TRADE NEWS BULLETIN Volume II Number 8 Wednesday, January 13, 1993 _________________________________________________________ GATT News Summary _________________________________________________________ US SOYBEAN GROUPS UNHAPPY WITH FARM DEAL The farm subsidy deal reached by the European Community and the United States last November was a victory for the U.S. on grain subsidies, but the EC came out ahead on subsidies for soybeans and other oilseeds, according to most analysts. American soybean lobbyists are becoming more and more frustrated with the agreement. American Soybean Association President Steve M. Yoder says the technical details of the pact, which have now been established, will lead to a smaller decrease in European subsidies than initially believed. "Every day that goes by, I get less and less pleased," Yoder said. He has told the Bush Administration the agreement is inadequate. The French government also objects to the deal because it would require the EC to take at least 10 percent of its oilseeds land out of production. France has asked the EC to threaten a complaint to GATT about U.S. subsidies on corn gluten feed in hopes of encouraging the U.S. to reopen the talks. "To renegotiate the soybean agreement, we must raise the threat of a complaint on corn gluten feed," said Andre Grammont, chief of staff for French Farm Minister Jean-Pierre Soisson. Environmentalists are also joining the battle. Greenpeace objects to limiting the amount of land in use if production limits are not also enacted. The group says the current agreement will encourage farmers to spray larger amounts of pesticides and chemicals to stimulate production on existing land. Ironically, according to the NEW YORK TIMES, U.S. farmers are relatively indifferent to the pact, even though it will have a significant effect on them. While European grain farmers have held massive demonstrations against the deal, U.S. farmers are not convinced the pact will hurt them and they feel they have little power to change the farm policy. "It's real nonproductive to get angry -- we've dealt with unfair trade for a long time," said Mark Larson, a soybean farmer in Jasper, Missouri. "As a farmer, you learn to roll with the punches." Source: Keith Bradsher, "How Trade Pact Plays on the Farm," NEW YORK TIMES, January 13, 1993, p. C1; "France Wants EC to Threaten U.S. with GATT Complaint," REUTER, January 12, 1993. ______________________________________________________ STUDY SAYS GATT WOULD HURT U.S. A study by the Economic Strategy Institute (ESI) concludes that a completed GATT deal could reduce the annual U.S. gross domestic product (GDP) by as much as $62 billion and increase the U.S. trade deficit by as much as $37.2 billion. The ESI said Bush administration projections of a $125 billion GDP gain from an agreement were based on a "best-case" scenario that is very different from realistic prospects. The study also estimates the total worldwide gains from enacting GATT chief Arthur Dunkel's draft agreement would total only $19.5 billion a year in the next decade. Source: "Study Says Proposed Trade Pact Would Cut U.S. GDP," REUTER, January 11, 1993; "Study Says GATT Proposals Shortchange U.S.," UPI, January 11, 1993. __________________________________________________ NAFTA News Summary __________________________________________________ NEW MARITIME RESEARCH PROGRAM ON NAFTA The U.S. Maritime Administration has created "The Maritime System of the Americas" program to help the U.S. shipping industry prepare for increased trade under the North American Free Trade Agreement. "Growing commerce within the Americas means new opportunities for U.S. merchant vessels and American seafarers," said Maritime Administrator Warren G. Leback. The program will examine different approaches to shipping goods to and from Mexico, Canada and other Western Hemisphere countries. Source: "NAFTA Sparks US Maritime Research Study," JOURNAL OF COMMERCE, December 31, 1992, p. 1B. __________________________________________________ Other Trade News GEPHARDT WANTS NEW US EXPORT POLICY U.S. House of Representatives majority leader Richard Gephardt (D- Missouri) called for a new U.S. export policy that provides a "level playing field" in world markets. "If other countries are not willing to give America access to their markets, then we will rethink their access to our markets," Gephardt said. "It must be a two-way street." Source: "Gephardt Calls for New U.S. Export Trade Policy," REUTER, January 11, 1993. _________________________________________________________ Resources: SHORT CHANGED: AFRICA AND WORLD TRADE by Michael Barratt- Brown and Pauline Tiffen. "A detailed and devastating critique of the economic strategies imposed on African nations by the International Monetary Fund and the World Bank." Available from Westview Press in Boulder, Colorado. (303) 444-3541. _________________________________________________________ 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.apc.org _________________________________________________________