TRADE NEWS BULLETIN Volume 2 Number 33 Monday, February 22, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ BOOK OMITS FINDINGS ON NAFTA'S LONG-TERM AFFECT ON JOBS Two U.S. economists, whose studies are often cited as evidence that the North American Free Trade Agreement would create jobs in the U.S., failed to include in their new book statistics on the accord's long-term impact. Gary C. Hufbauer and Jeffrey J. Schott have been criticized for excluding from their book, NAFTA: AN ASSESSMENT, their conclusions showing that any increase in jobs would vanish after 15 to 20 years. Schott and Hufbauer, who are both senior fellows at the Institute for International Economics, predict NAFTA would produce an immediate gain of 175,000 U.S. jobs by 1995. Their conclusions are based on Mexico's heavy dependence on foreign investment, such as American factory equipment and other exports. As the Mexican economy grows, imports and exports will roughly balance, and U.S. jobs will be lost, they explained. Schott said these results were not included in the book because they relied on complicated assumptions and he stressed that long term economic forecasts are unreliable. The U.S. will benefit from greater competition and a larger continent- wide market created by NAFTA, according to the study. Increased efficiency and higher output will earn approximately $15 billion a year between Mexico and the U.S. "Over the long-term, this figure -- not jobs won or lost -- is the true measure of the economic gain from the NAFTA agreement," the book states. Sources: Keith Bradsher, "Trade Pact Job Gains Discounted," NEW YORK TIMES, February 22, 1993; John Maggs, "NAFTA Study Finds Little Impact From Agreement On Wages in U.S.," JOURNAL OF COMMERCE, February 18, 1993. _________________________________________________________ U.S. WORKERS FIGHT JOB DISLOCATION, BLAME NAFTA The Teamsters, one of the largest U.S. labor unions, is protesting wage cut demands by Hasbro Company. Hasbro locked out workers at a Rhode Island plant two weeks before Christmas and threatened to move warehouse jobs to Mexico if workers refuse to take pay cuts. Local 251 members have estimated that over 400 warehouse jobs would be lost by a move south. They asked for community support in opposing Hasbro wage cuts and argued that NAFTA will create many similar situations. "We know that our enemy is not Mexican workers, trying to feed their families," said Teamster Vice President Tom Gilmartin. "Our enemy is companies like Hasbro that want to move profitable operations south so they can make even more profit by exploiting working people someplace else." Hasbro earned $2 billion in sales in 1991 and paid six top executives $9.6 million in compensation. In other news, Minnesota's Sheldahl Inc., announced last week that it will spend $40 million on expansion and relocation of its present site to another state and to Mexico. Officials said they expected to eliminate 104 assembly positions, but would offer 30 higher-skill positions to those losing jobs. Bev Brumbaugh, vice president of human resources, said the move is unrelated to NAFTA, arguing the circuit assembly operation is being relocated to serve major customers who already manufacture in Mexico. Sources: "Teamsters Fight Hasbro's 'Free Trade' Threat," THE NEW TEAMSTER, March 1993; Jill Hodges, "Sheldahl to Retool Northfield Site, Shift 104 Plant Jobs to Mexico," MINNEAPOLIS STAR AND TRIBUNE, February 11, 1993. _________________________________________________________ GATT News Summary _________________________________________________________ AUSTRALIA URGES U.S. TO HURRY GATT TALKS Australian Trade Minister John Kerin urged the United States today to make use of fast-track authority to conclude the Uruguay Round of the General Agreement on Tariffs and Trade (GATT.) "We'll do our utmost to convince the U.S. administration that after six and a half years now is the time to tie the Round together," Kerin told reporters after meeting with European Community Farm Commissioner Rene Steichen in Brussels. Kerin, who was representing the 14-member Cairns group of farm exporters, also stressed the importance of accepting last November's U.S.- EC farm deal. GATT supporters hoped the agreement would settle trade disputes and push GATT talks ahead, but it has been widely criticized by European farmers. U.S. Trade Representative Mickey Kantor vowed last week to resist pressures to conclude GATT talks in a hurry. The Administration demands, "a balanced round, one that favors global growth and is beneficial to the U.S. economy," he said. Kantor and U.S. Agriculture Secretary Mike Espy are expected to meet with Kerin this week in Washington. Sources: "Cairns Group to Urge U.S. to Speed GATT Accord," REUTER, February 22, 1993; Hobart Rowen, "Kantor Reticent on How Tough U.S. Will Be on Trade," WASHINGTON POST, February 21, 1993. _________________________________________________________ Events: "FREE/FAIR TRADE" FOR A MORE FREE WORLD, Tuesday February 23rd, 7:30-9:30 PM at West Bank Union, University of Minnesota. A panel discussion on diverse perspectives of the North American Free Trade Agreement, sponsored by Minnesota Peace and Justice Coalition, United Nations Association of Minnesota, World Citizen Inc., and World Federalist Association. For more information, call: (612) 333-2824. _________________________________________________________ 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 _________________________________________________________