From iatp@igc.apc.orgThu Jan 18 12:59:27 1996 Date: Thu, 18 Jan 1996 08:38:49 -0800 (PST) From: IATP To: Recipients of conference Subject: Trade News 1-18-96 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy January 18, 1996 Volume 5, Number 2 _________________________________________ Headlines: - US TO FILE COMPLAINT AGAINST EU BEEF BAN - WTO PANEL EXPECTED TO RULE AGAINST US IN GAS DISPUTE - US DROPS BANANA INVESTIGATION - CANADA, EU SETTLE OUTSTANDING DISPUTES - SOUTH ASIA TARIFF CUTS - EU-EAST ASIA SUMMIT TO FOCUS ON TRADE, INVESTMENT - US SETS UP TRADE WATCHDOG _________________________________________ WTO NEWS SUMMARY _________________________________________ US TO FILE COMPLAINT AGAINST EU BEEF BAN On January 11, US secretary of agriculture Daniel Glickman announced that he planned to lodge a complaint with the World Trade Organization (WTO) against a European Union (EU) ban on imports of hormone-treated beef. The US is expected to argue that the ban violates an agreement in the Uruguay Round GATT trade deal, which requires that trade restrictions imposed on health and safety grounds be justified scientifically if they do not meet international standards. The EU has offered no scientific justification for the ban, which has failed to win backing from scientists asked by the EU to investigate the effects of using growth-promoting hormones. The US, which says the ban costs about $100 million a year in lost trade, has already imposed trade sanctions of equivalent value on EU exports. The US says it wants to discourage other countries from restricting trade on dubious health grounds. The WTO allows 60 days for consultation after a complaint is lodged. If no settlement is reached, a dispute settlement panel is set up and must report in six months. An appeal can be made against its decision to an independent WTO tribunal, which must rule within 90 days. Guy de Jonquieres, "EU Defends Ban on Beef Treated with Hormones," FINANCIAL TIMES, January 13/14, 1996. WTO PANEL EXPECTED TO RULE AGAINST US IN GAS DISPUTE A World Trade Organization (WTO) dispute settlement panel is expected to issue a ruling later this month that US regulations governing gasoline and reformulated gasoline violate international trade rules. Venezuelan foreign minister Miguel Angel Burelli told reporters in Venezuela that the challenge by his country and Brazil of the US regulations had been upheld in a preliminary decision by the WTO panel. The final decision will be made public on January 29. If the US loses the case it will have the right to appeal the decision to the WTO appellate body. A final verdict against the United States would allow Venezuela and Brazil to impose retaliatory trade sanctions against US exports unless the US agreed to change the regulations. The US regulations govern the amount of pollutants which can exist in gasoline and reformulated gasoline in the US. The complaint centers on the fact that under the US Clean Air Act, domestic refiners can set their own baselines for pollutant content, while foreign refiners must meet statutory baselines which may be stricter. "WTO Panel Expected to Rule Against US in Gasoline Dispute," INSIDE US TRADE, Vol. 14, No. 1, January 5, 1996. _________________________________________ REGIONAL/BILATERAL AGREEMENTS _________________________________________ US DROPS BANANA INVESTIGATION On January 10, US trade representative Mickey Kantor conceded some ground in the long-running dispute between the US and the European Union (EU) over banana import arrangements when he dropped a section 301 trade investigation into Colombia and Costa Rica. The US launched the investigation a year ago after complaints from US companies that their interests were being harmed by the way these two countries were implementing quotas for deliveries to the EU market. Specifically, Colombia and Costa Rica did not give a share of their EU quota shipments to Dole and Chiquita, two US companies operating in Latin America. Colombia and Costa Rica have now amended the way quotas are assigned to give those companies a share of the EU shipments. Deborah Hargreaves, "Kantor Drops US Banana Inquiry," FINANCIAL TIMES, January 11, 1996. CANADA, EU SETTLE OUTSTANDING DISPUTES In December, Canada and the European Union (EU) reached a broad trade agreement that will benefit Canadian exporters of products ranging from grains, shrimps and cheese to automobiles. A key element of the agreement was compensation to Canada for higher EU import duties on a large number of products as a result of the accession of Austria, Finland, and Sweden to the EU. Because of accession, trade regimes in these countries were aligned with the EU, resulting in increased tariffs on a number of Canadian exports. As compensation, there will be significant tariff reductions on Canadian farm, fish, paper, snowmobile and other products. The new agreement also settles Canada's outstanding rights on barley stemming from earlier EU enlargements. And it provides for improved access for durum wheat, pork, canary seed and oats. "Canada, European Union Settle Several Outstanding Trade Issues," NEWS RELEASE, GOVERNMENT OF CANADA, December 5, 1995. SOUTH ASIA TARIFF CUTS On January 8, South Asian trade ministers urged sweeping tariff cuts to dismantle trade barriers in the region. Meeting in New Delhi, the seven-nation South Asian Association for Regional Cooperation (SAARC) was urged by the Indian commerce minister P. Chidambaram to apply zero or near zero tariffs on primary commodities in the region. His counterparts from Sri Lanka and Nepal went further, suggesting across-the-board tariff cuts rather than the limited product-by-product tariff reductions made so far under SAARC's month-old preferential trade agreement. SAARC, which groups India, Pakistan, Sri Lanka, Bangladesh, the Maldives, Bhutan and Nepal, is home to 1.2 billion people with a combined gross domestic product of $300 billion. "Tariff Cuts for South Asia," FINANCIAL TIMES, January 9, 1996. EU-EAST ASIA SUMMIT TO FOCUS ON TRADE, INVESTMENT Leaders of the 15-member European Union (EU) and 10 East Asian countries will discuss expanding trade and investment links between the two regions when they meet in Bangkok, Thailand on March 1-2. The summit, the first of its kind between the leaders of Europe and the East Asian countries, is also likely to cover ways the two regions can cooperate to strengthen the World Trade Organization (WTO), as well as the cross-regional flow of technology and intellectual property. The Asian nations attending the meeting will be the seven members of the Association of Southeast Asian Nations (ASEAN) -- Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- plus China, Japan and South Korea. A Thai foreign ministry official said there was no fixed agenda for the March summit. Two-way trade between the EU and the 10 Asian countries totaled $238 billion in 1992, compared with $240 billion between the EU and North America in the same year. But EU investment in Asia totaled only one percent of total European foreign investment. "Trade, Investment Focus of EU-East Asia Summit," JOURNAL OF COMMERCE, January 16, 1996. _________________________________________ WORLD TRADE ROUND-UP _________________________________________ US SETS UP TRADE WATCHDOG Last week, US trade representative Mickey Kantor announced the creation of an office devoted to overseeing enforcement of trade agreements and warned trading partners that failure to abide by pacts would bring a tough US response. "I want to give ample notice to foreign governments who are not living up to [their] obligations that we will not tolerate . . . a failure to honor agreements, or the violation of US trade laws," Kantor said. Kantor listed a number of priorities for the new office, which will be located in the Office of the United States Trade Representative. These include possible action against: South Korea, for failing to enforce a pact on product shelf-life; the European Union (EU), for its system of tariffs on grains and rice; China, for circumvention of textile and apparel quotas and for failure to enforce an anti-piracy pact; and Japan, South Korea, Australia, Turkey and others, for failure to protect intellectual property; and Canada for discriminating against US publications. The enforcement unit will work closely with the Commerce Department. In some cases it will use the dispute settlement mechanisms of the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA). Nancy Dunne, "Kantor Sets Up Trade Watchdog," FINANCIAL TIMES, January 6/7, 1996. __________________________________________ 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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