment Congress also support a binational trade pact. Leo Gerard, the national director for the steelworkers in Canada, said the Canada-U.S. Free Trade Agreement (FTA) has led to a sharp decrease in earnings for Canadian steel producers, and has not provided a forum for addressing disputes. "The FTA, and an over-valued dollar that followed its signing, combined with no access to the U.S. market, means Canada is left with the worst of all possible worlds." The U.S. move would slap 69 percent duties on Canadian steel exports. Source: "EC Condemns U.S. Steel Tariffs as Heavy Handed," REUTER, January 27, 1993; "Canadian Steelworkers Urges Steel Pact with U.S.," REUTER, January 27, 1993. _________________________________________________________ JAPAN THREATENS TO FILE COMPLAINT OVER AUTO TRADE Japan will file a complaint to the General Agreement on Tariffs and Trade if U.S. automakers follow through on efforts to impose punitive duties against foreign car imports, a top Japanese trade official said yesterday. The American Automobile Manufacturers' Association (AAMA) announced Tuesday it is considering filing legal action against what it claims are unfairly low prices on foreign cars. Japan also criticized the U.S. government decision to reclassify imported minivans as trucks, which raised the tariffs on the vehicles from 2.5 percent to 25 percent. International Trade and Industry Vice Minister Yuji Tanahashi said the move violates GATT rules. Source: "Japan to Appeal to GATT if U.S. Automakers Act on Cars," UPI, Jan. 27, 1993. _________________________________________________________ Other Trade News CLINTON MAY BLOCK HIGH TECH SALES TO CHINA US President Bill Clinton is expected to thwart China's controversial bid to buy advanced jet engines and a supercomputer from the United States. Clinton has indicated he is less likely than President Bush to support high technology exports to China until the Beijing government improves its human rights record. Internal disagreement prohibited the Bush Administration from acting on the sales before Bush left office January 20. The U.S. Commerce Department supports the plan, arguing the transfers would not violate U.S. laws banning the sale of high technology to communist nations. U.S. businesses lobbied hard for the deals, which would probably total 700 jets to China, for 500 million dollars. The Defense Department opposes the deals, arguing that China may use the computer and jets for military purposes. It has pointed to the reported sales of missiles to Third World countries including Iran, Pakistan and Syria as basis for its fears. Source: Yojana Sharma, "China: Deal for U.S. Jets, Super Computer in Peril?" SUNS, January 27, 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 _________________________________________________________