From kmander@igc.apc.orgThu Oct 27 01:56:08 1994 Date: 26 Oct 94 08:52 PDT From: Kai Mander To: "Recipients of conference trade.news" Newsgroups: trade.news Subject: Trade Week 10-26-94 Trade Week in Review and Resources Wednesday, October 26, 1994 Volume 3, Number 43 _________________________________________________ HEADLINES: Japan Closer to Ratifying Uruguay Round U.S. Maintains Right to MFN Exclusion Under GATT Malaysia Reveals North Trade Weapon NAACP Opposes Uruguay Round GATT Would Cost Savings Bond Holders $122 Million United We Stand Seeks Pledges on GATT EU Attacks Goldsmith Over GATT Caribbean Countries Criticize GATT Resources _________________________________________________ GATT NEWS SUMMARY _________________________________________________ Japan Closer to Ratifying Uruguay Round The Japanese government announced a plan to spend over $60 billion to help Japanese farmers adjust to increased competition under GATT. The plan eases opposition to GATT from rural politicians who had threatened to block a parliamentary vote on GATT if it opened Japan's rice market to foreign imports. The three ruling coalition parties, which had formerly opposed opening Japan's rice market, now support the trade pact. The plan calls for the government to provide: funds for public works including roads and draining paddy fields; cheap state loans; payments to encourage small rice farms to merge into larger, "more efficient units"; and funds to help rural regions develop new businesses. The legality of these payments, under the Uruguay Round, may be determined by a GATT panel early next year. Sources: Emiko Terazono, William Dawkins, "Japan in $60bn Farm Aid Plan," FINANCIAL TIMES, October 24, 1994; "Japan Earmarks 6 Trillion Yen for Farm Reform," REUTER, October 22, 1994; "Govt. Set to Seek Diet Approval of WTO Pact," JIJI PRESS, October 21, 1994. _________________________________________________ U.S. Maintains Right to MFN Exclusion Under GATT The U.S. denied news reports that it had dropped its right to refuse most-favored-nation (MFN) status to countries that discriminate against U.S. firms in the field of financial services. Under the Uruguay Round, once a country extends trading benefits to one GATT member, it must be extended to all other members. "The United States maintains the right after six months into the GATT agreement to invoke its MFN exception," said Lawrence Summers, Treasury Undersecretary for International Affairs. Summers said the MFN exception will be applied to Japan and "major emerging markets" until those countries lower their barriers to competition in financial services. Sources: "U.S. to Keep MFN Exclusion Right Under GATT," KYODO NEWS SERVICE, October 14, 1994; "U.S. Abandons Two-Tier Approach to Financial Services Negotiations," BNA, October 14, 1994. _________________________________________________ Malaysia Reveals North Trade Weapon Malaysia's customs service said it has found another potential trade weapon industrialized countries can use against developing countries. Datuk Mohd Nor Abdul Hamid, director-general of the Royal Customs and Excise Malaysia, said the World Trade Organization will establish private agencies to inspect and take over the duties of customs agencies in host countries. Mohd Nor said the independent agencies would likely be under the control of industrialized nations. "It is indeed not pleasant to see a body of people performing Customs functions when they are not Customs personnel and are not trained in the Customs procedures and requirements," Mohd Nor said. "I strongly advise the Malaysian Government to be very cautious of the new regulations." Source: Azhar Ghazali, "Malaysia: North Introduces New Trade Weapon," REUTER, September 27, 1994. _________________________________________________ NAACP Opposes Uruguay Round The National Association for the Advancement of Colored People (NAACP) passed a resolution urging Congress to reject Uruguay Round implementing legislation on the grounds that "the nation can no longer afford to turn its back on its most valuable citizens in order to promote the interest of the privileged few." The resolution states that GATT would eliminate millions of U.S. textile and apparel jobs, disproportionately impacting women and minorities. The NAACP also said GATT would encourage child exploitation by making it illegal for governments to place sanctions against countries that use children for cheap labor. Source: "Resolution on General Agreement on Tariffs and Trade," NAACP. _________________________________________________ GATT Would Cost Savings Bond Holders $122 Million According to a report in the November edition of KIPLINGER'S PERSONAL FINANCE MAGAZINE, GATT implementing legislation includes a provision to eliminate the Treasury's guaranteed minimum interest rate on U.S. Savings Bonds. The legislation also permits the Treasury to change the way interest is figured and the way it is paid, costing bond holders about $122 million over the next five years. Source: Gregory Spears, "A New Attack on Savings Bonds," KIPLINGER'S PERSONAL FINANCE MAGAZINE, November 1994. _________________________________________________ United We Stand Seeks Pledges on GATT Ross Perot's United We Stand organization is seeking pledges from House and Senate candidates to delay passage of the Uruguay Round. United We Stand headquarters in Dallas has asked local groups to urge congressional candidates to consider the Uruguay Round in January "to allow for a full and open debate of GATT/WTO's impact on jobs and sovereignty." Senator Frank Lautenberg (D-New Jersey) and Senator Harris Wofford (D-Pennsylvania) have already signed the pledge. Source: Nancy Dunne, "Perot Group in Pledge Drive Against GATT Deal," FINANCIAL TIMES, October 26, 1994. _________________________________________________ EU Attacks Goldsmith Over GATT The European Commission has begun countering the anti-GATT statements of English billionaire Sir James Goldsmith, who many in Europe hold largely responsible for delaying the Uruguay Round vote in the U.S. Congress. On the eve of the British publication of Goldsmith's THE TRAP, which was a huge success in France, the Commission has released a point-by-point rebuttal of Goldsmith's main arguments. Goldsmith argues that GATT would create massive unemployment in western Europe as manufacturers continue to take advantage of cheaper labor available in developing countries. The Commission responds that European capital has yet to move to cheaper Asian sites on the scale that Goldsmith imagines, but that if EU companies don't "take advantage of opportunities to locate production overseas, they would cease to be competitive, collapse, and destroy jobs in the home market as well." The Commission also criticizes Goldsmith's proposed Euro-tariff intended to promote investment in Europe. "Such a policy would see others retaliate and raise barriers against European exporters," the Commission contends. Source: Boris Johnson, "Anxious EC Turns Its Guns on Goldsmith," SUNDAY TELEGRAPH, October 23, 1994. _________________________________________________ Caribbean Countries Criticize GATT Government, business and labor leaders in the Caribbean Basin have accused the U.S. of backing down on promises to open the U.S. market to the region's garment industry. The Clinton administration withdrew provisions from GATT implementing legislation that would have given Caribbean Basin garment producers the same treatment Mexican garment manufacturers receive under the North American Free Trade Agreement. The Caribbean countries are urging U.S. legislators to reject the GATT bill unless it includes the provision. "The United States has reneged on a promise it made to the Caribbean Basin, and we must be wary of unreliable friends," said Peter King, president of the Caribbean Textile and Apparel Institute. Meanwhile, Caribbean banana exporters are concerned about losing their preferential access to the European market once the World Trade Organization comes into effect. Twice GATT panels have ruled in favor of Latin American banana producers who contend the EU's special treatment of fruit suppliers in the African, Caribbean and Pacific (ACP) group of countries violates GATT rules. The first two rulings were not adopted by GATT's members. Under the WTO, however, a similar ruling would be adopted unless there is consensus among GATT members against it. Caribbean banana producers, especially those in the small Windward Islands of Dominica, Grenada, St. Lucia and St. Vincent, say they are unable to compete with the larger Latin American producers who enjoy much larger plots of land to farm. Without the special treatment, the Caribbean banana producers say they would lose the market for their fruit, and their economies would fall apart. U.S. companies which produce bananas in Latin America support a lifting of the preferential treatment. An official representing the banana industry in St. Lucia said, "The lobby being mounted by these large, multinational fruit companies, which control the lion's share of the world's banana trade, will strengthen the U.S. resolve to attack our access to the EU market." Sources: Scott West, "Caribbean-Trade: U.S. Is Unreliable Friend Says Apparel Industry," INTER PRESS SERVICE, October 20, 1994; Scott West, "Caribbean-Agriculture: Bananas Are Early Test for New Trade Body," INTER PRESS SERVICE, October 12, 1994. _________________________________________________ RESOURCES _________________________________________________ For copies of the following, please contact the authors or organizations listed: "The Social Benefits of Regulating International Business," Harris Gleckman and Riva Krut, BENCHMARK ENVIRONMENTAL CONSULTING, October 1, 1994. 30 pages. Benchmark Environmental Consulting, 33 Bartlett St., Portland, ME 04103. (207) 775-9078. Fax: (207) 772-3539. $10. A discussion paper for the United Nations Research Institute for Social Development. "Cargill: In the Beginning It BeGATT," A.V. Krebs, THE AGRIBUSINESS EXAMINER, No. 2, September-October 1994. 6 pages. PrairieFire Rural Action, 550 11th St., Des Moines, IA 50309. (515) 244-5671. $25/year for individuals and non-profit organizations. Otherwise $50/year. A short review of how Cargill, the world's largest grain trader, helped to draft the GATT. A.V. Kreb's The Corporate Reapers: The Book of Agribusiness is available for $19.75, shipping and handling included. "Creating A New World Economy: Forces of Change and Plans for Action," ed. Gerald Epstein, Julie Graham and Jessica Nembhard, CENTER FOR POPULAR ECONOMICS, July 1993. 461 pages. Temple University Press, Broad and Oxford Streets, Philadelphia, PA 19122. (215) 204-8787. Fax: (215) 204-4719. $49.95/cloth. $22.95/paper. Twenty-three essays are grouped in three sections: "The Global Economy: International Flows and National Dilemmas;" "Changes in the Industrialized World;" and "The Third World in the Global Economy: Failed Models and New Approaches." _________________________________________________ For more information about the Institute for Agriculture and Trade Policy, send email to iatp-info@igc.apc.org. Trade Week in Review is produced by: 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 _________________________________________________