Trade Week in Review and Recent Publications Friday, March 25, 1994 Volume 3, Number 12 _______________________________________________________ Headlines: SUTHERLAND CONDEMNS SOCIAL, ECO TARIFFS U.S. GRANTED WAIVER IF CHINA JOINS GATT GATT TO HAVE WIDE IMPACT ON AGRICULTURE JAPAN CLOSE TO OFFERING DEAL TO U.S. RESOURCES _______________________________________________________ SUTHERLAND CONDEMNS SOCIAL, ECO TARIFFS GATT Director-General Peter Sutherland warned industrialized nations not to use trade sanctions to enforce national environmental and labor laws. "Simplistic demands for drastic trade remedies against so-called eco- dumping or social dumping sometimes bears a striking resemblance to more conventional forms of protectionist rhetoric," Sutherland said during a speech to Toronto's Canadian Club. Negotiators representing industrialized nations have been pushing for the inclusion of labor, social and environmental standards in the future World Trade Organization agenda. Developing countries, which are generally the target of such proposals, have been resisting U.S. and EU calls to "level the playing field" by harmonizing national environmental and worker standards. Sources: Robert Evans, "GATT Chief Opposes Labor Link in World Trade," REUTER, March 21, 1994; Chakravarthi Raghavan, "Trade: Strong Opposition to Work Programme on New Issues," SUNS, March 18, 1994; Frances Williams, "Caution on Labor Rights Sanctions," FINANCIAL TIMES, March 22, 1994; Guy de Jonquieres, David Buchan, "Brittan Rejects Action Over Low-Wage Exporters," FINANCIAL TIMES, March 24, 1994. _______________________________________________________ U.S. GRANTED WAIVER IF CHINA JOINS GATT The United States won a change in GATT rules Wednesday allowing it to withhold GATT benefits from China even if Beijing rejoins the global trade body. GATT's "non-application" rule allows any individual GATT member to refuse trade benefits to an incoming member providing bilateral tariff negotiations between the two countries have not taken place. The new interpretation, effective immediately, allows "non- application" even after bilateral negotiations have begun. The FINANCIAL TIMES reports the decision enables the U.S. to press forward on GATT membership negotiations with China without prejudice to this year's decision on Most Favored Nation trade status. Chinese Vice-Premier Li Lanqing accused the U.S. of breaching a 1992 bilateral market access deal by blocking China's bid to re-enter GATT. Li said the U.S. had vowed to "staunchly support" China's re- entry bid in exchange for improved Chinese market access for U.S. goods. "We hope that [the United States] will implement its serious commitment and change the impression that it is obstructing China's re-entry into GATT," Li said. China's major trade partners, with the exception of the United States, agreed during GATT membership negotiations last week to speed China's entry process. China is pushing for GATT membership this year to ensure that it becomes a founding member of the WTO. Sources: Frances Williams, "U.S. Secures GATT Waiver Over China," FINANCIAL TIMES, March 23, 1994; Stephanie Nebehay, "China Seeks Quick Entry in New World Trade Body," REUTER, March 15, 1994; "China Accuses U.S. of Violating Agreement," INVESTOR'S BUSINESS DAILY, March 23, 1994. _______________________________________________________ GATT TO HAVE WIDE IMPACT ON AGRICULTURE Government officials, farmers and agriculture manufacturers are not united in their opinions on the Uruguay Round's impact on agriculture. U.S. Secretary of Agriculture Mike Espy, for example, told a congressional hearing he expects the world trade agreement to boost U.S. agricultural exports by $4.7 to $8.7 billion and net farm income by $2.5 billion during the next ten years. Meanwhile, the U.S. National Farmers Union believes the Uruguay Round has "simply locked in the current trade inequities." Neal Bjornson, an economist with the American Milk Producers Incorporated, predicts the new GATT deal will cost U.S. dairy producers at least 55 cents per hundredweight in lost milk income. New limits on farm export and import subsidies under GATT have led to a split among French farm groups, according to a REUTER report. "When the cake is limited, it's more difficult to share," said Raymond Lacombe, former head of France's FNSEA farmers' union, in reference to producer subsidy cuts. Despite farmer complaints, France's machinery lobby predicts the GATT accord could trigger a recovery for equipment manufacturers. The lobby group said farmers have postponed equipment purchases over the past several years in anticipation of a GATT deal. Now it expects farmers will be ready to make new machinery investments. A new study by the Australian National University and Thailand's Office of Agricultural Economics projects agricultural export revenues will rise by more than 2 percent in Thailand once the GATT accord takes full effect. Gains are expected to result from increased sugar and low grade rice exports. The Cairns Group of agricultural exporting nations may recommend the establishment of a secretariat to monitor the implementation of GATT market-access measures. The Cairns group will meet formally in April, when the GATT accord is signed, and again in May to continue discussions. Sources: "GATT Accord to Boost Farm Exports-Espy," REUTER, March 16, 1994; "Farmers Union Convention Opposes GATT Trade Accord," NFU CONVENTION NEWS RELEASE, March 5, 1994; Joel McNair, "GATT Dairy Impact: 55 Cents, Maybe More," AGRIVIEW, March 18, 1994; Juliette Rouillon, "French Farmers Set for Subsidy Battle at Congress," REUTER, March 21, 1994; "French Farm Machinery Sales Seen Recovering in '94," REUTER, March 18, 1994; Robert Greene, "GATT- Agriculture," AP, March 17, 1994; Ron Corben, "Thai Farm Exports Forecast to Rise Under Uruguay Round Trade Pact," JOURNAL OF COMMERCE, February 25, 1994; "Australia Says Group Action Needed on Farm Trade," REUTER, March 17, 1994. _______________________________________________________ JAPAN CLOSE TO OFFERING DEAL TO U.S. U.S. Trade Representative Mickey Kantor warned Japan Thursday to be as forthcoming as possible about market proposals if it is to avoid U.S. trade sanctions. "We have been encouraging them to come up with as bold and far-reaching a package as possible, " Kantor said. The U.S. is pushing Japan to open its auto, autoparts, telecommunications, insurance and medical equipment markets. Japan is expected to announce next week a package of the minimum trade measures needed to satisfy the Clinton administration. Sources: Thomas L. Friedman, "Kantor Tells Japan to Make 'Bold' Offer for Trade Peace," NEW YORK TIMES, March 25, 1994; "U.S. Officials Warn Japan of Possible Sanctions," INVESTOR'S BUSINESS DAILY, March 24, 1994. _______________________________________________________ RESOURCES _______________________________________________________ For copies of the following, contact the authors or organizations listed. "Report by Ambassador H. Ukawa (Japan), Chairman of the Group on Environmental Measures and International Trade, to the 49th Session of the CONTRACTING PARTIES [to the General Agreement on Tariffs and Trade]," January 25, 1994. 28 pages. Institute for Agriculture and Trade Policy (see address below). $4. This report summarizes the GroupUs work during 1993. "Third World NetworkUs Position Paper on the World Trade Organization, Trade and Environment," March 22, 1994. 14 pages. Third World Network, 87 Cantonment Road, 10250 Penang, Malaysia. (60-604) 373511. Fax: (60-604) 364505. E-mail: twn@igc.apc.org. Request price. Also posted on EconetUs "trade.library" under the title "TWN Paper on trade and environment (2).S "Green Protectionism Q Differentiating Environmental Protection from Trade Protectionism," Charlie Arden-Clarke, WORLD WIDE FUND FOR NATURE, February 1994. 12 pages. WWF International, Avenue du Mont-Blanc, CH-1196 Gland, Switzerland. (41-22) 364-9111. Fax: (41-22) 364-5829. Request price. Also available from WWF International are a position paper and a joint Non-Governmental Organization Statement on the GATT Trade and Environment Work Programme. "Wages of Sin: JapanUs Foreign Trade," Kitazawa Yoko, AMPO; JAPAN- ASIA QUARTERLY REVIEW, Vol. 24 No. 4. 5 pages. Asia Resource Center, P.O. Box 15275, Washington, DC 20003. (202) 547-1114. Fax: (202)543-2364. $5/issue. Individuals: $28/year. Organizations: $40/year. This article critiques JapanUs export and import policies. "High-Value Product Exports; Good Potential Exists for More Trade With Taiwan, Malaysia and Indonesia," U.S. GENERAL ACCOUNTING OFFICE, GAO/GGD-94-52, November 1993. 36 pages. P.O. Box 6015, Gaithersburg, MD 20884-6015. (202) 512-6000. Fax: (301) 258- 4066. First copy free. _______________________________________________________ The following email services are offered by the Institute for Agriculture and Trade Policy: "trade.library" - a storehouse of trade related documents, including analyses, reports, fact sheets, White House transcripts ... etc. "trade.strategy" - an open discussion of trade issues and events "eai.news" - a regular bulletin summarizing the latest news in Latin American integration and development "susag.news" - a regular news bulletin pertaining to sustainable agriculture "susag.library" - longer documents, studies and analyses on sustainable agriculture "susag.calendar" - a calendar of events "env.biotech" - a news bulletin about biotechnology If you are on EcoNet/PeaceNet, you may access these services by going to the "conferences" section. If you are on another system and would like to be added to the e-mailing list for these services, send email to "kmander@igc.apc.org" with a note requesting to which lists you'd like to be added. Trade Week is produced by: Gigi DiGiacomo and Kai Mander Institute for Agriculture and Trade Policy (IATP) 1313 5th Street, SE, Suite 303 Minneapolis, MN 55414-1546 USA tel: (612) 379-5980 fax: (612) 379-5982 email: kmander@igc.apc.org _______________________________________________________