From iatp@igc.apc.org Fri Jul 26 10:50:43 1996 Date: Thu, 25 Jul 1996 15:06:20 -0700 (PDT) From: IATP To: Recipients of conference Subject: TRASDE NEWS 7-25-96 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy July 26, 1996 Volume 5, Number 13 _________________________________________ - CHINA DENOUNCES U.S. - U.S. BALKS AT PLAN TO HELP POOR NATIONS - U.S. DROPS TARIFFS ON EU FOOD - U.S. CALLS FOR END TO FARM SUBSIDIES - TRANSATLANTIC FREE TRADE AREA APEC CONSIDERS POLLUTION CHARGES _________________________________________ WTO NEWS SUMMARY _________________________________________ CHINA DENOUNCES U.S. On July 21, China accused the United States of making unreasonable demands for entry into the World Trade Organization (WTO) at the risk of sparking mass unemployment and social unrest. "It is unjust to exclude China from the WTO only because China fails to meet certain standards set by a particular country, since the WTO is intended to be a forum to conduct negotiations on progressive liberalization," said Li Zhongzhou, director-general of international trade at the Ministry of Foreign Trade and Economic Cooperation. The United States has insisted that China put forward firm commitments on market access for its WTO ascension. "China will have to come forward and put serious market access commitments on the table," said acting U.S. trade representative Charlene Barshefsky. In related news, on July 18, the former communist country of Mongolia won admission to the WTO, becoming the first transition economy of the old Soviet bloc to join the body as a new member. At the same time, the WTO's ruling General Council agreed to set up a working party to negotiate entry terms for the ex-Soviet republic of Georgia. "China Slams U.S. Demands for WTO Entry," UNITED PRESS INTERNATIONAL, July 21, 1996; "Mongolia Joins World Trade Body, Georgia Applies," REUTERS, July 18, 1996. U.S. BALKS AT PLAN TO HELP POOR NATIONS The U.S. has expressed strong reservations about a proposal by World Trade Organization (WTO) chief Renato Ruggiero that industrialized nations and advanced developing countries agree on trade concessions to help the world's poorest countries. Although Washington has not said outright that it will oppose the scheme, it has told Ruggiero it is unenthusiastic about it and would have difficulty securing the domestic legislation needed to put it into effect. Ruggiero has proposed that the WTO's richer members commit themselves to abolishing tariffs and non-tariff barriers on a range of exports from the 48 poorest countries, as part of an effort to prevent them being further marginalized in the global economy. But the Clinton administration has said that to participate it would need to obtain fresh legislative authority from Congress, which would be difficult in an election year. The administration has also said that it is not satisfied that enough advanced developing countries would be ready to contribute to such a scheme, or that it would genuinely help the poorest economies. The administration also says the proposal could create problems because at least two of the potential beneficiaries, Bangladesh and Kenya, are sizable textiles exporters. Guy de Jonquieres, "U.S. Cool on WTO Chief's Plan for Trade Help to Poor Nations," FINANCIAL TIMES, July 9, 1996. U.S. DROPS TARIFFS ON EU FOOD On July 15, the United States withdrew all the duty hikes against a variety of European Union (EU) agricultural products put in place in 1989 after Brussels banned imports of hormone-treated beef. The decision by acting U.S. trade representative Charlene Barshefsky forced the EU to withdraw its request for the World Trade Organization (WTO) to establish an international panel to examine the U.S. tariffs. When asked why the United States decided to drop the duties, deputy U.S. trade representative Booth Gardner said, "We agreed to use the WTO panel process and we got a panel set up on the hormone; there's no need for the duties anymore." Gardner was referring to a May 20 decision by the WTO's dispute settlement body to establish a panel examining the U.S. complaint that the unilateral EU ban was a violation of international trade rules costing the U.S. about $115 annually. John Zarocostas, "U.S. Drops 1989 Tariff Hikes Against EU Food Products," JOURNAL OF COMMERCE, July 16, 1996. U.S. CALLS FOR END TO FARM SUBSIDIES On July 18, U.S. agriculture secretary Dan Glickman called for "the elimination, not just the reduction of all trade distorting subsidies in agriculture," in the next round of global trade talks, which are scheduled to begin in 1999. In his speech to the U.S. Agricultural Export Development Council, Glickman did not mention state trading enterprises such as the New Zealand Dairy Board and the Canadian Wheat Board, which collect their nation's production and sell part of it abroad. But in an interview with reporters afterward he noted them as a problem. Asked whether he believed that such government agencies must be eliminated in other countries in order to have free trade, Glickman said that the state trading enterprises are a major concern, that he seeks "to minimize their injurious effects," but that he did not know if they "could exist in a non-trade distorting scenario." "Agriculture Secretary Seeks Elimination of Farm Subsidies," ENVIRONMENTAL NEWS NETWORK, July 18, 1996. _________________________________________ REGIONAL AGREEMENTS/BILATERAL RELATIONS _________________________________________ TRANSATLANTIC FREE TRADE AREA On July 11, German foreign minister Klaus Kinkel called for the gradual liberalization of trade and investment between the European Union (EU) and the United States as a step towards a transatlantic free trade area. Welcoming a study commissioned by the German Federation of Industry (BDI), Kinkel said Europe and the United States should first concentrate on solving trade issues such as harmonization of standards and mutual recognition of testing procedures. Among other steps, Kinkel called for the dismantling of trade discrimination in public procurement, a joint investment protection agreement and liberalization of audio-visual services. "Transatlantic Trade Area Plea," FINANCIAL TIMES, July 12, 1996. APEC CONSIDERS POLLUTION CHARGES On July 11, members of the Asia Pacific Economic Cooperation (APEC) forum announced that they would consider using market-based measures, including "pollution charges," to promote sustainable development in the region. The use of such measures "has a tremendous potential for building up funds that can be set aside for the dissemination and implementation of available clean technologies for industries," said Victor Ramos, chairman of the APEC ministerial meeting on sustainable development held in Manila. Ramos reported that some APEC members, such as Malaysia and Indonesia, have already started imposing some form of pollution charges. He also said that the Philippines plans to impose pollution charges nationwide following a pilot test on industries in the Laguna de Bay area. APEC's 18 members are the United States, Japan, Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Taiwan and Thailand. "APEC Enthusiastic About Imposing Pollution Charges," ENVIRONMENTAL NEWS NETWORK, July 12, 1996. RESOURCES The Agricultural Outlook: Trends and Issues to 2000, Organization for Economic Cooperation and Development (OECD). What are the trends and prospects for grains and oilseeds, and meat and dairy products on world markets in the next five years? What are the main uncertainties in these markets? How will policy affect them? The annual Agricultural Outlook assesses likely trends in OECD agricultural markets for the next five years. It highlights the effects of agricultural policies and critical issues raised by market developments. Projections are based on a unique procedure combining information and experience available in member countries with that of the OECD Secretariat in an economic model of OECD agriculture which guarantees consistency and allows the principle uncertainties affecting the market outlook to be evaluated. Tables provide detailed projections for production, consumption, trade and prices in OECD countries and more selected information on non-member countries. To order, contact: OECD Washington Center, 2001 L Street, NW, Suite 650, Washington, DC, 20036-4922; ph: 1-800-456- 6323; fax: 1-202-785-0350. (US) $34.00. __________________________________________ 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