From [email protected]
Date: 04 Aug 94 19:58 PDT
From: IATP <[email protected]>
Reply to: "Conference trade.news" <[email protected]>
To: "Recipients of conference trade.news" <[email protected]>
Newsgroups: trade.news
Subject: NAFTA & Inter-Am Monitor 8/1/94

Produced by the Institute for Agriculture and Trade Policy
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NAFTA and Inter-American Trade Monitor, vol. 1, #10
August 1, 1994
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HEADLINES

LOCKHEED THREATENS CANADIAN GOVERNMENT WITH NAFTA
CANADIAN FREE TRADE AND BEYOND
CERTIFICATE OF ORIGIN RULES POSTPONED
TOXIC WASTE IMPORT BAN DERAILED
MEXICAN NAFTA LABOR AGENCY CREATED
VENEZUELA STATE OF EMERGENCY CONTINUES
GATT SAYS US SHOULD END TUNA BOYCOTT
LATIN AMERICAN BANANA PRODUCERS MEET
RESOURCES/EVENTS

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LOCKHEED THREATENS CANADIAN GOVERNMENT WITH NAFTA

Taking advantage of  NAFTA provisions that require fair-market
compensation in case of expropriation, Lockheed may fight Canadian
legislation canceling an airport development deal.  As a US company,
Lockheed would be protected by NAFTA, although its Canadian
partners would not.

The now-challenged deal provided for redevelopment of two
terminals of Toronto's Pearson airport by a consortium of private
investors under a 57-year lease.  Shortly after it was elected, the
Liberal Chretien government sought to cancel the deal, saying that it
suspected political manipulation and excessive lobbying.  The
Liberal-
dominated House of Commons approved a bill that would strip
consortium members of their right to sue for cancellation of the
contract, limiting compensation to out-of-pocket expenses.  The Tory-
controlled Senate amended the bill, which is now in limbo until
September.

According to Maude Barlow of the Council of Canadians, this is one
more case of US. corporations using NAFTA to intimidate Canadian
governments.  Barlow cited the withdrawal of public automobile
insurance plans by Ontario three years ago, in part because of threats
by US.-owned insurers to seek compensation, and the failure of plain
cigarette packaging legislation after threats by Philip Morris tobacco
company to seek NAFTA damages.  Article 11 of NAFTA provides
that
investments can't be nationalized or expropriated unless fair
compensation is paid "in accordance with due process of law."

Source: Alan Freeman, "US. Firm Considers Pearson Challenge," THE
GLOBE AND MAIL, 7/20/94

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CANADIAN FREE TRADE AND BEYOND

After 127 years of inter-provincial trade barriers of various sorts,
Canada's 10 provincial premiers and Prime Minister Jean Chretien
signed a 200-page agreement aimed at reducing barriers to trade
within the country.  The agreement was criticized by business groups
and some of the premiers because of exemptions, including the right
of provinces to erect trade barriers for "social" reasons and
continuing
barriers to agricultural trade and to commerce in beer and wine.
Under NAFTA, provincial governments must treat the US  the same
as
other provinces.

Prime Minister Jean Chretien called for an expanded NAFTA to be
part
of the agenda for the Miami summit later this year.  Chretien said
Chile would probably be the next country to qualify for NAFTA
membership.

In a congressional hearing, US Commerce Secretary Ron Brown
praised
the "political and economic democratization of Latin America,"
predicting that, just as the Asian tigers prospered in the 1980s, the
"South American jaguars" are poised to pounce in the 1990s.  Brown
said, however, that it was unlikely that Chile or any other country
would join NAFTA by the end of the year.

Source: Peter Morton, "Canada Signs Pact to Topple Barriers to
Internal
Trade," JOURNAL OF COMMERCE, 7/19/94; Robert Kozak, "Canada's
Chretien Says NAFTA Should Be Expanded," REUTER, 7/19/94;
Lyndsay Griffiths, "US. Hails Latin "Jaguars" But No Quick Trade Ties,"
REUTER, 7/20/94

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CERTIFICATE OF ORIGIN RULES POSTPONED

US business leaders succeeded in persuading Mexican commerce
officials to indefinitely delay enforcement  for non-NAFTA certificate
of origin rules, which had been set to take effect on July 15.  The
rules
are designed to stop the influx of Chinese goods flooding Mexico.  US
businesses are involved because retailers have to present the
original
certificate of origin for goods being imported in Mexico.  Many US
retailers import large volumes from Asia, presenting the original
certificate of origin to US Customs, and then export a portion of the
goods to Mexico.

Other Chinese goods reach Mexico after being transshipped through a
third country, such as North Korea, in a practice known as
triangulation.  Mexico has imposed steep duties on Chinese goods that
are being sold there at below-production costs.

Mexico has asked trading partners to designate representatives that
can be recognized by its commerce department (Secofi) to certify
countries of origin on re-exported goods.  US businesses want self-
certification or, failing that, independent, non-governmental
certification.

Source: Kevin G. Hall, "Delay Sought on Non-Nafta Certificate of
Origin,"
JOURNAL OF COMMERCE, 7/13/94; Kevin G. Hall, "Mexico Indefinitely
Delays Its Certificate of Origin Rule," JOURNAL OF COMMERCE,
7/14/94;
Kevin G. Hall, "US Firms Ask Mexico to Make Further Changes to
Import Rules," JOURNAL OF COMMERCE, 7/18/94

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TOXIC WASTE IMPORT BAN DERAILED

In mid-July, the Mexican Chamber of Deputies defeated an
environmental protection bill amendment that would have banned
the
import of toxic wastes into Mexico.  The amendment originally called
for a ban on new imports and gave firms presently importing toxic
wastes four years to close their operations.  The new provisions
made
exceptions for firms bringing in wastes for "other than final
dumping."

Greenpeace, an international environmental group, charged that
Mexico's Zinc National Company in Monterrey and Cementos
Mexicanos
(CEMEX) and the US Mobley Environmental Services had formed a
joint venture called "Pro-ambiente" to import industrial wastes from
the US.  According to Greenpeace, toxic wastes will be used as an
alternative combustible in cement furnaces.

Source: "Ban on Toxic Waste Imports Derailed," IPS, 7/15/94

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MEXICAN NAFTA LABOR AGENCY CREATED

The National Administrative Office for the North American Labor
Cooperation Agreement (Oficina Administrativa Nacional para el
Acuerdo de Cooperacin Laboral de America del Norte) was created,
effective July 6, within the Secretariat of Labor and Social Planning.
The new office will deal with NAFTA labor issues and draft related
laws, regulations, and procedures for Mexico, and will issue opinions
on North American labor issues.

Source: "Mexico Creates Entity to Oversee NAFTA Labor Issues,"
INTER-AMERICAN TRADE AND INVESTMENT LAW, 7/15/94

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VENEZUELA STATE OF EMERGENCY CONTINUES

Despite Congressional restoration of some civil liberties suspended by
Venezuelan President Rafael Caldera on June 27, the president
reimposed the suspension, insisting the measures were necessary to
safeguard currency and stabilize the banking system.  Price controls
on food and medicine accompanied restrictions on foreign exchange
and government seizure of many banks.  Criticism has come from
many directions, ranging from human rights groups' denunciation of
the suspension of individual liberties to right-wing critics' charges
that
Caldera has plunged Venezuela into socialism.  Finance Minister Julio
Sosa said that the price and currency controls will be lifted once the
fiscal deficit is eliminated and inflation controlled, hopefully by the
end of 1994.

A criminal court judge issued sixteen arrest warrants against
pharmaceutical company executives, including Ciba-Geigy, Eli Lilly,
Merck, Rhone-Poulenc, Roche, Sandoz, and Servier.  The judge claims
that drug companies submitted price lists with inflated prices in
order
to avoid price controls on medicines.  An industry association
representative said that the drug companies cannot live with prices
frozen at December 1993 levels, given the inflation that Venezuela
has
seen since that time.

Source: "Venezuela Suspends Legal Rights," ASSOCIATED PRESS,
7/24/94; Carlos Ball, "Venezuela Plunges Headlong into State
Socialism," WALL STREET JOURNAL, 7/22/94; Joseph Mann, "Judge
Arrests Drug Company Chiefs," FINANCIAL TIMES, 7/21/94; Estrella
Gutierrez, "Government, Congress Clash Over Suspension of Rights,"
IPS, 7/22/94; Estrella Gutierrez, "Government Hopes Crisis Will Be
Over This Year," IPS, 7/18/94

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GATT SAYS US SHOULD END TUNA BOYCOTT

A GATT panel created in 1992 to deal with a complaint from Mexico
and Venezuela about a US law prohibiting tuna purchases from the
two countries has recommended that the US should change its law.
The panel called the law economic protectionism cloaked as
environmentalism.  The GATT Council - the highest authority - will
consider the report at its September session.

Source: "GATT Recommends That US. Buy Mexican, Venezuelan Tuna,"
IPS, 7/20/94

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LATIN AMERICAN BANANA PRODUCERS MEET

Representatives of Latin America's banana-growing countries met in
San Jose, Costa Rica in mid-July, and agreed to form a high-level
working group and meet again in Managua on August 3.  Costa Rica,
Ecuador, Colombia, Guatemala, Mexico, Nicaragua, Honduras, Panama,
and Venezuela agreed to strengthen the Union of Banana-Exporting
Countries (UPEB) or to create a new association to deal with a banana
glut that has sent prices plunging and with the European Union quota
on Latin American bananas.  Ecuador, the world's top banana-
exporter, is not a member of UPEB, but participated in the meeting
and said it was studying the possibility of joining UPEB.  Costa Rica,
criticized by some other producing nations for accepting the EU
quota,
appeared to be ready to stand together with the other Latin
American
banana producers once again.

The impetus for the meeting comes from a growing world surplus of
bananas.  UN data indicates that the world produces nine percent
more bananas than it consumes, with prices now at their lowest
levels
in six years.  About eight million of the 11 million metric tons of
bananas now on world markets comes from Latin America.

US banana prices have fallen from the 1991-92 price of $13-15 for
an
18 kg crate to only four dollars today.  The crate sells for five dollars
in Europe, though European consumer prices vary, with German
prices
higher than a year ago and French and British prices lower.  Germany
has threatened a second legal action against the EU banana quota in
the European Court of Justice, though chances of winning its first suit
appear slim.

Source: "Latin America Seeks United Stand on Bananas," IPS,
7/21/94;
"Sobreoferta Reunifica a Paises Bananeros," "Ecuador Frente al Reto
del
Banano," SERVIDATOS, 7/25/94; Debra Percival, "Commission Pat on
the Back Misplaced, Say Exporters," IPS, 7/13/94

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RESOURCES/ EVENTS

"Roundtable on Specific Mechanisms for Addressing Human Rights in
the Trilateral Context of North American Economic Integration,"
October 1-3, 1994, Ottawa, Canada.  Contact Gregory Binowsky,
Common Frontiers, 3 York Street, Suite 301, Ottawa, Ontario, K1N 5S6,
CANADA.  Tel: (613) 562-0670.  Fax: (613) 562-0327.

"Down to Earth: An International, Transdisciplinary Conference."
October 24-28, 1994, San Jose, Costa Rica.  Organized by the
International Society for Ecological Economics (ISEE), Costa Rica's
Universidad Nacional, and the Interamerican Institute for
Cooperation
on Agriculture.  Contact III International Conference of Ecological
Economics, PO Box 555, 3000 Heredia, Costa Rica.  Tel: 506-60-1600.
Fax: 506-37-6868

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