TRADE NEWS BULLETIN Volume 2 Number 100 Monday, June 7, 1993 Headlines: SALINAS SAYS HE'S COMMITTED TO THE ENVIRONMENT FRANCE SAYS IT WILL NOT VETO FARM DEAL GATT PANEL WILL EXAMINE US-EC STEEL DISPUTE ________________________________________________________ NAFTA News Summary ________________________________________________________ SALINAS SAYS HE'S COMMITTED TO THE ENVIRONMENT Mexican President Carlos Salinas de Gortari continues to deny the North American Free Trade Agreement would have adverse effects on the environment. During a ceremony in Mexico City to mark the preservation of an ecological park, Salinas said, "Mexico's commitment to the environment is complete, decisive." Critics of NAFTA fear the trade pact will encourage Canadian and American companies to move to Mexico to take advantage of lax environmental laws. The United States is seeking a side agreement to NAFTA to ease some of the environmental concerns. Canada and Mexico have voiced strong opposition to U.S. proposals for trade sanctions to enforce standards. But on Friday Canada said it would not oppose side accords as long as penalties to enforce environmental and labor standards did not allow sanctions against countries. Canada said it would permit fines against individual companies. "We are very much in favor of strong and effective enforcement mechanisms, so we are open to sanctions but as long as they are not trade sanctions," said Canadian spokesperson Richard Lecoq. Mexican officials are scheduled to release a counter-proposal to the U.S. environmental plan. Canadian Prime Minister Brian Mulroney appointed two NAFTA supporters to the Senate, apparently in an attempt to guarantee passage of the pact. The Senate is still debating NAFTA. The House of Commons already passed the agreement. Sources: "Mexico's Salinas Avows Commitment to a Clean Environment," REUTER, June 5, 1993; "Canada Signals Possible NAFTA Sanctions Breakthrough," REUTER, June 4, 1993; "Mulroney Appoints Two Pro-NAFTA Politicians to Canadian Senate," UPI, June 4, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ FRANCE SAYS IT WILL NOT VETO FARM DEAL France will not veto an oilseeds trade deal between the United States and the European Community despite heavy pressure from French farm groups, said French Agriculture Minister Jean Puech. "France is not in veto mode," Puech told reporters. "France is in negotiation mode to bring about political change." France's largest farm union, FNSEA, has threatened to "take up arms" if the agreement is accepted. The deal, which limits oilseed production to 5.12m hectares in the Community, is seen as a key to completing the Uruguay Round of General Agreement on Tariffs and Trade (GATT) talks. Meanwhile, the Federation of German Farmers urged EC foreign ministers to reject the oilseeds deal. The ministers are expected to approve the agreement in Luxembourg Tuesday. "The European Community would prematurely sacrifice its sovereignty over farm policy with the approval of the foreign ministers," Federation President Constantin Freiherr Heereman said in a statement. Heereman said the EC should not give in to the United States on farm issues in hopes of saving the Uruguay Round. The ministers will also discuss ways to speed up the opening of EC markets to eastern European states. This week's BUSINESS WEEK reports the U.S., EC, Japan and Canada are close to reaching a market-access agreement to present to July's meeting of the Group of Seven (G-7) leading industrialized nations in Tokyo. According to the magazine, the proposal offers GATT nations "a major incentive to deal" and work for the successful completion of the Uruguay Round. BUSINESS WEEK says the GATT talks could be completed by the end of the year. The G-7 leaders will meet for their annual summit July 7-9. In addition to world trade, the leaders will discuss arms control, disarmament, strengthening the United Nations, the civil war in Yugoslavia and North Korea's possible development of nuclear weapons. Sources: David Buchan, "France Set to Accept Oilseed Pact," FINANCIAL TIMES, June 7, 1993; "Minister Rules Out French Veto on Oilseeds," REUTER, June 4, 1993; "German Farmers Urge Rejection of Oilseeds Accord," REUTER, June 7, 1993; "EC Ministers to Debate E. Europe Trade Access," REUTER, June 7, 1993; Douglas Harbrecht, Bill Javetski, "Who Said GATT Is Dead," BUSINESS WEEK, June 14, 1993. ________________________________________________________ GATT PANEL WILL EXAMINE US-EC STEEL DISPUTE A GATT panel will rule on a European Community complaint against punitive U.S. steel duties. "The GATT subsidies committee established a panel to examine the EC complaint," said a spokesperson for the world trade body. The U.S. Commerce Department imposed the duties in January on hot-rolled lead and bismuth carbon steel products from Britain, France and Germany. The U.S. said the levies were in retaliation for high subsidies to British, French and German steel producers. Brazil, Canada and Japan supported the EC complaint. The panel has 60 days to report its findings. U.S. steel users met over the weekend to criticize the U.S. steel industry for filing so many complaints of unfair trade practices. The American Institute for International Steel, a group of 200 steel traders, said the cases are casting "a menacing shadow" over the U.S. economy and creating inflationary price rises. John Griffin, president of the group, said prices had already risen 20 percent this year and that another increase was expected in July. The Commerce Department defended the steel industry. "The U.S. industry is entitled to relief from unfair trade practices," said Roland McDonald, a Commerce Department official. Source: Stephanie Nebehay, "GATT Sets Up Panel on EC-US Row on Steel Duties," REUTER, June 4, 1993; Nancy Dunne, "Steel Users Condemn U.S. Trade Cases," FINANCIAL TIMES, June 7, 1993. ________________________________________________________ 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 ________________________________________________________