From: Human Rights Coordinator <hrcoord@igc.apc.org>
Newsgroups: soc.culture.latin-america
Date: 15 Aug 92 09:21 PDT
Subject: NORTH AMERICA: MEXICANS WARNED THAT
Nf-ID: #N:cdp:1473800271:000:6238
Nf-From: cdp.UUCP!hrcoord    Aug 15 09:21:00 1992


From: Human Rights Coordinator <hrcoord>
Subject: NORTH AMERICA: MEXICANS WARNED THAT

/* Written 12:11 am  Aug 15, 1992 by newsdesk in
cdp:ips.englibrary */ Copyright Inter Press Service 1992, all
rights reserved.  Permission to re- print within 7 days of
original date only with permission from 'newsdesk'.

Title: NORTH AMERICA: MEXICANS WARNED THAT NAFTA IS NO ''MAGIC
FORMULA''

mexico, aug 12 (ips/mario de cautin) -- mexicans have been warned
by their president that the just concluded north american free
trade agreement (nafta) is no ''magic formula to resolve their
country's problems.''

in a message to the nation wednesday, president carlos salinas
also cautioned that ''we must not think that its benefits will
reach us immediately,'' echoing an earlier forecast that the
potential benefits of the treaty will only become evident in the
medium to long term.

there is much suspense here as to the contents of the treaty.
salinas announced that the government would soon publish a
synthesis of the 400-page final draft of the agreement.

the president's message may have caused some disillusionment among
mexico's poor, who number 48 million (60 percent of the
population) and include six million unemployed persons.

nevertheless, the treaty which, according to salinas, might be
signed by the presidents of canada, mexico and the united states
''towards the end of this year'' could mean more, better paid jobs
as well as increased investments and foreign capital inflows.

in a recent interview, trade minister jaime serra puche, who
signed the draft trade pact wednesday along with his u.s. and
canadian counterparts, cautioned that ''nothing will happen on the
day after we sign the treaty.''

he forecast that ''it is in the medium and long term that we shall
begin to see the results: in nine, ten, twelve years,'' long after
salinas's term of office ends in 1994.

for it to become operative the treaty has to be signed by the
three presidents and then ratified by the parliaments of the three
countries.

salinas is not expected to have any difficulty getting mexico's
parliament to ratify the treaty, unlike u.s. president george
bush, who faces stiff opposition in the house of representatives,
where his republican party is in the minority.

the ruling institutional revolutionary party (pri), to which
salinas belongs, has a majority in both houses of the mexican
parliament.

during the two and one half years of discussions and tripartite
negotiations on the treaty, the battle between mexican advocates
and opponents of the pact centred basically on two key aspects.
(more)
----

one of these related to the mechanisms which would be used to
achieve compatibility between two highly developed economies
(canada and the united states) and a developing one (mexico).

the other focussed on the extent to which local negotiators would
make concessions on national sovereignty and the constitution,
especially in the case of oil. with the exception of secondary
petrochemicals, the oil industry here belongs solely to the
mexican state.

where achieving compatibility is concerned, the treaty is likely
to establish a differentation between the three economies, salinas
said wednesday.

less efficient and competitive mexican products will benefit from
a ''transitional period'' of five to 15 years before similar
products from canada and the united states are granted unbridled
entry into the mexican market.

seventy percent of mexico's products will be free to enter the
u.s. and canadian markets as soon as the treaty is ratified, while
40 percent of canadian and u.s. products will have similar
treatment in mexico.

salinas also sought to dispel mexican fears over the price paid in
terms of mexico's sovereignty and its constitution.

''as i have repeatedly stated, the negotiations were kept strictly
in line with the mandates of our constitution, in particular, with
regard to maintaining ownership and control of oil in the hands of
mexicans,'' he said.

however, some independent mexican analysts feel that the
uncertainty and doubts on the issue of petroleum and its
by-products can only be completely dispelled when the full text of
the pact is known.

what mexicans want to know is the extent to which concessions have
been made in this area, considered the thorniest issue in the
negotiations because of the strong pressure exerted by u.s.  oil
companies.

from the inception u.s. oil companies had demanded full access to
mexico's oil and petrochemical industries. they want to be allowed
to participate in risk contracts payable in crude oil and to be
given similar treatment to that granted to private mexican firms.

they had also demanded written energy supply guarantees similar to
those provided by an existing free trade agreement between canada
and the united states. u.s. companies bought 56 percent of the
1.36 million barrels of oil which mexico exported daily in 1991.
(more)
----

mexican economist ricardo carreta chan, a specialist in oil and
mining issues, told ips that ''if we are to heed the president's
information, the mexican negotiators succeeded in overcoming the
strong pressure from the u.s. oil companies.''

apparently, their demands for participation in risk contracts and
similar treatment with mexican companies, including access to the
trade in gasolene, were rejected, he said.

nevertheless, mexico has reportedly agreed to ''technically
reclassify'' some 20 basic petrochemicals and label them secondary
petrochemicals so as to make them accessible to private capital, a
way of circumventing the constitution without violating it.

mexico is also expected to lift a ban on total foreign ownership
of companies involved in the manufacture of secondary
petrochemicals.

according to carreta chan, the draft agreement probably grants
foreign companies the right to explore for oil, but through
service contracts payable in hard currency, and allows for the
establishment of joint oil refineries in the united states.

however ''the extent and nature of the concessions made by the
mexican state in this and other areas can only be evaluated when
the complete and definitive text of the treaty is made known,''
the specialist said.(end/ips/trd/so/mc-sfi/kb/92)
----

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