From iatp@igc.apc.orgSat Feb 17 10:43:02 1996 Date: Fri, 16 Feb 1996 14:39:22 -0800 (PST) From: IATP To: Recipients of conference Subject: Trade News 2-16-96 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy February 16, 1996 Volume 5, Number 4 _________________________________________ - U.S. FILES BANANA COMPLAINT - WTO CREATES REGIONAL TRADE COMMITTEE - U.S. INITIATES CASE ON JAPANESE MUSIC - COSTA RICA CHALLENGES U.S. TEXTILE QUOTAS - EU SEEKS TRADE DEAL WITH AUSTRALIA - VIETNAM OPENS TO EU TEXTILES _________________________________________ WTO NEWS SUMMARY _________________________________________ U.S. FILES BANANA COMPLAINT Last week, the United States filed a second complaint with the World Trade Organization (WTO) over the European Union's (EU) banana import regime. The new complaint has the support of Ecuador, as well as Guatemala, Honduras and Mexico which backed the first complaint last September. Both complaints charge the EU with discrimination by favoring banana imports from Africa, Caribbean and Pacific (ACP) countries at the expense of Latin American producers, in violation of international trade rules. U.S. officials said that, for procedural reasons, it was simpler to file another complaint than for Ecuador to join the one already filed, which will be withdrawn. Under WTO rules, the United States can ask for a panel to rule on the matter if consultations fail to resolve the dispute within 60 days. Previously, two panels set up under the General Agreement on Tariffs and Trade (GATT), the WTO's predecessor, condemned the EU's banana import system. But the EU has since secured a waiver from WTO rules for the so-called Lome Convention, which grants preferential trade access for ACP countries. Francis Williams, "U.S. Steps Up Banana Fight," FINANCIAL TIMES, February 7, 1996. WTO CREATES REGIONAL TRADE COMMITTEE Last week, the World Trade Organization (WTO) established a special committee on regional trade agreements with the goal of strengthening its monitoring of free trade areas and customs unions. The committee will examine the consistency of regional trade groupings with international trade rules, taking over the work of 20 separate WTO working parties on individual regional pacts. The committee also will look at the implications of proliferating regional arrangements for the multilateral trading system, reflecting concern about the collective impact of such arrangements, which increasingly have overlapping memberships but differing trade rules. Virtually all the WTO's 116 members belong to at least one regional grouping. Francis Williams, "Regional Groups Prompt Concern," FINANCIAL TIMES, February 7, 1996. U.S. INITIATES CASE ON JAPANESE MUSIC On February 9, the United States requested urgent talks with Japan on a complaint that Tokyo does not sufficiently protect foreign music recordings. The request for consultations, the first step in the dispute settlement procedure of the World Trade Organization (WTO), was made in a letter from U.S. trade ambassador Booth Gardner to Japan's trade envoy Minoru Endo. It is the first time the United States has brought an intellectual property rights case to the WTO. Current Japanese copyright law does not protect foreign music recordings made before 1971. According to U.S. trade officials, this means that American record companies are losing millions of dollars a year from copying. The United States argues that under the trade- related aspects of intellectual property rights (TRIPS) agreement of the Uruguay Round of world trade talks, Japan must extend copyright protection to foreign records dating back to 1945. Japan has ten days to reply to the request, after which the two sides have 60 days to try to resolve their dispute. At the end of that period, if no agreement has been reached, the United States can request a formal WTO dispute settlement panel. "U.S. Starts WTO Dispute Against Japan on Music," REUTERS, February 9, 1996; "U.S. Takes Recorded Music Royalties Dispute to WTO," FINANCIAL TIMES, February 10/11, 1996. COSTA RICA CHALLENGES U.S. TEXTILE QUOTAS Costa Rica has complained to the World Trade Organization (WTO) over U.S. quota restrictions on its underwear exports. Costa Rican officials charge that the U.S. restrictions, which were imposed last year, threaten jobs and investment in their country. Costa Rica can ask for a neutral WTO panel to rule on the issue if consultations now under way fail to resolve the dispute. The dispute stems from the failure of the WTO's textiles monitoring body to decide whether Costa Rican underwear exports pose a threat of "serious damage" to the U.S. industry. A safeguard provision in the WTO textiles agreement, which provides for a phase out of quotas on textiles and clothing by 2005, allows new restraints if domestic industry is threatened with "serious damage." Costa Rica, backed by other textile exporters, says that since the United States has failed to prove its case under WTO rules it is not entitled to continue the restraints. Francis Williams, "U.S. Textile Quotas Challenged," FINANCIAL TIMES, February 2, 1996. _________________________________________ REGIONAL/BILATERAL AGREEMENTS _________________________________________ EU SEEKS TRADE DEAL WITH AUSTRALIA Last month, the European Commission proposed a framework agreement with Australia to promote trade, industrial and economic cooperation. The proposed agreement follows a pact between the 15-member European Union (EU) and Australia signed last October to forgive past disputes - - mainly over agricultural issues -- and develop closer ties. The new agreement would be similar to those which the EU has concluded with other industrialized countries, such as Canada, and cover such topics as competition policy, consumer protection, worker education and training, information and culture. Relations between the EU and Australia were strained for several years following Britain's entry into the EU in 1973. At that time, Australia complained strongly about the loss of farm exports to Britain, its main EU export market, due to an increase in Britain's agricultural tariffs to EU levels. But the 1994 Uruguay Round world trade agreement brought the EU and Australia closer together. "EU Seeks Trade Pact with Australia," REUTERS, January 31, 1996. VIETNAM OPENS TO EU TEXTILES Vietnam has agreed to allow the European Union (EU) reciprocal access to its textile market, averting the threat of a trade dispute only six months after Hanoi and Brussels cemented diplomatic ties. Last month, the EU suspended a generous extension to an existing textile quota because Hanoi had not agreed to allow the EU access to its textile market by a December deadline. The head of the EU delegation in Hanoi said the Vietnamese admitted they made a "technical mistake" in failing to comply with the deadline. The new EU quota allows Vietnam to increase textile exports to the EU by $127 million this year. Textiles account for 70 percent of Vietnam's exports to the EU. Jeremy Grant, "Vietnam Relents on EU Textiles," FINANCIAL TIMES, February 2, 1996. _________________________________________ RESOURCES _________________________________________ TRADE AND THE ENVIRONMENT: THE SEARCH FOR BALANCE, Paul Demaret, James Cameron and Damien Geradin, eds. In this two volume book, leading experts on trade and the environment present their views about this vital debate. Volume I is a new collection of essays which present a cogent and thorough analysis of a range of complex legal, political and economic issues arising from the interaction of free trade and environmental policies. The challenges posed by the internationally recognized need for the integration of free trade with environmental values is examined from a number of perspectives. Volume II provides a comprehensive collection of primary materials which support the key references in the first volume. All the relevant European Union, United States, North American Free Trade Agreement (NAFTA), and General Agreement on Tariffs and Trade (GATT) materials are included. A valuable companion volume, it provides the reader with an easy reference to all materials examined in the first volume. To order, contact Cameron May LTD, 69-71 Bondway, London, SW8 1SQ, England; tel: 44(0) 171 582 7567; fax: 44(0) 171 793 8353. THE U.S. IN HAITI: HOW TO GET RICH ON $0.11 AN HOUR, A report for the National Labor Committee Education Fund in Support of Worker and Human Rights in Central America. This report examines the labor practices of more than 50 U.S. companies operating in Haiti. To order, contact The National Labor Committee Education Fund in Support of Worker and Human Rights in Central America, 15 Union Square West, New York, NY 10003-3377; tel: 212-242-0700. __________________________________________ 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. For more information about fax or mail subscriptions, contact: Institute for Agriculture and Trade Policy, 1313 Fifth Street S.E., Suite 303, Minneapolis, MN, 55414 Phone 612-379-5980. To learn more about IATP's contract research services, please contact Dale Wiehoff at dwiehoff@igc.apc.org