From iatp@igc.apc.org Fri Jan 3 00:57:00 1997 Date: Wed, 01 May 1996 09:41:23 -0700 (PDT) From: IATP To: Recipients of conference Subject: Trade News 4-30-96 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy April 30, 1996 Volume 5, Number 9 ______________________________________________________ Headlines: - U.S. COOL ON NEW TRADE ROUND - TELECOM PACT CLOSER - WTO SHOULD SET INVESTMENT RULES - WTO TO HEAR INDIAN WOOL CASE - BANANA GROWERS UPSET - NAFTA PARTNERS EXEMPT RULES ______________________________________________________ WTO NEWS SUMMARY ______________________________________________________ U.S. COOL ON NEW TRADE ROUND In a statement delivered to trade ministers in Singapore last week, U.S. deputy trade representative Jeffery Lang said the WTO should eschew a new round of comprehensive trade negotiations in the near future, and instead focus on work already in progress. According to Lang: "A new round, even if initiated today, could postpone rather than accelerate market-opening. There is more than enough work to be done right now in ensuring completion of the Uruguay Round negotiating and implementing agenda and ensuring the regime is well managed." Lang said it would be a mistake to ignore the built-in agenda of the Uruguay Round in favor of some process of laying the ground work for another big round or, as some have suggested, to argue for a broad vision of the future. He argued that the world needed such a vision, but it was best provided by such institutions as the Organization for Economic Cooperation and Development (OECD), or regional trade groupings. "The WTO has a culture which is fundamentally different from other international organizations. Its method of decision- making is consensual, and its subject matter is practical and concrete, not visionary. The WTO is about the bottom line," Lang said. He added that the WTO's biennial ministerial meetings, the first of which will be held in Singapore in December 1996, should act like a board of directors of a company, reviewing progress and setting medium-term objectives for the future. Lang's statement appeared intended to rebuff a call by European Union (EU) trade commission Sir Leon Brittan for WTO ministers to commit themselves this year to preparing for the start of a new round of trade talks before the end of the century. Guy de Jonquieres, "U.S. Cool on Idea for New World Trade Round," FINANCIAL TIMES, April 26, 1996. TELECOM PACT CLOSER Meeting in Kobe last week, the United States, European Union (EU), Japan and Canada moved closer to an accord in World Trade Organization (WTO) negotiations to liberalize the more than $500 billion a year global telecommunications market. In the negotiations, the EU indicated flexibility on what had been one of the main problems for the United States: restrictions on foreign ownership of telecommunications companies in three EU countries -- France, Belgium and Spain. In return, the U.S. and Canada showed readiness to compromise on what had been a problem for the Europeans: restrictions on the landing of submarine telecommunications cables on U.S. and Canadian shores. In addition, diplomats said expectations were high for resolution of the two other main problems in the WTO talks: U.S. anxiety over the terms under which free competition should be introduced into international telecommunications services; and the scope of application of free trade principles to outlaw unfair discrimination by dominant carriers. William Dawkins, "Main Trading Powers Near to Pact on Opening Telecoms," FINANCIAL TIMES, April 22, 1996. WTO SHOULD SET INVESTMENT RULES Meeting in Kobe last week, the world's four top trading powers -- the United States, Japan, the European Union (EU) and Canada -- agreed that the World Trade Organization (WTO) should discuss setting international rules on the treatment of foreign investment. The decision is intended to assuage concerns of developing countries, which fear that an international investment accord being negotiated by richer countries in the 25- nation Organization for Economic Cooperation and Development (OECD) will be imposed on them. Trade ministers from the so-called Quad countries agreed to set up an informal working group, including developing nations, to study possible WTO rules on fair treatment of foreign investors, with a view to establishing a formal group on trade and investment at the next WTO ministerial meeting in Singapore in December 1996. Trade officials said the group was not intended to supplant the OECD negotiations, but to ensure that developing countries' concerns were taken into account. In a related matter, Quad members also agreed that the Singapore ministerial should debate the possibility of setting global rules for fair competition, an increasingly important part of international relations. Diplomats said the aim would not be to set up a world competition authority, but to seek agreement on common rules, backed by the WTO's dispute settlement mechanism. William Dawkins, "Attempt to Calm Investment Fears," FINANCIAL TIMES, April 22, 1996. WTO TO HEAR INDIAN WOOL CASE On April 17, the World Trade Organization (WTO) agreed to establish two dispute settlement panels to examine complaints by India that U.S. import restraints on wool garments contravene global trade rules. One panel will examine women's and girl's wool coats, the other woven wool shirts and blouses. The dispute settlement panels will examine two earlier rulings by the lower Textile Monitoring Body of the WTO, which last year ruled that U.S. imports of Indian made women's and girl's wool coats had not caused serious injury. But it split on whether the imports posed a future threat. With regard to the woven wool shirts and blouses imports, the textile body found that the U.S. restraints were justified. John Zarocostas, "WTO to Examine Indian Complaints of Woolen Garment Import Curbs by U.S.," JOURNAL OF COMMERCE, April 18, 1996. BANANA GROWERS UPSET Caribbean banana exporters have accused the United States of "prematurely" taking its dispute with the European Union (EU) over banana trade to the World Trade Organization (WTO). The region's exporters, many of which are economically dependent on preferential access to the EU market, say they are "shocked" at the U.S. decision, and suggest that Washington has gone back on a promise to seek a negotiated settlement before going to the WTO. With the dispute put to the WTO, the region's prospects for saving its European preferences are not good, say Caribbean government officials. The EU's traditional banana suppliers in Asia, the Caribbean and the Pacific have preferential access to the European market. This arrangement has been attacked by Latin American exporters whose access to Europe is limited by quotas. Canute James, "Caribbean Banana Growers Upset," JOURNAL OF COMMERCE, April 26, 1996. ______________________________________________________ REGIONAL AGREEMENTS/BILATERAL RELATIONS ______________________________________________________ NAFTA PARTNERS EXEMPT RULES State and provincial laws and regulations that discriminate against foreign countries in the areas of non-financial services and investment will be protected from North America Free Trade Agreement (NAFTA) challenge, so long as they were in place on January 1, 1994, according to letters of agreement exchanged by the United States, Canada and Mexico on April 1, 1996. The decision came partly as a response to Canadian concerns about losing the ability to protect its social safety net through restrictions on foreign competition in the provision of health care and other social services. The three countries faced a March 31 deadline for the exchange of lists of state and provincial laws that might contravene NAFTA chapters 11 and 12, which call for national and most-favored nation treatment of other NAFTA nations. The governments agreed to furnish the lists of existing laws, called Annex 1, for purposes of transparency, though all three have had difficulty in identifying the non-conforming measures and compiling accurate lists. While states and provinces welcomed the agreement to cover all existing measures under Annex 1, U.S. officials agreed only reluctantly. The general reservation will limit the tools available to promote liberalization at the state and provincial level. "NAFTA Partners to Protect Sub-Federal Measures From NAFTA Challenges," INSIDE U.S. TRADE, April 5, 1996. ______________________________________________________ RESOURCES ______________________________________________________ "BUSINESS GUIDE TO THE URUGUAY ROUND." This guide, published jointly by the International Trade Centre UNCTAD/WTO and the Commonwealth Secretariat in London, explains the rules of the Uruguay Round trade agreements and their implementation; provides an overview of the achievements of the Uruguay Round and legal system established by it; explains the role of the World Trade Organization (WTO); presents rules applicable to trade and examines their implications for trade liberalization; reviews main features of the General Agreement on Trade in Services (GATS); examines rules applicable to government procurement and state trading; and describes provisions of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). To order, contact: International Trade Centre UNCTAD/WTO (ITC), Palais des Nations, 1211 Geneva 10, Switzerland; ph: 41-22-730-0111; fx: 41-22-733-4439. __________________________________________ 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