TRADE NEWS BULLETIN Volume 2 Number 217 Tuesday, December 7, 1993 Headlines: U.S., EU TALKS SUSPENDED FRANCE DEMANDS NEW CONCESSIONS, REJECTS DRAFT FARM DEAL LABOR UNIONS WITHHOLD CAMPAIGN FUNDS ________________________________________________________ GATT News Summary ________________________________________________________ U.S., EU TALKS SUSPENDED Despite nearly 24 hours of negotiation, top American and European Union trade officials failed to break the impasse in GATT talks. U.S. and EU officials said differences remain in audiovisuals, aircraft and agriculture provisions. "We were not ... able to conclude an agreement in the audiovisual sector because the (EU) was unwilling to provide foreign companies fair access to the revenues that are their due as owners of intellectual property rights," said U.S. Trade Representative Mickey Kantor. He also blamed the EU for failing to address the direct subsidies paid to the Airbus consortium. Under a previous bilateral agreement, the EU agreed to limit government funding for aircraft development to 33 percent of total development costs, and to require strict repayment from development borrowers. The U.S. claims these terms are not being met. The airbus consortium, grouping British Aerospace, Aerospatiale of France, Deutsche Airbus of Germany and CASA of Spain, is the world's second largest commercial aircraft maker behind Boeing. Kantor warned that there would be no Uruguay Round accord without satisfactory pacts on audio-visual and aircraft subsidies. EU member states offered mixed reactions to the outcome of overnight talks. Despite an earlier statement by Kantor that significant progress had been made in textile and agriculture sectors, Portugal was reportedly dissatisfied with the textile agreement. French farm groups welcomed farm concessions, but rejected the overall pact. Immediately following U.S.-EU negotiations, GATT Director-General Peter Sutherland asked Kantor and EU Trade Commissioner Leon Brittan to travel to Geneva so Sutherland could assist them in completing the deals. "On behalf of over 100 other participants involved in the Uruguay Round trade negotiations," Sutherland announced, "I refuse to accept any failure to conclude negotiations at the bilateral level between the European (Union) and the United States." Other unresolved issues in the seven-year-old talks include U.S. demands to change anti-dumping rules, banking and maritime challenges, creation of the Multilateral Trade Organization and attempts by the United States to protect its Section 301 law. In addition, international concern over food safety, intellectual property rights and services need to be addressed. Sources: "Kantor -- No GATT Deal Without Audio-Visual, Aircraft," REUTER, December 7, 1993; Bill Lamp, "GATT Talks Break Off Over Film, Aircraft Issues," UPI, December 7, 1993; Robert Evans, "GATT Chief Calls Kantor, Brittan to Geneva," REUTER, December 7, 1993; David Buchan, "French Farmers Cool on Deal," FINANCIAL TIMES, December 7, 1993; "EC's Brittan Plans to Go to Geneva on Trade," REUTER, December 7, 1993; Keith Bradsher, "Compromises Edge GATT Toward a New Accord," NEW YORK TIMES, December 5, 1993. ________________________________________________________ FRANCE DEMANDS NEW CONCESSIONS, REJECTS DRAFT FARM DEAL French Foreign Minister Alain Juppe told European counterparts in Brussels yesterday that the draft farm accord reached between EU and U.S. negotiators was "not acceptable" because the European Union could not guarantee that the proposed draft GATT accord would not violate Europe's Common Agriculture Policy. The temporary pact negotiated by U.S. Agriculture Secretary Mike Espy and EU Farm Commissioner Rene Steichen would: extend the Blair House "peace clause" from six to nine years; delay some of the cuts in subsidized farm exports; and reduce the impact of initial subsidy cuts by using last year's level of exports, rather than the 1986-89 average, as the basis for reductions. French Prime Minister Edouard Balladur outlined new trade demands in a letter sent last night to German Chancellor Helmut Kohl, EU President Jacques Delors and Belgium Prime Minister Jean-Luc Dehaene. Demands, which include improved EU trade defense mechanisms and a guarantee on levels of agricultural production, were criticized by German Economics Minister Gunther Rextrodt as going "too far." The FINANCIAL TIMES reports that "fresh uncertainty at this late stage could upset plans to use the EU-U.S. accords to conclude the multilateral GATT negotiations in Geneva." Sources: Lionel Barber, David Gardner, "France Sets Terms for World Trade Agreement," FINANCIAL TIMES, December 7, 1993; "U.S., EC Trade Accord Is Elusive as French Boost Their Demands," INVESTOR'S BUSINESS DAILY, December 7, 1993; Bill Lamp, "World Trade Talks Suffer Setback," UPI, December 6, 1993; Jeremy Gaunt, "EC-U.S. Seek Framework Trade Pact, But France Is Question," REUTER, December 6, 1993; "U.S., EC Report Progress, Snags," UPI, December 6, 1993; David Buchan, "French Farmers Cool on Deal," FINANCIAL TIMES, December 7, 1993; Peter Blackburn, "EC-U.S. Strike Agreement on Farm Trade," REUTER, December 6, 1993; Paul Taylor, "French Wage Hard GATT Battle on Three Points," REUTER, December 7, 1993. ________________________________________________________ NAFTA News Summary ________________________________________________________ LABOR UNIONS WITHHOLD CAMPAIGN FUNDS Organized labor, led by the AFL-CIO, has decided to cut off all financial support to Democratic campaign committees for at least the next three months as a way to register their anger over NAFTA passage. Approximately 50 union political directors and other labor leaders who met in Washington last week said they would wait until the presidents of the 86 AFL-CIO unions gather in February before dispersing campaign funds to Democratic candidates. "There's no question ... that NAFTA is a part of it," said AFL-CIO Spokesperson Rex Hardesty. Anther labor source confirmed, "People were very angry at the couple dozen House members and the two or three senators who broke their pledges to vote against NAFTA." The AFL-CIO contributed $1,059,700 in campaign funds to the three major Democratic committees this year. Representative Jim Bacchus (D-Florida) encountered angry citizen reaction to NAFTA during a recent "door-knocking" visit through Sherwood Forest, Florida. "I know how you voted on NAFTA!" said Everett Quint, a 64-year-old retired cabinetmaker, when Bacchus knocked at his door. Local Republicans and members of Ross Perot's United We Stand say Bacchus will be voted out of office next year, largely because of his "yes" vote on NAFTA. "The 100 or so members I've spoken to in the last two weeks are very upset with him," said Dennis Walter, a United We Stand district director. Bill Bywater, leader of the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, plans to target several lawmakers who failed to vote down NAFTA. Likely targets include Tom Sawyer (D-Ohio), Nita Lowey (D-New York) and Bob Franks (R- New Jersey). Bywater plans to withhold campaign funds and canvass districts to ensure the lawmakers are not reelected. Sources: David S. Broder, "Labor's NAFTA-Math: 1 Trade Pact 3-Month Cut in Funds for Democrats," WASHINGTON POST, December 7, 1993; "BRF--Labor-NAFTA," AP, December 7, 1993; Asra Q. Nomani, "Fire- Breathing Unionist Bywater Has Become Hero for Disaffected Losers of NAFTA Battle," WALL STREET JOURNAL, December 7, 1993; Clifford Krauss, "On Congress's Home Front, the Campaign Never Ends," NEW YORK TIMES, December 7, 1993. ________________________________________________ Event: News Conference: "NAFTA Opponents Turn Attention to GATT: Citizens Groups Caution Administration Against Rushing to Finish Another Bad Trade Deal," Wednesday, December 8, 10:00 a.m., McPherson Square, Washington, D.C. Contact: Angela Ledford, CITIZENS TRADE CAMPAIGN, Tel: (202) 554-1102, Fax: (202) 554-1654. ________________________________________________ Editors: Gigi DiGiacomo 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 ________________________________________________________