From iatp@igc.apc.org Mon Aug 26 08:30:32 1996 Date: Fri, 09 Aug 1996 10:14:44 -0700 (PDT) From: IATP To: Recipients of conference Subject: Trade News 8-9-96 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy August 9, 1996 Volume 5, Number 14 ________________________________________ Headlines: - U.S., AUSTRALIA SAY CHINA MUST DO MORE - U.S. STALLS GREEN TRADE TALKS - EU CALLS FOR LABOR STANDARDS - EU JOINS JAPAN ON BRAZIL TARIFFS - U.S. MAY END TUNA IMPORT BAN - INCREASED TRANSPARENCY IN WTO ________________________________________ WTO NEWS SUMMARY ________________________________________ U.S., AUSTRALIA SAY CHINA MUST DO MORE On July 26, the United States and Australia said that China must go further in meeting the criteria of the World Trade Organization (WTO) before Beijing can be accepted for membership. During bi-lateral security talks in Sydney, "both sides agreed that the terms of China's offer need to be improved substantially before there could be serious progress" on its application for membership in the WTO, said a senior Australian official. A senior U.S. official reaffirmed that Washington "genuinely" wants to see China join the WTO, but said that China has not put forward a "commercially acceptable offer." He speculated that this suggests Chinese leaders were still debating among themselves how far they are willing to go to reform their system to secure WTO membership. China is the world's third largest economy behind the United States and Japan, but has been seeking WTO membership on easier terms as a "developing" country. U.S. officials say Beijing must go further in commitments to reduce tariffs, open markets, eliminate exclusive trading rights and liberalize investment. China says these measures could increase unemployment and domestic social instability. "U.S., Australia Agree China Must Do More On WTO," REUTER, July 26, 1996. U.S. STALLS GREEN TRADE TALKS On July 25, trade officials at the World Trade Organization (WTO) in Geneva announced that the United States was refusing to play a constructive role in the WTO's trade and environment committee (CTE), threatening to prevent any firm results emerging in time for the WTO's first ministerial meeting in Singapore in December. Trade officials said that two years of discussions were going nowhere because the United States was unable to take a position on the issues ahead of November's presidential election. "The U.S. is proposing nothing and systematically trashing everyone else's proposals," said one official. "It is a major obstacle to getting anything done." Ironically, Washington was one of the strongest proponents of establishing the CTE in 1994, with a mandate to report to the Singapore ministerial meeting. The committee was charged with looking at the relationship between international trade rules and environmental measures and whether WTO rules needed amending as a consequence. The CTE's agenda includes how to handle WTO disputes arising out of trade provisions in multilateral environmental agreements (MEAs), and how to ensure that environmental measures such as ecolabelling and packaging requirements are compatible with international trade rules. The CTE was created on an ad-hoc basis and must be re- established by ministers in Singapore. Though no one has yet suggested that it be discontinued, some developing countries are known to favor turning the CTE into a committee on sustainable development. Developing countries say such a move would give them a greater voice in the trade and environment debate. Francis Williams, "U.S. Holding Up Green Trade," FINANCIAL TIMES, July 26, 1996. EU CALLS FOR LABOR STANDARDS On July 24, the European Union (EU) called for workers' rights to be put on the agenda of the World Trade Organization (WTO). The European Commission, the EU's executive agency, asked for the WTO ministerial meeting in Singapore this December to set up a working group on the link between trade and labor standards. "If the WTO fails to take up the challenge, there is a real danger that unilateral protectionist measures could emerge . . . (which) could, in turn, serve to destabilize the progress already achieved in relation to trade liberalization," the commission said in a policy paper. In an effort to assuage Asian nations who fear Europe is seeking to blunt their competitive edge, the commission said the WTO should limit its work to core labor standards and not discuss wage levels. Core labor standards include the right to collective bargaining, freedom of association and the prohibition of slavery, forced labor and the employment of children. The paper immediately drew criticism from the Association of Southeast Asian Nations (ASEAN) which expressed deep concern over what it called the tendency of industrialized nations to impose their domestic policies on less developed countries. Bruce Barnard, "EU Wants WTO to Discuss Wages, Labor Standards," JOURNAL OF COMMERCE, July 25, 1996. EU JOINS JAPAN ON BRAZIL TARIFFS Last week, pressure on Brazil to relax its restrictions on vehicle imports mounted when the European Union (EU) decided to join Japan in placing a complaint before the World Trade Organization (WTO). An EU representative in Brasilia said it would use WTO procedures to join a complaint lodged by Japan on July 30, rather than launch a separate action, after informal negotiations in Geneva failed to resolve differences between the trading partners arising from duties introduced by Brasilia last year. Brazil increased motor vehicle import tariffs from 32 to 70 percent in March 1995. Since December 1995, manufacturers operating in the country have been allowed to import vehicles at tariffs of 35 percent. Japan and the EU say this discriminates against other manufacturers. The United States and South Korea have also objected to the tariffs; diplomatic sources said the two countries were expected to lodge similar complaints at the WTO later this month. Jonathan Wheatley, "EU Joins Action On Brazil Tariffs," FINANCIAL TIMES, August 2, 1996. U.S. MAY END TUNA IMPORT BAN The U.S. House of Representatives has passed a bill lifting a six-year embargo on tuna fish imports imposed to protect dolphins in the eastern Pacific. If the bill passes the Senate, as expected, it will remove Mexico's threat to bring a potentially embarrassing complaint against the U.S. embargo to the World Trade Organization (WTO). The bill follows agreement by governments in the region -- an area of more than five million square miles from Southern California to Chile -- to institute reforms to keep dolphin from being killed in the circular mile-long nets used to catch tuna. The agreement, reached last year in Panama, was signed by 12 nations: Belize, Colombia, Costa Rica, Ecuador, France, Honduras, Mexico, Panama, Spain, Vanuatu, Venezuela and the United States. The United States lost an earlier case against the ban, brought by Mexico in the General Agreement on Tariffs and Trade (GATT) -- the WTO's predecessor. The agreement negotiated in Panama establishes a permanent mortality limit to reduce dolphin deaths to no more than 5,000 a year; gives each vessel a limit on deaths; works to reduce deaths of sea turtles, small fish and other species; and strengthens the enforcement and monitoring system. An estimated 130,000 dolphins a year were being killed unit the United States ordered American fishermen to stop using the huge circular nets and ultimately banned tuna imports from countries where the practice persisted. Nancy Dunne, "U.S. Close to Lifting Ban On Tuna Imports," FINANCIAL TIMES, August 2, 1996. INCREASED TRANSPARENCY IN WTO On July 22, acting U.S. trade representative Charlene Barshefsky announced improvements in transparency and public access to information on the actions in the World Trade Organization (WTO), including dispute settlement proceedings. The WTO General Council approval of these improvements on July 18 marked the culmination of two years of effort on the part of the United States. Barshefsky stated that "today's actions constitute important steps towards shedding more light on the day- to-day operations of the WTO. The U.S. public, including our industry, scholars and interest groups, should gain a better understanding of how the WTO works and the reasons underlying actions that its members take." The decisions taken by the WTO General Council will provide immediate public access to most WTO documents and shortened periods for the public release of the types of documents that are initially subject to limited access. Additionally, guidelines related to providing information and access for non-governmental organizations, such as environmental groups and trade associations, should create new avenues for communication between the WTO and public interest groups. The WTO maintains an internet home page at www.unicc.org/wto. "U.S. Trade Representative Announces Increased Transparency in the WTO," USTR PRESS RELEASE, July 22, 1996. __________________________________________ Trade News is produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Editor: Orin Kirshner. 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