TRADE NEWS BULLETIN Tuesday, December 8, 1992 __________________________________________________ GATT News Summary __________________________________________________ EC FARM, FOREIGN MINISTERS MEET; PROTESTS CONTINUE By the end of yesterday's joint meeting of European Community farm and foreign ministers, six countries backed France's contention that farm subsidy reductions agreed to by EC commission negotiators could require output cuts beyond the May reforms to the EC's common agricultural policy (CAP). The written documents embodying the controversial U.S. - EC agreement, widely regarded as a breakthrough in talks to liberalize world trade under the General Agreement on Tariffs and Trade (GATT), were signed last Friday. Representatives from Italy, Spain, Belgium, Greece, Ireland and Portugal all supported the French stance. Belgium Prime Minister Jean-Luc Dehaene expressed fears that the Commission had made a mistake in concluding a farm deal with the U.S. before other areas of the GATT negotiations are completed. "We have no idea of the results in other sectors, such as services, but we have made concessions in agriculture," he said. The results of the meeting prompted French farm minister Jean-Pierre Soisson to say the European Commission would risk a major crisis in the EC if they resumed multilateral GATT farm trade talks before EC farm ministers had fully evaluated the compatibility of the U.S. - EC deal with the CAP. Commission officials denied Soisson's implication that yesterday's meeting resulted in a rebellion against the Commission, but conceded that a resumption of formal GATT farm negotiations is unlikely before farm ministers examine the deal December 14. More than 50,000 farmers marched through Bonn today ringing cowbells and burning haystacks in the latest massive public protest against the agreement. Demonstrators protested outside the Agriculture Ministry, the Economics Ministry, the U.S. Embassy and the EC representation. A statement delivered to EC and German officials said the U.S. - EC deal threatened the very existence of German farmers. German Farmers Association President Constantin Freiherr Heereman, protected by umbrellas from eggs thrown by some protesters, addressed a large crowd. "GATT could be a windfall for Germany... but this round of GATT is a misfortune for German farmers. Europe is giving in to recklessness, blackmailing and use of power," he said. Two French textile organizations have also expressed skepticism that a GATT deal would be in their best interests. The Union Francaise des Industries de L'Habillement (UIH) and the Union de Industries Textiles (UIT) have broken with the country's employers' group, Conseil National du Patronat Francais (CNFP), to ask the French government to block any GATT deal unfavorable to the textile industry. Source: "Italy Says EC Should Not Ride Roughshod Over Farmers," REUTER, December 8, 1992; "France Wants Farm Put on GATT Backburner," REUTER, December 7, 1992; "Ireland WIll Oppose US-EC Trade Accord" JOURNAL OF COMMERCE, December 7, 1992; Belgium Criticizes EC GATT tactics," REUTER, December 8, 1992; "France Says EC Must Freeze GATT Farm Trade Talks," REUTER, December 8, 1992; "Commission Says GATT Farm Talks Not Frozen," REUTER, December 8, 1992; Patrick Moser, "Fifty Thousand Farmers Protest EC-US Agriculture Agreement," UNITED PRESS, December 8, 1992; Tara Patel, "Two French Textile Groups Call for GATT Veto," JOURNAL OF COMMERCE, December 7, 1992. __________________________________________________ CANADIAN, JAPANESE GROUPS AGAINST TARIFFICATION Canadian supply-managed egg, poultry and dairy groups issued a joint statement December 7 with JA Zenchu (Central Union of Agricultural Co-operatives of Japan) declaring firm support for their countries' opposition to comprehensive tariffication as the basis for a GATT agreement. Representatives said comprehensive tariffication would seriously harm family farming throughout the world. Japanese farm minister Masami Tanabu recently left to visit the U.S. and Europe to try to obtain understanding for Japan's food security policy, under which it bans all rice imports. The policy is designed to protect small farmers and maintain the nation's self sufficiency in rice. European Commission officials have accused Japan of using the U.S. - EC dispute over agricultural subsidies as a shelter for its own controversial policies. Japan has a trade surplus with most of the 12 EC states. Source: Joint Statement of Canada's Supply-Managed Commodity Groups and JA Zenchu On Comprehensive Tariffication, December 7, 1992; "Japanese Farm Minister to Discuss Rice in U.S., Europe, UNITED PRESS, December 8, 1992; Bruce Barnard, "EC Accuses Japan of Shirking Trade Responsibilities," JOURNAL OF COMMERCE, December 7, 1992. __________________________________________________ NAFTA News Summary __________________________________________________ MEXICO SEEKS EC-STYLE DEVELOPMENT FUND Mexican President Carlos Salinas de Gortari recently said Mexico will seek an economic support fund similar to that created for the less-developed states in the European Community to support its entry into the North American Free Trade Agreement. Both Salinas and a spokesman for U.S. President- elect Bill Clinton indicated that talks on this issue would not get serious until Clinton's economic team is in place. Salinas said he intends to use parallel agreements on labor and environmental issues, proposed by Clinton as a condition for his support for the NAFTA, to obtain new concessions for Mexico. A plan developed by a group of Mexican and U.S. economists calls for the creation of a North American Development Bank and Adjustment Fund to work on problems such as environmental clean-up of the border regions, rural development in Mexico and job retraining projects in the U.S. and Canada. University of California professor Raul Hinojosa Ojeda estimates the project would require start-up funds of $5 billion. Source: Matt Moffett and Diana Solis, "Mexico Will Ask U.S., Canada for Aid to Smooth Its Entry to Free Trade Pact," WALL STREET JOURNAL, December 8, 1992, p. A11. __________________________________________________ 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 _________________________________________________________