TRADE NEWS BULLETIN Volume II Number 67 Friday, April 16, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ U.S. DENIES RUMORS TO ELIMINATE ENFORCEMENT ON SIDE ACCORDS U.S. negotiator Rufus Yerxa presented the first detailed U.S. proposal on side accords to the North American Free Trade Agreement (NAFTA) at talks in Mexico City yesterday. The proposal suggested the formation of a trilateral panel to sort out commercial disputes on labor and the environment with the power to sanction governments and businesses which fail to cease unfair trade practices. The panel however would not have authority to subpoena information from governments or businesses. Yerxa denied earlier reports which indicated that the U.S. would not seek the establishment of a commission to sanction violators. He said the U.S. is seeking "to ensure that all three countries promote policies that ensure a strong environment and appropriate protection for workers." All three negotiating teams admitted that differences over side accords still exist after three days of discussion. "I think we have made some progress," said Yerxa. "But we still have differences to resolve." Canadian negotiator, John Weeks said disagreements are normal at such early stages in talks, "I don't think we should make too much of that." Herminio Blanco, Mexico's head negotiator agreed, calling the talks "constructive and useful." Diplomats have not announced a time or place for the next round of negotiations on the side accords, but Blanco hinted they would discuss the editing phases of side accords once completed. Supplemental agreements are necessary for successful ratification of the NAFTA text, which faces strong opposition in U.S. Congress and from many labor and environmental groups. Sources: Tim Golden, "Mexico Sees Progress on Trade Pact Problems," NEW YORK TIMES, April 16, 1993; "U.S. to Insist on Strong Effective NAFTA," REUTER, April 15, 1993; Laurence Iliff, "Differences Remain as NAFTA Side Talks End in Mexico," UPI, April 15, 1993; "NAFTA Negotiators Discuss Side Accord Enforcement," REUTER, April 15, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ EC RELEASES TRADE BARRIER REPORT The EC released its ninth annual report on U.S. barriers to Trade and Investment yesterday, which contends that a number of trade barriers cited last year have not been reduced. Ove Jorgensen, head of the commission's EC-U.S. affairs unit, said the report "seeks to correct the impression ... that the U.S. has an open market." Citing differences between the annual summary issued by USTR Mickey Kantor's office two weeks ago, and the new EC report, officials said differences exist in methods which address trade violations. The EC routes trade complaints through the General Agreement on Tariffs and Trade (GATT) and said it does not sanction violators without the approval of GATT members. Instead, the U.S. relies on its 1988 Trade Act, under which Washington can take unilateral action against countries who violate trade agreements, to resolve its complaints. This key difference between trade summaries of the U.S. and the Community will likely be discussed when USTR Mickey Kantor meets with the EC's foreign trade commissioner Sir Leon Brittan next week. The new EC report also revealed a substantial decline in its trade deficit with the U.S. from $16.7 billion in 1991 to $9 billion in 1992. Source: Julie Wolf, "EC Criticizes U.S. Sanctions in Trade Report," WALL STREET JOURNAL, April 16, 1993; "EC Report Lists U.S. Trade Barriers," UPI, April 15, 1993. ________________________________________________________ Other Trade News ________________________________________________________ EC URGES E EUROPE TO ADOPT REGIONAL TRADE EFFORT EC trade ministers urged east European countries to rebuild commercial ties among themselves and with former Soviet republics during an international conference in Copenhagen this week. East European leaders came to the conference, which was organized to serve economic development in central and eastern Europe, asking for greater trade liberalization with and early membership to the Community. But EC negotiators seemed unprepared to back their political ambitions of greater liberalization with economic offers. Instead, many EC leaders pushed east European countries to rebuild regional ties among themselves and Russia. "Ways too should be found to revitalize trade with neighboring states in the former Soviet Union," said British Foreign Minister Tristan Garel-Jones. French Minister for European Affairs Alain Lamassoure said demands from east Europeans for greater access to western markets is an "absurd paradox" considering that they are currently constructing barriers of their own with their eastern neighbors. Pledges were made to dismantle trade barriers by European leaders but no specific measures were outlined in the most sensitive areas: agriculture, fertilizers, steel and textiles. Reportedly Sir Leon Brittan, EC trade commissioner, was the only one to openly support an eventual free trade zone, saying the EC enjoyed a $1.3 billion trade surplus with the major east and central European economies, warning western ministers not to use the recession as an excuse for delaying trade concessions. Source: Lionel Barber, "East Europe Calls EC's Bluff Over Free Trade," FINANCIAL TIMES, April 16, 1993. ________________________________________________________ Events: "Sustainable Agriculture, Sustainable Communities: The Implications of the North American Free Trade Agreement," is a citizens' dialogue sponsored by the Institute for Agriculture and Trade Policy (IATP), with guest speaker Jim Hightower, former Texas Commissioner of Agriculture. April 20, 9:00-4:30, Hubert H. Humphrey Institute for Public Affairs, University of Minnesota. Attendance limited. Contact: Meredith Levy, IATP, 1313 5th Street SE, Suite 303, Minneapolis, MN 55414. Tel: (612)379-5980. Fax: (612)379-5982. ________________________________________________________ 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 ________________________________________________________