From iatp@iatp.org Sat Oct 31 11:34:10 1998 Date: Fri, 12 Jun 1998 11:42:01 -0500 From: iatp@iatp.org To: nafta-news@igc.apc.org Subject: NAFTA & Inter-American Trade Monitor Vol. 5, Number 12 [ The following text is in the "iso-8859-1" character set. ] [ Your display is set for the "US-ASCII" character set. Some ] [ characters may be displayed incorrectly. ] ------------------------------------------------------------------------ NAFTA & Inter-American Trade Monitor - Vol. 5, Number 12 June 12, 1998 ------------------------------------------------------------------------ Table of Contents - IPR AT ISSUE - BIO-TECH CRITICS SPEAK - HFCS DUTIES CHALLENGED - U.S. TOMATO GROWERS VS CANADA, MEXICO - RAIL UPGRADE FOR BORDER - CANADA WATER TRADE - BROOM CORN RULING IPR AT ISSUE On May 1, Colorado State University abandoned its application for U.S. patent #5,304,718 on Apelawa quinoa. Bolivia's National Association of Quinoa Producers (ANAPQUI) hailed the defeat of the patent as "a great victory" for Andean farmers. Alejandro Bonifacio, a quinoa researcher in Bolivia, noted that the Apelawa patent was named after a village on Lake Titicaca where the CSU scientists first picked up seed samples and also discovered a method of hybridizing quinoa that is used in 43 other traditional Andean quinoa varieties. Biodiversity concerns and indigenous rights conflict with intellectual property protection in many developing countries. Twelve years ago, Loren Miller, director of a small, California-based International Plant Medicine Corporation, took a sample of Ayahuasca, a medicinal plant cultivated by an Ecuadoran indigenous community. Back in the United States, Miller patented the plant material, obtaining exclusive rights under U.S. law to sell and breed new varieties from the plant. Miller says his company is now working on development of psychiatric and cardiac pharmaceutical drugs from the plant. The Ecuador-based Coordinating Body for Indigenous Organizations in the Amazon Region (COICA) has denounced the taking of the Ayahuasca since the beginning of the conflict 12 years ago. COICA General Coordinator Antonio Jacanamijoy charges miller with "an offense against indigenous people" in patenting a sacred plant taken from an indigenous family. The United States Senate has refused to ratify the United Nations Convention on Biological Diversity, an agreement that recognizes the intellectual property rights of indigenous peoples. Ecuador, and more than 100 nations, have signed the U.N. convention. The U.S. International Intellectual Property Alliance (IIPA) urged the U.S. Trade Representative to place Mexico on the Special 301 Priority Watch List (the second-highest of four possible categories) at the annual April 30 review, and to take other action under NAFTA. Instead, the U.S. Trade Representative (USTR) continued to place Mexico on the Other Observations List (the lowest category), and said it would conduct bilateral talks on intellectual property rights because "piracy and counterfeiting remain major problems." The USTR called the copyright law passed in Mexico in 1996 a step forward, but warned that there remain "problems and ambiguities in the law." Mexico agreed to carry out new measures to enforce protection for intellectual property rights by June 30, but cancelled a bilateral meeting that had been scheduled for June 4 to work out details. The IIPA says that Mexico pirates more than half of video, audio, business software applications and entertainment software, resulting in more than $435 million in lost sales to U.S. producers during 1997 alone. In addition, Mexican small businesses suffer from competition from pirates. The Mexican Video Association says that 3,500 of 8,000 registered independent video clubs have closed since 1994, due to piracy. "In Asia, piracy has been reduced through political will and good enforcement, and that's what Mexico doesn't have," said IIPA President Eric Smith. In 1997, the Mexican Federal Attorney General's office seized 3 million cassettes - compared with 55 million pirated cassettes sold and 30 million legal cassettes sold. Reebok International Chief Executive Bob Meers warned that Reebok will condition future investments in Mexico on better enforcement of IPR laws. "It is probably the single largest determinant in deciding whether we invest more money in our business in Mexico," said Meers. Argentina, Ecuador, and the Dominican Republic were among the 15 countries placed on the Priority Watch List, while Colombia, and possibly Ecuador, face "out of cycle" reviews of their IPR enforcement activities. The USTR cited complaints about lack of adequate patent protection for pharmaceuticals and inefficient border controls in Colombia. Ecuador remained on the priority watch list despite passage of new IPR legislation in April, since the legislation has yet to be signed by the president or to take effect. In a separate action, the USTR announced sanctions on Honduras, ending duty-free shipment of about $5 million worth of Honduran fruits, vegetables and other products, because of continuing failure of the Honduran government to prevent piracy of U.S. television programs and other copyrighted materials. The USTR placed Canada on its "watch list" because of controversy over recent changes to the Canadian copyright law, citing U.S. concern that "U.S. performers and producers are denied national treatment with respect to these provisions." NAFTA requires national treatment for member nations in intellectual property laws. A new rule that took effect on April 13 requires Customs inspectors to notify trademark and copyright holders when suspect merchandise is seized or detained at U.S. ports. Customs officials may also provide company executives with samples of the questionable imports. Companies say that the new regulation should be helpful to both Customs enforcement and company defense of intellectual property rights. "Mexico Cancels IPR Meeting: USTR Confident It Will Take Place," INSIDE U.S. TRADE, June 12, 1998; "Administration Softpedals IPR Complaints With NAFTA Trading Partners," INSIDE U.S. TRADE, May 8, 1998; Mary Sutter, "Put Your Foot Down, Mexico Told," JOURNAL OF COMMERCE, May 4, 1998; "U.S., Mexico to Meet Next Week to Address Mexican IPR Steps," AMERICASTRADE, May 298, 1998; Mary Sutter, "Piracy Takes Toll in Mexico," JOURNAL OF COMMERCE, April 7, 1998; Diego Cevallos, "Mexico: Region's Fastest Growing Market for Counterfeit Products," INTERPRESS SERVICE, March 13, 1998; Mario Gonzalez, "Trade-Ecuador: U.S. Threatens Sanctions Over Patents, Again," INTERPRESS SERVICE, April 23, 1998; Kevin G. Hall, "Microsoft Seeks to Tie Tech Loans to Piracy Purchases," JOURNAL OF COMMERCE, April 1, 1998; "U.S. Mulling NAFTA Retaliation Against Canada Over Copyright Changes," INSIDE U.S. TRADE, April 3, 1998; Paula L. Green, "Trademark Holders Told If Customs Seizes Fakes," JOURNAL OF COMMERCE, 4/22/98; Danielle Knight, "Development Rights: Battle Over Amazon Plant Patents," INTERPRESS SERVICE, March 25, 1998; "Quinoa Patent Dropped, Andean Farmers Defeat U.S. University," ANAPQUI PRESS RELEASE, May 22, 1998; "U.S. to Impose Sanctions on Honduran Products," JOURNAL OF COMMERCE, April 1, 1998. BIO-TECH CRITICS SPEAK A major review of government biotechnology policies is underway in Canada. A public opinion poll commissioned by the British Columbia branch of the Consumers Association of Canada found three-quarters of British Columbians to be concerned that some of the food they eat may be genetically altered. According to the survey, 80 percent would choose non-altered products if given a choice. Corn producers oppose labeling of biotechnology-derived food products, except "where the genetic alteration is known to cause allergenic problems, or where nutritional composition has been changed significantly." In Washington, the Alliance for Bio-Integrity and other plaintiffs filed suit in May, charging that U.S. Food and Drug Administration policy, which permits genetically altered foods to be marketed without testing or labeling, violates the agency's legal duty to protect public health and provide consumer information. The lawsuit challenges marketing of 33 genetically engineered whole foods, including potatoes, tomatoes, soy, corn, squash and other fruits and vegetables. These foods are also present in products ranging from soy-based baby formulas to corn chips. Plaintiffs cite health and religious concerns. The Grocery Manufacturers of America said in response to the lawsuit that mandatory labeling of genetically engineered foods would mislead consumers and hamper research, wrongly implying that the foods are less safe than other food products. "There is no scientifically-valued distinction between the safety of genetically-enhanced food and food grown by traditional methods," insisted Dr. Stephen Ziller, GMA Vice President for Scientific and Regulatory Affairs. Use of genetic engineering in agriculture has increased dramatically in the past two years, with farmers planting millions of acres of gene- modified crops. The May 11th Monsanto announcement of intent to purchase DeKalb Genetics Corp. and Delta & Pine Land Co. for $4.4 billion highlights the demand for biotechnology and the increasing value of the few agritech firms not yet acquired by the multinational mega-firms like Monsanto, Dupont, Novartis, and Dow Chemical. Monsanto and Cargill also plan a joint venture to create biotech-enhanced products for the grain processing and animal food industries. Kevin Carmichael, "Critics Complain About Biotech 'Consensus,'" WESTERN PRODUCER, May 21, 1998; Emily Kelser, "Monsanto Sees Alliance With Cargill Expanding," WESTERN PRODUCER, May 21, 1998; Emily Kelser, "Monsanto Purchases Send Waves," WESTERN PRODUCER, May 21, 1998; Grania Litwin, "Meddling With Nature Irks Advocate," VICTORIA TIMES COLONIST, May 26, 1998; "Landmark Lawsuit Challenges FDA Policy on Genetically Engineered Foods," ALLIANCE FOR BIO-INTEGRITY PRESS RELEASE, May 27, 1998; "Don't Turn Back the Clock on Enhanced Foods, GMA Says," GROCERY MANUFACTURERS OF AMERICA PRESS RELEASE, May 27, 1998. HFCS DUTIES CHALLENGED The United States has requested World Trade Organization consultations over Mexican antidumping duties imposed on U.S. high-fructose corn syrup. The challenge claims that Mexico has wrongly classified HFCS as a like product with sugar, that rules on public notice and explanations of dumping determinations were not followed, that provisional dumping duties were kept in force more than the maximum time authorize by international rules, and that Mexico failed to safeguard confidential information, instead making it available to the Mexican sugar industry. In a related move in early May, the United States allocated rights to import 200,000 metric tons of raw sugar to foreign countries other than Mexico. Mexican Commerce Secretary Herminio Blanco said that Mexico is seeking a mutually agreeable settlement, not a dispute resolution panel, but defended the duties as consistent with WTO regulations. Mexico is also seeking access for more sugar to the U.S. market. "U.S. Says Mexican HFCS Duties Amount to Broad Violation of WTO Obligations," INSIDE U.S. TRADE, May 15, 1998. U.S. TOMATO GROWERS VS CANADA, MEXICO The Florida Tomato Exchange is seeking a U.S. Commerce Department investigation of whether Canadian producers are dumping hothouse tomatoes on the U.S. market at prices below the cost of production. Tomato Exchange director of education and promotion Stephanie Johnson noted that the exchange has observed increased imports and lower retail prices, but said "We're just requesting they put together some facts to make sure something that isn't supposed to be happening isn't happening." Canadian Denton Hoffman, general manager of the Ontario Greenhouse Vegetable Producers Marketing Board said Canadians are not dumping tomatoes and that he was quite aware of the Florida request "and I'm looking at it with some levity." Assistant Commerce Secretary Robert LaRussa is meeting with parties to an agreement suspending a U.S. antidumping case against Mexican tomatoes. His goals include increasing participation of Mexican growers in the agreement and consideration of changes in floor prices or possibly a split in the marketing season to winter and summer seasons. Meanwhile, California tomato growers alleged that Baja California growers are engaging in predatory pricing. The California Tomato Commission has requested talks with its Mexican counterpart. Tracy Rosselle, "Florida Suspects Canadian Dumping," THE PACKER, May 25, 1998; "Florida Tomato Growers Allege Unfair Pricing of Canadian Imports," AMERICASTRADE, May 28, 1998; "Commerce to Consider Possible Change to Tomato Agreement," AMERICASTRADE, May 28, 1998. RAIL UPGRADE FOR BORDER Union Pacific Railroad said in early May that it will spend $1.4 billion during the next five years to strengthen its rail network between New Orleans and the Mexico border, including $800 million in track and signal improvements for existing routes and $600 million for increased capacity. Rail traffic has been congested in this corridor, and the Union Pacific plan was a response to a Surface Transportation Board order to make route improvements. Rip Watson, "UP Plans Rail Upgrade to Unclog Mexican Border," JOURNAL OF COMMERCE, May 5, 1998. CANADA WATER TRADE The Nova Group, a small company from northern Ontario, has been granted a provincial permit to draw 10,000 liters of water a day for five years from Lake Superior, in order to bottle the water for export to Asia. Barry Appleton, a Canadian trade attorney and an authority on NAFTA, characterized the permit as "a fundamental change." Appleton said that because there are no restrictions on exporting Canadian water, any ban on export to the United States would amount to an illegal export quota for Asia, in violation of the WTO. Critics of NAFTA have long worried that Canada may be legally obligated to divert water for export to the arid southwestern United States. Scott Morrison, "Canada Water Could Become A Trade Good," FINANCIAL TIMES, May 5, 1998. BROOM CORN RULING Rather than responding directly to a January NAFTA dispute settlement panel ruling that the United Stats violated NAFTA when it imposed emergency tariffs on broom corn brooms in 1996, U.S. Trade Representative Charlene Barshefsky asked the International Trade Commission for a study on how the broom corn industry has done since the imposition of the tariff. The study will be completed by August 11. Mexico may be entitled to a second round of retaliatory tariff increases if the United States does not address the panel's findings. U.S. strategy seems to make a speedyi resolution of the dispute unlikely. The tariffs imposed on Mexican broom corn brooms in November 1996 amounted to approximately a 33 percent tariff on over-quota imports. "Barshefsky Sidesteps Direct Response to NAFTA Panel on Mexican Brooms," INSIDE U.S. TRADE, 5/15/98. ------------------------------------------------------------------------ NAFTA & Inter-American Trade Monitor is produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Edited by Mary C. Turck. Electronic mail versions are available free of charge for subscribers. For information about fax subscriptions contact: IATP, 2105 1st Ave. S., Minneapolis, MN 55404. Phone: 612-870-0453; fax: 612-870-4846; e-mail: iatp@iatp.org. The Spanish version of this news bulletin, El Monitor de NAFTA y Comercio Interamericano, and a searchable archive of all back issues is available at: http://www.sustain.org/bulletins. To unsubscribe to the email version of this news bulletin, send email to: Majordomo@igc.apc.org. Leave the subject blank. In the body of the message say: unsubscribe trade-news. ------------------------------------------------------------------------