TRADE NEWS BULLETIN Tuesday, December 1, 1992 Volume I, Number 203 __________________________________________________ GATT News Summary __________________________________________________ PROJECTED GATT GAINS CALLED "THEORETICAL" The much cited OECD projection that a completed Uruguay Round GATT agreement would increase world output by $200 billion was "highly theoretical," and could be misleading, according to OECD (Organization for Economic Cooperation and Development) Secretary General Jean-Claude Paye. Speaking today before an association of French journalists, Paye said the report generating the projection was ... "a pretty theoretical study, and does not hide the fact." He said the media underreported the fact that the gains would take ten years to achieve and that developing countries could be hurt by a GATT deal. Nonetheless, Paye said an agreement in the current round of discussions would increase confidence and thus be welcome. Last week, French Trade and Industry Minister Dominique Strauss-Kahn also downplayed the prospect that a completed GATT deal would bring immediate economic recovery. Noting that the 1979 GATT deal failed to significantly boost world trade, Strauss-Kahn also criticized the U.S. negotiating position and argued that several issues affecting trade are not likely to be adequately addressed in the GATT talks, such as currency movements. "We make fools of ourselves when we negotiate three-basis-point cuts in customs duties over five years when the dollar can fluctuate by 10 percent in a month," he said. Top trade negotiators agreed last week to aim to reach a political agreement on the GATT by the end of this year, with European officials arguing that parallel talks must be held on all 15 sectors of the round to achieve this goal. Source: "Senior OECD Official Plays Down Potential Gains From GATT Deal," REUTER, December 1, 1992; "Expected Growth Deal is a Joke - France," REUTER, November 26, 1992; Robert Evans, "Uruguay Round Trade Accord Sought by End of Year," REUTER, November 26, 1992. __________________________________________________ INTERNATIONAL FARMER PROTEST OF US-EC DEAL Farmers from around the world came together in Strasbourg today for a mass demonstration against the U.S.-EC agreement on agricultural export subsidies. Organizers were expecting a final turnout of 70,000 people. The majority are French, but all other EC states, Austria, Switzerland, Canada, Japan, South Korea and the U.S. are also represented. Effigies of the European and U.S. trade negotiators were burned at the start of the march. The organizers made a point of not routing the march by the U.S. Consulate or the EC Parliament building in an effort to avoid violence, but some demonstrators did clash with riot police. The European Community farmer organization, COPA, estimates that half of the Community's 10 million farm workers could lose their jobs under a GATT agriculture agreement, charges dismissed by the European Commission. France has been attempting to rally opposition to the US-EC deal from other ministers to avoid having to attempt a veto. Italy and Belgium have so far both expressed reservations about the deal. French Agriculture Minister Jean-Pierre Soisson said Monday that Britain might call an emergency meeting on December 7 to discuss the U.S. - EC accord, but British officials have denied that any plans existed for such a meeting. Although the U.S. delegation to the Strasbourg protest is small, a letter from the National Family Farm Coalition to EC Agriculture Council President John Gummer further indicates that not all U.S. farmers are in favor of the official U.S. position on GATT. The letter reads in part, We acknowledge the necessity of and benefits of international trade, but the 'terms' of agricultural trade must be based upon the expressed best interests of every country's farmers, not merely upon the demands of the international trading companies or of particular political interests. The letter concludes with a statement that the Coalition would work against U.S. Congressional approval of any agreement that fails to ensure the right of countries to determine their own food and farm policies. Source: Emanuel Jarry, "Farmers Burn Effigies, Clash with Police in GATT Demo," REUTER, December 1, 1992; William Dawkins, "Big Farm Protest Planned," FINANCIAL TIMES, December 1, 1992; Peter Blackburn, "EC Farm Body Sees Massive Job Losses After GATT," EC Commission Denies Farm Job Losses After GATT," REUTER, November 30, 1992; Richard Wallis, Italians Sitting on Fence over GATT," REUTER, November 30, 1992; Britian Denies Plans for EC Farm Ministers Meeting," REUTER, December 1, 1992; National Family Farm Coalition letter to John Gummer, President, EC Agriculture Council, November 26, 1992. __________________________________________________ FRENCH STEEL MAKER WANTS TO TAKE U.S. TO GATT French state-owned steel maker Usinor Sancilor urged the EC to take the U.S. to GATT for imposing countervailing duties on steel imports. The duties range from less than one percent to nearly 60% and affect 12 countries. A European Commission spokesman said the imposition of the duties was "not necessarily fruitful for the climate of the general GATT negotiation." The U.S. Commerce Department said France was subsidising exports of cold-rolled carbon steel by 26%. Usinor Saoncilor claims that although the state controls the company, the government has not given it aid since 1986. Belgium, Germany, Italy, Spain and Britain are the other EC countries affected by the duties. Source: "EC Says Steel Duties Will Close U.S. Markets," REUTER, December 1, 1992; "French Steel Firm Wants U.S. Taken to GATT," REUTER, DEcember 1, 1992. __________________________________________________ JAPAN MAY COMPROMISE ON RICE IMPORTS Japanese Chief Cabinet Secretary Koichi Kato told a new conference the government might have to make a "political decision" on a GATT agriculture deal negotiated between the U.S. and EC that would end Japan's ban on rice imports. This statement cast doubt on assurances made earlier by the Agriculture ministry contradicting a report by the paper Asahi Shimbun that the government had decided to replace rice import bans with tariffs. A U.S. official said, "The farm trade negotiations are over, and Japan simply didn't participate. Japan cannot come in and think they can open negotiations again." Source: "Japan May Be Considering Rice Imports Compromise," REUTER, December 1, 1992; "U.S. Official Says No Deals on Rice with Japan," REUTER, December 1, 1992. __________________________________________________ Other Trade News 1. Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Uzbekistan and Afghanistan have formally signed onto the Economic Cooperation Organization (ECO), joining founding members Iran, Pakistan and Turkey. The ECO, now the world's biggest economic bloc after the EC, has cut duties on a small range of goods to 10% and is setting up an investment bank. Pakistan Prime Minister Nawaz Sharif said, "The most important and dynamic mix seems to consist of massive investments in infrastructure and the encouragement of the private sector which can bring together resources and act as a multiplier for development." Source: Jane Macartney, "Central Asian Nations Form Vast Economic Bloc," REUTER, November 28, 1992. __________________________________________________ Other On-line Conferences: trade.strategy - a discussion of trade issues trade.library - a repository of trade information eai.news - a news summary on Latin American trade topics susag.news - a news summary of sustainable agriculture issues Produced by: Hannah Holm The Institute for Agriculture and Trade Policy (IATP) 1313 Fifth Street SE, Suite #303 Minneapolis, MN 55414-1546 USA Telephone:(612)379-5980 Fax:(612)379-5982 E-Mail:kmander@.org