TRADE NEWS BULLETIN Volume 2 Number 118 Thursday, July 1, 1993 ________________________________________________________ Headlines: WHITE HOUSE, PRESS REACT TO ENVIRONMENTAL RULING LATIN AMERICAN BANANA PRODUCERS TAKE CASE TO GATT U.S. RELAXES TRADE POLICY, JAPAN GLASS MAKERS ________________________________________________________ NAFTA News Summary ________________________________________________________ WHITE HOUSE, PRESS REACT TO ENVIRONMENTAL RULING The North American Free Trade Agreement hit a major stumbling block yesterday when a U.S. District court ruled that the Clinton Administration must complete an environmental impact statement before Congress can vote on the trade pact. The White House optimistically announced plans to press forward with the pact, but major newspapers and some government officials suggest that NAFTA will remain permanently stalled. U.S. Trade Representative Mickey Kantor said the court's ruling is "not a problem overall" and that the Clinton administration still intends to submit NAFTA to Congress. "The judge did not say we could not continue on, which we will continue to do" said U.S. Trade Representative Mickey Kantor on CBS television. President Bill Clinton vowed to appeal yesterday's ruling, but the FINANCIAL TIMES cautioned that a lengthy appeal process could ruin the prospects for implementing NAFTA by January 1, 1994. U.S. Treasury Secretary Lloyd Bentsen said the White House is "concerned" because the ruling "could result in an inordinate delay of NAFTA ... and we don't want to see that." Senator John Danforth (R- Missouri) echoed Bentsen's comments, saying, "My fear is that NAFTA is finished unless this ruling is overturned." The WALL STREET JOURNAL called the ruling a "death blow" to NAFTA, and warned that a delay or termination of the trade pact would have a profound impact on Mexico. The newspaper said Mexico must now try to restore investor confidence. Mexico's stock market dropped sharply yesterday after the court's decision was announced. One-fifth of Mexico's equities and half of its treasury bills are held by foreign investors. Sources: Steven Greenhouse, "Judge in a Ruling That Could Delay Trade Pact," NEW YORK TIMES, July 1, 1993; "Greens Win a Review of Trade Agreement," AP, July 1, 1993; Bob Davis, Asra Nomani, "Federal Judge's Ruling Could Be a Death Blow to Free-Trade Accord," WALL STREET JOURNAL, July 1, 1993; Nancy Dunne, "U.S. Court Blocks NAFTA Deal Over Environmental Impact," FINANCIAL TIMES, July 1, 1993; Matt Yancey, "Free Trade," AP, July 1, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ LATIN AMERICAN BANANA PRODUCERS TAKE CASE TO GATT Latin American banana producers said they will step up appeals to the General Agreement on Tariffs and Trade against Tuesday's EC Court decision to go ahead with a plan to maintaim preferential treatment for traditional banana suppliers. The plan, which honors Lome Convention market access guarenteed, would impose a 20% tariff on the first two million of the cheaper Latin American bananas and a 200% tariff on each addtional ton. Quotas will begin today. Officials from Costa Rica, El Salvador, Honduras, Nicaragua, Guatemala and Columbia submitted complaints about the restrictions to GATT earlier this year. A GATT commission ruled last month that Britain, France, Greece, Italy, Portugal and Spain should eliminate discriminatory quotas and lower tariffs in compliance with global trade rules. Honduran Economy Minister Carlos Chahin said that because of the EC's decision to push forward with the quotas it will now face arbitration by the GATT commission. Sources: "German Bid to Block Banana Import Links is Rejected by Court," WALL STREET JOURNAL, June 30, 1993; "Latin American Banana Producers to Take EC Banana Ruling to GATT," UPI, June 30, 1993. ________________________________________________________ U.S. RELAXES TRADE POLICY, JAPAN ASKS GLASS MAKERS TO REFORM INDUSTRY The U.S. administration, which has been pressuring Japan to agree to market access reforms before the Group of Seven meeting July 7-9, said it will relax efforts until after a new Japanese Prime Minister is chosen July 18. Kichi Miyazawa, Japan's current prime minister, was forced to call elections after Parliament gave him a vote of no- confidence last month. U.S. Officials said they expect to resume market-access talks later this summer. Meanwhile, Japan's Ministry of International Trade and Industry (MITI) asked flat glass producers to "review" their business procedures. MITI's request followed a recent report by the Japanese Fair Trade Commission which concluded that foreign glass producers are unable to compete in Japan's market because of internal barriers. Japanese flat glass producers issue rebates to domestic wholesalers, creating an enormous disadvantage for foreign glass makers. A spokesperson for Asahi Glass Co., one of Japan's largest flat glass producers, said, "We will review the areas that MITI says may have an exclusionary nature." Flat glass is used mainly in buildings and automobiles. The United States has complained that Japan's closed glass market structure typifies problems other producers, such as American construction companies, have in entering Japanese markets. U.S. construction companies have sought access to Japan's market since 1986 but have failed due to tight contracting agreements between Japanese builders and suppliers. U.S. and Japanese officials were unable to reach an agreement when they met in mid-June. USTR Mickey Kantor said the U.S. will implement sanctions November 1, if a resolution is not reached. Sources: Masayoshi Kanabayashi, "Japanese Make Trade Gesture to Summit," WALL STREET JOURNAL, July 1, 1993; Robert Hershey Jr., "Japan Formally Accused of Bias Against U.S. Contractors," NEW YORK TIMES, July 1, 1993; Asra Nomani, "U.S. Suspends Push For Japan to Accept Targets in Trade," WALL STREET JOURNAL, June 30, 1993. ________________________________________________________ Resources: "The Impact of the North American Free Trade Agreement on the Environment," Barbara Dudley, executive director of GREENPEACE, March 10, 1993. 43 pages. GREENPEACE, 1436 U Street NW, Washington, DC 20009. Tel: (202) 462-1177. Fax: (202) 462-4507. ________________________________________________________ Produced by: Gigi Boivin and Hannah Holm 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 ________________________________________________________