TRADE NEWS BULLETIN Wednesday, November 11, 1992 _________________________________________________________ GATT News Summary _________________________________________________________ MACSHARRY BACK AS EC AG NEGOTIATOR In a sign the European Community may be willing to compromise with the United States on a farm trade pact, EC Agriculture Commissioner Ray MacSharry announced he has rejoined the negotiating team and that he will reopen talks with the U.S. MacSharry and Frans Andriessen, the EC's top trade negotiator, might travel to Washington as soon as next week to meet with U.S. Trade Representative Carla Hills and Agriculture Secretary Edward Madigan. White House trade officials said they hoped MacSharry's return as chief EC agriculture negotiator indicates that he has been granted full authority to complete a deal. "The question now is, have they given him wiggle room" to complete a deal, a U.S. official said. Hills told CNN that the "basis for a solution" existed, and that an accord "is in France's best interests." MacSharry abandoned his duties last week and complained that EC Commission President Jacques Delors was interfering with the negotiations. The dispute over oilseeds subsidies, which has blocked completion of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), led the United States last week to threaten 200 percent retaliatory tariffs on $300 million worth of EC imports beginning December 5. European and American officials alike said the U.S. announcement had succeeded in forcing the EC to realize the U.S. was serious on the oilseeds issue. In talks last month in Geneva, U.S. officials said the two sides reached a tentative accord under which the EC would limit its oilseeds production to 8.5 million tons a year, but EC negotiators later withdrew that offer. They are now offering to cut their 13-million ton production to 11 million, an offer U.S. Agriculture Secretary Edward Madigan says is unacceptable. Meanwhile, GATT Director-General Arthur Dunkel received a formal mandate from top trade envoys yesterday to serve as an intermediary in the dispute. Dunkel, who is expected to travel to Washington and Brussels to encourage resolution of the dispute, again asserted that failure in the Uruguay Round "is something which neither the world economy nor participating governments can afford." Source: Stuart Auerbach, William Drozdiak, "Europeans Move to Revive Stalled U.S. Trade Talks; EC's Negotiator Reassigned to End Impasse Over Oil Seeds," WASHINGTON POST, November 11, 1992; Bob Hagerty, Bhushan Bahree, "EC Shows Signs of Compromise in Trade Battle," WALL STREET JOURNAL, November 11, 1992, p. A3; Frances Williams, David Gardner, David Buchan, "World Pleads for End to Transatlantic Row," FINANCIAL TIMES, November 11, 1992, p. 4; Sally Jacobsen, "Europe-Trade," AP, November 11, 1992; Robert Evans, "Dunkel Plans 'Serious Talks' in Trade War Mission," REUTER, November 11, 1992; Regine Brandon, "EC, U.S. to Resume Trade Talks," UPI, November 11, 1992. _________________________________________________________ FRANCE MAY BE READY TO MAKE CONCESSIONS IN GATT France may be ready to support a compromise position in agriculture talks with the United States. While French farmers are still strongly opposed to reduced subsidies, EC pressure is having an impact on French government officials. "I want to reach an agreement," President Francois Mitterand said this week in a televised address. "I want it even more so because the isolation of a country like France, if it were to occur, would be very dangerous for France. We must not get to this point." The EC argues that France's interests would be served better by finishing the round under U.S. President George Bush than President- elect Bill Clinton. London's FINANCIAL TIMES warns that Clinton may "try to make the environment and fair labor standards central issues in the Uruguay Round, whereupon the whole draft agreement could easily disintegrate." Germany and Great Britain have been quite vociferous in encouraging the French to agree to concessions. German Finance Minister Klaus Kinkel on Tuesday expressed confidence France would agree to a deal even if it meant French farmers will "storm the city halls." Meanwhile, British Prime Minister John Major told parliament that he would like to see a completed GATT deal "in a matter of weeks at the outside." But, Mitterand did not help Anglo-French relations by criticizing Britain's decision to delay ratification of the Maastricht treaty. Major angrily responded that France was simply trying to divert attention from its indecisiveness over GATT. "The crucial immediate issue before Europe is achieving a GATT settlement and avoiding a trade war," Major said. Major also received a letter from the 50 Commonwealth nations urging him to personally work for a conclusion of the Uruguay Round. France received some support from visiting Italian Prime Minster Giuliano Amato. Amato told a news conference in Paris that France was not isolated in its position on agricultural trade. "There isn't a French problem ... There is a problem between the European Community and the United States," he said. Source: "Trade Threats," FINANCIAL TIMES, November 5, 1992; Roger Cohen, "France's Choice on Trade," NEW YORK TIMES, November 11, 1992, p. A1; Peter Bale, "Major Slams Mitterand Over GATT and Maastricht," REUTER, November 10, 1992; "Kinkel Confident France Will Agree to GATT Compromise," REUTER, November 10, 1992; "France Italy Close Ranks on GATT," REUTER, November 10, 1992. _________________________________________________________ Other Trade News BRIEF OUTLINE OF ASEAN FREE TRADE AREA: The six-member Association of Southeast Asian Nations (ASEAN) will launch the ASEAN Free-Trade Area (AFTA) beginning January 1, 1993. Country Population GNP Per Capita GDP Brunei 372,000 $4.4 billion n/a Thailand 54.9 million $81.1 billion $1,700 Indonesia 191.3 million $104.0 billion <$1,000 Malaysia 17.1 million $42.5 billion $2,600 Philippines 66.6 million $46.4 billion <$1,000 Singapore 2.7 million $42.4 billion $14,500 Total population: 333 million Source: Paul Blustein, "Southeast Asia Joins the Bloc Party," WASHINGTON POST, November 10, 1992, p. B1. _________________________________________________________ Resources: 1. In a cover article, the December 1992 edition of THE NEW TEAMSTER argues that "free trade" destroys good jobs and that NAFTA would not improve working and living conditions in Mexico. Subscriptions are $12 a year. Single copies are available for $2. THE NEW TEAMSTER, official magazine of the International Brotherhood of Teamsters, AFL-CIO, 25 Louisiana Ave. NW, Washington, DC 20001. _________________________________________________________ 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: Kai Mander 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@igc.org _________________________________________________________