TRADE NEWS BULLETIN Volume I Number 209 Thursday, December 10, 1992 _________________________________________________________ GATT News Summary _________________________________________________________ GATT TALKS LIKELY TO CONTINUE INTO 1993 Despite last month's settlement of the US-EC agriculture standoff and pressure from Washington to conclude a deal quickly, negotiations on the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) are most likely to extend into January, and perhaps into the beginning of the Clinton Administration. It has been suggested that President- elect Bill Clinton may express displeasure with the current negotiations and/or call for a delay until his Administration takes office. Robert Reich, chief of the Clinton economic transition team said in an interview that the team is "on the verge" of making recommendations and "it would be entirely appropriate [for Mr. Clinton] to signal how he'll make decisions" concerning GATT. Should Mr. Clinton communicate disapproval of the current agreements, it is assumed that the current round would collapse. "The trading partners would say we won't negotiate to have it undone" in the next Administration, said a senior U.S. trade official. The trade official also cited other problems including European negotiators needing more time to explain the agricultural deal to various EC bodies and Japan's unwillingness to open their markets as the current stumbling blocks. Japanese Chief Cabinet Secretary Koichi Kato said yesterday that Japan is "not opposed" to concluding the Round this month but "we should avoid being in too much of a rush" or the resulting agreement would not be sound. South Korea, Canada, Switzerland and Mexico have joined Japan in opposing the GATT proposal to replace all non-tariff barriers with tariffs, which would then be eliminated over a number of years. Like Japan, South Korea wants to defend its rice market, Mexico its corn and Canada and Switzerland their dairy markets. The five nations have called for a revision of the Dunkel Draft to allow exceptions to the proposed tariffication plan. Such a revision is strongly opposed by the US, EC and other farm produce exporting countries. Sources: Bob Davis, "GATT talks likely to carry into new year: But if shifts course and presses for delay, this Round would fail", WALL STREET JOURNAL, December 10, 1992; "Angry farmers protest any lifting of rice ban", UPI, December 9, 1992; "Japan, 4 other nations oppose tariffication", ASAHI, December 10, 1992. _________________________________________________________ NAFTA News Summary _________________________________________________________ SALINAS TO COUNTER US "SIDE AGREEMENTS" WITH FUND Mexican President Carlos Salinas de Gortari said Wednesday that he intends to ask the Clinton Administration for an unspecified amount of money as part of the North American Free Trade Agreement to help upgrade the Mexican infrastructure and make Mexico more competitive. Comparisons have been made between the fund Salinas has suggested and that created by the EC to help the integration of Portugal, Greece, Spain and Ireland into the European Common Market. Political observers have suggested that Salinas' proposal is meant to counter the "side agreements" on American jobs and environmental concerns which President-elect Bill Clinton plans to implement in conjunction with the NAFTA. "Salinas is saying it takes two to negotiate, that you can come to the table but don't expect you can make all the demands," said Mexican political observer Sergio Sarmiento. Mexico has made no mention of asking Canada for similar financial support. Yesterday, Canadian Trade Minister Michael Wilson ruled out such help from Canada. Source: Bill Cormier, "Mexico-Free Trade", AP, December 10, 1992. _________________________________________________________ NO SUCH THING AS LEVEL PLAYING FIELD - EXPERT There are too many factors, such as currency exchange rates and the different agricultural policies of each nation, to create a truly level playing field on foreign trade, said Steve Taff, a University of Minnesota extension economist. Much of the export conflict results from nations looking after their own agricultural interests. "If we do it, it's called export enhancements. If the Japanese or French do it, we call it dumping." Taff admitted that freer trade tends to lower world commodity prices because federal programs and trade barriers are eliminated, but free trade won't help American farmers because most of the U.S. farmer's markets are domestic. "Decent government policies are more important than NAFTA or GATT to American farmers," he said. Taff urged farmers not to listen to all the expert predictions, but to try to determine how free trade will affect them indivudally. "The real measure of success for export programs is how many farmers stay in business." Source: Gary Gunderson, "Expert: Free trade not always equal," AGRI NEWS, December 10, 1992. _________________________________________________________ Other Trade News JAPAN WARNS CHINA AGAINST DUMPING Japan has warned Chinese exporters of ferrosilicon manganese (a compound used in the steel industry) that anti-dumping duties of between 5 to 26 per cent may be imposed unless they increase prices alleged to be unfairly low. If imposed, these would be the first anti-dumping penalties required by Japan. Japanese investigators have warned Chinese export corporations that evidence exists of unfair pricing and damage caused to Japanese producers. Tokyo is hoping the Chinese exporters will agree to "voluntary restraints" before duties are formally imposed, much like South Korean knitwear exporters who had been accused of dumping by Japan in the past. Investigations were also made into ferrosilicon manganese producers in South Africa and Norway, but it is believed both countries will be cleared of dumping. Source: Robert Thomson, "Japan waves anti-dumping stick at China," FINANCIAL TIMES, December 10, 1992. _________________________________________________________ Other On-line Conferences: trade.strategy - a discussion of trade issues trade.library - a repository of trade information eai.news - a news summary of Latin American trade topics susag.news - a news summary of sustainable agriculture issues Produced by: Lessa J. Scherrer 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:lscherrer@igc.org _________________________________________________________