6:50 AM Nov 4, 1993

NAFTA PACKAGE SENT TO CONGRESS FOR 'YES/NO' VOTE

Geneva 4 Nov (Chakravarthi Raghavan) -- The United States administration, having secured deals with Mexico to assist the US sugar, citrus and vegetable industries, has submitted to Congress its NAFTA package, thus setting off the final phase of the 'uphill campaign' for approval.

The US Mission 'Daily Bulletin' in Geneva quoted President Clinton as saying at a White House ceremony that the administration did not at the moment have the necessary votes "but we're getting there".

The House of Representatives is due to vote on the package on 17 November under the fast track authority -- with the vote limited to approval or disapproval. If the administration wins the vote, a yet is expected in the Senate, where it has an easier passage, a week or so later.

NAFTA opponents in the House claim a solid 208 votes against, needing only ten more to reject it.

USTR Mickey Kantor was quoted as denying any suggestion that the administration would seek a delay in the vote -- a prospect that would result in slowing down the Uruguay Round negotiations in Geneva where trade officials are marking time, waiting for the US to emerge from its state of immobilisation.

The Daily Bulletin -- which quoted Kantor as telling reporters that he had negotiated on telephone with Mexican authorities until 4 in the morning of Wednesday to conclude the sugar, citrus and vegetable agreements -- said this "might secure a few extra votes in the House, where Nafta approval remains highly uncertain". Kantor was also quoted as saying that Mexicans had agreed to begin negotiations, as soon as Nafta enters into force, on import problems cited by the US wine, flat glass and small appliances industries.

To make up the projected loss of tariff revenues (an estimated $2600 million over five years) by the NAFTA (and as mandated by the Congressional budget deficit cutting law), the NAFTA package also contains revenue raising measures for about $3100 million -- a four-year increase in customs user fees for air and sea passengers entering the US from five to 6.50 dollars, and elimination over the same period of existing user fee exemptions for passengers from Canada, Mexico and the Caribbean.

The rest of the package comprises acceleration of electronic income-tax payments to the Treasury, savings in farm subsidy outlays in connection with higher exports to Mexico of feed-grains, soybeans and maize, and higher collection of customs tariffs expected from an 'ant-fraud' programme.

(The US customs user fee has however been the subject of a GATT panel ruling, where addition of fees as a revenue raising measure, rather than actual costs, was found by a panel to be illegal. The US after considerable hesitance accepted the ruling. If the new measure is seen as revenue-raising it could run into trouble at the GATT)

According to the Daily Bulletin, the NAFTA package legislation does not contain a proposal, supported by the Senate Finance Committee for reviving the 1989-1990 'Super 301' trade provisions -- whose elimination, as of other US unilateralisms is a central point of the Uruguay Round institutional questions for the trading partners of the US.

Kantor was quoted as saying that the administration would support such a provision in another bill next year. The Nafta package, the US Mission Bulletin said, also does not contain any proposals relating to US complaints of subsidized Canadian grain exported to the US. But Kantor said this problem was part of the subsidy and dumping issues on the Uruguay Round agenda.