TRADE WEEK, VOLUME 3, NUMBER 11 Friday, March 18, 1994 ----------------------------------------------------------------- Headlines: -NEGOTIATORS DRAFT WTO PROCEDURES -U.S. PLAN TO SELL TEXTILE QUOTAS VIOLATES GATT TRADE RULES -U.S. MAY DROP CLEAN AIR REGULATION -CHINA, U.S. MAKE LITTLE PROGRESS ON HUMAN RIGHTS, MFN -N. KOREA PLANS SECOND FREE TRADE ZONE -GREECE SAYS EU EXPANSION A MISTAKE -RESOURCES ----------------------------------------------------------------- NEGOTIATORS DRAFT WTO PROCEDURES Trade negotiators in Geneva agreed Thursday on draft outlines of two procedural decisions applying to GATT's successor -- the World Trade Organization. The first aims to speed membership negotiations with countries not slated for WTO entry July 1, 1995. The draft decision would allow negotiations on WTO membership to begin immediately after the Uruguay Round signing ceremony in Marrakesh, Morocco this April. Countries awaiting WTO membership include: China and Algeria, which participated fully in the Uruguay Round but are still negotiating GATT membership; some lesser developed countries which have not yet submitted tariff and service schedules; some GATT members which joined too late to take full part in the Round; and countries joining GATT after the Marrakesh signings but before the WTO goes into effect. The second draft decision establishes a WTO preparatory committee to bridge the transition between the Marrakesh meeting and the WTO's formal establishment. The committee, open to all eligible WTO members, would handle administrative, financial, and procedural matters relating to future WTO operation. The committee would also be used to launch work programs already outlined under the GATT accord, such as those proposed to link trade and the environment and trade in services. However, negotiators failed to complete draft statements on whether the preparatory committee would be able to discuss new suggestions for the WTO work agenda. The U.S. and some European countries, for example, are calling for the addition of an international social clause. France and Italy are leading the push to include international restrictions on child labor and forced prison labor in the Uruguay Round trade pact. EU Trade Commissioner Leon Brittan and some U.S. officials are backing the proposal, but Asia reportedly opposes the idea. Sources: Frances Williams, "Moves to Speed up WTO Negotiations," FINANCIAL TIMES, March 18, 1994; J. Wolfe, "Brittan Veers From UK Line on Unions," UK GUARDIAN, March 11, 1994; George Graham, "Pressure for Social Clause in GATT Deal," FINANCIAL TIMES, March 16, 1994. ----------------------------------------------------------------- U.S. PLAN TO SELL TEXTILE QUOTAS VIOLATES GATT TRADE RULES The U.S. dropped plans to sell textile quotas as a way to pay for the GATT Uruguay Round, after concluding that the plan violates international trade rules. The U.S. trade representative's office completed a legal analysis of the proposal and found that it violated specific provisions of the GATT accord, and commitments made under the Multi-Fibre Agreement. The U.S. had been considering auctioning textile import rights to recover $13.9 billion tariff revue losses expected during the first 10 years of the GATT accord. Only exporters, however, are permitted to sell quota rights according to the USTR analysis. Source: Bob Davis, "U.S. Drops Plan to Sell Quotas for Textiles," WALL STREET JOURNAL, March 16, 1994. ----------------------------------------------------------------- U.S. MAY DROP CLEAN AIR REGULATION The Clinton administration, prompted by complaints from Venezuela, is considering revising a clean air regulation on gasoline. Venezuela recently complained to GATT that the U.S. rule requiring controls on gasoline to reduce smog-producing chemicals discriminates against foreign oil companies. Officials of the U.S. Trade Representative, the State Department and the Environmental Protection Agency concluded during a White House meeting this week that the regulation, in its present form, is likely to violate GATT rules. A U.S. official said no final decision has been made on modifications. The WALL STREET JOURNAL notes that supporters of the rule, such as environmentalists and U.S. oil companies, are likely to vigorously oppose the plan. Source: "Clean-Air Rule Defied by Venezuela Under GATT May Be Killed," WALL STREET JOURNAL, March 18, 1994. ----------------------------------------------------------------- OTHER TRADE NEWS ----------------------------------------------------------------- CHINA, U.S. MAKE LITTLE PROGRESS ON HUMAN RIGHTS, MFN Chinese and U.S. officials failed to move forward after three days of talks aimed at improving China's human rights policy in exchange for renewed Most Favored Nation trade status. According to the NEW YORK TIMES, the two sides were so far apart that plans to hold a joint press conference after the meetings were cancelled. During separate, simultaneous media briefings, China's Foreign Minister Qian Qichen blamed the U.S. for the lack of progress. "The United States should be held accountable for all the consequences," Qichen said. But U.S. Secretary of State Warren Christopher called the talks "appropriate" and said although "I wouldn't describe it as a breakthrough ... We began to narrow differences." China did agree to release detailed information about 106 Tibetan political prisoners and to document oral promises made in January to open Chinese prisons to U.S. inspection. However, despite repeated U.S. requests, China would not release political prisoners believed to be in poor physical health. U.S. President Bill Clinton said he has repeatedly warned that he will not renew MFN trade status with China this June unless human rights concerns are met. Sources: Elaine Sciolino, "Sourly, Christopher's Talks in Beijing Come to an End," NEW YORK TIMES, March 15, 1994; "China, U.S. Reported Approaching Accord on Favored Trade Status," INVESTOR'S BUSINESS DAILY, March 15, 1994. ----------------------------------------------------------------- N. KOREA PLANS SECOND FREE TRADE ZONE North Korea is expected to formally announce the creation of a second free trade zone along its Northwestern coast September 9. According to reports from South Korea's domestic YONHAP news agency, the North Korean initiative is an attempt to attract more foreign investment. The project is modelled on China's five special economic zones, which offer preferential tax treatment and other incentives to promote foreign joint ventures. North Korea has already unveiled plans to establish its first free trade zone, which will serve as an export center. The second zone will reportedly act as a light industry complex. Sources: "North Korea Said to Plan Second Free Trade Zone," REUTER, March 17, 1994. ----------------------------------------------------------------- GREECE SAYS EU EXPANSION A MISTAKE Greece Minister for European Affairs Theodoros Pangalos, who headed EU expansion talks, said the decision to allow Sweden, Norway, Finland and Austria into the European Union was made too quickly. "Now that I have done my duty, I honestly want to say that this decision was wrong," Pangalos said. The EU is still wrangling over the details of voting rights for its governing council given the planned expansion. Greece opposes suggestions offered by Britain and Spain to limit the new members' voting rights. Pangalos said he would have preferred that the four potential members be asked to wait until the end of the decade before being admitted to the EU. Source: "Greece Balks at EU Enlargement," WALL STREET JOURNAL, March 18, 1994. ----------------------------------------------------------------- RESOURCES ----------------------------------------------------------------- For copies of the following, contact the authors or organizations listed. "Dollar and Yen: The Problem of Financial Adjustment Between the United States and Japan," Ronald I. McKinnon, ASIA/PACIFIC RESEARCH CENTER, December 1993. 25 pgs. Asia/Pacific Research Center, 200 Encina Hall, Stanford, CA 94305-6055. (415) 723-6530. Fax: (415) 723-6530. Contact organization for price. "From Trade-Driven Growth to Growth-Driven Trade: Reappraising the East Asian Development Experience," Colin I. Bradford, Jr., March 1994. 46 pgs. OECD Information and Publications Center, 2001 L Street NW, Washington, D.C. 20036- 4910. (202) 785-6323. Fax: (202) 785-0350. US$7.00. "Integrating Emerging Market Economies into the International Trading System," OECD, February 1994. 99 pgs. OECD Information and Publications Center, 2001 L Street NW, Washington, D.C. 20036-4910. (202) 785-6323. Fax: (202) 785-0350. US$24.00. OECD Letter. George Williamson, Editor, The OECD Letter, Organization for Economic Co-operation and Development, 2, rue Andre-Pascal, 75775 Paris CEDEX 16, France. (33) (1) 45 24 80 28. Fax: (33) (1) 45 24 18 15. A monthly publication containing information about OECD- related activities. Included in the March 1994 issue is an article titled: "Does Life-Cycle Management of Environmental Impacts Create Trade Frictions?" "South-North Terms of Trade, Environmental Protection and Sustainable Development," Charles Arden-Clarke, WORLD WILDLIFE FUND, International Discussion Paper, February 1992. 12 pgs. Charles Arden-Clarke, World Conservation Centre, Avenue du Mont Blanc, CH-1196 Gland, Switzerland. (41-22) 64 95 09. Fax: (41-22) 64 58 29. Contact author for price. ----------------------------------------------------------------- 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 ------------------------------------------------------------------