TRADE NEWS BULLETIN Volume 2 Number 105 Monday, June 14, 1993 ________________________________________________________ NAFTA News Summary ________________________________________________________ NEW CANADIAN LEADER IS STRONG NAFTA SUPPORTER Canada's defense minister, Kim Campbell, was chosen as leader of the Progressive Conservative Party in a victory that will make her prime minister this month. Campbell is a strong supporter of continental and global efforts to create free trade pacts. She proposes expanding the North American Free Trade Agreement to include Pacific Rim countries. Campbell will be Canada's first female prime minister. Campbell, who succeeds Brian Mulroney, will face a difficult time in the next election, which must be held by November. Women's groups are among Campbell's strongest critics. In other NAFTA news, Mexican Foreign Minister Fernando Solana said Mexico will seek a trade agreement with the European Community once NAFTA has been ratified. Source: "New Canadian Leader Would Extend NAFTA to the Pacific," REUTER, June 13, 1993; "In Brief," EUROCOM, May 1993; John Urquhart, Rosana Tamburri, "Campbell to Become Prime Minister of Canada, Following Election," WALL STREET JOURNAL, June 14, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ U.S. WELCOMES FRENCH ACCEPTANCE OF OILSEED ACCORD In Paris, U.S. Commerce Secretary Ron Brown said France's acceptance of a U.S.-EC oilseeds agreement was a "positive signal" that could lead to a successful completion of GATT talks sometime this year. Last week, France agreed to accept limiting the area available for oilseed production. But French Prime Minister Edouard Balladur told the European Commission that France still objects to other parts of the U.S.-EC farm deal. Balladur will meet with U.S. President Bill Clinton in Washington on Tuesday. The United States and France are the world's number one and number two food exporters respectively. Brown said the United States would be "willing to make appropriate compromises" to ensure a trade deal is completed as soon as possible. "Eight years of negotiations is too long for anything," Brown said, referring to the Uruguay Round of GATT talks. Some trade negotiators are feeling the pressure of another tight deadline for concluding the Uruguay Round. Australian Trade Minister Peter Cook said that following the G-7 meeting in July, there will be a very limited amount of negotiating time before U.S. fast- track negotiating authority expires December 15. Most European Community offices are closed during the month of August. Source: "U.S. Hails French Trade Move, Plays Down Tough Talk," REUTER, June 14, 1993; Paul Taylor, "Balladur Takes GATT Campaign Into Lion's Den," REUTER, June 14, 1993; Roger Cohen, "Cabinet Secretary Promises Closer U.S.-Industry Links," NEW YORK TIMES, June 14, 1993; "Pressure Increasing on Uruguay Round Timetable," AGRA EUROPE, June 4, 1993 ________________________________________________________ EC DEMANDS FULL DETAILS OF U.S.-GERMAN TELECOMS DEAL The European Commission sent a letter to German Chancellor Helmut Kohl demanding the details of a secret German - U.S. telecommunications deal. U.S. Trade Representative Mickey Kantor revealed last Thursday the existence of the deal, which lets U.S. and German telecommunications suppliers bypass EC-U.S. sanctions and countersanctions. EC Trade Commissioner Leon Brittan will discuss the matter with Kantor this week. France sharply criticized Germany at a time when the two countries are trying to bridge their differences over GATT. "France has asked the European Commission to fully clarify this matter. We cannot imagine that such a breech of Community solidarity could be approved," said a foreign ministry statement. Source: "Andres Wolberg-Stok, "U.S.-German Telecoms Pact Causes Pre-Summit EC Rift," REUTER, June 14, 1993. ________________________________________________________ U.S., JAPAN MAKE LITTLE PROGRESS IN TALKS The United States and Japan ended two days of talks without agreeing on a framework for reducing Japan's trade surplus. Nevertheless, officials said they made progress. "We did not come to any specific agreement but we had a very, very productive time," said Tim Wirth, the lead U.S. negotiator in the talks. Japan was believed to have rejected a U.S. proposal to set a target of reducing its account surplus to between 1-2 percent of GDP development and increase the ratio of imports to GDP. The U.S. contends the nature of Japan's markets is a primary reason for Japan's trade surplus. The Clinton Administration's top economist, Laura Tyson, says the U.S. can't rely on conventional economic forces and liberalized trading rules to restore trade balance with Japan. She and others are seeking to set trade targets and quotas for Japan. Japan is rejecting this, claiming it has one of the most open markets in the world. Talks will continue in July. Some believe the appointment of former Vice-President Walter Mondale as the new U.S. ambassador in Japan will smooth trade tensions between the two countries. Meanwhile, news reports said Japan plans to cut tariffs on agriculture imports by an average 36 percent to help break an impasse in GATT. The move applies to about 1400 products but excludes rice and dairy products. Japan had earlier offered to cut tariffs on farm imports by 30 percent. Sources: Michiyo Nakamoto, "US, Japan Fail to Bridge Gap in Trade Talks," FINANCIAL TIMES, June 14, 1993; Lyndsay Griffiths, "Rivals in Trade, U.S., Japan Talk On," REUTER, June 12, 1993; "Mondale Faces Testing Time on Tokyo Mission," FINANCIAL TIMES, June 14, 1993; Bob Davis, "Clinton's Get-Tough Stance With Japan Signals Rise of Revisionist Thought," WALL STREET JOURNAL, June 14, 1993; "Japan to Cut Food Tariffs by 36 Percent - Reports," REUTER, June 13, 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 ________________________________________________________