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Subject: NAFTA & Inter-American Trade Monitor Vol. 5, Number 14
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NAFTA & Inter-American Trade Monitor - Vol. 5, Number 14 July 10, 1998
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Table of Contents
- NAFTA ENVIRONMENTAL ISSUES
- FTAA & CIVIL SOCIETY INPUT
- FAST TRACK - ON AGAIN, OFF AGAIN
- U.S. FARMERS PROTEST LOW PRICES, SANCTIONS
- FAO AGRICULTURE PRIORITIES SET
- ILLEGAL CHICKEN, PORK EXPORTS ALLEGED
- RESOURCES/EVENTS
NAFTA ENVIRONMENTAL ISSUES
NAFTA's Commission for Environmental Cooperation (CEC) met in Merida,
Mexico in late June, handicapped by lack of a director since Victor
Lichtinger's controversial resignation or firing in February. The three
members of the CEC, U.S. Environmental Protection Agency Administrator
Carol Browner, Mexican Environmental Secretary Julia Carabias, and
Canadian Environment Minister Christine Stewart, are rumored to have
opposed Lichtinger's alleged activist position on environmental issues.
The CEC meeting resulted in a pledge to create better mechanisms for
public input. All three NAFTA countries continue to struggle with
environmental issues.
Canadian government officials criticized Canada's environmental record
in June. Brian Emmett, an independent federal commissioner for
environmental protection monitoring, charged in his eight-chapter, four-
volume report that Canada is failing to implement its environmental
vision due to heavy industrial pollution and high use of fuel oil,
natural gas and petroleum. Canada's Auditor General Denis Desautels
warned that Canada will not be able to live up to its Montreal Protocol
commitments on reducing greenhouse gas emissions, instead increasing
those emissions by at least 11 percent by 2010.
The House of Commons Standing Committee on Environment and Sustainable
Development called for more effective enforcement of environmental laws,
pointing to 30 percent cuts in the enforcement staff of Environment
Canada between 1995 and 1997. In addition to cuts in prosecutions, water
sampling stations on the Great Lakes have been cut by 80 percent and all
water testing in acid rain-plagued lakes in northern Ontario was
terminated last year.
In Mexico, widespread forest fires contributed to declaration of an air
quality emergency in Mexico City on May 25-29. During the state of
emergency, more cars are kept off the streets and stricter emissions
standards apply to taxis and mini-buses used for public transportation
and to diesel-fueled cargo vehicles. About 600 companies are required to
reduce production during emergency days. Some seven companies may be
subject to penalties for alleged noncompliance with reductions during
the emergency period. Critics said the government should have acted
earlier to reduce emissions from traffic and industry during the
continuing crisis.
The Mexican fires have burned more than a million acres of forest and
grassland, and were characterized as the most serious fires in the world
by Brian Atwood, director of the U.S. Agency for International
Development. Mexican environmentalists say that both the Mexican and
U.S. governments have been slow to react to the fires.
Environmental issues along the U.S.-Mexican border range from sewage
treatment to hazardous nuclear waste disposal. NAFTA was supposed to
provide money to address border air and water pollution, but no
environmental project financed by NAFTA-related funds is operating yet.
The North American Development Bank (NADBank) recently approved loans
for construction of two sewage treatment systems in Ciudad Juarez and
Tijuana, on the recommendation of the Border Environmental Cooperation
Commission.
Both Mexican and U.S. environmentalists oppose a plan to locate a low-
level nuclear waste dump just 30 kilometers from the Mexican border in
one of the poorest regions in Texas where about two-thirds of the
residents are of Mexican origin. the dump would be located near Sierra
Blanca, which already has the world's largest sewage sludge dump. The
Mexican Congress's Permanent Commission voted unanimously against the
nuclear waste dump earlier this year and some Mexican congressional
deputies say the dump violates the 1983 La Paz Agreement between the two
countries. Mexican officials say they will fight the dump by using NAFTA
structures.
In the United States, the nonprofit Environmental Working Group reported
in May that U.S. children are eating more pesticides on fresh produce
than ever before. The Environmental Working Group found trace mounts of
between three and ten different pesticides after washing and peeling
fresh produce, but the average pesticide level was below legal limits.
The U.S. Environmental Protection Agency had announced in 1993 that it
would promote the use of biological pest management rather than
chemicals. The Environmental Working Group charged that the Clinton
administration has "no plan to develop a plan for reducing pesticides in
agricultural use."
A study of children in Mexico who were exposed to pesticides used on
crops there found decreased memory, ability to catch a ball, and eye-
hand coordination. The study, conducted jointly by the University of
Arizona and the Instituto Tecnol�gico de Sonora, Mexico, said many
substances banned in the United States were found in the blood of those
studied.
Canada, Mexico and the United States all pledged to effectively enforce
their own environmental laws and regulations under Article 5 of the
environmental side accord to NAFTA.
Mary Sutter, "NAFTA 'Green' Council Meets Amid Doubts About Its Role,"
JOURNAL OF COMMERCE, June 25, 1998; Mary Sutter, "NAFTA 'Green' Panel
Renews Pledge on Input," JOURNAL OF COMMERCE, June 29, 1998; Mark
Bourrie, "Canada Failing to Enforce Environmental Laws," INTERPRESS
SERVICE, June 2, 1998; Barry Wilson, "Government Under Attack Over
Environment Record," THE WESTERN PRODUCER, June 11, 1998; "Audit Reveals
Nation Failing to Meet Domestic, International Environmental Pledges,"
INTERNATIONAL ENVIRONMENTAL REPORTER, June 10, 1998; "Inadequate
Enforcement of Regulations on Environment Found by Government Panel,"
INTERNATIONAL ENVIRONMENTAL REPORTER, June 10, 1998; "Authorities
Toughen Air Quality Standards After Five Days of High-Level
Contamination," INTERNATIONAL ENVIRONMENTAL REPORTER, June 10, 1998;
"Seven Companies May Face Penalties for Alleged Failure to Curb
Emissions," INTERNATIONAL ENVIRONMENTAL REPORTER, June 10, 1998; Sam
Dillon, "Rainy Season Starts, But Mexico Fires Roar On," NEW YORK TIMES,
June 6, 1998; Danielle Knight, "Concern Over Border Nuclear Waste Dump,"
INTERPRESS SERVICE, June 24, 1998; "Heavy Exposure Linked to Decreases
in Mexican Children's Neurological Ability," INTERNATIONAL ENVIRONMENTAL
REPORTER, June 10, 1998; Julie Vorman, "U.S. Pesticide Residue Shows No
Decline," May 21, 1998; Sam Howe Verhovek, "Pollution Puts People in
Peril on the Border With Mexico," NEW YORK TIMES, July 4, 1998; Mary
Sutter, "Scope of NAFTA 'Green' Agency Narrows," JOURNAL OF COMMERCE,
June 30, 1998.
FTAA & CIVIL SOCIETY INPUT
Negotiators working on the Free Trade Agreement of the Americas have
delayed decisions on interim agreements and early implementation of
business facilitation measures for six months. The United States and
business groups have pushed for early implementation of agreements,
especially business facilitation measures, such as streamlined customs
procedures, by the year 2000. Kathryn McCallion, the Canadian chair of
the FTAA Negotiating Committee, said that no interim agreements were
likely until the United States passes fast-track legislation.
McCallion cited U.S. rigidity in its negotiating posture on agricultural
policy as another barrier to early agreements, since Mercosur nations
have responded by saying, "in that case, we will not reach fast
agreement on an investment framework."
Non-governmental organizations across the Americas fear that
"governments won't give their concerns the same treatment as that
granted to the interests of multinationals when it comes to negotiating
accords on trade and investment," according to a letter submitted to
Kathryn McCallion by some 20 NGOs.
The NGOs expressed concern over the level of participation in the FTAA
process that has been given to business forums. "We are not against the
business community holding its own forums," said Atziri Iba�ez of the
U.S. National Wildlife Federation, but he asked that businesses present
their input through the civil society processes set up by governments,
just as other NGOs must do. "That is the only way for everyone to
participate on an equal footing," said Iba�ez.
U.S. Representative Richard Gephardt also expressed reservations about
the process for allowing input from civil society in a June 15 letter to
U.S. Trade Representative Charlene Barshefsky, warning: "This Committee
[for Civil Society] will isolate the trade ministers from direct public
participation by flitering all comments from labor and non-governmental
organizations (ngos). The business community because of its ability to
muster greater resources than the ngos and labor will dominate the
process. . . . Just because the U.S. has failed to achieve working
parties on labor and environmental issues thus far, doesn't mean that we
should give up on the objective."
William New, "Hemispheric Officials Wrestle With Terms of FTAA
Negotiation," INSIDE U.S. TRADE, June 26, 1998; "Food Exporters Form
Free Trade Lobby Group," THE WESTERN PRODUCER, June 25, 1998; "U.S.
Proposal for FTAA Civil Society," AMERICASTRADE, June 17, 1998; Marcela
Valente, "Civil Society Fighting Hard for Inclusion in FTAA," INTERPRESS
SERVICE, June 22, 1998; Kevin G. Hall & Beth Rubenstein, "Trade
Ministers Give Clinton Time to Nail Fast Track," JOURNAL OF COMMERCE,
June 23, 1998; Richard Gephardt, "Letter on Public Participation in FTAA
Process," INSIDE U.S. TRADE, June 15, 1998.
FAST TRACK - ON AGAIN, OFF AGAIN
House Speaker Newt Gingrich (R-GA) announced at the end of June that he
would schedule a September vote on legislation for fast-track
negotiating authority. On July 6, President Bill Clinton said he would
not support a fast-track debate and vote this fall. While reiterating
his support for fast track, the president said that "if there is no
reason [to] believe we can pass it, it would be a mistake" to bring
fast-track legislation back before Congress at this time.
Clinton said that instead of focusing on fast-track, he will ask
Congress to pass an Africa trade bill and the Caribbean Basin
Initiative. Trade negotiators from Brazil, Argentina and other Latin
American countries have warned that fast-track authority must be in
place by September 1999 in order to continue to move negotiations on the
Free Trade Area of the Americas to completion by the scheduled
completion date of 2005.
Florida farmers pledged to fight against fast track in Florida and in
other states where growers have been adversely affected by free trade,
including California, Tennessee and Virginia.
The AG for Fast Track coalition supported Gingrich's call for a vote
this fall, saying that they could see "absolutely no down side," but
said that the alternative would be a vote in spring of 1999. Neither
Gingrich nor the AG for Fast Track coalition addressed the concerns of
other farm groups over the crisis situation of farmers in the midwest,
northwest and north central states as wheat prices and exports to Asia
fall. Republican Senators insisted that the farm sector needs increased
foreign trade to prosper, and that the 1996 free-market "Freedom to
Farm" law is not in need of overhaul.
"Clinton Indicates He Will Not Push for Fast Track This Year," CONGRESS
DAILY, July 6, 1998; "Farm Industry Concedes It Faces Uphill Battle in
Fight for Fast Track," INSIDE U.S. TRADE, July 3, 1998; Curt Anderson,
"Senators: Foreign Trade Vital to Farming Sector," ASSOCIATED PRESS,
June 22, 1996; Kevin G. Hall & Beth Rubenstein, "Trade Ministers Give
Clinton Time to Nail Fast Track," JOURNAL OF COMMERCE, June 23, 1998;
Ian Elliott, "FTAA Steams Ahead as APEC Sputters," FEEDSTUFFS, July 6,
1998.
U.S. FARMERS PROTEST LOW PRICES, SANCTIONS
The Montana Farmers Union called for increased grain prices in a rally
at the Coutts, Alberta-Sweetgrass, Montana border port of entry in June.
"We need the support of government and the people," said MFU president
Ken Maki, blaming politics for the near-record-low grain prices. Montana
winter wheat is now selling at $2.45 per bushel, and government loan
prices are pegged at only $2.58.
House Minority Leader Richard Gephardt (D-MO) and Senate Minority Leader
Tom Daschle (D-SD) in March introduced legislation making changes in the
1996 farm bill to allow farmers to pay back loans at the loan rate or at
the price that they actually receive for their crops, if that is lower
than the loan rate.
Maki blames the 1996 farm bill for many of the troubles of northern
plains farmers. "Farmers here are really limited to winter wheat, spring
wheat, barley and feed grains because it is so dry and such a short
growing season," Maki explained. "Add to the condition, prevailing low
grain prices and you have a situation that is putting these guys out of
business."
U.S. sanctions against India and Pakistan further concern wheat farmers,
since the sanctions end export credit programs used by the two countries
to purchase U.S. wheat. Wheat farmers fear that the sanctions will cause
already-low wheat prices to drop even further. Speakers at the Montana
Farmers Union rally said that trade sanctions against various countries
cost U.S. farmers sales worth about $26 billion per year.
Senator Richard Lugar (R-IN) said he will introduce legislation
requiring Congress and the Administration to consult during formulation
of sanctions policies and providing that all sanctions would expire
after two years. President Clinton expressed sympathy for farmers,
saying that, "Cutting off the supply (of U.S. wheat) will only hurt the
citizens of Pakistan and American farmers, without furthering our goals
of nonproliferation of nuclear weapons."
Canadian agriculture officials responded to recent reports of a 23
percent decline in prairie farm income this year, following a 50 percent
drop last year, and a negative net income for farmers in Saskatchewan
last year by saying that cash income was at record levels, so the
situation was not bad. Canadian Senate agriculture committee chair Len
Gustafson said that the officials of Agriculture Canada painted too rosy
a picture, ignoring real problems of Canadian farmers.
Ric Swihart, "U.S. Farm Group Wants Grain Price Hike," THE WESTERN
PRODUCER, June 25, 1998; "Farm Industry Concedes It Faces Uphill Battle
in Fight for Fast Track," INSIDE U.S. TRADE, July 3, 1998; Barry Wilson,
"Farm Economy Not That Bad, Says Agriculture Canada," THE WESTERN
PRODUCER, June 18, 1998; Jerry Hagstrom, "Senate Action Concerns Wheat
Producers," AGWEEK, June 15, 1998; "Farmers Take Anger to the Road," THE
WESTERN PRODUCER, June 25, 1998; "Lugar Seeks to Add Sanctions Proposal
to Farm Appropriations Bill," INSIDE U.S. TRADE, June 26, 1998; Jim
Lobe, "Anti-Sanctions Campaign Gathers Steam," INTERPRESS SERVICE, June
29, 1998; William Roberts, "Sanctions Flexibility Sought," JOURNAL OF
COMMERCE, June 23, 1998.
FAO AGRICULTURE PRIORITIES SET
The 25th regional conference of the U.N. Food and Agriculture
Organization in Nassau, Bahamas in June called for rural development as
the key to the fight against poverty, and for reforms of international
agricultural trade. The 33 Latin American and Caribbean agriculture
ministers in attendance also agreed on the importance of sustainable
management of natural resources while seeking food security, and
emphasized the importance of the code of Conduct for Responsible Fishing
in the region.
Gustavo Gonzalez, "FAO Conference Sets Priorities," INTERPRESS SERVICE,
June 22, 1998.
ILLEGAL CHICKEN, PORK EXPORTS ALLEGED
Mexican chicken and hog producers allege illegal exports of U.S. fresh
chicken parts and slaughter hogs, blaming both corrupt Mexican
inspectors and U.S. producers.
Mexican chicken producers say that customs officials fail to adequately
inspect trailers carrying imports of fresh chicken parts. U.S. producers
sell the more profitable chicken breasts in the United States, sending
the legs south, where they can get a higher price from Mexican consumers
than from U.S. consumers. Fresh or frozen chickens from the United
States pay duties of 240 percent on entry to Mexico, but salted or
smoked meats pay only 8 percent. Smugglers claim that their fresh or
frozen chicken parts are "brine-chicken." Allegedly-processed chicken
imports have risen from 450 tons to 9,000 tons per year since NAFTA's
effective date.
The Mexican Pork Producers Council claims that U.S. pork producers are
dumping slaughter hogs on the Mexican market. The Council filed an anti-
dumping petition with the International Commercial Practices Unit of
Mexico's Secretariat of Commerce (SECOFI) at the beginning of June. At
the World Pork Expo in Iowa at the beginning of June, University of
Missouri agriculture economist Glenn Grimes told U.S. producers that
they could expect a 40 percent increase in production during the next 18
months, taking the industry to a 137-million-head pig herd.
Joel Millman, "Illegal U.S. Chickens Pour Into Mexico," WALL STREET
JOURNAL, June 24, 1998; Ian Elliott, "Mexican Pork Producers Start Anti-
dumping Action Against U.S.," FEEDSTUFFS, June 29, 1998.
RESOURCES/EVENTS
Regional Integration and Multilateral Cooperation in the Global Economy,
edited by Jan Joost Teunissen. Forum on Debt and Development (FONDAD),
The Hague: 1998. Collected papers presented at 1997 conference on
regional integration and multilateral cooperation, including
consideration of prospects and priorities for integration in Latin
America, Africa, Asia, the Middle East, and Eastern Europe; the issue of
regionalism versus multilateralism; and economic globalization. Order
from FONDAD at Noordeinde 107 A, 2514 GE The Hague, the Netherlands;
telephone 31-70-3653820; fax 31-70-3463939; email
[email protected]
"Hazardous Waste Management on the Border: Problems With Practices and
Oversight Continue," BORDERLINES, Vol. 6, Number 5, July 1998. Monthly
publication of Interhemispheric Resource Center, Box 4506, Albuquerque,
NM 87196-4506. Articles in this issue focus on hazardous waste issues on
the border.
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