From iatp@igc.apc.orgSat Oct 28 16:53:40 1995 Date: Thu, 26 Oct 1995 13:20:00 -0700 (PDT) From: IATP To: Recipients of conference Subject: Trade News 10-26-95 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy October 26, 1995 Volume 4, Number 16 _________________________________________ Headlines: - CHINA POSTPONES WTO TALKS - EU: CANADIAN SUGAR DUTY "UNJUSTIFIED" - U.S.-PALESTINIAN FREE TRADE PACT - U.S., VIETNAM WILL LAUNCH TRADE TALKS - TUNA EXPORTERS WILL LIMIT DOLPHIN KILL - U.S., GERMAN AVIATION AGREEMENT NEARER - HOUSE CUTS FAST-TRACK AUTHORITY _________________________________________ WTO NEWS SUMMARY _________________________________________ CHINA POSTPONES WTO TALKS Internal political problems and a series of unproductive bilateral contacts with the United States and the European Union have forced China to call off a new round of accession talks to join the World Trade Organization (WTO). The two-week talks, which were slated to begin on October 23, have been postponed until at least early December, senior Western and Chinese officials said. The delay has been called in order to give Chinese trade officials more time to coordinate a new negotiating package, said an Asian official who declined to be identified. Trans-Atlantic trade officials familiar with the China-WTO brief, however, hinted that the Chinese negotiating team is in a difficult position trying to get the political hierarchy in Beijing to make some hard decisions regarding the liberalization of China's economy. Both the United States and the European Union (EU) are supportive of China's nine-year bid for accession but are insisting that Beijing must meet the strict commercial criteria stipulated in WTO rules. Chinese officials, such as trade minister Wu Yi, however, have repeatedly complained that Beijing has done enough and should be allowed to join the WTO, and assert that the major trading powers are denying China access in order to squeeze more concessions. John Zarocostas, "China's Postponement of Talks Puts Its Bid for WTO Seat on Back Burner," JOURNAL OF COMMERCE, October 20, 1995. EU: CANADIAN SUGAR DUTY "UNJUSTIFIED" Earlier this month, the European Union (EU) said that a Canadian anti-dumping duty on EU sugar was unjustified and that it might have to seek a World Trade Organization (WTO) panel to resolve the dispute. On October 5 Canada decided that EU sugar exports carried an average subsidy of 50 European currency units (ECU) per 100 kilograms and that German, Dutch, Danish, British, U.S. and South Korean sugar was being dumped on to its market. "We don't believe there is any justification for these duties," the European Commission's agricultural spokesman said, adding that if bilateral talks failed to bring a solution, "we could end up with a WTO disputes panel." The spokesman also said that the dumping duties breached GATT rules, that the EU was not exporting subsidized sugar to Canada and that the EU was only a very minor Canadian supplier. "EU Says Canadian Sugar Dumping Duty 'Unjustified'," REUTER, October 6, 1995. _________________________________________ REGIONAL/BILATERAL AGREEMENTS _________________________________________ U.S.- PALESTINIAN FREE TRADE PACT Last week, U.S. trade representative Mikey Kantor announced that the United States had finalized a free- trade pact with the Palestinians. "We have finalized an exchange of letters that will give free-trade status to the West Bank and Gaza Strip," Kantor told a news conference at Israel's Industry and Trade Ministry. According to the letters, among Washington, Israel and the Palestinian self-rule authority, the United States will not charge customs duties on Palestinian exports from the West Bank or Gaza. Kantor said the move was meant to reaffirm Washington's commitment to strengthening the Middle East peace process. Palestinian self-rule began in Gaza and the West Bank in September 1993. Last month, Israel and the Palestine Liberation Organization (PLO) signed an accord in Washington expanding West Bank self-rule. "Free-Trade Deal Concluded with Palestinians, Kantor Says," JOURNAL OF COMMERCE, October 18, 1995. U.S., VIETNAM WILL LAUNCH TRADE TALKS The United States and Vietnam are expected to launch negotiations early next month toward a comprehensive trade agreement aimed at fully normalizing trade relations between the two countries. The trade agreement, which, among other things, would sharply reduce U.S. tariffs on Vietnamese goods, would be subject to congressional approval. According to under secretary of state for economic affairs, Joan Spero, the negotiations "will not be easy or quick." They will encompass a wide range of issues, including Vietnam's plans for trade, investment and other economic reforms, its labor and emigration practices, and its nearly $150 million in U.S. debt. In the background are other talks covering human rights, MIAs and POWs, and regional security. The United States, she said, will also press for legal reforms, such as due process, which she called "critical." Richard Lawrence, "U.S., Vietnam to Begin Trade Talks Next Month," JOURNAL OF COMMERCE, October 4, 1995. TUNA EXPORTERS WILL LIMIT DOLPHIN KILL Tuna-catching countries have agreed to place legal limits on dolphin kills if the United States lifts an embargo that has hurt their fishing industries. The agreement came on October 4 when twelve countries -- the United States, Mexico, Columbia, Costa Rica, Venezuela, Ecuador, Panama, Belize, France, Spain, Peru, and Vanuatu -- signed the "Declaration of Panama." The declaration commits fishing countries to take legal action to hold dolphin kills to 5,000 a year or less if the United States lifts the embargo imposed in 1991 on tuna from several countries whose fishing led to massive dolphin kills on the Pacific coast. Several environmental groups, including Greenpeace, the World Wildlife Fund and the National Wildlife Federation, supported the declaration. But others have opposed it. On October 2, U.S. Senators Barbara Boxer (D-CA) and Joseph Biden (D-DEL), and Representatives George Miller (D-CA) and Gerry E. Studds (D-MA), released an open letter to President Clinton expressing "grave concern" over the measure. They said it would let foreign companies use a "dolphin safe" label even if their practices continued to endanger dolphin populations and said it "is nothing short of consumer fraud." "Tuna Exporters Offer to Limit Dolphin Kill," ENVIRONMENTAL NEWS NETWORK, October 5, 1995. U.S., GERMAN AVIATION AGREEMENT NEARER As part of its strategy to open aviation markets in Europe, the Clinton administration is accelerating negotiations with Germany to forge an open-skies pact similar to those now in place with 10 other European countries. An open-skies agreement with Germany, coupled with other developments on the European aviation scene, may give the United States unprecedented negotiating leverage with Britain for a similar accord. A deal with Bonn could set the stage for closer ties -- including the possibility of antitrust exemption -- between Germany's principal airline and its U.S. partner United Airlines, a move that could put British Airways at a serious disadvantage. Germany and the United States are now operating under a 1993 interim bilateral aviation agreement that replaced an accord signed after World War II. The 1993 bilateral agreement gave all cargo carriers unlimited air cargo services, but placed capacity restrictions on U.S. passenger carriers. This allows Germany's airline Lufthansa an opportunity to catch up with its more powerful postwar U.S. competition. Lisa Burgess, "U.S. Prods Germany on Aviation Agreement," JOURNAL OF COMMERCE, October 20, 1995. _________________________________________ WORLD TRADE ROUND-UP _________________________________________ HOUSE CUTS FAST-TRACK AUTHORITY Last week, U.S. House Republicans all but killed chances President Clinton will get a renewal of expedited trade negotiating authority this year or next. The GOP lawmakers dropped from a pending budget bill a provision renewing so-called fast track authority, which allows trade agreements negotiated by the administration to move through congress on an expedited basis. The action came after weeks of futile negotiations between Republicans and the U.S. trade representative's office. At issue was whether the administration's negotiating authority should allow negotiators to include labor and environmental standards to foreign trade agreements. Republicans do not want labor and environmental issues included under fast-track rules; Democrats do. The Republicans' move is a serious setback to President Clinton's trade agenda because it means the administration probably will not be able to complete a trade pact to bring Chile into the North American Free Trade Agreement (NAFTA). Most political observers believe passing any fast-track measure will require bipartisan support because a significant number of Republicans, along with some Democrats closely allied with labor, oppose liberalized trade policies. Helene Cooper, "House Move Clips Clinton's Authority on Trade Accords," WALL STREET JOURNAL, October 19, 1995. ___________________________________________ Trade News is produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Editor: Orin Kirshner. E-mail versions of Trade News are available free of charge for Econet/IATP Net subscribers. For more information about fax or mail subscriptions, contact: Institute for Agriculture and Trade Policy, 1313 Fifth Street S.E., Suite 303, Minneapolis, MN, 55414 Phone 612-379-5980. To learn more about IATP's contract research services, please contact Dale Wiehoff at dwiehoff@igc.apc.org