TRADE NEWS BULLETIN Volume 2 Number 141 Wednesday, August 4, 1993 Headlines: ENVIRONMENTAL CLEANUP TOPS NAFTA TALKS JAPANESE STUDY CONCLUDES NAFTA VIOLATES GATT RULES FRANCE READY TO MAKE FARM CONCESSIONS U.S. MAY BE WILLING TO LIBERALIZE MARITIME INDUSTRY ________________________________________________________ NAFTA News Summary ________________________________________________________ ENVIRONMENTAL CLEANUP TOPS NAFTA TALKS Trade ministers from the United States, Canada and Mexico will focus on border cleanup when they meet today and Thursday to discuss side agreements to the North American Free Trade Agreement. Several accords emerged from last week's talks: Canada will not have to provide funding for the cleanup of the U.S.-Mexico border; the World Bank will likely supply $4 billion in loans; bonds will be issued to finance border projects; and strong private sector participation will be sought. A number of issues remain unresolved. Mexico continues to press for a border fund that would raise as much as $8 billion through bonds and fines against polluters. The United States favors sanctions to penalize repeated violators and is seeking greater funding through various mechanisms, including the creation of a North American Development Bank. Among those in the United States who agree that the bank is needed, opinion is divided as to whether the bank should be independent or affiliated with the Inter-American Development Bank. Sources: "Border Pollution and Compliance Subject of NAFTA Negotiations," INVESTOR'S BUSINESS DAILY, August 4, 1993; "U.S. Says Progress Being Made in NAFTA Talks," REUTER, August 3, 1993. ________________________________________________________ JAPANESE STUDY: NAFTA VIOLATES GATT RULES A Japanese government report concluded that NAFTA violates international trade rules. The Study Group on Economic and Trade Policy in the Asia-Pacific Region said in an interim report that NAFTA regulations on local content, safeguard measures and tariffs will discriminate against non-NAFTA members. The report said NAFTA "will be disadvantageous for other trading partners especially in textiles on which the United States maintains high tariffs." In addition, it contends that NAFTA's increase in the local content requirement on cars from 50% to 62.5% violates GATT rules. However, the group said NAFTA will hurt Japan less than other Asian nations because U.S. tariffs on Japanese exports are relatively low. Source: "Japan Says Part of NAFTA Is Against Trade Rules," REUTER, August 4, 1993. ________________________________________________________ GATT News Summary ________________________________________________________ FRANCE READY TO MAKE FARM CONCESSIONS French Prime Minister Edouard Balladur said Paris would make agriculture concessions to help secure a General Agreement on Tariffs and Trade accord. "We have to make concessions ... we shall present concessions in August in Brussels," Balladur told CNN International in London last week. But Balladur also said that France would not agree to last November's U.S.-EC farm deal, which he called unacceptable. France will present the four farm proposals and a three-month-old document defining France's position in GATT talks to its partners in August. Full discussion by EC foreign and agriculture ministers is expected in mid-September. Source: "France Working on Fresh GATT Proposals," REUTER, August 3, 1993; "Balladur Says France Will Make GATT Concessions," REUTER, July 26, 1993. ________________________________________________________ U.S. MAY BE WILLING TO LIBERALIZE MARITIME INDUSTRY The United States may be willing to liberalize maritime services under GATT, providing other market access issues are resolved. President Clinton reportedly hinted during last month's meeting with Quad leaders from Canada, Japan and the European Community that the White House is ready to make some changes. The U.S. has traditionally opposed including shipping services in global trade accords and has thus blocked maritime service arrangements in GATT. "It appears there is now a clear indication by the Quad powers to do something on maritime," said one negotiator. The EC crafted a maritime draft proposal that aims to liberalize ocean shipping, port access and use, and auxiliary port services. The United States set two conditions before it will consider a shipping accord: the European Community must commit to opening its audiovisual sector to foreign broadcasting; and other nations must make other liberalization commitments. Some officials and lobbyists insist the U.S. position on maritime has not changed. John Meagher, a Washington attorney who represents several U.S. flag shipping companies, said, "There is no change in the U.S. position. They've made it plain they will not negotiate on shipping issues." Source: John Zarocostas, "U.S. Eases Stand on Ship Services Inclusion in GATT," JOURNAL OF COMMERCE, July 26, 1993. ________________________________________________________ Resources: "NAFTA Supplemental Scorecard," PUBLIC CITIZEN, July 29, 1993, an analysis of side accords based on information from U.S. Trade Representative meetings, phone conversations with USTR officials and the most recent reports from INSIDE U.S. TRADE. For a copy contact: PUBLIC CITIZEN, 215 Pennsylvania Avenue, SE, Washington, D.C. 20003. Tel: (202) 546-4996. Fax: (202) 547-7392. "The Politics of NAFTA: Judicial Surprises and Populist Perils," AMERICAN POLITICAL REPORT, Volume XXII, Number 22, July 2, 1993. For a copy contact: AMERICAN POLITICAL RESEARCH CORPORATION, 7316 Wisconsin Avenue, Bethesda, Maryland 20814. Tel: (301) 654-4990. ________________________________________________________ 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 ________________________________________________________