Trade Week in Review and Recent Publications November 27 - December 3, 1993 Volume 2 Number 215 Headlines: Negotiators Scramble to Meet Deadline U.S., EU Close to Farm Trade Resolution, Expect Deal Monday Conflicting Reports Continue to Surround Rice Policy Canada Says It Will Hold Out for Supply Management Provisions Developing Countries Frustrated With Market Access Offers U.S. Congressional Leaders Create GATT Advisory Group Canada Will Implement NAFTA Salinas Announces PRI Presidential Candidate ___________________________________________________________ GATT News Summary ___________________________________________________________ -Negotiators Scramble to Meet Deadline- GATT Director-General Peter Sutherland told negotiating teams that substantive deals must be completed by December 13 so that texts can be finalized and translated by the December 15 deadline. "The point is we have to have time to wrap it up," Sutherland said. "People must know they can't just come in on the 15th and go on talking." France is calling for an even earlier deadline -- December 10 -- saying it wants to present a draft accord to Parliament for a vote of confidence. -U.S., EU Close to Farm Trade Resolution, Expect Deal Monday- U.S. Trade Representative Mickey Kantor told reporters Thursday after a two-day meeting with European Union Trade Commissioner Leon Brittan: "We have agreed on an approach to all major issues that would pave the way to the completion of a substantive and comprehensive Uruguay Round." He said the two trading partners had reached an outline pact on industrial tariffs and all service sectors exceptaudiovisual. According to Kantor, the outline includes "an approach which would successfully resolve all the issues in the area of agriculture." Kantor cautioned that there was still "a lot left to do" but said leaders planned to complete deals Monday. The United States hinted earlier this week that it was prepared to make minor concessions to the overall agriculture section of GATT talks, but rejected French demands to renegotiate the Blair House farm agreement. Brittan told reporters that EU foreign ministers had backed the outline, and that they instructed him to continue trying to reach a deal by Monday. Chief European negotiator Tran van Thinh said the outcome of U.S.-EU talks was "encouraging but not enough." -Conflicting Reports Continue to Surround Rice Policy- Japanese newspapers reported that Prime Minister Morihiro Hosokawa will announce plans December 10 to lift the 45-year old ban on rice imports if the United States and European Union resolve disputes over the Blair House farm accord. Under a secret rice proposal, reportedly negotiated between Japan and the United States, Japan would begin importing a "minimum access" amount of rice equal to four percent of its national production and raise the level to eight percent in exchange for a six year moratorium on import tariffs. Negotiations to completely lift the ban would resume in fiscal year 1999/2000. CHINA TIMES reported Monday that Taiwan also would relax its ban on rice imports if Japan was forced to do the same. However, Japan and Taiwan representatives officially denied plans to open their rice markets. Meanwhile, Indonesia is expected to propose a significant reduction in its rice imports during upcoming negotiations. Indonesia agreed to import only 70,000 tons of foreign rice -- 10 percent of the 700,000 tons proposed by GATT. -Canada Says It Will Hold Out for Supply Management Provisions- Canadian Agriculture Minister Ralph Goodale said Canada will defend its system of import quotas on agricultural products during GATT talks. "We will be defending Article 11 (which allows for the import quotas) up until the very end," Goodale said. Canada maintains import quotas on dairy and poultry products. EU Farm Commissioner Rene Steichen has refused to back the proposal to clarify and strengthen Article 11. Under the current GATT proposal, Canada would be required to convert import quotas to tariffs and eventually phase them out. -Developing Countries Frustrated With Market Access Offers- India's GATT ambassador, Balkrishnan Zutshi, Friday said developing countries were frustrated with poor market access offers by leading GATT participants. "There is a deep imbalance in the exchange of concessions in the areas of interest to developing countries ... in textiles and agriculture," Zutshi said. "The developing countries are making larger offers in the areas of interest to the developed countries. It should work the other way around." The United States kicked off efforts this week to extend the tariff phase-out on textiles from 10 to 15 years, which Harriet Lamb of the World Development Movement said would "seriously undermine" economic prospects of the developing world. -U.S. Congressional Leaders Create GATT Advisory Group- Senate Republican Leader Bob Dole and House Majority Leader Richard Gephardt announced Thursday the creation of an industry advisory group to monitor final GATT negotiations. During the next two weeks, Dole and Gephardt will consult with members of the new Advisory Group to obtain their views and input on developments in negotiations. "We can't afford to accept a deficient GATT that sells America short," Gephardt said. The 11-member Advisory Group includes representatives from Cargill, Farmland Industries, Kodak Co., Chrysler Corp., Motorola Inc., Intel Corp., Zenith Electronics Corp., Bethlehem Steel and others. Sources: "Kantor Says U.S., EC Have Outline Pact On All but Audiovisual," REUTER, December 2, 1993; Frances Williams, "Trade Officials Encouraged by Progress in Talks," FINANCIAL TIMES, December 3, 1993; Roger Cohen, "U.S. and Europeans Report Key Steps to a Trade Accord," NEW YORK TIMES, December 3, 1993; Bob Davis, Julie Wolf, "U.S., EC Believe Deal Is in Sight on World Trade," WALL STREET JOURNAL, December 3, 1993; "U.S. and EC Report They're Closing In on Trade Agreement," INVESTOR'S BUSINESS DAILY, December 3, 1993; Michelle Thom, "Japan Places Political Reform Over Rice," FARM POLICY WEEK, November 29, 1993; "Taiwan Denies It Might Relax Ban on Rice Imports," REUTER, November 29, 1993; "Canada May Accept Tariffs to Get GATT Deal -- Goodale," REUTER, December 2, 1993; "Canada Shot Down on GATT Proposal: Moved Over Farm Data," AG SOURCE, November 29, 1993; "Canada Says to Defend Supply Management to End," REUTER, December 2, 1993; "Developing Countries Unhappy in Trade Round," REUTER, December 3, 1993; Harriet Lamb, "Textiles Bargaining Tactic Heavy Handed," FINANCIAL TIMES, December 3, 1993; Robert Evans, "U.S. Pushes Trade Treaty Changes in Textiles, Services," REUTER, November 29, 1993; "U.S. Congress Leaders Urge Fair GATT Deal," REUTER, December 2, 1993; "Dole & Gephardt Announce Uruguay Round Advisory Group," U.S. CONGRESS, December 2, 1993. ___________________________________________________________ NAFTA News Summary ___________________________________________________________ -Canada Will Implement NAFTA- Canadian Prime Minister Jean Chretien agreed Thursday to implement NAFTA January 1 as planned, despite failing to get changes he sought on energy provisions from the United States. Chretien got "zero, zilch, nothing" of what he promised to obtain during last fall's election, said former deputy prime minister Jean Charest. "It's not a perfect situation," Chretien admitted, but he said Canada received several promises from its trade partners. U.S. and Mexican leaders agreed to participate in talks with Canada over the next two years on setting codes for trade subsidies and "dumping" practices. Canada was not awarded the same energy provisions as Mexico under NAFTA, but made a declaration to maintain energy security during times of shortages. In the event of shortages, Canada will "interpret and apply the NAFTA in a way that maximizes energy security for Canadians," Chretien said. But some Canadian trade analysts said Chretien's statement carried little, if any, legal weight. Canada's energy industry welcomed Chretien's decision to go ahead with NAFTA. -Salinas Announces PRI Presidential Candidate- Social Development Minister Luis Donaldo Colosio was nominated Sunday as the presidential candidate of Mexico's ruling Institutional Revolutionary Party (PRI). According to PRI officials, Colosio has broad party support, largely due to his multi-billion dollar spending on an anti-poverty campaign, environmental clean-up and housing and infrastructure programs. "Mr. Colosio is known by all of us and we will work for him," said Mario Ruiz, municipal president from Naucalpan. During his acceptance speech Sunday night, Colosio strongly endorsed Salinas' pro-market economic policies and pledged to continue the government's anti-poverty program. The PRI has dominated elections for the past 64 years. Sources: John Urquhart, Rosanna Tamburri, "Canada Clears NAFTA, Claims 'Improvements'," WALL STREET JOURNAL, December 3, 1993; "Mexico Forms Trade Dispute Groups With U.S., Canada," REUTER, December 2, 1993; "Canada-NAFTA," AP, December 2, 1993; "Canada Says NAFTA to Become Law as Planned by January 1," UPI, December 2, 1993; "Clinton Announces Canada Will Sign NAFTA on Jan. 1," CONGRESS DAILY, December 2, 1993; Chris Reese, "Canada Energy Industry Supports NAFTA Declaration," REUTER, December 2, 1993; Damian Fraser, "Mr Continuity Set to Succeed Salinas," FINANCIAL TIMES, November 30, 1993; Paul B. Carroll, "Rare Rift in Mexico's Ruling PRI is Quickly Patched Up by Salinas," WALL STREET JOURNAL, November 30, 1993. ___________________________________________________________ Recent Publications on International Trade ___________________________________________________________ For copies of the following, contact the authors or organizations listed. "The Evolving Supra-National Policy Arena," David Ranney, CENTER FOR URBAN ECONOMIC DEVELOPMENT, August 1993. 46 pages. 815 W. Van Buren St., Suite 500, Chicago, IL 60607-3525. (312) 996-6336. Fax: (312) 996-5766. Contact author for prices. "The Challenge of Cross-Border Environmentalism: The U.S.-Mexico Case," Tom Barry, RESOURCE CENTER PRESS, 1993. 121 pages. Box 4506, Albuquerque, NM 87196. (505) 842-8288. $9.95. "Breaking the Deadlock: The United States and Agriculture Policy in the Uruguay Round," Mark Ritchie, INSTITUTE FOR AGRICULTURE AND TRADE POLICY, October 1993. 67 pages. $5. "Indians Destroy American-Based Seed Company," NATIONAL PUBLIC RADIO, November 15, 1993. 3 pages. 2025 M St., NW, Washington, DC 20036. (202) 822-2000. (202) 822-2329. $10. This is a transcript of a radio interview between Cargill officials and Indian farm leaders. "Dark Victory: The U.S., Structural Adjustment, and Global Poverty," Walden Bello with Shea Cunningham and Bill Rau, FOOD FIRST BOOKS, October 1993. 160 pages. 398 60th St., Oakland, CA 94618. (510) 654- 4400. Fax: (510) 654-4551. $12.95. "The Pacific Rim, Special APEC Issue: Seattle on the Brink," Denis Hayes, SEATTLE WEEKLY, November 1993. 4 pages. INSTITUTE FOR AGRICULTURE AND TRADE POLICY. $1.50. "NAFTA's Environmental Side Agreement: A Review and Analysis," Mary Kelly, TEXAS CENTER FOR POLICY STUDIES, September 1993. 17 pages. P.O. Box 2618, Austin, TX 78768. (512) 474-0811. Free. "The Carbon II Dilemma: A Case Study of the Failings of U.S./Mexico Environmental Management in the Border Region," Chris Green and Mary Kelly, TEXAS CENTER FOR POLICY STUDIES, September 1993. 62 pages. P.O. Box 2618, Austin, TX 78768. (512) 474-0811. $3. "Tourism, World Heritage and Sustainable Development," Bernd von Droste, Dana Silk and Mechtild Rossler, KYOTO JOURNAL, No. 24, 1993. 4 pages. 31 Bond St., New York, NY 10012. (212) 228-3063. $12. "Environmental Regulation and the GATT," Jeanne J. Grimmett, CONGRESSIONAL RESEARCH SERVICE, March 27, 1991. 43 pages. Free. Call your Congressional representative's office to order CRS studies. This study discusses the various types of health and environmental proposals in current GATT rules, with attention to GATT rulings involving U.S. statutes or complaints. ___________________________________________________________ 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 E-Mail:kmander@igc.apc.org ___________________________________________________________