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Date: 23 Oct 94 18:15 PDT
From: IATP <
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To: "Recipients of conference trade.news" <
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Newsgroups: trade.news
Subject: NAFTA & Inter-Am Monitor 10/24/94
Produced by the Institute for Agriculture and Trade Policy
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NAFTA and Inter-American Trade Monitor, vol. 1, #22
October 24, 1994
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HEADLINES
NAFTA TRADE NOTES
EFFORTS TO EASE NAFTA TRADE CONTINUE
ALADI REDEFINING ROLE AS TRADE GROWS
CENTRAL AMERICAN PRESIDENTS PROPOSE NAFTA ENTRY
MERCOSUR DOCKWORKERS UNITE
EUROPEAN UNION, MERCOSUR, ANDEAN PACT
DEVELOPMENTS
RESOURCES/EVENTS
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NAFTA TRADE NOTES
% Blue jeans are big business in El Paso, despite the
vulnerability of the industry to competition from cheaper
Mexican labor. The prestige of the "Made in the USA" jeans
label has helped to maintain 20,500 jobs in El Paso's apparel
industry, as have low-wage shops stitching up designer jeans.
While some manufacturers, such as Wrangler, boast of state-of-
the-art computerized plants, others skimp on tax payments and
close their doors without paying workers, leaving El Paso one of
the country's poorest metropolitan areas, with personal
incomes at 59 percent of the US national average. Overall US
employment in the apparel industry has fallen from 1,075,700
in 1989 to 959,000 in August 1994.
% Xerox Corporation, which last year announced plans to slash
10,000 of its 97,000 jobs by 1996, may consolidate or close a
plant in Oak Brook, Illinois. Employees said that Xerox officials
plan to move the work to a huge refurbishing facility in
Aguascalientes, Mexico, but company officials declined to
comment. Both plants refurbish used Xerox copiers for lease or
sale, and the Oak Brook plant makes some parts as well.
% California's U.S. Electricar Inc. and Mexico's Grupo Industrial
Casa signed an agreement to manufacture electrical industrial
vehicles for North, Central and South America. Grupo
Industrial Casa is the largest manufacturer of bus bodies in
Mexico. The two hope to take advantage of anti-pollution
needs and NAFTA trade benefits. California's Taylor-Dunn also
purchased a 10 percent share in Industrias Murrell, with plans
to make electric vehicles for urban areas, including delivery
vans for package express companies.
% A Canadian firm, White Bear Water L.T.D., recently advertised
in Mexico's El Financiero that it has approval to export 7.2
million metric tons of water annually.
% Texas grapefruit growers expect to begin shipments to
Mexico soon, as Mexican officials have approved US precautions
to prevent spread of Mexican fruit fly.
% Grupo Industrial Bimbo canceled its planned acquisition of 50
percent of Mrs. Baird's Bakeries, saying talks about commercial
agreements between the two companies would continue.
% Villa Sana Industries complained that Mexican health
administration regulations on prior registration and approval
have effectively eliminated most US medical exports from sale
in Mexico, since US exporters are not prepared to deal with the
complex registration procedures.
Source: Allen R. Myerson, "Jeans Makers Flourish on Border,"
NEW YORK TIMES, 9/29/94; Frederick H. Lowe, "Xerox May
Close Oak Brook Site," CHICAGO SUN-TIMES, 9/22/94; Kevin G.
Hall, "Electric Vehicle Maker Inks Mexico Pact; Calif., Mexican
Firms Form Venture to Make Electric Industrial Vehicles,"
JOURNAL OF COMMERCE, 10/11/94; "Canadian Water," EL
FINANCIERO, 9/19-25/94; "Shippers Eye Mexico Markets for
Grapefruit," THE PACKER, 9/26/94; "Bakery Acquisition Off,"
NEW YORK TIMES, 10/10/94; "Rule on Medical Sales to Mexico
Criticized," JOURNAL OF COMMERCE, 10/5/94.
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EFFORTS TO EASE NAFTA TRADE CONTINUE
Representatives from standards groups in Mexico, Canada, and
the United States met in Mexico City in early October to work
on formulating common standards for a wide variety of
products. Substantial progress has been made in
telecommunications and electrical standards since the
beginning of discussion in 1991. NAFTA imposes a four year
limit for intra-NAFTA recognition of companies accredited by
governments to certify that a product meets a country's
standards. NAFTA-wide standards may have the added benefit
of shutting out cheaply made Asian imports that Mexican trade
officials want to bar.
Meanwhile, US customs brokers along the Mexican border are
consolidating and expanding to offer services at all commercial
crossings along the 2,000-mile US-Mexico border. Large
shippers prefer to deal with a single company, which allows
them to file all the customs documents in a single location.
Mexus Ro-Ro Line offers a roll-on, roll-off service from Houston
to the Mexican port of Tuxpan. Other cargo lines are also
working on combined rail-barge transportation.
NAFTA trade is not without risks, particularly for small and
medium-sized companies, according to the US Commerce
Department, which advises that businesses should seek special
insurance to protect themselves. Such insurance may make it
easier to get lines or letters of credit for accounts receivable.
Source: Kevin G. Hall, "Nafta Groups Meet to Set Common
Product Standards," JOURNAL OF COMMERCE, 10/11/94; Kevin
G. Hall, "US Brokers Consolidating for 1-Stop Border Service,"
JOURNAL OF COMMERCE, 10/5/94; Kevin G. Hall, "Roll-On, Roll-
Off Line Offers Route to Mexico without Border Hassles,"
JOURNAL OF COMMERCE, 10/5/94; Kevin G. Hall, "Small
Exporters to Mexico Urged to Seek Insurance," JOURNAL OF
COMMERCE, 10/7/94.
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ALADI REDEFINING ROLE AS TRADE GROWS
The vice-ministers of foreign relations of the 11 member
countries of the Latin American Integration Association
(ALADI) will meet on November 17-18 in Montevideo, Uruguay
to discuss the future of ALADI and its contribution to regional
integration. All of ALADI's members -- Argentina, Bolivia,
Brazil, Colombia, Chile, Ecuador, Mexico, Paraguay, Peru,
Venezuela, and Uruguay -- participate in various other trade
and commercial pacts, such as Mercosur, the Andean Pact, G-3,
and NAFTA. Since its creation in 1980, ALADI has been
overtaken by a proliferation of bi-lateral and multi-lateral
trade pacts in the Americas.
A recent SELA (Latin American Economic System) report
showed trade within Latin America and the Caribbean growing
rapidly over the past four years. Intra-regional trade rose
from 13 percent of the region's commerce in 1990 to 18
percent in 1993. Exports within the region grew by nearly 25
percent per year.
ALADI's secretary general, Brazilian Antonio Antunes, has
proposed a two-part role for ALADI: to create, for all of the
region's trade pacts, legal norms that facilitate trade, such as
rules of origin and common nomenclature, and to promote the
convergence of the various pacts. "We all have wanted to say
that Mercosur should advance, that G-3 should advance, as
much as the Andean Pact, but this has not advanced the
regional aspect of integration," said Antunes. "The great
characteristic of this proposal is the flexibility that will permit
the coexistence of subregional systems with a project of
integration of global dimension."
Source: "Aladi Redefine Su Papel en el Proceso de Integracion,"
SUCESOS, 10/13/94; "Report Shows Intra-Regional Trade
Growth," IPS, 10/7/94.
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CENTRAL AMERICAN PRESIDENTS PROPOSE NAFTA
ENTRY
Meeting with US Vice President Al Gore in Managua during the
"Ecological Summit," presidents Carlos Roberto Reina
(Honduras), Armando Calderon Sol (El Salvador), Ramiro Leon
Carpio (Guatemala), Ernesto Perez Balladares (Panama), Jose
Maria Figueres (Costa Rica), and Violeta Chamorro (Nicaragua)
united in a proposal for conditional and temporary
membership in NAFTA. The presidents proposed that Central
America, as a region, be accepted as a "temporary and special"
member in NAFTA for a certain period of time, with each
country to use this time to fulfill the conditions imposed for full
membership.
The Central American presidents also called on the United
States to fulfill the promise made by Vice President Gore in
May to open its market for the import of textiles and clothing
from the region. The Clinton Administration recently removed
the Interim Trade Program (ITP) provisions, which
implemented this promise, from GATT legislation.
Source: "Centroamerica Aspira a Ser "Miembro Temporal" del
TLC," SUCESOS, 10/13/94; "U-turn by US Hits Caribbean
Exporters," FINANCIAL TIMES, 10/11/94.
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MERCOSUR DOCKWORKERS UNITE
The dockworkers' unions of three of the four Mercosur
countries announced the joint scheduling of a two-hour work
stoppage on October 11 to protest plans for privatization of
ports in Argentina, Brazil, and Uruguay. According to the
secretary general of the Uruguayan union, "the tendency in
Latin America is for the state to abandon the tasks in the ports
so that they fall into the hands of transnational agencies."
Source: "Portuarios Haran Paro Contra Privatizaciones," IPS,
10/8/94
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EUROPEAN UNION, MERCOSUR, ANDEAN PACT
DEVELOPMENTS
Speaking in Brazil, European Commission Farm Commissioner
Rene Steichen expressed hopes of liberalizing agricultural trade
and opening up free trade in industrial products with
Mercosur, though he rejected the idea of free trade in farm
products as unrealistic. According to Steichen, the European
Union (EU) may make changes that favor the less-developed
nations, while withholding benefits from more developed
nations, such as Brazil and Argentina. The EU is Mercosur's
main trading partner, with a balance of trade of $46 billion in
favor of Mercosur between 1985 and 1992. The EU bought 45
percent of agricultural and food products exported by Mercosur
countries during the same years.
In early October, Venezuelan Finance Minister, Werner
Corrales, asked the EU to support development of Small and
Medium Enterprises (SMEs) and telecommunications networks
and social projects for poor communities in Venezuela.
Emphasizing the request for SME development, Corrales called
for "solidarity programs" to help poor communities, citing
Mexico, Chile, and the Toscana region of Italy as examples of
successful use of SMEs.
The EU will renew trade benefits under the Generalized System
of Preferences to the four Andean Pact members currently
covered (Bolivia, Colombia, Ecuador, Peru) as part of its
economic reform and drug fighting efforts, and is expected to
extend the benefits to Venezuela for the first time. Despite
open access to EU markets, Andean Pact members have a trade
deficit with the EU in 1993. The Andean Pact represents less
than one percent of the 12 EU countries' trade. The EU is also
considering a suggestion that Cuba should be included in the
GSP, but the proposal has met with opposition from Germany,
Denmark, and Greece.
Source: "Steichen Promises Freer Trade with Mercosur
Countries," REUTER, 10/11/94; "EU/Latin America: Plans to
Boost EU Ties with Mercosur, Andean Pact and Cuba,"
EUROPEAN INFORMATION SERVICE, 10/8/94; Debra Percival,
"Caracas Finance Minister Lobbies EU for Support," IPS,
10/10/94; Raymond Colitt, "EU to Renew Andean Pact Trade
Benefits," FINANCIAL TIMES, 10/4/94; Diego Cevallos, "Andean
Pact-E.U.: A Tense and Asymmetrical Relationship," IPS, 10/94
----------------------
RESOURCES/EVENTS
"Border Right-to-Know Project: The 1993 Northeastern Sonora
Pilot Inventories," Gildardo Acosta-Ruz, et al. ARIZONA TOXICS
INFORMATION, INC./ENLACE ECOLOGICO, A.C., August 1994.
About 200 pages. Arizona Toxics Information, Inc., Post Office
Box 1896, Bisbee, AZ 85603. (602) 432-5374. Available in
Spanish or English. $20.
Advertised as "the first systematic public collection and
analysis of hard data on toxics use by small farmers and US-
owned maquiladoras in three communities of Mexico's northern
border zone" and "a low-cost, easily replicable model for future
local, state and national inventories in Mexico."
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The NAFTA and Inter-American Trade Monitor is available in
both
English and Spanish on Association for Progressive
Communications (APC) computer networks on the conference
eai.news. It can also be faxed or sent via mail on request. We
welcome your comments and contributions.
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For more information about the Institute for Agriculture and Trade
Policy, send email to
[email protected].
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Produced by: Mary C. Turck, Institute for Agriculture & Trade
Policy, 1313 Fifth St. SE, Suite #303, Minneapolis, MN 55414-
1546 USA
Tel: (612) 379-5980, Fax: (612) 379-5982, email:
[email protected]
