TRADE NEWS BULLETIN Tuesday, November 17, 1992 __________________________________________________ GATT News Summary __________________________________________________ FRENCH CONCERNS BRUSHED ASIDE BY EC, TALKS TO RESUME EC Farm Commissioner Ray MacSharry yesterday called French claims that getting a U.S. - EC farm deal would require EC farmers to idle more than one third of their land "absolute nonsense." Other EC ministers gave MacSharry the go-ahead to resume talks despite French objections that a deal would be inconsistent with the EC's Common Agricultural Policy (CAP). British Farm Minister John Gummer said, "There was a very clear agreement by the ministers that they want a successful conclusion in the (General Agreement on Tariffs and Trade)." French Farm Minister Jean-Pierre Soisson disagreed with Gummer's assessment of the talks, calling it "political manipulation." EC farmers presented the farm ministers with bags of wheat to protest what they fear will be an unfair deal. "The proposed deal is completely unbalanced in favor of big farmers who produce the surpluses dumped on world markets," said Paul Nicholson of the European Farmers Coordination, an organization representing family-owned farms in 11 countries. The farmers are concerned that cereal substitutes from the U.S. will not be adequately addressed in negotiations, tipping the deal in favor of the U.S. GATT chief Arthur Dunkel met yesterday with U.S. Trade Representative Carla Hills and Agriculture Secretary Edward Madigan in preparation for Wednesday's resumption of talks. Dunkel claimed he would serve not as a mediator but as a representative of third parties in the GATT negotiations stalled by the dispute. In the meeting, Madigan sipped French white wine of the sort the U.S. has threatened with 200% duties if the talks fail. Dunkel ordered a California red. Source: Jeremy Lovell, "France Tries But Fails to Stall EC-US Talks," REUTER, November 16, 1992; "French Minister Says Deal With U.S. Would Harm EC," REUTER, November 17, 1992; "EC Farmers Give Farm Ministers Wheat in GATT Deal Protest," REUTER, November 17, 1992; "GATT Chief in U.S. Talks," NEW YORK TIMES, November 17, 1992; "U.S. Farm Secretary Sips French Wine at Trade Meet," REUTER, November 16, 1992. __________________________________________________ EC TO COMPLETE BANANA DEBATE EC farm ministers were scheduled to complete their debate on a new trade regime for bananas today. Germany is among the opponents of a proposal which would impose quotas designed to favor bananas produced in the EC, Africa, the Caribbean and the Pacific over cheaper bananas from Latin America. Many of the favored countries are former colonies and produce bananas in smaller production units than the Latin American countries. France, Spain and Britain are among the proponents of the plan, which honors commitments made to banana- dependent developing countries under the Lome Convention. According to sources, no progress was made in talks held Monday. Source: "EC Farm Ministers Mark Time on Bananas," REUTER, November 16, 1992. __________________________________________________ JAPAN KEEPS RICE IMPORT BAN, U.S. MAY CHALLENGE Japan will increase rice production to build its reserves up to acceptable levels rather than lift its rice import ban. Japan defends the ban on national food security grounds, a position that could create an obstacle to the conclusion of the GATT talks even if the U.S. and EC resolve their differences on agriculture subsidies. The U.S. Rice Millers Association may file a complaint against the ban if the GATT talks fail. Source: "Japan to Keep Rice Import Ban, U.S. May Move," REUTER, November 13, 1992. __________________________________________________ NAFTA News Summary __________________________________________________ MULRONEY TO WORK WITH CLINTON ON FAST NAFTA APPROVAL Canadian Prime Minister Brian Mulroney said President-elect Bill Clinton has expressed support for the Canadian-U.S. free trade agreement negotiated in 1989. Mulroney said, "We will now be working with the new Clinton administration to ensure the NAFTA is implemented as quickly as possible." Although Mulroney said the North American Free Trade Agreement will aid the Canadian economy, the pact is unpopular among Canadians, where the U.S.- Canada free trade agreement is blamed for the loss of hundreds of thousands of jobs. Higher prices for drugs is one of the effects Canadians would feel under the NAFTA. An intellectual property rights provision of the agreement would require harmonization of Canadian drug patenting laws with those in the U.S., which allow companies to produce a drug exclusively for 17-20 years rather than the 7-10 allowed under Canadian law. The resulting rise in prices will further increase costs for Canada's already financially strapped universal health care system. Source: "Canada to Work with Clinton on Fast NAFTA Approval," REUTER, November 16, 1992; Milt Freudenheim, "For Canada, Free Trade Accord Includes Higher Prices for Drugs," NEW YORK TIMES, November 16, 1992. __________________________________________________ Other Trade News __________________________________________________ WEB OF PACIFIC TRADE ALLIANCES COMPLICATED Amid doubts over the future of GATT talks, countries around the Pacific rim are looking to regional alliances to secure their places in the world economy. Australia has said it would back Japan in any future trade dispute with the U.S. at the same time as it promotes the formation of the Asia Pacific Economic Co-operation (APEC) process. APEC includes the U.S., Canada, Japan, Taiwan, Hong Kong and China as well as Southeast Asian nations working to set up the ASEAN Free Trade Area (AFTA) by 2008. The ASEAN countries, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, would not include Australia in the AFTA. Indonesian officials have complained that Apec is overly dominated by the U.S. To be implemented, the AFTA will have to overcome problems created by the volatility of several ASEAN currencies. Japan has chosen to stay distant from regional agreements as it concentrates more on North American and European markets, while the U.S. is seeking to extend the NAFTA east as well as south. The economies of China and South Korea are more linked in spite of recent protectionist moves by South Korea. Meanwhile, the recent election of Bill Clinton makes the future of relations between the U.S. and China uncertain. Clinton has threatened to revoke China's Most Favored Nation status if China does not address human rights concerns. Source: Kevin Brown, "All Eyes on GATT Outcome," FINANCIAL TIMES, November 16, 1992; Ho Kay Tat, "Currency Volatility May Scuttle ASEAN Free Trade," REUTER, November 13, 1992; Gerald F. Seib, "Clinton Could Get Tough With China Without Hurting Ties, Analysts Say," WALL STREET JOURNAL, November 17, 1992; Damon Darlin, "No Trade Relationship With China Is Changing South Korea's Economy," WALL STREET JOURNAL, November 17, 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@igc.org ________________________________________________________ _