TRADE WEEK Volume 3 Number 3 Friday, January 21, 1994 ___________________________________________________________ Headline: URUGUAY ROUND SCHEDULE DISCUSSED GATT CRITICIZES EU BANANA BARRIERS G-3 SIGNING DELAYED MERCOSUR COMMITMENTS REAFFIRMED; CET REMAINS ELUSIVE U.S., CHINA SIGN TEXTILE AGREEMENT MALAYSIA WANTS TO HURRY AFTA TIMETABLE RESOURCES ___________________________________________________________ GATT News Summary ___________________________________________________________ URUGUAY ROUND SCHEDULE DISCUSSED GATT Director General Peter Sutherland met with members of the European Commission Monday, including Trade Commissioner Leon Brittan and Farm Commissioner Rene Steichen, to discuss wrapping up the Uruguay Round text by April 15, 1994. "The discussions were largely to do with tying up the remaining loose strings following the December 15 agreement on the minimum that the final deal will contain," said a Commission spokesperson. The talks reportedly focused on improved market access, EU import restrictions on Chilean apples, the EU-Latin American banana dispute, EU and U.S. pressure on Japan to make further tariff reductions, and the new World Trade Organization. "But it was not a negotiating meeting. We are not negotiating with Sutherland," the spokesperson said. "Both sides are simply keeping each other informed of their actions." Sutherland also restated his position that any new tariff reduction or market access offers must be made by February 15. Sources: "GATT's Sutherland Meets EU's Brittan on Trade Issues," REUTER, January 17, 1994; "Sutherland, Brittan Discuss Uruguay Round Steps," REUTER, January 18, 1994. ___________________________________________________________ GATT CRITICIZES EU BANANA BARRIERS A GATT panel report condemning the EU trade barriers against Latin American bananas was released January 18, following the failure of EU attempts to convince Latin American countries to withdraw their backing from the report. The report was issued in response to a complaint launched by several Latin American countries July 1, 1993, when the EU instituted a new tariff and quota regime on bananas that gave preferential treatment to former European colonies in Africa, the Caribbean and the Pacific (the ACP countries). The regime was designed to maintain market access commitments to the ACP countries under the Lome Convention, and met resistance from countries in the EU that were not party to the Convention. The GATT panel report, which is unlikely to be adopted, said the Lome Convention could not be defended against general GATT principles as a free trade agreement or a customs union. Sources: Stephanie Nebehay, "Latin Americans Win GATT Ruling on Banana Quota," REUTER, January 18, 1994; David Dodwell, "GATT Condemns EU Over Bananas," FINANCIAL TIMES, January 19, 1994. ___________________________________________________________ Other Trade News ___________________________________________________________ G-3 SIGNING DELAYED Plans to sign a free trade agreement between Mexico, Colombia and Venezuela (the Group of Three; G-3) this week have been postponed until after February 2, when Venezuelan President-elect Rafael Caldera takes office. Mexican President Carlos Salinas de Gortari reportedly requested the delay because of the current armed uprising in the state of Chiapas. Caldera is not expected to seek changes in the accord, which will eliminate tariffs on most goods over the next 10 years. Source: "G-3 Pact Delayed Until After February 2," REUTER, January 19, 1994. ___________________________________________________________ MERCOSUR COMMITMENTS REAFFIRMED; CET REMAINS ELUSIVE Argentina, Brazil, Paraguay and Uruguay signed a joint declaration January 17 reaffirming their commitment to establishing the Southern Common Market (Mercosur), set to go into effect January 1, 1995. The countries failed, however, to conclude talks on forming a common external tariff (CET). The CET and macro-economic policy harmonization have been major stumbling blocks in the integration process, leading Paraguayan President Juan Carlos Wasmosy to argue that, "The timetables set in the (Mercosur's founding 1991) Act of Asuncion are extremely tight, which makes it necessary to establish more reasonable deadlines." Agreement has been reached for common tariffs on 85% of the goods on their customs list. The remaining 15% include capital goods, information products and chemicals. In principle, common tariffs for these goods is to be set by the year 2001. A solution is impeded by Brazil's desire for high tariffs to protect its ability to produce the controversial goods, while its partners want lower cost access to goods that will help them develop other industries. Sources: Esteban Israel, "Mercosur Deadline Too Tight, Paraguay Tells Summit," REUTER, January 17, 1994; "Brasil Obtem Adiamento No Mercosul," PROJETO CRONOLOGIA - IBASE, January 18, 1994; "Tariff Accord Hits a Snag," NEW YORK TIMES, January 17, 1994. ___________________________________________________________ U.S., CHINA SIGN TEXTILE AGREEMENT The United States and China struck a textile quota agreement in Beijing Monday that effectively freezes Chinese imports to the U.S. at present levels. Under the pact, China agreed to limit exports to the United States and to accept U.S. proposed penalties and fines for any violation of the deal. The last minute agreement averted a trade row, which the U.S. had threatened to initiate over alleged Chinese trans-shipments, overshipments and false labeling of textile exports. U.S. officials estimate that the value of trans-shipments of Chinese textiles routed through third countries exceeds $2 billion annually. U.S. Trade Representative Mickey Kantor welcomed the pact calling it "the beginning of a healthier and more productive relationship" between the U.S. and China. The China National Textile Council said last week during negotiations that the quota reduction would hurt hundreds of companies, force some into bankruptcy and eliminate up to 300,000 jobs. Sources: Tony Walker, Simon Holberton, Nancy Dunne, "Last-Minute Textile Deal Freezes U.S. Imports From China," FINANCIAL TIMES, January 18, 1994; "U.S. and China Reach Agreement on Textile Imports," MINNEAPOLIS STAR & TRIBUNE, January 18, 1994; "China Says U.S. Quota Cut Threatens 300,000 Jobs," REUTER, January 11, 1994. ___________________________________________________________ MALAYSIA WANTS TO HURRY AFTA TIMETABLE Malaysian Trade Minister Rafidah Aziz called on Southeast Asian nations Tuesday to agree to shorten the 15-year timetable for implementing the Asean Free Trade Area (AFTA) and to widen the trade area's scope. Under AFTA, members of the Southeast Asian Nations (ASEAN) agreed to cut tariffs on manufactured and processed goods to a maximum of five percent over 15 years from 1993. "We are thinking of reducing the timeframe of 15 years to say 10 years," Rafidah told reporters at the end of a four-day visit to Manila. "If we can make those tariff cuts faster, why not?" She said the Philippines, Singapore and Brunei reacted favorably to the proposal, but did not comment on whether other ASEAN members, Thailand and Indonesia, would support it. Rafidah also warned that Malaysia would oppose any attempts to formalize the Asia-Pacific Economic Cooperation (APEC) forum because it could weaken the ASEAN structure. "We don't want ASEAN to be diluted," she said. "The moment APEC is institutionalized, ASEAN will be submerged." APEC was initially formed by Australia, Brunei, Canada, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, South Korea, Singapore, Taiwan, Thailand and the United States to act as a loose consultative forum, according to Rafidah. She said Malaysia does not want to turn APEC into "another Commonwealth" or an organization similar to the European Union. Sources: "Malaysia Urges Shorter Timeframe for AFTA," REUTER, January 18, 1994; "Malaysia Opposes Formal Structure For APEC," REUTER, January 17, 1994. ___________________________________________________________ Recent Publications on International Trade ___________________________________________________________ "GATT And India: The Politics of Agriculture," Devinder Sharma, KONARK PUBLISHERS PVT LTD, 1994. 188 pages. A-149, Main Vikas Marg, Delhi, India, 110092. $25.00. "NAFTA'S Bizarre Bazaar: The Deal Making That Bought Congressional Votes On The North American Free Trade Agreement," PUBLIC CITIZEN, December, 1993. 76 pages. 215 Pennsylvania Avenue SE, Washington, D.C. 20003. (202) 546-4996. Fax: (202) 547-7392. $10.00. "Dislocated Workers : Trade Adjustment Assistance Program Flawed," GENERAL ACCOUNTING OFFICE, GAO/T-HRD-94-4, October 19, 1993. 8 pages. P.O. Box 6015, Gaithersburg, MD 20884-6015. (202) 512- 6000. Fax: (301)258-4066. First copy free. "The Challenge of Cross-Border Environmentalism: The U.S.-Mexico Case," Tom Barry, RESOURCE CENTER PRESS, No. 1 in U.S.-Mexico Series, 1994. 118 pages. Box 4506, Albuquerque, NM 87196. (505) 842-8288. Fax: (505) 246-1601. $9.95. "On Foreign Soil: Government Programs in U.S.-Mexico Relations," Beth Sims, RESOURCE CENTER PRESS, No. 2 in U.S.-Mexico Series, 1994. 84 pages. Box 4506, Albuquerque, NM 87196. (505) 842-8288. Fax: (505) 246-1601. $9.95. "Crossing The Line: Immigrants, Economic Integration, And Drug Enforcement On The U.S.-Mexico Border," Tom Barry, RESOURCE CENTER PRESS, No. 3 in U.S.-Mexico Series, 1994. 142 pages. Box 4506, Albuquerque, NM 87196. (505) 842-8288. Fax: (505) 246- 1601. $9.95. "For Richer, For Poorer: Shaping U.S.-Mexican Integration," Harry Browne, RESOURCE CENTER PRESS, No. 4 in U.S.-Mexico Series, 1994. 115 pages. Box 4506, Albuquerque, NM 87196. (505) 842-8288. Fax: (505) 246-1601. $9.95. "Mexico Through the Tortilla Curtain," THE NEW INTERNATIONALIST, No. 251, January, 1994. 36 pages. P.O. Box 1143, Lewiston, NY 14092. (905) 946-0407. Fax: (905) 946-0410. One year subscription: $42.00. The NEW INTERNATIONALIST magazine reports on the issues of world poverty and inequality. This month's issue focuses in depth on Mexico and includes articles on cross border integration. "The Final Act of the Uruguay Round - Press Summary," NEWS OF THE URUGUAY ROUND, NUR 080, December 14, 1993. 32 pages. Information and Media Relations Division, Centre William Rappard, 154, rue de Lausanee, CH-1211, Geneva 21 Switzerland. (41-22) 739-51-11. Contact organization for prices. "Chiapas Digest," INSTITUTE FOR AGRICULTURE & TRADE POLICY, Volume 1, No. 1, January, 1994. 5 pages. 1313 5th Street SE, Suite 303, Minneapolis, MN 55414-1546. (612) 379-5980. Fax: (612) 379-5982. E-Mail: e-mail hholm@igc.apc.org IATP is temporarily producing this weekly bulletin which includes news, analysis and declarations on the peasant uprising in Chiapas, Mexico. _____________________________________________________________ Editors: Gigi DiGiacomo and Hannah Holm 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 _____________________________________________________________