TRADE NEWS BULLETIN Volume 2 Number 104 WEEK IN REVIEW AND RECENT PUBLICATIONS June 5-11, 1993 Headlines: SIDE ACCORD TALKS REMAIN STALLED OVER SANCTIONS GATT READY FOR PUSH FORWARD RUSSIA HOPES FOR GATT MEMBERSHIP THIS YEAR U.S. ISSUES TRADE DEMANDS TO JAPAN ________________________________________________________ NAFTA News Summary ________________________________________________________ SIDE ACCORD TALKS REMAIN STALLED OVER SANCTIONS -Talks Move to Ministerial Level- The United States, Canada and Mexico made little progress this week during the fourth round of negotiations on establishing side agreements to the North American Free Trade Agreement. A Canadian official said talks will now have to move to the ministerial level to resolve differences over enforcement powers for labor and environmental commissions. Canada and Mexico strongly oppose the U.S. proposal to allow the use of sanctions to enforce labor and environmental laws. Canada suggested using fines as an alternative to outright sanctions. -Negative Reaction to Supplemental Proposals- The Canadian Chamber of Commerce issued a written statement to the media this week promising to oppose NAFTA if side deals provide strong enforcement mechanisms. "Sanctions and fines are a new form of unpredictable and unacceptable contingency protection," said the Chamber. "They would be inconsistent with the trade- liberalizing intent of NAFTA itself and ironically, they would permit NAFTA partners to apply to one another trade restrictions which would not be permitted under GATT," the letter said. In addition, the Chamber said that the proposed creation of a supranational and independent secretariat with powers to override the principles of national sovereignty would not be acceptable for any of the negotiating countries. Some U.S. House Republicans also promised to vote no on NAFTA if sanctions are permitted. Sources: "Canada Chamber Opposed to NAFTA Fines, Sanctions," REUTER, June 10, 1993; "No NAFTA Impasse But 'Difficult' Issues - Officials," REUTER, June 9, 1993; Nancy Dunne, "U.S. NAFTA Plan Draws Fire," FINANCIAL TIMES, June 8, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ GATT READY FOR PUSH FORWARD -France Approves Oilseeds Deal- France formally accepted the EC-U.S. oilseeds agreement this week, removing an obstacle to long-stalled General Agreement on Tariffs and Trade talks. France had refused to sign the pact, which limits the EC's oilseed production to 5.128 million hectares, claiming it would impose an unfair burden on French farmers. But EC officials recently compromised on a number of French demands, prompting France to sign the oilseed section of the more comprehensive U.S.-EC farm deal. U.S. Commerce Secretary Ron Brown said French acceptance of the oilseed pact has fostered a "giant step toward moving forward in the Uruguay Round." But French farmers responded with less enthusiasm. "The agreement is too vague to reassure us," said Jean- Claude Sabin, president of the oilseed producers association FOP. Two of France's leading farmers' unions protested the deal. -Sutherland Appointed New GATT Chief- Peter Sutherland, former EC competition commissioner, will become the fourth GATT director-general July 1, when current GATT chief Arthur Dunkel retires. Sutherland was appointed to the top GATT post on Wednesday, promising to work toward a "quick, comprehensive and far-reaching conclusion" to the Uruguay Round. He welcomed France's decision to sign the oilseed pact, but cautioned that France's refusal to accept the entire U.S.-EC farm deal could spell trouble for a GATT conclusion. "It seems to me that Blair House is the basis, and will remain the basis for discussions leading to the conclusion of the Round," Sutherland told the FINANCIAL TIMES. Sutherland stressed that an Uruguay Round conclusion is needed to ensure global trade growth. "If there is a failure to deliver, then I think we could have a serious crisis," Sutherland said. Sources: Bhushan Bahree, "New Chief Confronts a Changing GATT," WALL STREET JOURNAL, June 11, 1993; David Gardner, Tim Coone, "New GATT Chief Looks to G7 For Leadership," FINANCIAL TIMES, June 11, 1993; "Angry French Farmers Paint the Town Yellow," REUTER, June 10, 1993; "U.S. Commerce Secretary Increasingly Confident of GATT Deal," REUTER, June 10, 1993; Frances Williams, "Sutherland Elected as New Chief of GATT," FINANCIAL TIMES, June 10, 1993; "Sutherland Says GATT Progress Needed Quickly," REUTER, June 10, 1993. ________________________________________________________ RUSSIA HOPES FOR GATT MEMBERSHIP THIS YEAR President Boris Yeltsin submitted Russia's GATT application this week, requesting admittance to the global trade body by the end of 1993. "I hope you will not put this on the back burner until the end of the decade," Yeltsin told GATT Director-General Arthur Dunkel. Diplomats said earlier this week that Russia's application will likely take two years to approve. All 111 GATT members must accept the application. Yeltsin said Russia is eager to join the European and global markets. "We can't do without the help of your organization," Yeltsin told Dunkel during a Kremlin ceremony. Sources: David Ljunggren, "Russia Applies to Join GATT, Urges Quick Decision," REUTER, June 11, 1993; Steven Greenhouse, "Russia Will Formally Seek Full Status in Trade Group," NEW YORK TIMES, June 9, 1993; Stephanie Nebehay, "Yeltsin to Make Russian Application to GATT," REUTER, June 8, 1993. ________________________________________________________ U.S. ISSUES TRADE DEMANDS TO JAPAN The United States is expected to pressure Japan for tough trade reforms during two days of talks beginning today in Washington. U.S. President Bill Clinton issued a formal report to Japanese negotiators earlier this week, targeting six key sectors for reform: cars, car parts, computers, supercomputers, electronics and semiconductors. In addition, the United States demanded that Japan reduce its account surplus from the current three percent of gross domestic product. Japan is refusing any form of managed trade. But U.S. Trade Representative Mickey Kantor said the "results oriented" policy is necessary to reduce Japan's $50 billion trade surplus with the United States. "We need to look for measurable results and if we can't get them, we ought to take appropriate action," Kantor declared. The United States and Japan hope to reach a compromise before July's Group of Seven meeting in Tokyo. Sources: Nancy Dunne, "Washington Focuses on Six Difficult Sectors," FINANCIAL TIMES, June 11, 1993; Robert Keatley, "U.S. Is Headed for Longer Trade Talks as Japan Resist American Solutions," WALL STREET JOURNAL, June 11, 1993; Lyndsay Griffiths, "U.S. Defends Tough New Japan Trade Policy," REUTER, June 10, 1993. ________________________________________________________ Recent Publications ________________________________________________________ For copies of the following resources, contact the authors or organizations listed. 1. Robert Benson, "The Threat of Trade, the Failure of Politics and Law, and the Need for Direct Citizen Action," INTERNATIONAL COMPARATIVE LAW JOURNAL, Vol. 15, No. 1, 1992. 18 pages. Robert Benson, Loyola Law School, 1441 West Olympic Blvd., Los Angeles, CA 90015. Tel: (213) 736-1094. US$5.00. 2. Patti A. Goldman, "Resolving the Trade and Environment Debate: In Search of a Neutral Forum and Neutral Principles," WASHINGTON AND LEE LAW REVIEW, Vol. 49, No. 4, 1992. 19 pages. Washington and Lee Law Review, School of Law, Washington and Lee University, Lexington, VA 24450. Tel: (703) 463-8566. US$6.00. 3. Robin Alexander, "Economic and Environmental Conditions In the Lower Rio Grande Valley Along the Texas-Mexico Border," TEXAS RURAL LEGAL AID, INC., 1993. 19 pages. Robin Alexander, Texas Rural Legal Aid, Inc., 259 S. Texas Blvd., Weslaco, TX 78596. Tel: (210) 968-9574. US$3.00. 4. Eric Rosenthal, "No Double Standards In International Law," MINNESOTA ADVOCATES FOR HUMAN RIGHTS, December 1992. 22 pages. Minnesota Advocates for Human Rights, 400 Second Ave., South, Suite 1050, Minneapolis, MN 55401. Tel: (612) 341-3302 Fax: (612) 341-2971. US$4.00. 5. Robert Weissman ed., MULTINATIONAL MONITOR, May 1993. 31 pages. Multinational Monitor, P.O. Box 19405, Washington, D.C. 20036. Tel: (202) 387-8030 Fax: (202) 234-5176. US$3.00. This month's Multinational Monitor is dedicated entirely to issues surrounding the NAFTA. 6. Jamie Linton, "NAFTA AND WATER EXPORTS," April 1993. 15 pages. Jamie Linton, Rawson Academy of Aquatic Science, 1 Nicholas St., Ottawa, Ontario K1N 7B7, Canada. Tel: (613) 563-2636 Fax: (613) 563-4758. US$7.00. 7. Thea M. Lee, "The North American Free Trade Agreement: A Misguided Economic Development Strategy for North America," ECONOMIC POLICY INSTITUTE, May 1993. 12 pages. Economic Policy Institute, 1730 Rhode Island Ave., NW, Suite 200, Washington D.C. 20036. Tel: (202) 775-8810. US$5.00. 8. Kristin Dawkins, "NAFTA, The New Rules of Corporate Conquest," OPEN MAGAZINE, No. 24, 1993. 21 pages. Open Magazine Pamphlet Series, P.O. Box 2726, Westfield, NJ 07091. Tel: (908) 789-9608 Fax: (908) 654-3829. US$4.00. ________________________________________________________ Published by: Mark Ritchie Produced by: Gigi Boivin and Chirag Mehta 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 ________________________________________________________