Economic Report of the President 1994 - The American Presidency ...

1998, while nontariff barriers on a few products (poultry, eggs,dairy products, and sugar) are maintained. In a separate agreementunder NAFTA, Mexico and Canada will eliminate tariffs ontheir bilateral trade (except for the four products listed above). Allthree countries agreed to work for the elimination of agriculturalexports subsidies.As a consequence of these changes under NAFTA, U.S.-Mexicoagricultural trade is expected to grow significantly. U.S. corn growers,for example, can expect to export more corn to Mexico, whileMexican farmers can expect to export more fresh vegetables to theUntied States.NAFTA-Plus: The Side Agreements. The Clinton Administrationaccepted NAFTA as negotiated by its predecessor, but argued thatmore was needed. The result was the negotiation of three innovativeside agreements.The North American Agreement on Labor Cooperation representsthe first attempt to manage the terms of the potential change inlabor markets brought about by an accord between the UnitedStates and a trading partner. The agreement involves such issuesas restrictions on child labor, health and safety standards, andminimum wages. The supplemental labor agreement was developedaround three fundamental principles: (1) enhanced collaboration,cooperation, and information exchange among the three countries;(2) increased efforts to make each country's labor laws and theirimplementation explicit and highly visible; and (3) increased use ofeffective mechanisms to encourage the enforcement of nationallabor laws. The agreement establishes procedural mechanisms forenforcement, including channels of public communication, exchangesof information, discussion of issues, and various levels ofconsultations. If a solution cannot be reached, the agreement providesfor binding arbitration and assessment of penalties. In additionto signing the labor side agreement, the Mexican governmenthas pledged to link increases in the Mexican minimum wage toproductivity increases. Moreover, the United States has retainedits right to use its domestic trade laws, such as Section 301 of the1974 trade act, with respect to labor issues not covered underNAFTA.The North American Agreement on Environmental Cooperationexplicitly ensures our right to safeguard the environment. NAFTAmaintains all existing U.S. health, safety, and environmentalstandards. It allows States and cities to enact even tougher standards,while providing mechanisms to encourage all parties to harmonizetheir standards upward. The environmental side agreementcreates a new North American Commission on Environmental Cooperation,with a Council made up of the three countries' top environmentalofficials. The Commission will have a Secretariat with228