From iatp@igc.apc.orgThu Sep 7 09:59:00 1995 Date: Wed, 06 Sep 1995 13:49:45 -0700 (PDT) From: IATP To: Recipients of conference Subject: Trade News 9-6-95 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy Volume 4, Number 13 September 6, 1995 ___________________________________________ Headlines: - APEC ADVISORS CALL FOR FASTER LIBERALIZATION, ENHANCED COOPERATION - ASEAN TO LOWER TARIFFS ON FARM IMPORTS - U.S. ANNOUNCES PLAN TO MONITOR AUTO PACT WITH JAPAN - INDIA PUSHES TRADE PACT TO COUNTER WEST - NAFTA INVOKED TO BLOCK LOGGING LAW ___________________________________________ REGIONAL/BILATERAL AGREEMENTS ___________________________________________ APEC ADVISORS CALL FOR FASTER LIBERALIZATION, ENHANCED COOPERATION Last week, the so-called Eminent Persons Group of the Asia Pacific Economic Cooperation (APEC) forum released a report calling on APEC countries to cut in half the phase-in period for tariff cuts and other trade liberalizing measures agreed to under last year's Uruguay Round trade pact. The report is intended as the basis for decisions by APEC leaders at the forum's next summit meeting in Osaka, Japan in November 1995. Specifically, the report calls for: Industrialized countries to halve the period for cutting tariffs, reducing agricultural subsidies and/or increasing the value of textile and clothing imports under the Multi-Fiber Arrangement as agreed to in the Uruguay Round. Developing countries to halve the periods for accepting internationally agreed rules on intellectual property rights, trade-related investment measures and/or export subsidies as agreed to in the Uruguay Round. Closer coordination of competition policies in an effort to reduce trade disputes, notably between the United States and Japan. Reform of anti-dumping laws to prevent abuse. Creation of a dispute mediation service to help settle regional trade conflicts. Stronger efforts to harmonize national product standards and testing procedures, and further measures to liberalize investment in the region. Member countries to strongly support a new "early warning system" and an International Monetary Fund (IMF) emergency financing mechanism to help avert Mexico-style financial crises. APEC and the World Trade Organization (WTO) to review any new trade groupings within the APEC region to ensure compliance with multilateral trade rules. APEC nations account for about 40 percent of the world's population and about 50 percent of its gross national product. The 18 APEC nations are: Australia, Canada, China, Chile, Hong Kong, Taiwan, the United States, and the Association of Southeast Asian Nation (ASEAN) countries of Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Guy de Jonquieres, "APEC 'Road Map' Sets Out Path to Free Trade," FINANCIAL TIMES, August 31, 1995; John Maggs, "APEC Advisors Call for Accelerated Tariff Reductions," JOURNAL OF COMMERCE, August 30, 1995. ASEAN TO LOWER TARIFFS ON FARM IMPORTS On August 25, agriculture ministers from the Association of Southeast Asian Nations (ASEAN) agreed to lower tariffs on 62 percent of farm commodities traded among them to help realize the grouping's plan of free trade in the region by 2003. But they failed to agree on lower tariffs on key commodities, such as grains and edible oils, and decided to work with ASEAN economic ministers, who will meet in Brunei next month to deal with the issue. "The ministers were satisfied with the progress on the inclusion of unprocessed agricultural products into the Common Effective Preferential Tariff [CEPT] scheme of the ASEAN Free Trade Area [AFTA]," the ministers said. All together, the ministers agreed to the immediate inclusion of 1,304 tariff lines into the CEPT scheme. Tariff reduction on these products is scheduled to be implemented on January 1, 1996. Abdul Jalil Hamid, "ASEAN Plans to Lower Tariffs on 62% of Agricultural Goods," JOURNAL OF COMMERCE, August 28, 1995. U.S. ANNOUNCES PLAN TO MONITOR AUTO PACT WITH JAPAN The Clinton administration announced this week that it is beefing up efforts to ensure U.S. companies are selling more cars and parts to Japan as called for in the recent U.S.-Japan auto agreement. The monitoring program, called the U.S. Implementation and Compliance Program, will focus primarily on collecting new data to track Japanese purchases of Amercan cars and parts. The plan calls for the U.S. Treasury, Commerce and State departments to cooperate in tracking sales to Japan. The plan also features a commitment from U.S. manufacturers to supply their sales figures to a neutral organization -- such as a trade association or an accounting firm -- that would compile the figures into a report card on U.S. car and parts sales to Japan. U.S. trade officials said they will review the monitoring plan every six months to track progress. Helene Cooper, "Clinton Administration to Unveil Plan to Monitor Auto Trade Pact with Japan," WALL STREET JOURNAL, September 5, 1995. INDIA PUSHES TRADE PACT TO COUNTER WEST On August 26, Indian foreign minister Pranab Mukherjee announced that a trade pact among the nations of South Asia would help the region strengthen its bargaining power with developed nations. "Serious attempts are being made to raise non-tariff barriers under the World Trade Organization (WTO). We can resist these if we take advantage of regional trade," Mukherjee told a business seminar. He said South Asian nations, comprising India, Nepal, Bhutan, Bangladesh, Sri Lanka, the Maldives and Pakistan had a market of 1.2 billion people and contained a powerhouse of skilled and unskilled labor. "If we can pool these resources, the ultimate objective being a free trade zone, and join the countries into one entity, our bargaining power with the developed world will increase considerably," he said. Developed nations want the WTO to set new rules which include allowing trade privileges to be withheld from developing countries that exploit children or other workers, or fail to adopt strict anti-pollution rules. Developing nations like India have repeatedly argued that strict interpretation of these laws would deprive low-wage countries of a valuable trade advantage. The seven nations who form the South Asian Association for Regional Cooperation (SAARC) have already agreed to reduce tariffs among the bloc under the South Asian Preferential Trade Arrangement (SAPTA). India, which ratified SAPTA in mid-August, was the fifth SAARC nation to accede to the pact. Officials said Bangladesh and Pakistan were expected to ratify it soon, and the treaty would come into effect on November 8, 1995. However, trade with Pakistan, with whom India has fought three wars since independence from foreign rule in 1947, remains a sticking point in the treaty's implementation. Sonali Verma, "India Pushes Regional Trade Pact to Combat West," REUTERS, August 29, 1995. ___________________________________________ WORLD TRADE ROUND-UP ___________________________________________ NAFTA INVOKED TO BLOCK LOGGING LAW Environmentalists are asking an international trade panel to help block a new U.S. logging law, saying it violates provisions of the North American Free Trade Agreement (NAFTA) relating to protection of the environment. Lawyers for the Sierra Club Legal Defense Fund said they planned to file a formal complaint with the North American Commission for Environmental Cooperation in Montreal on Wednesday, September 6, about a logging law that President Clinton signed last month. The law exempts some logging in national forests from environmental regulations, a step the environmentalists say violates the treaty's environmental provisions. The provisions were inserted in the treaty in 1993 in response to environmentalists' concerns that Mexico would try to gain an unfair trade advantage by skimping on environmental protections. "Trade Pact Invoked to Block Logging Law," NEW YORK TIMES, August 30, 1995. RESOURCES OPENING AMERICA'S MARKET: U.S. FOREIGN TRADE POLICY SINCE 1776, by Alfred E. Eckes, Jr.; University of North Carolina Press, 1995. Despite the passage of NAFTA and other recent free trade victories in the United States, former U.S. trade official Alfred Eckes warns that these developments have a dark side. Based on extensive archival research, this book offers a bold critique of U.S. trade policies, concentrating on the evolution of those policies over the last sixty years and placing them within a broad historical perspective. Eckes reconsiders trade policy issues from Benjamin Franklin to Bill Clinton, attributing growing political unrest and economic insecurity in the 1990s to shortsighted policy decisions made in the generation after World War II. To order, contact the University of North Carolina Press, P.O. Box 2288, Chapel Hill, NC, 27515-2288. ___________________________________________ Trade News is produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Editor: Orin Kirshner. E-mail versions of Trade News are available free of charge for Econet/IATP Net subscribers. 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