From kmander@igc.apc.orgThu Nov 3 00:00:34 1994 Date: 02 Nov 94 08:40 PST From: Kai Mander To: "Recipients of conference trade.news" Newsgroups: trade.news Subject: Trade Week 11-2-94 Trade Week in Review Wednesday, November 2, 1994 Volume 3, Number 44 _________________________________________________ HEADLINES: Hollings Schedules Hearings on GATT Special Deals GATT Would Create Higher Grain Prices Thailand Criticizes Negotiation Process Africa Seeks to Offset GATT's Impact Portugal Threatens to Delay GATT Australia May Resist China GATT Entry Resources _________________________________________________ GATT NEWS SUMMARY _________________________________________________ Hollings Schedules Hearings on GATT Special Deals Senator Ernest Hollings (D-South Carolina) will hold a hearing this month to examine special provisions included in U.S. legislation to implement GATT. The latest controversial provision, found in Section 769, would exempt Trans World Airlines and LTV Steel from having to adhere to proposed pension funding reform included in the legislation. The controversy involves investor Carl Icahn who, as part of the sale of TWA to its employees, put $200 million into the company pension fund as a loan. Under the deal, if TWA meets the federal pension standards and fully funds the plan over a period of time, Icahn will get his money back. If not, the money stays in the plan. Section 769 exempts the TWA plan from complying with the federal pension regulations that are imposed on other underfunded plans. As a result, Icahn is more likely to recapture his $200 million while U.S. taxpayers -- who guarantee the plan -- are more likely to be forced to pay . Source: "Sen. Hollings to Hold November Hearing on TWA Pension, Other Provisions in GATT," BUREAU OF NATIONAL AFFAIRS, October 27, 1994. _________________________________________________ GATT Would Create Higher Grain Prices The Uruguay Round would lead to higher grain import prices for developing countries, according to a senior United Nations Food and Agriculture Organization (FAO) official. Christian Emmrich, the FAO's senior commodity specialist, said grain import prices for developing countries would increase by five to eight percent due to planned cuts in subsidized exports under GATT. "The increase in world market prices ... points to a considerable increase in the grain import bills for developing countries," he told a grains conference organized by Agra Europe. Emmrich also expressed concern that a reduction in government involvement in price support could reduce surpluses in certain developed countries. Surplus stocks have been an important source of food aid for developing countries. He argued, however, that for most developing countries the gains from GATT, such as increased textiles and clothing exports, would outweigh the losses. Source: Peter Blackburn, "FAO Sees Soaring Third World Food Bill," REUTER, October 28, 1994. _________________________________________________ Thailand Criticizes Negotiation Process Thailand criticized industrialized nations for leaving developing countries largely out of GATT negotiations. Speaking at the Pacific Rim Forum in Beijing last week, Thailand Deputy Prime Minister Supachai Panitchpakdi said that Uruguay Round negotiations began as a multilateral effort on the part of 117 nations, but were eventually controlled by industrialized nations. "It ended in December 1993 with the U.S. and Europe talking about the agriculture package on their own ... that was the linchpin, everything depended on the success of that package, when the final touches were put on the agreement, none of us in the Third World was involved," Panitchpakdi said. Panitchpakdi argued that while developing countries were making concessions in areas like intellectual property rights, textile trade and exchange rates, developed countries had put up "new walls of non-tariff barriers" by linking trade privileges with social clauses. Sources: Catherine Ong, "Thailand Voices Fears Over Post-GATT Trade," BUSINESS TIMES, October 27, 1994; Mary Kwang, "West Paying Lip Service to Global Trade Ties: Thailand," STRAITS TIMES, October 27, 1994. _________________________________________________ Africa Seeks to Offset GATT's Impact African trade ministers, officials from international organizations and representatives from the United States, European Union and Japan held a four-day meeting last week in Tunis to discuss ways of offsetting GATT's adverse impact on Africa, the world's poorest continent. The Uruguay Round's elimination of Africa's preferential trade treatment and opening of global markets will make it more difficult for Africa to export goods, costing Africa $2.6 billion a year, according to a report by the UN's Economic Commission for Africa (ECA). The Organization for Economic Cooperation and Development reached similar conclusions in a recent study of GATT's impact on Africa. "The African countries' interests were not taken into consideration during the Uruguay Round negotiations and its results were imposed on us. We must now try to adapt ourselves at a lesser cost," said ECA Executive Secretary Layashi Yaker. "If the African countries do nothing to adapt themselves, Africa might be the big and probably (the) only loser in the post-Uruguay Round," said Tunisian Economy Minister Sadok Rabeh. The European Union and the African, Caribbean and Pacific (ACP) states have applied to waive GATT rules for the Lome Convention, which gives preferential trade treatment to 46 developing countries. A GATT panel will consider the request on November 10. A previous GATT panel criticized Lome as contrary to GATT's rules. Sources: "African Economy to Suffer Great Loss From GATT," XINHUA NEWS AGENCY, October 28, 1994; "GATT Waiver Sought for Lome," FINANCIAL TIMES, October 28, 1994; Abdelaziz Barrouhi, "Africa Agrees to Adjust Economies to Adapt to GATT," REUTER, October 28, 1994. _________________________________________________ Portugal Threatens to Delay GATT Portugal has threatened to delay ratification of the Uruguay Round until it receives the millions of dollars in aid the European Union promised for Portugal's textiles industry. The Council of Ministers granted Portugal the money last December in exchange for Portugal's acceptance of GATT. But, in a move that could delay the payment, the European Parliament has reclassified the funds. Portuguese textiles represent 30 percent of the country's exports and employs, directly or indirectly, 10 percent of the labor force. Sources: "Portugal Says No Trade Accord Until Textile Funds Approved," REUTER, October 27, 1994; "EU'S Millan Says Portugal Will Get Textiles Aid," REUTER, October 28, 1994. _________________________________________________ Australia May Resist China GATT Entry Australian Trade Minister Bob McMullan said Australia will not support China's bid to enter GATT unless an agreement over wool exports can be reached. Wool is Australia's main export to China, reaching A$700 million in 1993. "At present China is offering access tonnages for wool which are below existing import levels and providing for inadequate opportunities for growth in the level of exports," McMullan told Australia's Wood Council recently. "Moreover, China has proposed tariffs which are in excess of those currently being imposed on wool imports." China is seeking to re-enter GATT by December 31, enabling it to be a founding member of the World Trade Organization, which comes into existence on January 1. Source: "Australia Says May Not Support China's GATT Bid," REUTER, October 27, 1994. _________________________________________________ RESOURCES _________________________________________________ For copies of the following, please contact the organizations or authors listed: "The Trap," Sir James Goldsmith, CARROLL & GRAF PUBLISHERS, November 1994. 207 pages. Carroll & Graf Publishers, Inc., 260 Fifth Avenue, New York, NY 10001. (212) 889-8772. $20. A series of interviews with a prominent opponent of the Uruguay Round of GATT. "GATT Impact on State Law: California," Robert Stumberg with Denis Gooding, Mary Rundle and Gian-Michele a Marca, CENTER FOR POLICY ALTERNATIVES, September 24, 1994. 38 pages. Center for Policy Alternatives, 1875 Connecticut Avenue, NW, Suite 710, Washington, DC 20009. (202) 387-6030. Fax: (202) 986-2539. This study outlines 90 California statutes that may be in conflict with the text of the Uruguay Round. Studies that review the impact of the Uruguay Round on Florida and Pennsylvania are also available for $10 each. Other case studies of the impact of GATT on U.S. states will be forthcoming. "Stop the GATT," RURAL VERMONT REPORT, Vol. 5, No. 2, Fall 1994. 8 pages. Rural Vermont, 15 Barre Street, Montpelier, VT 05602-3504. (802) 223-7222. Quarterly publication comes with membership to Rural Vermont. $20/individual. $30/family. _________________________________________________ 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 _________________________________________________