WORLD TRADE BODY URGES MORE REFORM FOR MEXICO


Via NY Transfer News Collective * All the News that Doesn't Fit


    Copyright 1997 by Reuters
    Wed, 8 Oct 1997 11:31:48 PDT

         GENEVA (Reuter) - The World Trade Organization, worried by
recent measures in Mexico favoring domestic industries, urged
Latin America's biggest trading nation Wednesday to push ahead
with economic reform.
         In a report on Mexico's trade policies, analysts from the
world trade body also signaled concern that the government's
focus on regional agreements could hurt prospects for closer
integration into the global economy and broader trade links.
         The report was the first to be issued since Mexico's full
integration into the 1994 North American Free Trade Agreement
linking it with the United States and Canada, and the financial
crisis that led to the recession of 1995.
         About 80 percent of Mexican merchandise trade is with the
United States, with NAFTA sharply boosting trade between the two
countries.
         The report said continued protection of the Mexican auto
industry, recent tariff increases on a range of goods, tougher
standards for imports and the use of anti-dumping measures
showed the reform process was not complete.
         It added that continued reforms were needed for Mexico to
achieve a ``higher, sustainable rate of economic growth.''
Mexico's economy grew 5.1 percent last year and the government
has projected growth of 6 percent for this year.
         The report noted that Mexican manufacturers have taken
advantage of economic reforms so far and foreign investment to
boost efficiency and profitability.
         The so-called maquiladora industry, where goods are
assembled from mostly imported raw materials using cheap labor,
has played a major role in boosting exports since 1994.
         But in a study timed to coincide with the WTO report, a
leading labor union group said the mainly young female workers
in the industry's export-processing zones suffered ``poor
conditions, sexual discrimination and intimidation.''
         The body, the Brussels-based International Confederation of
Free Trade Unions, said labor organizers in the maquiladora
industry were often fired. It said low work standards were
``aimed at keeping wages artificially low to encourage exports''
from the sector.
         The report by the WTO, which has no mechanism to study labor
standards and their relation to world trade despite years of
pressure from the United States and other western countries, did
not refer to this issue.
         But the report suggested that efforts were needed to ensure
that the benefits of the country's ``generally positive example
of progressive liberalization'' flowed more visibly ``to a
larger proportion of the population.''
         This, the report said, ``would also be important in securing
continuing support for the reforms'' -- which have been
increasingly challenged by Mexican development groups and
left-wing political parties.
         The analysts said Mexico's focus on trade liberalization in
the Americas and Pacific region reflected the government's view
that global negotiations through the WTO offered fewer chances
for freer trade at the pace and depth it would like.
         But this strategy, it said, ``has to be weighed carefully
against potential costs.''
 
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