Trade Week in Review and Resources Friday, April 22, 1994 Volume 3, Number 16 ____________________________________________________ Headlines: WTO AGENDA ISSUES OUTLINED IN MARRAKESH INDIAN PARLIAMENT ADJOURNS OVER GATT CONGRESSIONAL AG PANEL THREATENS GATT APEC DIVIDED ON TRADE LIBERALIZATION EUROPE URGED TO OPEN MARKETS TO EAST RUSSIA PUSHES FOR G-7 EXPANSION RESOURCES ____________________________________________________ GATT News Summary ____________________________________________________ WTO AGENDA ISSUES OUTLINED IN MARRAKESH Trade ministers outlined future issues to be discussed by the World Trade Organization during last week's GATT signing ceremonies in Marrakesh, Morocco. Trade Negotiations Committee Chair Sergio Abreu Bonilla said participating delegations asked that the following issues be addressed in future talks: % linking trade and labor standards; % the relationship between immigration policies and international trade; % trade and competition policy, including rules on export financing and restrictive business practices; % trade and investment; % regionalism; % the interaction between trade policies and policies relating to financial and monetary matters, including debt, and commodity markets; % international trade and company law; % the establishment of a mechanism for compensation for the erosion of preferences; % the link between trade, development, political stability, and the alleviation of poverty; % the unilateral or extraterritorial trade measures. Abreu said a Preparatory Committee will discuss suggestions for adding items to the agenda of the WTO work program and that trade ministers will convene the first WTO Ministerial Conference within two years of WTO's implementation. Singapore has offered to host the conference. Prior to WTO implementation, GATT trade ministers must decide the location of WTO headquarters and who will head GATT's successor organization. Germany may make a formal request to host the WTO, but GATT officials say the costs of relocating the headquarters from Geneva will probably prevent them from making the shift. Meanwhile, GATT Director-General Peter Sutherland hinted to reporters that he may not remain as head of the global trade body. Sutherland said he had only committed himself to concluding the seven year old Uruguay Round talks. "That, in terms of the immediate process of negotiation, concludes here," he said in Marrakesh last week. "As to whether or not on the medium-term future, [my] future is with the multilateral system or not, I'm not prepared to go further than to say that I have no long-term commitment to remain with the multilateral system." Sources: "Concluding Remarks by H.E. Mr. Sergio Abreu Bonilla, Chairman of the Trade Negotiations Committee," April 15, 1994; "Bonn Has Good Chance of Hosting WTO, Rexrodt Says," REUTER, April 19, 1994; "GATT Unlikely to Move From Geneva," UPI, April 20, 1994; "Sutherland Says Won't Stay Trade Head Forever," REUTER, April 11, 1994. ____________________________________________________ INDIAN PARLIAMENT ADJOURNS OVER GATT Indian opposition parties, shouting "Cancel the [GATT] pact," forced the adjournment of a parliament session Monday. "GATT has become the code word for all economic discontent in the country," said Kewal Ratan Malkani, an upper parliament deputy for the Bharatiya Janata Party (BJP). "It's going to be a key issue." India's ruling Congress party said the government was likely to introduce two pieces of legislation in response to the signing of GATT. One bill would protect farmers' access to seeds. The other would safeguard against any steep rise in the price of medicines resulting from GATT patent laws. Sources: Jawed Naqvi, "Indian Parliament Adjourns Budget Meet on GATT Row," REUTER, April 18, 1994; "India to Enact New Laws on Trade Accord," UPI, April 18, 1994; Hari Ramachandran, "India Says GATT Signing Will Prevent Isolation," REUTER, April 19, 1994. ____________________________________________________ CONGRESSIONAL AG PANEL THREATENS GATT In a letter to President Bill Clinton, all 17 members of the U.S. Senate Agriculture Committee threatened to vote against the GATT accord if the administration moves forward with plans to finance GATT through farm spending cuts. "Read that letter very carefully," Agriculture Committee Chair Senator Patrick Leahy (D-Vermont) told U.S. Trade Representative Mickey Kantor. "You can't afford to lose 17 votes." Kantor said the administration had not yet made a final decision on how to pay for the $13 billion in lost tariff revenues expected during GATT's first five years. But, he warned, "the fact is that industries that are big winners under GATT, like agriculture, pharmaceuticals, retailers, heavy construction equipment, intellectual property industries, should also be the industries where we look to try to find the proper offsets." Farm state lawmakers say they were told that agriculture would be responsible for 40 percent of the $13 billion. Only 5 percent of the GATT tariff revenue losses are expected as a result of agriculture tariff cuts. Sources: "Senate Ag Panel Threatens GATT Over Farm Spending," MINNEAPOLIS STAR & TRIBUNE, April 21, 1994; Jenny Tomkins, "U.S. Farmers Warn Against Paying Higher Tab for GATT," REUTER, April 20, 1994; Robert Greene, "GATT-Congress," AP, April 21, 1994. ____________________________________________________ Other Trade News ____________________________________________________ APEC DIVIDED ON TRADE LIBERALIZATION Two senior Asia Pacific Economic Cooperation (APEC) officials said the 18-nation forum was divided on the pace and agenda of trade liberalization. Thailand's APEC Eminent Persons' Group representative Narongchai Akrasanee said the split had formed mostly between developed and developing nations. Akrasanee said developed nations want to move ahead quickly with efforts to boost trade and export incomes, while developing countries favor informal undertakings aimed at helping them develop faster. Source: "Officials Say APEC Split on Trade Liberalization," REUTER, April 19, 1994. ____________________________________________________ EUROPE URGED TO OPEN MARKETS TO EAST New Zealand is urging Western Europe to open its markets to Eastern Europe and the former Soviet Union. Gerald Thompson, European Director of New Zealand's Ministry of Foreign Affairs and Trade, said without access to developed markets, the reforming countries' private sectors would never reach full potential and opportunities for investment would remain limited for the West. "It does not make sense to invest in those sectors where Eastern Europe does enjoy a real competitive advantage if markets are then blocked by tariff and non-tariff barriers," he said. Many East European countries have reduced trade barriers, making them more open to imports and investment than some West European countries. Source: "New Zealand Calls for Open Trade for E. Europe," REUTER, April 19, 1994. ____________________________________________________ RUSSIA PUSHES FOR G-7 EXPANSION The Group of Seven industrialized nations is likely to reject Russia's bid to join the group. "The G7 is G7, not G8," said one European official. "We have no particular interest in expansion." Many Russian officials view G7 membership as an opportunity to secure Moscow's integration into the Western community. The G7, which includes Britain, Canada, France, Germany, Italy, Japan and the United States, holds annual summits to exchange ideas on economic and political issues. Source: Janet Guttsman, "G7 Seen Vetoing Russian Bid to Create G8," REUTER, April 19, 1994. ____________________________________________________ RESOURCES "International Trade; Observations on the Uruguay Round Agreement," Statement of JayEtta Z. Hecker, Director International Trade, Finance, and Competitiveness General Government Division, GENERAL ACCOUNTING OFFICE, February 22, 1994. 8 pages. U.S. GAO, P.O. Box 6015, Gaithersburg, MD 20884-6015. (202) 512-6000. Fax: (301) 258-4066. First copy free. "Foreign Assistance; U.S. Support for Caribbean Basin Assembly Industries," GENERAL ACCOUNTING OFFICE, December 1993. 95 pages. U.S. GAO, P.O. Box 6015, Gaithersburg, MD 20884-6015. (202) 512-6000. Fax: (301) 258-4066. First copy free. "Can the World Industrialization Project Be Sustained?" Isidor Wallimann, MONTHLY REVIEW, March 1994. 17 pages. Monthly Review Foundation, 122 West 27th Street, New York, NY 10001. $3.00. "Statistics: International Trade," THE GENERAL AGREEMENT ON TARIFFS AND TRADE, 1993. 120 pages. UNIPUB, 4611-F Assembly Drive, Lanham, Maryland 20706-4391. (301) 459-7666 or (800) 274-4888. Fax: (301) 459-0056. $25.00. "World Resources: A Guide to the Global Environment," WORLD RESOURCES INSTITUTE, 1994-1995. 400 pages. WRI, 1709 New York Ave., N.W., Washington, D.C. 20006. (800) 822-0504. $23.95. 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