TRADE NEWS BULLETIN Volume II Number 66 Thursday, April 15, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ TALKS CONTINUE ON SIDE ACCORDS Meetings on supplemental agreements to the North American Free Trade Agreement (NAFTA) continue in Mexico City today. Canadian officials recently submitted a proposal which they hoped would narrow the gap between the U.S. and Mexican positions on labor and environmental side accords. The proposal was said to include ideas contributed by U.S. officials on their minimum requirements for a successful deal as well as terms from Mexican negotiators on what they would consider acceptable. But when Canadian officials presented the draft proposal, both Mexico and the U.S. rejected it. The Canadian compromise proposed a trinational dispute panel to enforce regulations, however the Mexican government argued sanctions would violate its sovereignty, prompting the U.S. to temporarily back away from the idea. The U.S. itself has not presented supplemental proposals yet, according to the Mexican newspaper EL ECONOMISTA. However, U.S. officials have hinted that their proposal will eventually include "watch-dog" commissions to report violators but not sanction them. Talks will continue every two weeks in effort to reach side accords that will satisfy the U.S. Congress. Negotiators are attempting to secure ratification of NAFTA by January 1994. Herminio Blanco Mendoza, Rufus Yerxa and John Weeks head the Mexican, U.S. and Canadian negotiating teams respectively. Sources: Tim Golden, "Mexico and U.S. Split on Some Trade Issues," NEW YORK TIMES, April 14, 1993; "Talks on NAFTA Side Accords Enter Second Day," April 14, 1993; Andrea Durbin, "Timeline," FRIENDS OF THE EARTH. ________________________________________________________ GATT News Summary ________________________________________________________ KANTOR TO REVIEW TRADE PROMISES, SANCTIONS POSSIBLE The results of a comprehensive trade review, ordered by U.S. Trade Representative Mickey Kantor in February, will be presented to him late today by USTR support staff. The review targets countries who have failed to comply with previously negotiated trade agreements. Since being appointed USTR, Kantor has threatened to impose sanctions on these countries, which is allowed by law. As part of his tough trade stance Kantor has also indicated he will push to renew the Super 301, a 1988 amendment to the Trade Act which expired in 1990, which would allow the U.S. to unilaterally impose retaliatory trade sanctions against supposed violators. Japan, the primary target of U.S. trade concerns, has never accepted the Super 301 saying the U.S. should rely on the General Agreement on Tariffs and Trade (GATT) negotiations to settle trade disputes. "It is not for the United States to determine that the trade practices of Japan or any other country are illegal," said Seiichiro Noboru, Japanese economy minister. Kantor said trade disputes would be discussed tomorrow when Japanese Prime Minister Kiichi Miyazawa meets with U.S. President Bill Clinton in Washington, DC. While voicing an aggressive trade policy, Kantor has accepted Japanese criticism that the persistent U.S. trade deficit with Japan will only be resolved if the U.S. makes significant changes in its own economy. "The sectoral issues with Japan are important but not nearly as critical as the President's economic program," Kantor said. Kantor will also address European trade rows early next week when he meets with EC Trade Commissioner Sir Leon Brittan. Public procurement contract disputes, which were discussed at length during a March meeting between Kantor and Brittan, will likely be the focus of Monday's talks. The disputes stem from a new EC policy giving preferential treatment, on basis of price, to EC firms bidding for public contracts. Kantor has postponed sanctions against the EC twice in order to give Brittan time to amend the policy. According to EC officials a deal will also have to be struck including effective access to the U.S. public procurement market. "This is going to be an important meeting," said one U.S. official. Sources: Keith Bradsher, "White House Reviewing Trade Pact Compliance," NEW YORK TIMES, April 15, 1993; Stephen Nisbet, "EC, U.S. Officials to Meet on Contracts Row," REUTER, April 14, 1993. ________________________________________________________ EC ANGRY ABOUT E EUROPE RETALIATION ON LIVESTOCK BAN EC officials reacted angrily to the recent decision by Central and East European countries to ban EC livestock in retaliation to a similar decision made by the Community. Yesterday Rene Steichen, the EC's agriculture commissioner, called the East and Central European attempts to ban EC goods "unacceptable." Foot-and-mouth disease was initially found in cattle imported to Italy from Croatia, which prompted the EC to impose a month-long ban of East and Central European livestock and dairy products. EC veterinary experts have since inspected Czech and Slovak cattle imported into Britain and found that 200 of 450 had been vaccinated against the disease. Vaccinated animals cannot be legally exported, in case they actually develop the disease. Steichen said, "very clearly it was unacceptable for East European states to turn this into a political problem." However Poland, Hungary, Bulgaria, Slovakia and the Czech Republic contend they have not attempted the ban in political retaliation, but rather in an effort to protect themselves against the foot-and-mouth disease which they argue could still be present on EC territory. It is not clear what ramifications this conflict will have on other agriculture trade disputes. Source: Andrew Hill, "Retaliation to Livestock Import Ban Angers EC," FINANCIAL TIMES, April 15, 1993; "EC Says E Europe Meat Bans Politically Motivated," REUTER, April 14, 1993. ________________________________________________________ Events: FRIENDS OF THE EARTH will be organizing a week of action from May 1-9 to promote fair trade. For information on participation, organizing or events, contact: Andrea Durbin, Friends of the Earth, 218 D Street, SE, Washington, DC 20003. Tel: (202)544-2600. Fax: (202)543-4710. ________________________________________________________ Produced by: Gigi Boivin 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 ________________________________________________________