From iatp@igc.apc.org Fri Jan 3 00:57:18 1997 Date: Wed, 27 Nov 1996 16:27:52 -0800 (PST) From: IATP To: Recipients of conference Subject: Trade News 11-27-96 Trade News Produced by the Institute for Agriculture and Trade Policy November 27, 1996 Volume 5, Number 17 ____________________________________________ Headlines: - NGOS, GOVERNMENTS CLASH OVER TRADE AT WORLD FOOD SUMMIT - ILO SHAPES ITS RESPONSE TO TRADE AND LABOR LINKAGE - WTO REFUSES REQUEST OF DEVELOPING COUNTRIES - BURMA RE-ENTERS RICE EXPORT MARKET - MEXICO SUSPENDS PARTICIPATION IN TUNA ACCORD - CHRISTIAN AID PUSHES FOR FAIR TRADE - NEXT TRADE ROUND TO BE TOUGHER FOR CANADIAN FARMERS ____________________________________________ NGOS, GOVERNMENTS CLASH OVER TRADE AT WORLD FOOD SUMMIT The World Food Summit held in Rome last week yielded much talk, but little action. Governments backed off at the last minute from signing the Summit Plan of Action, citing legal implications in some countries to signing international agreements. Bread for the World spoke for many NGOs in calling both the Rome Declaration on World Food Security and the Summit Plan for Action "major disappointments." They cited as particularly weak the lack of any real commitment to strengthening international law regarding the right to food. Although a number of Third World governments supported this initiative, it was opposed by the U.S. government. A deep division emerged between the views of the NGOs and the official position of many governments on the issue of further deregulation of trade. While governments argued that the solution to hunger was more trade liberalization, NGOs presented dozens of case studies on specific instances where the new agricultural rules of the World Trade Organization were causing hunger, poverty, and food insecurity. In response to what they saw as a watering down of governments' commitment to food security, NGOs put forward a statement endorsing the call by many Third World governments for a Code of Conduct on the Right to Food and supporting a Food Security Convention which gained wide support at the NGO Forum. Global Network on Food Security, "World Food Summit Network News," November 11 and 12, 1996. ILO SHAPES ITS RESPONSE TO TRADE AND LABOR LINKAGE Amid growing certainty that the WTO will not be addressing the controversial issue of trade and labor linkages in Singapore, the International Labor Organization (ILO) looks to be the appointed arbiter of trade and labor linkage after the Singapore conference. The US, EU and other developing countries had wanted the issue of global trade and labor standards to be added to the WTO workplan for the next two years but faced strong opposition from developing countries, most notably India. The ILO met in Geneva this month for an "enterprise forum" geared at developing new, more effective ways of addressing the growing power of multinational corporations and the globalization of the world economy. As it stands, the organization sees itself as the social conscience of the international economic system, but lacks any real power to enforce standards for employment practices and social responsibility. If the WTO is to hand the trade and labor linkage issue over to the ILO, an option supported by a number of developed and developing countries, it must also be afforded some powers by the WTO, lest the ILO remain without teeth. The ILO will begin a study next year of social labeling projects such as the Rugmark, which certifies that carpets have not been made with child labor. Social labeling will be linked to core ILO standards including the prohibition of child and slave labor, and rights to collective bargaining and freedom of association. ILO Director-General Michel Hansenne noted, however , that there is still no agreement on utilizing a compulsory mechanism like social labeling, nor for any direct link between ILO standards and trade sanctions. John Zaracostas, "ILO Chief Hopes Summit Will Yield Enforcement of Global Standards," JOURNAL OF COMMERCE, November 7, 1996; Frances Williams, "ILO changes tactics on Labor Reform," FINANCIAL TIMES, November 11, 1996. WTO REFUSES REQUEST OF DEVELOPING COUNTRIES The WTO Committee on Agriculture rejected the position of poor countries that the Uruguay Round(UR) agricultural agreements had resulted in greater food insecurity. On October 24th, the committee refused to implement the "Marrakesh Decision On Net Food Importing Developing Countries" (NFIDCs) for the Singapore Ministerial Conference, which promised compensation to poor countries if the UR agriculture agreements harmed their food security. Many of the net-food importing countries were disappointed by the Committee's recommendation that WTO member countries merely "encourage" international financial institutions, like the World Bank and the IMF, to make further consideration of establishing or enhancing facilities available to NFIDC for managing short-term difficulties for financing food imports. "Report by the Committee on Agriculture on the Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Program on Least- Developed and Net Food-Importing Developing Countries," Report for the Singapore Ministerial Conference adopted by the Committee on Agriculture, October 24, 1996. BURMA RE-ENTERS RICE EXPORT MARKET Burma shipped 20,000 tons of rice in August, ending a moratorium on new rice exports in place since February, 1995. The country expects to ship 150,000 tons in the first quarter of 1997. Rice traders remain skeptical of the re-entry, however, having been burned by 18 months of unfulfilled contracts, including contracts for 500,000 tons canceled earlier this year. Rice exports are the main source of foreign exchange earnings for the Burmese government, which holds a monopoly on rice exports. The Burmese military regime is currently facing a keen foreign exchange shortage as it looks to pay for fuel imports and arms. Most of the rice for export is secured through a "paddy tax" placed on growers of between 200 to 600 pounds per acre, purchased anywhere from one-fifth to one-half of the (liberalized) domestic price. Burma experienced a dramatic rise in domestic rice prices in 1995, forcing the government to call a moratorium on new rice exports. Prior to that, Burma had hoped to increase its yearly rice exports to 3 million tons by 2000. Traders advise that Burma must act quickly to ship the 150,000 tons of rice or lose out in the low quality rice market. Vietnam, which allows private traders to move rice into the world market, could get to market faster then the Burmese government can manage. Ted Bardacke, "Burma Returns to the Rice Export Market," FINANCIAL TIMES, November 7, 1996. MEXICO SUSPENDS PARTICIPATION IN TUNA ACCORD Mexico suspended its active participation in a the La Jolla Agreement, a marine-life conservation forum, citing failure on the part of the U.S. to lift a ban on tuna imports from Mexico or to revise the definition of "dolphin-safe" tuna. Mexico will continue to allow the Inter-American Tropical Tuna Commission (IATTC) to monitor its fishing practices in a continuing effort to move toward a binding, enforceable international agreement called for in the 1995 Panama Declaration between the U.S. and Latin American fishing nations. The U.S. Congress failed to vote on legislation lifting the tuna ban at the end of its last session. President Clinton did promise in October, however, to push passage of the bill sponsored by Sens. Breaux (D-LA) and Stevens (R-AK) as soon as the new congressional session begins next year. In addition to lifting the embargo on tuna, the bill would consider "dolphin-safe" any tuna caught by setting nets on dolphins, as long as no dolphins are observed killed in the process. The bill is supported by five U.S. environmental groups -- Greenpeace, World Wildlife Fund, Center for Marine Conservation, National Wildlife Federation and Environmental Defense Fund. Opponents of the bill criticized Mexico's decision to suspend its participation in the La Jolla Agreement as an attempt to gut U.S. protection laws. Mexico charges that failure to pass the Breaux-Stevens bill is a rejection of multilateral, science-based environmental policy in favor of unilateral interests. Columbia, Costa Rica, Ecuador, Panama, Vanuatu and Venezuela joined Mexico in criticizing the U.S. for failing to meet its commitment to pass legislation, but did not suspend participation in the LaJolla Agreement. "Mexico Suspends Active Role in Tuna Pact in Protest of U.S. Inaction," INSIDE U.S. TRADE, November 1, 1996. CHRISTIAN AID PUSHES FOR FAIR TRADE The international organization Christian Aid published a report on October 28, 1996, chastising British supermarkets for selling food products produced by farmers in developing countries who are working under degrading conditions for unacceptably low wages. The report sites its observations of workers and facilities in countries including Brazil, South Africa, Thailand and Peru. In addition to receiving low wages, the organization found workers subjected to pesticide poisoning, discrimination and other "punishing" working conditions on the farms and plantations visited. According to the study, more than 25% of the United Kingdom's imported food and drink comes from developing countries. By raising awareness of unjust working conditions, Christian Aid hopes consumer pressure will force supermarkets to adopt a code of conduct with standards for minimum age for workers, right to union representation, and working hours and conditions. The organization also called for an independent monitoring body for supermarkets. Graham Bowley, "Charity Attacks Supermarkets Ethics," FINANCIAL TIMES, October 28, 1996. NEXT TRADE ROUND TO BE TOUGHER FOR CANADIAN FARMERS Officials at the Ontario Federation of Agriculture are warning Canadian farmers to expect hard times with the next round of international trade negotiations. Tony Morris predicts that the U.S. will push hard to dismantle all trade barriers and tariffs, but still protect its farmers against keen competition. Even more challenging, the EU will demand that imports meet their high animal welfare, environment and food safety standards. More important, given the "mad-cow" crisis Europe faced this year, the EU will demand complete traceability from farm to fork for an individual cow, including on-farm records of what the cow was fed and what drugs, vaccines and medicines were administered. "Next Trade Round is Going to Be Tougher," ONTARIO FARMER, October 22, 1996. ____________________________________________ RESOURCES/EVENTS ____________________________________________ The White House announced that the 1997 G-7 Summit will be held in Denver June 20 through 22, 1997. CIIR Briefing: The Marrakesh Decision- Honoring the Commitment to Net Food Importing Developing Countries, by Penny Fowler. September, 1996. Examines the practical implications of the Marrakesh Decision for least developed and net food-importing developing countries. The paper recommends which types of assistance or compensation should be provided to developing countries in implementing the Decision Order from the Catholic Institute for International Relations, Unit 3, Canonbury Yard, 190a New North Road, London N1 7BJ UK. Sterile Fields: The Impacts of Intellectual Property Rights & Trade on Biodiversity & Food Security, by Kristin Dawkins and Steve Suppan. Institute for Agriculture and Trade Policy. November, 1996. Examines the Uruguay Round "TRIPs" Agreement and impact of patenting and plant breeders' rights on farmers' rights, and outlines the Uruguay Round Agriculture Agreement covering market access, domestic support and export competition. The report includes NGO recommendations to the world's governments for addressing needs of LIFDCs and NFIDCs. $5.00 U.S. Order from IATP, 2105 1st Avenue South, Minneapolis, MN 55404, USA. 612/870/0453; fax 612/870/4846. Specify English and Spanish. Trade and Foreign Direct Investment, by Richard Blackhurst and Adrian Otten. World Trade Organization: October 16, 1996. Order from the Information and Media Relations Division of the World Trade Organization, Centre William Rappard, 154 Rue de Lausanne, CH-1211 Geneva 21. Telephone 41-22 739/50/07; fax 41-22- 739/54/58. The World Trade Organization and Sustainable Development: An Independent Assessment, A Report by the International Institute for Sustainable Development. Order from IISD, 161 Portage Avenue East, 6th Floor, Winnipeg, Manitoba R38 0Y4. Telephone 204/958/7700; fax 204/958/7710. Offers a comprehensive guide to WTO bodies and committees, TRIPs, transparency and policies with regards to sustainable development. ________________________________________ Trade News is produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Edited by Judy Brienza. Electronic mail versions are available free of charge for subscribers. For information about fax subscriptions contact: IT, 2105 1st Ave. S., Minneapolis, MN 55404. Phone: 612-870-0453; fax: 612-870-4846; e-mail: For information on subscribing to this and other IATP news bulletins, send e-mail to: iatp-info@iatp.org. IATP provides contract research services to a wide range of corporate and not-for- profit organizations. For more information, contact Dale Wiehoff at 612-870-0453 or send email to: dwiehoff@iatp.org