From nafta_monitor@iatp.org Fri Feb 5 17:22:04 1999 Date: Fri, 5 Feb 1999 15:15:29 -0600 From: NAFTA Monitor To: nafta-news@igc.org Subject: NAFTA & Inter-American Trade Monitor Vol. 6, Number 2 ================================ Date Posted: 02/05/1999 Posted by: nafta_monitor@iatp.org ================================ ------------------------------------------------------------------------ NAFTA & Inter-American Trade Monitor - Vol. 6, Number 2 February 05, 1999 ------------------------------------------------------------------------ Table of Contents - PROBLEMS WITH NAFTA-NEWS LIST - CANADIAN BGH BAN CONTINUED - U.S. BLINKS ON BANANAS - YANOMAMI CHARGE BIO-PIRACY - TRADE AND BIO-SAFETY AGREEMENTS - MEXICAN BUDGET CUTS AG EMPHASIS - CORN TRQ EXCEEDED - TOUGH TIMES FOR TRADE LEGISLATION - RESOURCES PROBLEMS WITH NAFTA-NEWS LIST Dear Nafta-News subscribers: Last week there were some problems with the list serve that distributes the electronic version of our news bulletin. We apologize for any inconvenience this may have caused. To unsubscribe to Nafta News send email to: Majordomo@igc.apc.org In the body of the message say: unsubscribe nafta-news Thanks for your patience. Cordially yours, The List Administrator CANADIAN BGH BAN CONTINUED In mid-January, Health Canada officials ruled that a ban on the use of recombinant bovine somatotrophin, the bovine growth hormone known as BGH or rBST, will continue. The Canadian ruling came three months before a temporary European Union ban on rBST is due to expire. While the panel considering BGH health risks to humans found no conclusive evidence of risk, another panel found that BGH does adversely affect the health of dairy cows, causing a 50 percent increase in lameness, an 18 percent increase in infertility, and a 25 percent increase in mastitis. "It's a decision that's based on more than nine years of comprehensive review," said Joel Weiner, an acting director of the Health Protection Branch. The Canadian government asked for reports from two outside panels after its own scientists testified before a Canadian Senate committee that they had been pressured by the chemical industry and politicians to approve BGH. Health Canada scientists agreed with the findings of the two panels and with the continuance of the ban on BGH. Ray Mowling, a vice president of Monsanto Canada said that his company, which has invested millions in BGH research and development, will respond to the decision and charged that the investigative reports were full of errors. Mowling noted that Monsanto has the right to appeal the decision to the department or to take the case to court or to challenge the ruling under NAFTA. BGH was approved for use in the United States in 1993 and has been used in Mexico and Brazil since 1988. The U.S. Center for Food Safety (CFS) and other consumer groups have petitioned the U.S. Food and Drug Administration to reverse its 1993 decision. The Codex Alimentarius, an international food standards agency, will meet this summer to consider approval of BGH. "Canada Upholds Hormone Ban; Could Rekindle Debate With US," ASSOCIATED PRESS, January 19, 1999; Mark Bourrie, "Canada Rejects Bovine Growth Hormone," INTERPRESS SERVICE, January 17, 1999; Kelly Morris, "Who's Crying Over Spilt Milk?" THE LANCET, January 23, 1999; Barry Wilson, "BST Decision Called Good and Bad," WESTERN PRODUCER, January 28, 1999; Scientists' Complaints About BST Dismissed," WESTERN PRODUCER, January 7, 1999; Barry Wilson, "BST Rejected; Issue Not Dead," WESTERN PRODUCER, January 21, 1999; Barry Wilson, "Dairy Producers Call BST Rejection a Victory," WESTERN PRODUCER, January 21, 1999; "Hormone Refused Over Cow Health Issues," WESTERN PRODUCER, January 21, 1999; Ed Maixner, "U.S., Canada Divided on Safety of BST to Cows," FEEDSTUFFS, February 1, 1999. U.S. BLINKS ON BANANAS Half a billion dollars in U.S. trade sanctions against half a billion dollars of European Union exports, scheduled for implementation on February 1, have been postponed until at least March 3. The delay, characterized as a victory by U.S. officials, came after a week of lobbying by Japan, Canada, India and other countries not directly involved in the U.S.-EU banana dispute. The other countries argued that the U.S. request for sanctions could not be considered until after a WTO panel had ruled that the EU's amended banana regime was illegal. The United States says that the European Union's new banana regime, adopted after WTO rulings ordering the EU to end unfair discrimination against U.S. distributors of Latin American bananas, does not constitute full compliance with WTO rulings. The EU says it does. The European Union formally notified the WTO disputes settlement panel that it intends to ask for a ruling on U.S. imposition of sanctions under Section 301 (of the U.S. Trade Act) at the February meeting of the dispute settlement body. The EU move came after the United States sought WTO approval of its sanctions in late January. Frances Williams, "US Postpones EU Sanctions," FINANCIAL TIMES, January 30, 1999; "EU Mounts WTO Challenge to U.S. Trade Sanctions Law," REUTERS, January 29, 1999; "Legal Gaps in WTO Fan Flames of EU/US Banana Dispute," INTERPRESS SERVICE, January 13, 1999; Chakravarti Raghavan, "US-EC Raise Stakes in Banana War," INTERPRESS SERVICE, January 22,1999; Chakravarti Raghavan, "US-EC Banana Saga Continues With No Compromises," INTERPRESS SERVICE, January 28,1999; Earl Moxam, "Caribbean Bands Together in Banana Dispute," REUTERS, January 28, 1999; Robert Evans, "WTO Chief Pushes for End to Banana Trade Deadlock," REUTERS, January 29, 1999; "WTO Members Avert Procedural Crisis on Bananas; Will Meet Again Today," INSIDE US TRADE, January 29, 1999. YANOMAMI CHARGE BIO-PIRACY The Venezuelan Ministry of the Environment signed a contract with the University of Zurich in January, permitting the university access to genetic resources in the Yanomami area. Guillermo Guevara, coordinator of the Organization of Indigenous Peoples of the Amazon State (ORPIA), denounced the agreement because it was arrived at without notification to or approval of the Yanomami population that lives in the zone. Guevaro said that the agreement amounts to theft of the ancestral knowledge and bio-diversity of the community, because the university plans to patent life forms developed by the indigenous people over generations. "ORPIA hasn't endorsed the agreement because it considers that it's another version of plundering our land's bio-diversity and our people's ancestral heritage," said Guevaro. "Amazon Basin Indigenous Community (COICA) groups have taken a decision against the westernized patent system. (Cartagena Decision No. 391)." The agreement provides for payments to indigenous groups that cooperate with the university's activities and to the Ministry of the Environment. Mireya Tabuas, "Biopirataria Suiza en Area Yanomami," EL NACIONAL (Caracas), January 26, 1999; "Yanomami Indian Elders Accuse Swiss University of Hidden Agenda," VENEWS, January 27, 1999. TRADE AND BIO-SAFETY AGREEMENTS Some 150 signatories to the Convention on Biological Diversity are negotiating a Biosafety Protocol that would affect trade in products containing genetically modified organisms. The United States has not ratified the Convention on Biological Diversity, so it cannot vote on the Protocol, which is scheduled for adoption in February. The United States wants to keep the scope of the protocol narrow, so that it applies only to GMOs that might be planted in the environment, not to food or other products that will be consumed directly by animals or humans. A number of developing countries want the protocol to provide for labeling of any products containing GMOs. The purpose of the protocol is ensuring the safety of existing species by restricting import of agricultural products that might threaten those species. A December 14 industry letter to President Clinton objects to the inclusion of food, beverage and consumer products in the biosafety protocol, alleging that such inclusion would conflict with WTO rules proscribing any regulation not based on science. A December 21 letter signed by more than 70 NGOs and individuals advocated agreement to a "rigorous protocol based on the Precautionary Principle, which the United States endorsed at the 1992 Earth Summit." "U.S. Fights to Reduce Impact of Biosafety Protocol on GMO Trade," INSIDE US TRADE, January 8, 1999. MEXICAN BUDGET CUTS AG EMPHASIS Measured as a percentage of the country's Gross Domestic Product, Mexico's 1999 agriculture development budget is at the lowest level in the last 25 years and is 20% less the 1998 agricultural development budget. The 1999 Mexican federal budget calls for agriculture to receive approximately four percent of total expenditures, compared to 5.18 percent in 1998 and up to 10 percent in past decades. The lower agricultural development budget comes as staple food prices are being allowed to rise. The quasi-public company LICONSA, which assists the poor with low-cost milk, increased its milk prices from 2.00 to 2.50 pesos per liter in mid- January. Lifting of price controls resulted in tortilla prices increasing from 3 pesos per kilogram to as much as 7 pesos at the beginning of January. Corn tortillas account for about half of the daily caloric intake of poor Mexicans. By late January, corn flour producer and tortilla association representatives said they would voluntarily limit the price of tortillas to 3.5 pesos per kilogram. "Lower Ag Budget for 1999," FUTURES WORLD, January 21, 1999; "LICONSA Increases Milk Prices to the Poor," FUTURES WORLD, January 21, 1999; Ginger Thompson, "Tortilla Rises: Must Belts Tighten?" NEW YORK TIMES, January 4, 1999; John Ward Anderson, "Tortilla Price Hike Hits Mexico's Poorest: Five Years After NAFTA, Trickle-Down Has Yet to Trickle," WASHINGTON POST, January 12, 1999; Dudley Althaus, "Malnutrition Gnaws at the Children of Mexico," HOUSTON CHRONICLE, December 27, 1998; Robert Randolph, "Mexico Untethers the Price of Corn Tortillas," JOURNAL OF COMMERCE, January 8, 1999; "Voluntary Pact Ends Tortilla Price Surge in Mexico," MILLING AND BAKING NEWS, January 19, 1999. CORN TRQ EXCEEDED According to Mexico's Secretariat of Commerce and Industrial Development (SECOFI), import certificates for 5.862 million metric tons (MMT) of U.S. corn were issued for 1998. The NAFTA tariff rate quota (TRQ) is only 2.815 MMT of U.S. corn. Not all of the import certificates were used, however. SECOFI said that 4.375 MMT of corn was imported from January-November and estimates that the final 1998 figure will be no more than 5 MMT. The United States was apparently the sole supplier of imported corn to Mexico in 1998. On December 11, SECOFI's Corn Allocation Committee decided to delay the initial allocation of 1999 import permits until January, in order to obtain more information on the results of Mexico's corn harvest, which was delayed due to late rains. According to the Foreign Agricultural Service of the U.S. Department of Agriculture, U.S. corn exports are expected to increase by about 5.8 million tons in 1999 to a global total of 43.5 million tons, but the average price for export corn for 1998-1999 will probably fall 13 percent to $98 a ton. "Mexico Reports 1998 Corn Imports Exceed NAFTA TRQ," FUTURES WORLD, January 13, 1999; "Farmers Seek Spark in Grain Export Bottom Line," JOURNAL OF COMMERCE, January 27, 1999. TOUGH TIMES FOR TRADE LEGISLATION In addition to seeking fast-track trade negotiating authority, the Clinton administration trade agenda for 1999 includes initiatives ranging from new trade preferences for Africa and the Caribbean Basin to the opening of a new round of global trade negotiations to reduce tariffs in Seattle in November. Fast-track authority would allow the president to negotiate trade deals that the Senate would have to accept or reject without amendment. U.S. public opposition to expanded trade has increased with recent expansion in steel imports from Japan, Russia, Korea and Brazil. Japan's steel exports to the United States grew 500 percent last year. The 1998 U.S. trade deficit is forecast at a record-breaking $170 billion, and some analysts predict a1999 deficit approaching $300 billion. Fast-track negotiating authority still faces an uphill battle in Congress, where Democrats and a few Republican allies want to see inclusion of labor and environmental protection provisions. Even if the fast track legislation authorized inclusion of such provisions in trade agreements, other countries could be expected to oppose their inclusion. Mexico, for example, continues to oppose any environmental protection provisions in trade agreements, arguing that dialogue with environmental and other groups is best done on a domestic level and has no place in international trade accords. Jim Lobe, "Clinton Faces Tough Fight for Trade Agenda," INTERPRESS SERVICE, January 27, 1999; Kevin G. Hall, "Mexico Adamant About Keeping Environment Out of Trade Talks," JOURNAL OF COMMERCE, January 26, 1999; Kevin Galvin, "Clinton Seeks Trade Authority," ASSOCIATED PRESS, January 28, 1999; "Industry Groups Cautious on Push for Fast Track This Year," INSIDE US TRADE, January 29, 1999; "Lott Urges CBI Action This Year; USTR to Hold Off on Proposal," INSIDE US TRADE, January 29, 1999; William Roberts, "Executives Lobby to Pass Fast-Track," JOURNAL OF COMMERCE, January 28, 1999; William Roberts, "Clinton Seeks Consensus on Freer Trade," JOURNAL OF COMMERCE, January 21, 1999. RESOURCES The AGRIBUSINESS EXAMINER: Monitoring Corporate Agribusiness From a Public Interest Perspective. A.V. Krebs, Editor\Publisher. Weekly newsletter available by email. Send request to: avkrebs@earhlink.net. No subscription fee, but donations may be sent to A.V. Krebs, P.O. Box 2201, Everett, Washington 98203-0201. ------------------------------------------------------------------------ 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.newsbulletin.org To subscribe/unsubscribe to the email version of this news bulletin, send email to: Majordomo@igc.org. Leave the subject blank. 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