TRADE NEWS Volume 2 Number 170 WEEK IN REVIEW AND RECENT PUBLICATIONS September 24, 1993 HEADLINES: U.S. Court Ruling: No Environmental Study Needed for NAFTA Gephardt Vows to Fight NAFTA Iacocca Courted by White House to Battle Perot on NAFTA Clinton to Announce Worker Program, Labor Still Opposed EC Agrees to "Interpretive" Talks Over Blair House U.S. Rejects Further Farm Talks Latin American Leaders Call Blair House Too Weak Japan Hints at Rice Concessions India Outlines GATT Proposals ___________________________________________________________ NAFTA News Summary ___________________________________________________________ -U.S. Court Ruling: No Environmental Study Needed for NAFTA- A federal appeals court in Washington, D.C. has overturned a lower court ruling requiring the Clinton administration to complete an Environmental Impact Statement (EIS) for NAFTA. Three judges ruled unanimously this morning that NAFTA is not subject to judicial review as far as environmental assessments are concerned. On June 30, U.S. District Court Judge Charles R. Richey ruled in favor of environmental groups who had argued that the National Environmental Policy Act (NEPA) requires the White House to complete a formal review of NAFTA's environmental impact before sending the pact to Congress. Environmental groups, led by Public Citizen and the Sierra Club, expressed disappointment with today's decision and promised to appeal to the U.S. Supreme Court. -Gephardt Vows to Fight NAFTA- House Majority Leader Richard Gephardt (D-Missouri) formally announced his opposition to NAFTA earlier this week.. "Despite the best efforts of President Clinton and his administration to remedy the flaws in the Bush-negotiated NAFTA, the agreement is not a sufficient force for progress," Gephardt said. "I am announcing that I will vote against this NAFTA." Jim Jontz, director of the Citizens Trade Campaign, called Gephardt's decision "one more nail in the coffin of NAFTA." The announcement from Gephardt, the second- ranking Democrat in the House of Representatives, could persuade many of the 100 undecided House Democrats to reject the pact, -Iacocca Courted by White House to Battle Perot on NAFTA- Lee Iacocca joined President Clinton's campaign for NAFTA Thursday. "NAFTA will help us all," Iacocca said following a 30-minute Oval Office meeting with President Clinton. "I think it's good for America and good for jobs." Clinton invited the former Chrysler chief to join the campaign in hopes he can counter the anti-NAFTA statements of Ross Perot, and win support from Congress and Americans for the trade pact. "Lee Iacocca is a folk hero to many Americans," said White House Communications Director David Gergen. "I think when more Americans hear him, know where he stands, it will make a difference." -Clinton to Announce Worker Program, Labor Still Opposed- President Clinton is expected next month to introduce a worker retraining bill aimed at appeasing labor concerns over anticipated job losses under NAFTA. The proposal, which requires $5 billion annually in funding, would overhaul the current unemployment compensation program, but would not allocate funds for NAFTA- specific training programs. "People need to know that this administration will have policies in place to help ease the transition from the old economy to the new," said Labor Secretary Robert B. Reich. Thomas R. Donahue, AFL-CIO secretary-treasurer, criticized the plan. "No promise of worker retraining, no breakthrough in technology, no government-business partnership scheme can bring back the jobs and the investment dollars that NAFTA will take from the United States," Donahue said. Sources: "Court Strikes Down Environmental Study Order for NAFTA," UPI, September 24, 1993; "Clinton Wins NAFTA Victory in U .S. Court," REUTER, September 24, 1993; Pete Yost, "Trade Agreement," AP, September 24, 1993; Martin Crutsinger, "NAFTA," AP, September 21, 1993; "'Hero' Iacocca Voices Support of NAFTA," UPI, September 23, 1993; Tom Raum, "NAFTA-Iacocca," AP, September 23, 1993; Jim Luther, "NAFTA-Labor," AP, September 21, 1993. ___________________________________________________________ GATT News Summary ___________________________________________________________ Hopes for a speedy conclusion to the Uruguay Round of the General Agreement on Tariffs and Trade were dashed this week when the United States rejected an EC compromise to renew talks over the Blair House farm accord. Japan and India continued to push forward with market-access concessions. -EC Agrees to "Interpretive" Talks Over Blair House- Thirty-five EC foreign and farm ministers emerged from a 12-hour meeting Tuesday prepared to renew talks with the United States over the Blair House farm accord. France has called the present farm draft unacceptable and has threatened to veto the GATT accord unless changes are made to the Blair House text. EC officials, while expecting the promise of further talks to satisfy France and other EC members, tried to reassure the United States by saying that they did not seek renegotiation of the farm accord, only further talks. "The Commission is not closed to clarification or interpretation but there will be no renegotiation," said EC Farm Commissioner Rene Steichen. -U.S. Rejects Further Farm Talks- The United States immediately rejected the EC call for further farm talks, saying the 10-month old agreement would not be discussed. "We will not reopen the Blair House agreement either directly or indirectly," said U.S. Trade Representative Mickey Kantor. Kantor flatly refused to include the controversial deal on his agenda next week when EC trade chief Leon Brittan travels to Washington for a meeting. French Foreign Minister Alain Juppe warned that if the United States was unwilling to discuss the Blair House, then "the GATT accord will no longer figure on the Community's agenda." -Latin American Leaders Call Blair House Too Weak- Representatives from 11 Latin American countries complained to GATT Director-General Peter Sutherland that the United States and Europe have wasted two years of global trade talks over the much- disputed farm accord. "We are in the final and most sensitive stage of the Round and this must take place in strict transparency, avoiding the bilateral negotiations which have marked the last two years and made the multilateral system less credible," said members of the so-called Group of Rio in a formal statement at the end of last week. Latin American leaders also criticized the Blair House farm accord for being more protectionist than the original draft GATT proposal on agriculture. -Japan Hints at Rice Concessions- Japanese Prime Minister Morihiro Hosokawa hinted Monday during talks in Tokyo with British Prime Minister John Major that Japan would open its rice markets if the Uruguay Round of GATT talks nears conclusion. Hosokawa said he and Major "mutually reaffirmed" the need for countries facing "difficult" agricultural problems to override differences. The United States has been pressuring Japan for years to open its domestic rice market to imports. -India Outlines GATT Proposals- India is expected to offer a number of market access concessions in GATT talks, including tariff cuts on most industrial raw materials, intermediates and capital goods to a maximum 40% from the current top rate of 85%, according to the JOURNAL OF COMMERCE. India may also push for quicker integration of textile trade into the Uruguay Round of GATT talks. Textile trade currently is governed by a system of quotas under the Multi-Fiber Arrangement. Textiles comprise nearly one-third of India's total exports. Sources: Vicki Allen, "U.S. Says Will Not Reopen Farm Deal With EC," REUTER, September 21, 1993; "EC and France Strike Compromise Over Farm Talks," WALL STREET JOURNAL, September 21, 1993; Jeremy Gaunt, "EC Reaches Farm Deal, Says Will Speed GATT," REUTER, September 20, 1993; Robert Evans, "Developing States Skeptical on EC Trade Accord," REUTER, September 21, 1993; Roy Berocay, "Latins Say West Wasted Two Years in GATT Talks," REUTER, September 17, 1993; K. Brown, "Japan to Open Rice Market by Year-End," FINANCIAL TIMES, September 21, 1993; N. Vasuki Rao, "India Ready to Slash Tariffs to Help GATT Talks Along," JOURNAL OF COMMERCE, September 21, 1993. ___________________________________________________________ Recent Publications on International Trade ___________________________________________________________ For copies of the following, contact the authors or organizations listed. "The North American Free Trade Agreement: A Growing Threat to Indigenous Peoples," Connie Reimer, INSTITUTE FOR AGRICULTURE AND TRADE POLICY, September 1993. 4 pages. $1. "International Trade: Effectiveness of Market Promotion Program Remains Unclear," U.S. GENERAL ACCOUNTING OFFICE, June 1993. 20 pages. P.O. Box 6015, Gaithersburg, MD 20884-6015. (202) 512-6000. Fax: (301) 258-4066. First copy is free. This study concludes that no clear relationship exists between how much the U.S. Department of Agriculture spends on marketing commodities and the level of U.S. exports. "U.S. Food Aid Exports: The Role of Cargo Preference," Allan I. Mendelowitz, INTERNATIONAL TRADE, FINANCE AND COMPETITIVENESS DIVISION, June 1993. 15 pages. General Accounting Office, Gaithersburg, MD 20884-6015. (202) 512-6000. Fax: (301) 258-4066. First copy is free. The author argues that it would be cheaper to use foreign-flagged vessels for shipping U.S. food aid, although U.S. cargo preference laws require that the majority of aid be shipped on U.S. vessels despite the extra cost. "Farmers, Seedsmen, and Scientists: Systems of Agriculture and Systems of Knowledge," Stephen A. Marglin, HARVARD UNIVERSITY, May 1991. 59 pages. Institute for Agriculture and Trade Policy. $6.50. "Emerging Equity Markets in the Global Economy," John Mullin, FEDERAL RESERVE BANK OF NEW YORK, QUARTERLY REVIEW, Vol. 18, No. 2, Summer 1993. 30 pages. 33 Liberty St., New York, NY 10045- 0001. (212) 720-6134. Free. The author examines the impact of recent structural reforms in developing countries on their equity markets, and how these markets have been integrated into the global economy. "The GATT Uruguay Round: A Negotiating History," John M. Breen, KLUWER LAW AND TAXATION PUBLISHERS, 1993. 130 pages. 6 Bigelow St., Cambridge, MA 02139. (617) 354-0140. Fax: (617) 354- 8595. $35. "The Pathology of the U.S. Economy: The Costs of a Low-Wage System," Michael Perelman, ST. MARTIN'S PRESS, September 1993. 252 pages. 175 Fifth Ave., New York, NY 10010. (212) 982-3900. $45. "Difficult Liaison: Trade and the Environment in the Americas," Heraldo Munoz and Robin Rosenberg, eds., NORTH-SOUTH CENTER, 1993. 285 pages. Transaction Publishers, 140 W. Ethel Rd. Units L-M, Piscataway, NJ 08854. (908) 932-2280. Fax: (908) 932-3138. $21.95. ___________________________________________________________ Editors: Gigi DiGiacomo, Chirag Mehta 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 Mail:kmander@igc.apc.org