TRADE NEWS BULLETIN Tuesday, December 22, 1992 __________________________________________________ GATT News Summary __________________________________________________ NEW GATT OBSTACLE: U.S. NEGOTIATING STANCE U.S. moves to revoke earlier concessions in such areas as industrial tariffs and financial services have provoked European accusations that the U.S. is backtracking in GATT negotiations. The charge, along with a number of other still-unresolved issues, casts doubt on whether a completed world trade deal will be reached by mid-January, a goal U.S. President Bush and British Prime Minister John Major promised to aim for over the weekend. U.S Trade Representative Carla Hills argued that the U.S. position was justified by the "limited results" the U.S. achieved in its recent deal with the EC over farm subsidies. Assistant U.S. Trade Representative Kathleen A. Lyndon said all blame for delay in the trade talks rests with the French, "who have made no secret of their goal to hold hostage the entire world trade system to get past their March election." French Agriculture Minister Jean Pierre Soisson claimed victory for France in its efforts to resist the terms of the U.S. - EC agricultural deal, saying, "We are winning the battle over GATT. I don't think the Washington draft agreement can be implemented in the present circumstances." Soisson told Reuter in an interview that points of contention remain between the U.S. and EC over whether export subsidy cuts of 21% and guaranteed 5% EC market access by 1999 are to be accross the board for all products, or whether bigger percentages for some goods can be offset by smaller percentages in others. On Monday, French Foreign Minister Roland Dumas accused the European Commission of overstepping its negotiating mandate by presenting its formal offers on subsidy cuts at GATT talks in Geneva last week without obtaining approval from the ministers. Frans Andriessen, EC Commissioner for external relations and trade, hotly denied that the Commission action was innappropriate. Andriessen and EC agriculture commissioner Ray MacSharry will leave this week to make way for members of the new EC Commission. Former EC competitiveness commissioner Sir Leon Brittan of Britain will take over Andriessen's post, and Luxembourg farm minister Rene Steichen will replace MacSharry. Source: William Drozdiak, "U.S. Accused of Retreating in Trade Talks," WASHINGTON POST FOREIGN SERVICE; Juliette Rouillon, "France Winning GATT Tussle, Farm Minister Says," REUTER, December 22, 1992; "France Repeats Trade Charges Against EC Commission," REUTER; "Britain Joins Chorus Against U.S. Stance on GATT," REUTER, December 21, 1992; Andres Wolberg-Stok, "EC's Andriessen-MacSharry GATT Duo Bows Out," REUTER, December 22, 1992; Lionel Barber, "French Threat to Trade Accord," FINANCIAL TIMES, December 22, 1992; John Zaracostas, "Dunkel Warns Trade Negotiators of Race on Time," JOURNAL OF COMMERCE, December 21, 1992. __________________________________________________ LATIN AMERICAN NATIONS PROTEST BANANA QUOTA Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Nicaragua, Panama and Venezuela have signed a statement asking the EC to review its banana quota agreement. The EC Farm Council last week adopted a 2 million ton quota on Latin American banana imports with a 20% tariff. The tariff rises to 170% for quantities over the quota. The limits are designed to protect bananas from former European colonies in Africa, the Caribbean, the Pacific and within the EC, which are produced on a smaller scale than bananas from the corporate plantations of Latin America. Source: "Latin Banana Producers Protest EC Import Quotas," REUTER, December 22, 1992. __________________________________________________ NAFTA News Summary __________________________________________________ NAFTA KEY IN U.S. BUYING OF MEXICAN STOCKS Wall Street analysts say U.S. investors will increasingly invest in Mexico in 1993, due to expectations of lower interest rates and increased confidence in the stability of the Mexican economy. Expectations of progress towards approval of the NAFTA will also play a big role, according to one analyst. "NAFTA is sort of a signal on many fronts that in Mexico you wont be able to turn the clock back and the reforms will be there to stay, " said Smith Barney analyst Scott Kaulb. Source: Patricia Vowinkel, "U.S. Investors Back Mexican Stocks, NAFTA Key," REUTER, December 21, 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 ___________________________________________________