The Center for the Study of Western Hemispheric Trade has a developed
"TRACKING US TRADE" and the CSWHT TRADE INDEX for all those engaged in
tracking trade with the Western Hemisphere. The CSWHT Trade Index is a part
of our free trade news service, "Tracking US Trade", and is available on
the World Wide Web at URL:
<< http://lanic.utexas.edu/cswht/tradeindex.html >>
_________________________________________
TRACKING US TRADE: A TRADE NEWS SERVICE FOR THE AMERICAS
Released Wednesday, February 19, 1997
Western Hemispheric Trade Issues for December 1996:
U.S. - W. Hemisphere Trade
at Record High in 1996
While the U.S. trade deficit as a whole reached an eight-year high in 1996,
trade with South and Central America and the Caribbean earned a surplus for
the fifth year in a row. Total merchandise trade with the non-NAFTA
hemisphere was up almost ten percent last year to $101.3 billion, $52.5
billion of it in U.S. exports, for a surplus of $3.7 billion. This
compares to 1995's total volume of $92.2 billion and surplus of $7.7
billion.
U.S. trade in goods with the world climbed 6.5 percent in 1996. Exports
and imports were at about the same rate. U.S. trade with the Western
Hemisphere grew even faster (10.2%), as did trade with our NAFTA partners
(10.3%).
Total merchandise trade with Mexico was up 20.2 percent in 1996 over the
previous year, marking a record high of $129.7 billion ($56.7 billion in
exports, $73.0 billion in imports). The trade gap with Mexico widened
slightly ($777 million) in 1996 as the dollar strengthened. The Mexican
Finance Ministry estimates that $36.8 billion of its exports to the United
States in 1996 originated from maquiladora assembly plants. Exports now
account for around 30 percent of Mexico's gross domestic product.
U.S. exports to Mexico grew faster in December (up 7.3 percent to $5.3
billion over November) than imports from Mexico (down 7.7 percent to $5.9
billion). Motor vehicles and power generating machinery led the hike in
exports while telecommunications equipment and electrical machinery
accounted for most of the drop in U.S. imports.
U.S. exports of goods to Canada dropped 15.2 percent to $10.2 billion in
December over the previous month. Imports fell 9 percent to $12 billion.
Both of these movements were dominated by seasonal shifts in the
automobile, auto parts, and power generating machinery industries.
_________________________________________
SPECIAL FEATURE: WILL CHILE JOIN NAFTA?
_________________________________________
Will Chile Join NAFTA?
Chile's membership in NAFTA has been anticipated since 1992, when the Bush
administration announced that Chile would be the next country admitted to
the North American Free Trade Agreement (NAFTA). The Clinton administration
reiterated this position at the Summit of Americas in 1994 and established
working groups to lay the groundwork for formal negotiations that would
eventually lead to Chile's accession by 1996.
Chile's population of under 15 million is a relatively small market. But
its political stability, growing export-oriented economy and pro-market
reforms have made the country an attractive candidate for NAFTA. Chile
stands to benefit from NAFTA through greater access to U.S. markets,
technology and investment capital. NAFTA would put the seal of approval on
the Chilean economy.
>From the U.S. perspective, the political case for admitting Chile is
stronger than the economic. Chile is not a major U.S. trading partner.
Opportunities for production-sharing and joint ventures are limited, given
the dissimilarities in industrial structure and the distance between the
two countries. Nevertheless, the Clinton administration believes that
ratifying Chile's commitment to economic reform and democratic procedures
would signal to other countries the "preconditions" for NAFTA accession.
The U.S., Canadian and Mexican business communities have been supportive of
Chile's joining NAFTA. They view Chile as a strategic partner in a rapidly
expanding hemispheric market. Many labor and environmental groups, however,
oppose the addition of members to NAFTA at least until the agreement is
revised to include more stringent provisions.
Chile's membership in NAFTA was put on hold in 1996 to minimize conflicts
over trade policy between the President and Congress during the election
year. The delay caused Latin American leaders to express concern over the
U.S. commitment to hemispheric trade. Congress will evaluate NAFTA later
in 1997. A favorable analysis will be important for both securing Chile's
membership in NAFTA and for future NAFTA accessions. Clinton is preparing a
trip to the region in April and his administration is developing its
strategy to secure congressional approval for the "fast-track" authority
needed to negotiate the Chilean accession. According to administration
officials, Chile's membership in NAFTA is a top priority. Chilean
President Frei visits Washington in late February in part to discuss NAFTA.
While talks over NAFTA and trade policy have been bogged down in
Washington, Chile has been busy expanding its trade ties elsewhere.
Bilateral free trade agreements with Canada and Mexico are viewed as
"bridging" arrangements. They are less comprehensive than full membership
in NAFTA, but are moving closer toward the goal of free trade until
Washington rejoins the negotiations. Chile also became an associate member
of MERCOSUR, the Southern American customs union linking Brazil, Argentina,
Uruguay and Paraguay in a $1 trillion market. Chile began talks with the
European Union on a trade and cooperation agreement. And Chile became the
only non-Asian member of the Asia-Pacific Economic Forum (APEC), besides
the NAFTA countries, in 1994. As a member of APEC, Chile offers MERCOSUR a
window to Asia.
While Chile's trade officials view membership in NAFTA as important, they
consider MERCOSUR to be vital. Chile's exports to Latin America are growing
faster than those to any other region. Chilean exports include manufactured
equipment, computer software, and professional services as well as
traditional natural resources and mineral exports. Chile's trade is well
distributed among Western Hemispheric countries, the nations of Western
Europe and Asia. In 1996, the NAFTA countries accounted for roughly 23
percent of Chile's trade, while the European Union accounted for 24
percent, the APEC countries 25 percent, and MERCOSUR 15 percent. The U.S.
is Chile's principal trading partner, receiving roughly 15 percent of
Chile's exports and accounting for 24 percent of its imports. Chile's
economy continues to grow between 7-8 percent per year.
The Clinton administration is confident that Chile will join NAFTA soon.
Chile remains interested. Decisive action however will not come until after
the congressional review of NAFTA. The battle in Congress will signal
whether free trade or protectionist forces will be victorious.
Additional Information: J. Michael Patrick, Chair, Department of Economics
and Finance, Texas A&M International University. Tel.(210)326-2515, e-mail:
jmpatrick@tamiu.edu
_________________________________________
********************************
* IMPORTANT ANNOUNCEMENT *
********************************
TRACKING US TRADE fax and e-mail services have changed to a QUARTERLY
basis. The new expanded publication will be released on may 21, 1997.
Monthly electronic updates of trade data and newsworthy developments will
continue to be made available on our web page. The next monthly web update
will be on March 20th.
To request your FREE E-MAIL SUBSCRIPTION to quarterly publications, call
(512) 475-8679 or reply to:
< trade@uts.cc.utexas.edu > including the following : 1) name, 2)
organization, 3) telephone, 4) fax and 5) e-mail address
(Please note: if you are already a member of our subscription service,
there is no need to re-subscribe.)
_________________________________________
FOR MORE INFORMATION CONTACT:
Center for the Study of Western Hemispheric Trade
3925 W. Braker Lane / MCC Bldg., Ste. 1.900
Austin, TX 78758
Tel. (512) 475-8680 / Fax (512) 475-7966
e-mail: trade@uts.cc.utexas.edu
URL: http://lanic.utexas.edu/cswht/tradeindex.html
_______________________________________________________________________
Julie Nordskog-Mier, Research Associate
Center for the Study of Western Hemispheric Trade
MCC Building, Suite 1.900
3925 West Braker Lane Telephone: 512-475-8679
Austin TX 78759 Fax:512-475-7966
E-mail: jnordskog@mail.utexas.edu
URL: http://www.lanic.utexas.edu/cswht/tradeindex.html
_______________________________________________________________________