From [email protected] Nov  5 18:14:37 1995
Date: Fri, 03 Nov 1995 10:11:59 -0800 (PST)
From: IATP <[email protected]>
To: Recipients of conference <[email protected]>
Subject: NAFTA & Inter-Am Trade Monitor 11-33

NAFTA & Inter-American Trade Monitor
Produced by the Institute for Agriculture and Trade Policy
November 3, 1995
Volume 2, Number 28
_________________________________________
Headlines:
- MEXICO-U.S. AG TRADE CONFLICTS
- BRAZIL: AGRARIAN REFORM PROPOSED TO END VIOLENCE
- TIGHTENING THE SCREWS ON CUBA
- MEXICO: PESO PLUNGES, PLAN PROPOSED
- PROGRESS IN CHIAPAS TALKS
- BRAZIL: REAL FALTERS

MEXICO-U.S. AG TRADE CONFLICTS

Avocados and tomatoes continue to create conflicts between
U.S. and Mexican growers and government officials. The 80-
year-old U.S. ban on Mexican avocados, scheduled to be lifted
this November, probably will remain in place for at least
another growing season, according to officials of the U.S.
Department of Agriculture (USDA). The USDA's July proposal to
lift the ban encountered heavy opposition from California
growers, who produce almost all of the U.S. avocado crop, and
the department now says it will need more time to evaluate
more than 1,000 comments received during the 60-day comment
period.

USDA officials had proposed allowing Mexican avocados to be
shipped to 19 northeastern states where cold winter weather
was expected to kill seed weevils and other insects from
Mexico that might pose a threat to U.S. avocado trees.
Growers maintain that there is no effective way to contain
avocados in the northeast, citing examples of avocados now
shipped to Alaska that have ended up in Washington and other
Pacific northwest states. Mexican growers maintain that the
ban is based on economic rather than phytosanitary
considerations.

Florida tomato growers' demands for economic protection from
cheaper Mexican winter tomato imports appear to have found a
powerful advocate in U.S. Trade Representative Mickey Kantor.
Kantor proposes that Mexico's imports be measured weekly
rather than once for each of the year's two growing seasons,
and that higher tariff rates be imposed whenever big
shipments exceed the quota. U.S. Customs Service officials
say they cannot monitor tomato shipments and adjust tariffs
weekly. Mexican growers say that it is impossible to maintain
uniform weekly tomato shipments throughout the season, and
that the plan violates NAFTA's prohibition against making
changes in trade laws to further restrict imports. A Mexican
official sarcastically suggested that Mexico begin measuring
its corn imports every 10 minutes.

Despite opposition from State, Treasury, and Agriculture
departments, President Clinton is considering the plan, which
might win him votes next year in the key state of Florida.
"This is precisely the kind of sneaky thing that China and
Japan and Korea do to us," complained one administration
official. Other protection proposals made by Florida growers
include raising the tariff on Mexican tomatoes by the same
percentage as the devaluation of the Mexican peso since last
December; applying U.S. packing standards to tomato imports,
which would mean a change in box size; and redefinition of
"seasonal industries" provisions of NAFTA.

Peter M. Tirschwell, "US Delays Lifting Ban on Mexican
Avocados," JOURNAL OF COMMERCE, October 26, 1995; John Maggs,
"Clinton May Put Squeeze on Mexican Tomato Import," JOURNAL
OF COMMERCE, October 26, 1995; Nicole Laborde, "U.S. Tomato
Growers See Red," EL FINANCIERO, October 9-15, 1995.

BRAZIL: AGRARIAN REFORM PROPOSED TO END VIOLENCE

President Fernando Henrique Cardoso, facing increasing
violence in the countryside, ordered his cabinet to make land
reform a priority and called for help from the Catholic
Church and opposition political leaders.

The Movimiento dos Trabalhadores Sem-Terra (MST), an
organization of landless campesinos, says 4.8 million
families -- 12 million people -- have no land. More than 1,000
campesinos have been assassinated in the past 10 years in the
struggle for land. The August 10 police torture and execution
of at least eight campesinos and a 13-year-old girl in
Hacienda Santa Elena near Corumbiara in Rondonia focused
national and international attention on Brazil's rural
crisis.

During his 1994 presidential campaign, Cardoso promised
agrarian reform and after his inauguration he proposed
distributing 11,000 hectares of land to 280,000 families by
1998. To date, 17,000 families have received land. On
September 28, Cardoso replaced the head of the government's
National Institute of Colonization and Agrarian Reform
(INCRA) with his personal secretary, Francisco Grazziano, who
said in 1994 that "agrarian reform is a thing of the past, it
belongs to the 1960s." The former head of INCRA, Brazilio de
Araujo Neto, was a powerful landowner.

The MST calls the government plan inadequate and proposes
that the government call in past-due debts of 1,276 major
debts of the state-owned Bank of Brazil, claiming that most
large debtors are large landowners who produce nothing on
their land but use it to obtain rural credits that are never
paid back. Rural landowners have organized to prevent
enforcement of the provision in the 1988 Constitution that
allows expropriation of unproductive lands.

Meanwhile, the Justice Ministry has ordered investigation of
reports that landholders in Paranapanema in western Sao Paulo
state are arming themselves with automatic weapons. The
National Confederation of Agriculture created a Commission
for the Defense of Property in September, calling for
resistance by landowners to threats of occupation of their
property. MST has pledged to continue land occupations, in
which about 85,000 families are currently involved. About
2,100 families occupy the disputed land in Paranapanema.  The
government owns the land, but large landholders have occupied
it for decades.

According to a labor-based research institute, DIEESE, the
richest half of Brazil's population controls 88 percent of
national income, making Brazil first in the world in
concentration of wealth. In rural Brazil, 10 percent of the
farmers own 80 percent of arable land. But neither land
distribution inequities nor rural violence are limited to
Brazil.

Mining and oil drilling have driven native peoples from their
lands in Sierra de la Perija in Venezuela, leading to
killings of Indians by military and police. The Maroons of
Suriname-- descendants of African slaves who escaped their
colonial masters 350 years ago -- have been shot at by
security officials for the Canadian-owned Golden Star mining
company in recent months, according to local human rights
organizations. In Paraguay, where 80 percent of the land is
owned by five percent of the population, at least one person
died in clashes between police and campesinos occupying land.
The Paraguayan parliament responded by passing a new proposal
for expropriation and distribution of land. In Honduras,
where land occupations and clashes with police are on-going,
three campesinos were killed by police in October and a
campesino leader was assassinated by unknown persons.

Mario Osava, "Fear of Social Unrest Revives Land Reform,"
INTERPRESS SERVICE, September 28, 1995; President Fernando
Henrique Cardoso Makes Agrarian Reform a Priority to Stem
Tide of Violence in Countryside," NOTISUR, October 6, 1995;
"Brazil President Pledges Land Reform," WEEKLY NEWS UPDATE ON
THE AMERICAS, October 8, 1995; "Brazilian Landowners Prepare
to Fight Squatters,"  WEEKLY NEWS UPDATE ON THE AMERICAS,
October 8, 1995; Pratap Chatterjee, "Battles Over Land Spread
Across Amazon Basin," INTERPRESS SERVICE, October 7, 1995;
Cristhian Torres, "Paraguay-Agriculture: Demands for Agrarian
Reform," INTERPRESS SERVICE, September 15, 1995; "Three
Killed in Honduran Land Clash," WEEKLY NEWS UPDATE ON THE
AMERICAS, October 29, 1995.

TIGHTENING THE SCREWS ON CUBA

By a vote of 74-24, the U.S. Senate approved the Helms-
Burton bill to tighten the U.S. embargo against Cuba. The
legislation commits the United States to seeking a worldwide
embargo against Cuba at the United Nations, despite the U.N.
General Assembly's consistent and repeated condemnation of
the U.S. embargo. It also forbids import of sugar or
molasses from countries that buy those products from Cuba
and cuts aid to Russia by $200 million in retaliation for
Russia's payment of rent to Cuba for an electronic
intelligence-gathering base.

The anti-Cuba legislation passed after it was stripped of an
even more stringent provision that would have allowed Cuban
exiles and U.S. companies whose property was expropriated by
the government of President Fidel Castro to use U.S. courts
to sue foreign firms and individuals who "trafficked" in
those properties. The U.S. House of Representatives included
the more punitive provisions in the version of the bill that
it passed in September.

Jim Lobe, "Senate Clears Weakened Sanctions Bill,"
INTERPRESS SERVICE, October 19, 1995; "'Gutted' Bill to
Strengthen Cuba Sanctions Passes U.S. Senate," WEEKLY NEWS
UPDATE ON THE AMERICAS, October 22, 1995.

MEXICO: PESO PLUNGES, PLAN PROPOSED

After the peso fell dramatically to an seven-month low of
7.23 to the dollar (about 14 cents, compared to 29 cents one
year ago), the Mexican government, business, and unions
signed a new pact, the Alliance for Economic Recuperation, on
October 29. No exchange rates were set, but the government
offered various incentives and tax breaks for businesses and
set a goal of three percent economic growth and 20 percent
inflation in 1996. More pessimistic private economists
forecast five percent economic contraction and 50 percent
inflation. The latest economic figures show inflation at 1.1
percent for the first two weeks of October (about 30 percent
annually). Foreign reserves fell by $1.034 billion to $13.758
billion from October 6 to October 13. Up to 95 percent of the
reserves is borrowed money.

The Alliance for Economic Recuperation raises some minimum
wage categories by 20 percent to about $3 per day, and
increases gasoline and electricity rates by seven percent in
December and 1.2 percent each month in 1996, except for a six
percent rise in April. Business agreed to moderate price
increases, and the government agreed to eliminate sales taxes
on new cars, which have had a 70 percent drop in domestic
sales during 1995. The government also pledged to reduce the
budget but increase spending on investment in energy
production, education, and health.

Carlos Heredia, "Peso Plunge Once Again Underscores Lack of
Strategy for Recovery," EQUIPO PUEBLO, October 27, 1995;
"Behind the Latest Mexican Crisis," WEEKLY NEWS UPDATE ON THE
AMERICAS, October 29, 1995; Craig Torres, "Mexico Reaches
Wage and Price Accord But Some Economists Are Wary of Goals,"
WALL STREET JOURNAL, October 30, 1995; Anthony DePalma,
"Mexicans Reach New Pact on the Economy," NEW YORK TIMES,
October 30, 1995; Anthony DePalma, "Mexican Markets Applaud
Economic Plan," NEW YORK TIMES, October 31, 1995.

PROGRESS IN CHIAPAS TALKS

As a 6.3 magnitude earthquake shook Chiapas on October 20,
government and Zapatista National Liberation Army (EZLN)
talks continued. Six concurrent working groups met in two
cities to discuss indigenous rights and autonomy, with both
sides characterizing the talks as successful. "The document
under discussion was so good we made the earth shake," joked
an EZLN adviser.

Then, on October 21, police in Mexico City arrested Fernando
Yanez Munoz, whom they alleged to be Commandante German, the
"maximum leader" of the EZLN. Yanez and two companions were
arrested in what police tried to pass off as a routine
traffic stop, and charged with possession of weapons. Police
accounts of the stop and arrest were contradicted by eye-
witnesses. Yanez says he is not Commandante German and has no
links to the EZLN, "though it would be an honor for me," but
was part of the guerrilla Liberation Armed Forces (FLN) in
the 1970s. In response to the arrest, the EZLN went on "red
alert," and charged that the government had broken a special
March 11 amnesty suspending arrest warrants against rebels
during the peace talks. On October 27, the government dropped
all charges and released Yanez.

In elections held in Chiapas in mid-October, the governing
Institutional Revolutionary Party (PRI) maintained control of
the state congress and won a majority of disputed municipal
elections. Voter turnout was the lowest in ten years, 44
percent according to official figures, and violence during
the pre-election period included 30 murders and four
disappearances, according to human rights organizations. The
PRI won 48.5 percent of the vote, with 31.5 percent going to
the Democratic Revolutionary Party (PRD), and 13 percent to
the conservative National Action Party (PAN). Voting was
postponed in Ocosingo, due to the possibility of violence,
and the local PRI leaders in the Tzotzil municipality of San
Juan Chamula delivered only 100 percent of the vote to the
PRI, down from a high of 110 percent of registered voters in
Ocosingo who voted for the PRI in 1988.

"Mexico: Peso Plunges as 'Rebel Leader' Arrested," WEEKLY
NEWS UPDATE ON THE AMERICAS, October 29, 1995; "PRI Holds
Chiapas, Although Opposition Gains Ground," INTERPRESS
SERVICE, October 16, 1995; "Final Vote Count in Elections,"
MEXICO UPDATE, October 24, 1995; "Communique from the
Indigenous Revolutionary Clandestine Committee General
Command of the EZLN," October 21, 1995; Elio Henriquez and
Herman Bellinghausen, "Alerta Roja," LA JORNADA, October 26,
1995; "This Week in Mexico," EL FINANCIERO, October 23-29,
1995.

BRAZIL: REAL FALTERS

After rapid economic growth of about 10 percent on an
annualized basis during the first quarter of 1995, Brazil's
economy has slowed dramatically. The government Planning
Ministry now predicts annual growth of about five percent,
down slightly from 1994's rate of 5.8 percent. While 1995's
25 percent inflation is low compared to previous years, it is
expected to continue in double digits for the foreseeable
future.

After Brazil's "Plan Real" currency and economic
stabilization plan was implemented in July 1994, Brazil's
balance of trade went from monthly deficits in the billion
dollar range to eight months of trade surpluses ranging from
$183 million in November 1994 to more than $2 billion in
March 1995 to $775 million in June 1995. Trade deficits
reappeared, with $2 million in July 1995 and $328 million in
August. Both exports and imports have increased since the
implementation of the Plan Real.

The bond debt of the central government grew by 41.7 percent
during the third quarter of 1995 alone, to a total of more
than $100 billion or 98.4 billion Reals, according to Central
Bank figures. The debt has increased by 65.4 percent since
the Plan Real took effect in July 1994. State bond debts rose
by 88.6 percent to $37.3 billion since July 1994. In
response, the government proposes to eliminate job security
for Brazil's public employees through a constitutional
amendment. Most state payrolls exceed 60 percent of state
budgets, and grow by more than 25 percent per year.

Bill Tomson, "Brazil Economic Slowdown to Extend Into 1996,"
KNIGHT-RIDDER FINANCIAL SERVICE, October 24, 1995; Mario
Osava, "Public Finances Threatened by Soaring Debt and
Payrolls," INTERPRESS SERVICE, October 23, 1995; James Bruce,
"Stretched to the Limit," JOURNAL OF COMMERCE, October 25,
1995.

RESOURCES/EVENTS

Decision at Midnight: Inside the Canada-US Free-Trade
Negotiations, by Michael Hart, Bill Dymond, and Colin
Robertson. UBC Press, Vancouver, BC: 1994. 448 pp. $35
cloth/$24.95 paper. Order from UBC Press, 6344 Memorial Road,
Vancouver BC Canada V6T 1Z2. Telephone 604/822-4546, fax
604/822-6083. Three officers in Canada's Department of
Foreign Affairs outlines preparation for and conduct of
negotiations between United States and Canada on 1988 free
trade agreement from a Canadian insider perspective.

Mexican Insights: Mexican Civil Society Speaks to the United
States, Washington Office on Latin America, Washington, DC:
1995.  51 pp. Order from Washington Office on Latin America,
400 C Street NE, Washington, DC 20002.  Telephone 202/544-
8045, fax 202/546-5288, email: [email protected].  Compilation
of presentations given by Mexican participants in roundtables
sponsored by WOLA and the Mexican Academy for Human Rights in
1995, focusing on Chiapas and prospects for peace, on
prospects for democratization under Zedillo, and on drug
trafficking in Mexico and international implications.
____________________________________________
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