TRADE NEWS BULLETIN Volume 2 Number 131 Wednesday, July 21, 1993 Headlines: CANADIAN NEGOTIATOR SAYS U.S. MAY NEED TO WEAKEN STANCE U.S. PRESENTS STATEMENT IN ENVIRONMENTAL APPEAL U.S. ENVIRONMENTAL GROUPS MAY SUE GOVERNMENT OVER GATT JAPAN-U.S. TRADE TARGETS NOT FORESEEN ________________________________________________________ NAFTA News Summary ________________________________________________________ CANADIAN NEGOTIATOR SAYS U.S. MAY NEED TO WEAKEN STANCE Canadian Trade Minister Tom Hockin hinted the United States should stop seeking enforcement mechanisms for labor and environmental side accords to the North American Free Trade Agreement. "I think you can narrow the grounds for disagreement and you may be able to do away with the need for trade sanctions," Hockin told reporters in Ottawa. "Sanctions create the kind of trade barriers that the NAFTA is designed to eliminate." He argued the United States should stop seeking enforcement in an effort to complete the free trade pact before Congress breaks August 6. "It seems the Americans are running out of time," Hockin said. U.S. Commerce Secretary Ron Brown said he expects side accords to be completed over the next few weeks. Negotiators meet in Ottawa today and in Washington next week in an attempt to conclude the supplemental accords. U.S. Trade Representative Mickey Kantor flies to Mexico today to meet with President Carlos Salinas de Gortari and Mexico's trade minister. Sources: Robert Kozak, "NAFTA Negotiators Close to Finalizing Side Deals," REUTER, July 20, 1993; Bob Davis, "Clinton Is Pushing to Get Side Deals on Free Trade Pact," WALL STREET JOURNAL, July 21, 1993; "Canada Says Trade Deal Possible Without Sanctions," REUTER, July 20, 1993; "Labor Letter," WALL STREET JOURNAL, July 20, 1993. ________________________________________________________ U.S. PRESENTS STATEMENT IN ENVIRONMENTAL APPEAL The U.S. Justice Department submitted a 50-page brief appealing a federal district court ruling that the Clinton administration must conduct an environmental impact statement for NAFTA. Judge Charles Richey ruled last month that the National Environmental Policy Act (NEPA) requires an environmental statement for all major federal actions, including trade agreements. The Clinton administration contends that U.S. environmental laws do not apply to international trade agreements. Justice Department officials dismissed as "too speculative" concerns about increased border pollution under NAFTA. Acting Assistant Attorney General Myles Flint, head of the Justice Department's Environmental Division, said the ruling has already created uncertainty over the pact's future. Flint called the ruling an "intrusion on the president's inherent authority to conduct foreign affairs and enter into international agreements." He said it has "disrupted the sensitive political and diplomatic landscape in which the president will present NAFTA to Congress." The appeals court will hear oral arguments August 24. Sources: James Vicini, "U.S. Appeals NAFTA Environmental Review Ruling," REUTER, July 20, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ U.S. ENVIRONMENTAL GROUPS MAY SUE GOVERNMENT OVER GATT Three U.S. environmental groups plan to force the Clinton administration to produce an environmental impact statement (EIS) for the General Agreement on Tariffs and Trade. Public Citizen, Friends of the Earth and the Sierra Club say they will "probably" sue the government to ensure that the environmental implications of a global trade pact are addressed. The three groups recently won a similar case ordering the U.S. government to produce an EIS for the North American Free Trade Agreement. Peter Sutherland, GATT director-general, said claims by environmental groups that the global trade accord is "anti-green" are unfounded. He said negotiations to link trade and the environment should begin after the Uruguay Round of GATT is completed. Sources: James Ledbetter, "Blitzkriegs," VILLAGE VOICE, July 20, 1993; Keith M. Rockwell, John Zarocostas, "New GATT Chief Shakes Up Staid Trade Bureaucracy," JOURNAL OF COMMERCE, July 19, 1993. ________________________________________________________ Other Trade News ________________________________________________________ JAPAN-U.S. TRADE TARGETS NOT FORESEEN Japanese officials continue to reject U.S. demands for specific trade targets, and are expected to do so regardless of which political party shapes the new government. Sozaburo Okamatsu, vice minister of trade, said the current political turmoil surrounding last weekend's parliamentary elections will have "little influence" on trade negotiations. The Liberal Democratic Party (LDP), which had ruled Japan for 38 years, lost its parliamentary majority Sunday. Some officials worried that the United States may try to take advantage of the political crisis by demanding specific trade surplus reduction measures from Japan. "America may rock Japan with demands for relaxation of restrictions and reduction of price gaps between foreign and domestic products," reported Japan's YOMIURI newspaper. Okamatsu said trade negotiations with the United States will be postponed until September. The U.S. trade deficit with Japan dropped slightly in May due to a reduction in U.S. imports of Japanese goods. Analysts suspect the drop resulted from a weakening of the U.S. dollar against the yen. Sources: David Thurber, "Japan-U.S. Trade," AP, July 21, 1993; Richard Lawrence, "Steep Drop in Japanese Imports Helps Shrink U.S. Trade Deficit," JOURNAL OF COMMERCE, July 20, 1993. ________________________________________________________ Resources: "Heading South: The High Cost of NAFTA," PRAIRIE JOURNAL Volume 4, Number 1, Spring 1993. $35.00 quarterly subscription. Contact: PrairieFire, 550 Eleventh Street, Suite 200, Des Moines, Iowa 50309- 2622. ________________________________________________________ Editors: Gigi Boivin and 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 ________________________________________________________