TRADE NEWS BULLETIN Volume II Number 25 Wednesday, February 10, 1993 _________________________________________________________ NAFTA News Summary _________________________________________________________ GROUP OF THREE LEADERS WILL MEET ON FREE TRADE Leaders of "Group of Three" (G-3) countries, Mexico, Colombia and Venezuela, will not conclude a free trade accord during a meeting in Caracas Thursday. Herminio Blanco, Mexico's chief negotiator for the North American Free Trade Agreement, said Presidents Carlos Salinas de Gortari of Mexico, Cesar Gaviria of Colombia and Carlos Andres Perez of Venezuela will examine current progress in an effort "to move ahead as much as possible and have a good accord as soon as possible." The G-3 will go ahead with plans to sign a free trade pact with Central American nations on Friday. Blanco and Mexican Trade Minister Jaime Serra Puche are scheduled to discuss NAFTA with U.S. Trade Representative Mickey Kantor in Washington, February 17. Sources: "Venezuela, Colombia, Mexico Meet Over Free Trade," REUTER, February 9, 1993; "Mexico's Serra To Meet U.S. Trade Representative," REUTER, February 8, 1993; Hannah Holm, "G-3 Negotiations," EAI NEWS, February 4, 1993. _________________________________________________________ GATT News Summary _________________________________________________________ BRITTAN TO PRESS KANTOR FOR FAST TRACK EXTENSION EC Trade Commissioner Leon Brittan and U.S. Trade Representative Mickey Kantor will meet Thursday in Washington, DC to discuss new trade disputes and the long-stalled GATT negotiations. In a speech this week, Brittan said he hoped he and Kantor could agree on strategies to speed up GATT talks. Brittan implied that a GATT package would not be ready before U.S. fast-track negotiating authority expires March 2. The Clinton Administration has been accused of protectionism since it imposed new taxes on steel imports and restricted certain EC companies from bidding on government contracts. The Administration, which says it is only trying to level the playing field, avoided further accusations as the Big Three U.S. auto manufacturers announced yesterday they would not seek new duties on Japanese cars. "This isn't the right time to be filing this dumping action," said Lew Goldfarb, a Chrysler official. The automakers said they hope the new approach "will give the Clinton Administration time to develop its position" on trade. The three held out the possibility of taking anti- dumping action in the future. Since a January 26 article revealed the plans of Detroit automakers, foreign automakers and governments have pressured the U.S. against the duties. Source: "Brittan Says U.S. Needs Breathing Space on GATT," REUTER, February 8, 1993; "Steichen, Espy Plan EC-U.S. Farm Meeting in March," February 9, 1993; Keith Bradsher, "Detroit Decides Against Seeking Trade Penalties on Auto Imports," NEW YORK TIMES, February 10, 1993; Douglas Lavin, Asra Q. Nomani, "Car Firms Drop A Plan to File Dumping Case," WALL STREET JOURNAL, February 10, 1993. _________________________________________________________ GATT FARM NEGOTIATIONS MAY SHIFT FROM TARIFFICATION GATT may drop comprehensive tariffication as its basis for an agriculture agreement because of strong opposition from Japan, Korea and Canada. According to a U.S. official, it is not unfathomable that GATT would eliminate its fundamental stance, which states that all non-tariff barriers on agricultural goods must be converted to tariffs. The 1991 Draft Final Act on agriculture market access does not explicitly require that trading partners offer tariff rate quotas which would allow imports amounting to at least five percent of the market in year six of the agreement, but the U.S. has insisted on the provision. While the U.S. and EC battle over the interpretation and implementation of the final draft, their largest trading partners, have refused altogether "to consider comprehensive tariffication as the basis for an agreement," according to Canadian Trade Minister Michael Wilson. Access rules will need to be re-established "because everyone has an interest," noted a senior U.S. trade official. Source: "U.S. Officials See New GATT Negotiations On Agriculture Market Access" INSIDE U.S. TRADE, February 5, 1993. _________________________________________________________ SWAZILAND JOINS GATT - CZECHS, SLOVAKS NEXT Swaziland has become the newest member of the General Agreement on Tariffs and Trade. The African nation apparently convinced the world trade body's ruling council that its economic policies are compatible with free trade. GATT also began the process of admitting the Czech and Slovak republics by approving their terms for accession. Observer status was granted to Azerbaijan. Source: "GATT Admits Swaziland, Set to Admit Czechs and Slovaks," REUTER, February 9, 1993. _________________________________________________________ Resources: "Trade Policy: Outlook: Past as Prologue" by Professor Alfred Eckes. A speech presented at the Economic Strategy Institute which discusses the historical ideologies of free trade vs. "economic nationalism," as they relate to upcoming Clinton administration policy decisions. Also included is a brief description of Clinton's potential responses to the current NAFTA proposals based on previous presidential agreements. For a copy of the speech, send $2.00 to: ECONOMIC STRATEGY INSTITUTE, 1100 Connecticut Av. NW., Suite 1300, Washington DC. 20036. _________________________________________________________ Produced by: Kai Mander The Institute for Agriculture and Trade Policy (IATP) 1313 Fifth Street SE, Suite #303 Minneapolis, MN 55414-1546 USA Telephone:(612)379-5980 Fax:(612)379-5982 E-Mail:kmander@igc.apc.org _________________________________________________________