From [email protected] Jan 26 15:42:36 1995
Date: Tue, 29 Nov 1994 16:56:42 -0800 (PST)
From: IATP <[email protected]>
To: Recipients of conference <[email protected]>
Subject: NAFTA & Inter-Am Monitor 11/28/94

Produced by the Institute for Agriculture and Trade Policy
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NAFTA and Inter-American Trade Monitor, vol. 1, #27
November 28, 1994
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HEADLINES
FOCUS ON THE MIAMI SUMMIT
NAFTA, GATT AND AGRICULTURAL EXPORT ISSUES
ECONOMIC STABILIZATION, PRIVATIZATION CONTINUE PROBLEMS
U.S. TRADE DEFICIT INCREASES
TELECOMMUNICATIONS MARKET MOVES
RESOURCES/EVENTS

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FOCUS ON THE MIAMI SUMMIT

The U.S. government designated three themes for the Inter-
American Summit in Miami on December 9-10.  The first theme is
"Making Democracy Work: Reinventing Government," and includes
specific initiatives on fighting drug trafficking, protecting
investors and financial markets, funding and legal/tax
frameworks for non-governmental organizations (NGOs), and
enhancing the Organization of American States (OAS).  The second
theme, "Making Democracy Prosperous: Hemispheric Economic
Integration," includes initiatives for hemispheric free trade
through "open regionalism," promotion of the free flow of capital
and reducing corruption.  The third theme, "Making Democracy
Endure: Sustainable Development," includes focuses on people
(education, health care, and microenterprises) and on
environmental protection.

Despite the hopes of many Latin American governments for
entrance to NAFTA, prospects for hemispheric free trade have
worsened over the past year.  Latin American regional free trade
agreements continue to increase integration, but the U.S. Clinton
administration has failed to obtain either "fast track" negotiating
authority to extend NAFTA or the NAFTA parity that it promised
the countries of Central America and the Caribbean.  Both Canada
and Mexico appear ready to push for enlargement of NAFTA, with
Canada planning negotiations with Chile and Mexico voicing
support for Central American efforts to join NAFTA.

Some Latin American governments, notably including Brazil,
express reservations about bilateral trade agreements with the
U.S. and about the desirability of making NAFTA a priority.  They
advocate, instead, consolidation and expansion of Latin American
regional groupings, such as Mercosur, and later to negotiate access
to NAFTA for such regional trade groupings.

Leaders of the Caribbean Community (Caricom) have asked the
U.S. to address some of their concerns at the summit, including
parity with Mexico for some Caricom exports, protected access to
European banana markets for Caricom members, and the foreign
debt of Caricom members.  Caricom leaders have also criticized the
exclusion of Cuba from the summit, and called for
institutionalization of the summit on a regular basis through the
OAS.

Various NGOs are pushing for changes and additions to the agenda,
such as incorporating language on labor rights.  Others criticize the
omission of any focus on indigenous issues and on human rights
issues, particularly since December 10 is Human Rights Day.  The
exclusion of Cuba has also been protested.

The summit itself will consist of closed meetings, to be attended
by the president and one designated minister from each country.
Various conferences and seminars meeting concurrently with the
summit will be attended by business persons, academics, and
NGOs.  As many as 3,000 journalists are expected to cover the
summit and related activities.

Luis Lauredo, a Cuban-American business person named by
President Clinton to organize the summit, said in recent interviews
that the summit should be seen as a process rather than an end,
but that a communiqu might be signed on the final day.

Source: Karen Hansen-Kuhn, "9-10 December Miami Summit,"
DEVELOPMENT GAP, 11/4/94; "CARICOM Leaders Say U.S. Now
Listens," REUTER, 11/18/94; "Caribbean Leaders Still Unhappy
With Agenda of Americas Summit," IPS, 11/18/94; "Miami
Summit is a Process and Not an End," IPS, 11/10/94; Eugenio
Valenciano, "Cambio de las Expectativas Relativas a la Cumbre de
las Americas," SUCESOS, 11/10/94; "Mexico's Zedillo Backs Centam
Entry to NAFTA, REUTER, 11/18/94; Stephen Fidler, Nancy Dunne,
Bernard Simon, "Hope Dims for All-Americas Trade Bloc,"
FINANCIAL TIMES, 11/18/94; Diane Lindquist, "Latin America
Free Trade Debated," SAN DIEGO UNION-TRIBUNE, 11/19/94;
Marco Antonio Sibaja, "Human Rights: Conspicuous Absentee from
Summit," IPS, 11/94.

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NAFTA, GATT AND AGRICULTURAL EXPORT ISSUES

Despite projected widening of opportunities for beef exports from
Texas to Mexico under NAFTA, Texan meat processors are critical
of progress to date.  Liborio Hinojosa, a 47-year veteran of meat
processing and exporting, said that his H&H Meat Products
Company did brisk business with Mexico, about half a million
dollars weekly, during the first three months of NAFTA.  Since
then, he charges, Mexican authorities have constructed non-tariff
barriers to access, including rigid inspection and labeling
requirements, and some of his Mexican customers have been
harassed.

Australian beef exporters complain that recently-imposed limits
on their access to tariff-free imported beef and veal will seriously
disrupt their operations and cause increased prices to meat
processors and consumers in Canada. Complex new Canadian
restrictions come under the terms of the GATT agreement.
Canadian meat processors say they need more imported beef and
veal to remain competitive with U.S. processors, who are
increasing their Canadian market share.

Texas vegetable and citrus producers also complain about Mexican
import restrictions, and about competition from a bumper harvest
of Mexican onions.

Source: Steven H. Lee, "The State of Texas Agriculture," DALLAS
MORNING NEWS, 11/6/94; "Beef Quota Threatens Processors and
Consumers," CANADA NEWSWIRE, 11/9/94.

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ECONOMIC STABILIZATION, PRIVATIZATION CONTINUE
PROBLEMS

Despite an inflow of privatization dollars across Latin America,
many countries are still struggling with high unemployment and
drastic cuts in social programs.  Overall, the Latin American
economy grew 14.1 percent from 1991 to 1994, but one person in
five still lacks an adequate diet, according to the Latin American
Economic System (SELA), and 46 percent live below the poverty
line.  Experts at the SELA meeting in Venezuela in mid-November
said that 83 percent of the new jobs created in Latin America
from 1990-93 were in the low-paying informal sector, evidencing
continuing stagnation of the productive sector.

Brazil's economic stabilization plan, credited with winning the
presidential election for former Finance Minister Fernando
Henrique Cardoso, is now threatened as inflation approaches three
percent a month.  Current Finance Minister Ciro Gomes, trying to
impose economic controls, denounced business leaders as "villains,
scoundrels, and thieves."  Wage hikes are scheduled to take effect
in November.

Since the beginning of the 1980s, the Mexican government has
divested itself of 911 enterprises ranging from banking to bicycle
manufacture, from coffee shops to mines and airlines.
Privatization made many of the small to medium-sized businesses
more efficient and productive, and brought $22.1 billion into the
national treasury under the Salinas administration alone.  But
privatization also cost the jobs of more than 400,000 workers and
concentrated production in the hands of a small number of
owners.  Rather than breaking up state monopolies, privatization
transformed many into private monopolies, say critics.

"In international forums, they are enchanted with the
privatization process," said Roberto Salinas, director of the Mexico
City-based Center for Free Trade Research.  "But in Mexico, the
public reaction is one of general discontent."  That discontent
focuses not only on job losses and benefits flowing to a small
number of people, but also on failure to achieve any significant
improvement in services provided by the newly-private
companies.  Telmex, the national telephone company, is a case in
point.  Tens of thousands of complaints against Telmex have been
filed since privatization, and Telmex's rates remain significantly
higher than telephone rates in other countries.

Source: "Economic Growth Fails to Abate Poverty," IPS, 11/9/94;
Mario Osava, "Snags in Economic Plan Increase Tensions," IPS,
11/10/94; Jane Holligan, "Trade Gaps, Unemployment Nag Latam
Economies," UPI, 11/15/94; Claudia Fernndez, "Private Matters,"
EL FINANCIERO, 10/31-11/6/94; Estrella Gutierrez, "Over 80
Percent of New Jobs in Informal Sector," IPS, 11/17/94.

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U.S. TRADE DEFICIT INCREASES

The U.S. merchandise trade deficit increased from $14.1 billion in
August to $14.6 billion in September, the second-highest level
ever.  Exports of goods and services declined from $59.9 billion in
August to $59.7 billion in September.  Economists say the deficit is
due to macroeconomic factors, and the US Chamber of Commerce
says exports to NAFTA partners are growing.  Nonetheless,
Congress is expected to use the trade gap to attack the GATT
legislation in debate this month.

During the first nine months of 1994, according to U.S. Commerce
Department officials, the total merchandise trade deficit ran at an
annual rate of $148.8 billion.  The record annual trade deficit of
$152.1 billion was set in 1987.

Source: "U.S. Trade Deficit Widens," NEW YORK TIMES, 11/19/94;
Nancy Dunne, "US Trade Gap Widens as Exports Fall," FINANCIAL
TIMES, 11/19-20/94.

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TELECOMMUNICATIONS MARKET MOVES

In October, the United States and Argentina signed a
memorandum of understanding, beginning a five-year effort to
share telecommunications information, ensuring that U.S. firms
will have access to new market openings in areas ranging from
fiber optics to cellular phones.  Even before this opening,
Continental CableVision, the third-largest cable operator in the
U.S., agreed to buy a 50 percent equity interest in Fintelco SA, a
holding company for Argentina's Video Cable Communicacin SA.
The Fintelco cable companies have more than half a million
subscribers in Argentina.

US West International has acquired a 49 percent share in Listel,
Brazil's largest printer and publisher of telephone directories.  US
West International publishes more than 300 white and yellow
pages directories in the western United States, and has British and
Polish units as well, but this is its first venture into Latin America.

The Brazilian government has also proposed legislation to lift
barriers to importing telecommunications equipment.

Source: "US Cable Company Buys Into Fintelco SA;" Paula L. Green,
"US Sees Telecom Gains With Argentina Deal," JOURNAL OF
COMMERCE, 11/9/94; "US West Takes Stake in Brazilian Firm,"
JOURNAL OF COMMERCE, 11/10/94; "Government to Lift Import
Barriers," IPS, 11/9/94.

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RESOURCES/EVENTS
"The New Supremacy of Trade: NAFTA Rewrites the Status of
States," Robert Stumberg with Timothy Boller and Karen
Wendelowski.  Center for Policy Alternatives.  Testimony before
Pennsylvania House of Representatives, 9/22/93, 23 pages and
Testimony before Florida House of Representatives, November 3,
1993, 33 pages.  Center for Policy Alternatives, 1875 Connecticut
Ave. NW, Suite 710, Washington, DC 20009.  Telephone 202/387-
6030; Fax 202'986-2539.
$10 each.
Testimony covers NAFTA-related issues of particular relevance to
state legislators, including conflicts between NAFTA and state
laws.

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The NAFTA and Inter-American Trade Monitor is available in
both
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Communications (APC) computer networks on the conference
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welcome your comments and contributions.

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