TRADE NEWS BULLETIN Volume I Number 200 Monday, November 23, 1992 _________________________________________________________ GATT News Summary _________________________________________________________ FRANCE CALLS US-EC FARM DEAL "UNACCEPTABLE" France has not given its endorsement to the recently announced EC- US agriculture agreement and has asked for an emergency meeting of European Community foreign and agriculture ministers to discuss the deal. Agriculture Minister Jean-Pierre Soisson said on Monday that France would probably seek the meeting next week, once the executive European Commission has discussed the deal on oilseeds and farm trade on Wednesday. Soisson called the EC-US deal "unacceptable" in two areas. He objected to the stipulation that 21 percent cuts in subsidized exports be applied on a product-by-product basis instead of an aggregate one. Soisson also criticized the treaty's production limits for oilseeds used for industrial purposes. Soisson said trade issues will be discussed in a Franco-German summit December 3-4, and at the EC summit in Edinburgh December 11. He predicted the Uruguay Round would not be concluded until next spring, after U.S. President-elect Bill Clinton assumes office. Prime Minister Pierre Beregovoy said France would seek backing from other EC nations in its opposition to the agriculture deal. Beregovoy urged the governments yesterday to understand France's position and to remember that France has backed their causes in the past. Beregovoy said France would consider using an obscure EC law to veto the agreement if it has no alternative. "If at the very end, there is no other possibility than for France to refuse, then France will naturally refuse because we consider the fundamental interests of (our) agricultural economy are at stake," Beregovoy said. Source: Paul Taylor, "France Seeks Emergency EC Farm Deal Talks," REUTER, November 23, 1992; "Clinton, Not Bush, Will Finish GATT Talks-Soisson," REUTER, November 23, 1992; Keith Bradsher, "The Breakthrough Was the Result of a Gamble and A Last Minute Idea," NEW YORK TIMES, November 23, 1929, p. C3; Alan Riding, "France Asks Other Nations to Rally Around Its Position," NEW YORK TIMES, November 23, 1992, p. C3. _________________________________________________________ EC-US FARM DEAL WILL NOT LEAD TO QUICK GATT FINISH While the recent EC-US agriculture deal has increased the prospects for completing the Uruguay Round of GATT, a number of other stumbling blocks must be overcome before a global deal can be completed. Even if France does not block the agriculture accord, several other nations -- Japan and South Korea in particular -- must make changes in their agriculture policies before the agriculture section of GATT is completed. Under the proposed GATT deal, all nations would be required to partially open their markets to imports. Japanese Prime Minister Kiichi Miyazawa has repeatedly said that Japan will refuse to end its ban on rice imports. The U.S. rice industry wants the U.S. to push Japan to accept twice the amount contained in the proposal. Even when the agriculture chapter is finished, other contentious areas, such as telecommunications, financial services, maritime services, government procurement contracts and intellectual property rights, remain for negotiators to resolve. Since the EC-US agriculture deal was announced, other GATT member nations have made it clear that they will not be hastily shepherded into concluding the deal. "Just because the U.S. and the Community have blown a whistle overnight in Washington doesn't mean that everyone will troop in the next day and sign an agreement," said B.K. Zutshi, India's ambassador to GATT. Economists have long noted how slowly GATT talks move. Gary Hufbauer, a trade economist at the Institute for International Economics, said the negotiations have been "frozen in a glacier" while the EC and U.S. argued over farm subsidies. Jagdish Bhagwati, a Columbia University economist and senior adviser to GATT, predicted a GATT deal would be completed within months, but that it will not be as far-reaching as predicted when the talks began over six years ago. Source: Bob Davis, "Tough Trade Issues Remain as EC, U.S. Agree on Agriculture," WALL STREET JOURNAL, November 23, 1992, p. 1; Peter Passell, "Although Trade Is Trickier, 'More Is Better' Is Still True," NEW YORK TIMES, November 23, 1992, p. 1. _________________________________________________________ FARMERS NOT HAPPY WITH DEAL French farmers expressed outrage over the completed agriculture deal and began planning for a large protest Wednesday. Meanwhile, Britain's National Farmers Union (NFU) said farmers would benefit from the general economic implications of a world trade deal but they also feared it could lead to further pressure on farming businesses. "It is too soon to quantify any pressure, but we will take up with agricultural institutions all the issues farmers will have to face as a result of the implementation of this agreement," an NFU spokesman said. U.S. farmers were generally happy to have avoided a costly trade war, but soybean farmers were angry that negotiators agreed to let the EC set aside some of its land from oilseed production instead of agreeing to firm production limits. They fear the European farmers could boost the yield on the land they can use. "We're glad we averted a trade war," said Clay Pederson, of the National Farmers' Union, which represents 250,000 farmers. "But we conceded an awful lot." Source: "Brussels Hopeful Over Trade Deal," FINANCIAL TIMES, November 23, 1992, p. 1; "British farmers remain watchful after GATT news," REUTER, November 20, 1992; Scott Kilman, "U.S. Farmers Get Modest Shot in the Arm From Subsidy Compromise with the EC," WALL STREET JOURNAL, November 23, 1992, p. A4. _________________________________________________________ NAFTA News Summary _________________________________________________________ ANALYSTS: NAFTA WILL CUT ASEAN EXPORTS BY $2 BILLION Association of Southeast Asian Nations (ASEAN) can expect a loss of at least $2 billion in export earnings when the North American Free Trade Agreement (NAFTA) goes into effect, analysts said. Malaysia is expected to take the biggest loss, as its sales of clothing and semi-conductor products to the United States decreases. But Mexico's ambassador to Malaysia, Jorge Dominguez, said NAFTA was not intended to create new trade barriers. "NAFTA is to be regarded as a major contribution to vigorously expand global trade, investment opportunities and employment generation," Dominguez told a conference on global trade and finance in Kuala Lumpur. Investment analyst Patrick Lim told reporters that losses could be offset by increased trade and investment between ASEAN and the Far East, especially China, Japan, South Korea and Taiwan. Source: K.T. Arasu, "NAFTA Seen Cutting ASEAN Exports By $2 Billion," REUTER, November 23, 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: 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 _________________________________________________________