NAFTA Talks Resume On Side Agreements

NEGOTIATORS gather today in Ottawa to decide how sharp the enforcement teeth of the North American Free Trade Agreement (NAFTA) sidebar agreements will be. They are designed to beef up compliance on labor and environmental laws in Mexico, the United States, and Canada.

Negotiations have been bogged down for more than two months over sanctions. But Mexican officials are optimistic that a draft will be prepared this week for a final round between trade ministers at the end of July. "This meeting is key. But we are very close. There aren't many differences left," says a senior Mexican trade official.

Still, the remaining differences could be deal breakers. To give teeth to the sidebar accords, the US is pushing for trade sanctions. If a Monterrey steel manufacturer, for example, violates Mexican labor or environment laws, the Mexican steel industry could face higher tariffs on its North American exports.

But Mexico and Canada flatly oppose trade sanctions as too broad and too protectionist. They are lobbying for economic sanctions or fines. At the close of the last negotiating round here on July 9, Herminio Blanco, Mexico's chief negotiator said "substantial progress" had been made. But negotiators admitted the talks were still "conceptual." The written text has not been tabled.

If the US opts for economic instead of trade sanctions, issues include how fines will be levied. "If you're fining a government, who will be doing the fining? What will the funds collected be used for? If the fines are passed along to an industry without due process of law, that could create problems," says Lynn Fischer, of the Natural Resources Defense Council in Washington.

US negotiators are in a tight spot. For NAFTA to be ratified, Democrats in the US Congress have made it clear that the administration needs sidebar agreements with strong enforcement measures.

Although ratification of NAFTA in the Mexican legislature is not in jeopardy, some Mexican labor unions also want trade sanctions. "We want sanctions that hit the flow of products. Fines are not enough. Corporations would just pay the fines and go on with practices which prevent workers from organizing," says Bertha Luthan, a leader in the Authentic Workers Front and the Mexican Action Network Against Free Trade.

The other major challenge for the negotiators is the structure and powers of the North American Commission on the Environment (NACE), which will administer the sidebar agreements. The US proposal for NACE, supported by several US environmental groups, calls for an independent secretariat to monitor enforcement, initiate dispute settlements, and investigate and recommend solutions. "The most important element in the enforcement process is citizen participation," Ms. Fischer says. "It is vital that the sec retariat not be beholden to any one government."

Mexico, however, is concerned that a supranational agency could impinge on its sovereignty. Its NACE proposal calls for separate national sections overseen by an executive committee of cabinet level officials from each country. Environmentalists here condemn the plan as weak, lacking in nongovernmental representation and susceptible to political pressures.

Ms. Luthan advocates a trinational commission that would be backed by national commissions with the power to recommend sanctions in their own countries. "A national commission composed of government, academic, and nongovernmental experts is the way to safeguard our sovereignty," she says.

As the negotiators meet today, the Clinton administration will try to dismantle another roadblock. It will appeal a ruling by US District Judge Charles Richey requiring an environmental impact study of NAFTA before it can be sent to Congress. A ruling on the appeal is expected as early as September.

The slow progress toward NAFTA ratification is taking place against a backdrop of diminishing US popular support. A July 13 CNN/USA Today/Gallup survey shows 65 percent of those polled opposed NAFTA. That is up from 63 percent in March, and 57 percent last September.