Trade Week in Review and Recent Publications December 4-10, 1993 Volume 2 Number 220 Headlines: Negotiators Work Toward Final Agreements New Concessions: Farm Deal, MTO, Rice Unresolved Issues Reaction to Proposed Deals Largely Negative Clinton Signs NAFTA NAFTA Will Hurt Mexican Textile, Electronics, Agriculture Industries ___________________________________________________________ GATT News Summary ___________________________________________________________ -Negotiators Work Toward Final Agreements- Negotiators have begun near-final talks with GATT chief Peter Sutherland in an attempt to "multilateralize" several bilateral trade proposals forged by the United States and European Union this week. But the EU estimates there is only enough time to meet with 20-25 of GATT's largest trading nations before the December 15 deadline. This could weaken support for the accord as many of GATT's developing nations would be forced to make a decision on the deal without having discussed its details. -New Concessions: Farm Deal, MTO, Rice- Throughout the week negotiators succeeded in reaching some bilateral and multilateral accords in long-standing agriculture disputes. France agreed to a final U.S.-EU farm accord after significant changes were offered by the United States, and the European Union promised cash compensation for French farmers. South Korea announced plans to open its rice market under GATT, but Japan temporarily postponed formal announcement of its decision on rice. The United States also agreed to French demands to create a Multilateral Trade Organization (MTO) to replace GATT if other elements in a GATT package are satisfactory. Tariff cuts were reached in electronics, wood, paper products and toys. -Unresolved Issues- Negotiators failed to resolve a number of trade disputes involving audiovisuals, aircraft, textiles, steel, leather and maritime liberalization. The maritime dispute, which erupted Thursday, was so heated that EU negotiator Karl Falkenberg told reporters it could block conclusion of the Uruguay Round. "This is a crisis for the services talks," he said. The United States and Japan rejected new EU offers in audiovisuals Friday. In addition the U.S. remained firm on demands to strengthen proposed GATT provisions on anti-dumping laws, intellectual property rights, tax exemption, and banking reforms. -Reaction to Proposed Deals Largely Negative- % "Many countries are dissatisfied" with the U.S.-EU farm deal, said GATT Trade Negotiations Committee (TNC) Chair Sergio Abreu. "It (the accord) weakens the (draft) final act ... we don't like it." The Cairns Group of farm exporting nations is demanding improved EU market access for farm products. The U.S. National Corn Growers Association warned it would oppose a GATT deal that limits U.S. corn gluten shipments to the European Union. More than 30,000 farmers and politicians gathered in Seoul this week to protest South Korea's decision to open its rice market. Many protesters carried signs condemning the U.S. for pressuring their government to agree to rice imports. % Developing countries, in general, have reported frustration over the direction of GATT talks. Many developing nations have made substantial liberalization offers in return for a weakened Dunkel Draft in agriculture and textiles. China, India and other developing nations are reportedly fighting a U.S. proposal to extend the phaseout of textile quotas from 10 to 15 years. Latin America opposes seasonal concessions won by the United States for fruits and vegetables. Christian Aid, a British-based non-governmental agency, is calling for special concessions for the world's poorest countries. It says poor countries will be prevented from gaining market access under the proposed GATT deal. % Japan expressed concern and anger over the U.S.-EU deal on industrial goods and services. Koro Besscho, director of Japan's foreign office on GATT, said the proposal put forward by Kantor and Brittan was substantially less than that agreed to during Quad negotiations last July and hinted that Japan may reverse some of its own offers in light of the weakened U.S.-EU proposals. % Environmental groups, concerned that the current GATT deal would undermine national environmental laws, are calling for firm commitments from the United States and other leading GATT members to create a panel to link trade and environment concerns, and provide a transparent forum to settle disputes. The United States has reportedly received little support for these proposals. Instead, other GATT members appear willing only to study the links between trade and the environment under the creation of a work program. Some developing nations already support such a work program as proposed by the EU, Brazil and India. Sources: Clare Nullis, "Trade Talks," AP, December 9, 1993; Robert Keatley, "Late, Loud Objections to GATT in U.S. Are Not Likely to Block Its Fast Track," WALL STREET JOURNAL, December 10, 1993; "EC GATT Farm Access Must Be Improved -- Cook," REUTER, December 10, 1993; Eiichiro Tokumoto, "Leather's a Headache for Japan GATT Negotiators," REUTER, December 10, 1993; "U.S. Says Opposes New EC Audio-Visual Offer," REUTER, December 10, 1993; Nelson Graves, "EC Expects Sweeping GATT Tariff-Cutting Pact," REUTER, December 9, 1993; "U.S. Seen Accepting New Trade Body if GATT Succeeds," REUTER, December 9, 1993; Peter Blackburn, "GATT's TNC Chairman Criticizes EC-U.S. Farm Deal," REUTER, December 9, 1993; "U.S. Corn Group Warns Gluten Is GATT Deal-Breaker," REUTER, December 6, 1993; David E. Sanger, "Ending Sacred Trust, Will Open Rice Market," NEW YORK TIMES, December 8, 1993; "GATT: U.S. Accused of Backtracking, Crisis Seen in Services Talks," KRF, December 9, 1993; Letter to Mickey Kantor, SIERRA CLUB, December 8, 1993; Asra Q. Nomani, Bhushan Bahree, "Aircraft Firms Ask to Remove Issue at GATT," WALL STREET JOURNAL, December 10, 1993. ___________________________________________________________ NAFTA News Summary ___________________________________________________________ -Clinton Signs NAFTA- U.S. President Bill Clinton signed the North American Free Trade Agreement Wednesday. In an auditorium packed with NAFTA supporters Clinton said the accord "has become a symbolic struggle for the spirit of our country and how we would approach this very rapidly changing world." NAFTA will go into effect January 1, 1994. -NAFTA Will Hurt Mexican Textile, Electronics, Agriculture Industries- Arturo Nava Bolanos, president of the Social Union of Mexican Businesses, said Mexico's textile, electronics and agriculture industries will be hardest hit under NAFTA. The electronics industry, for example, reportedly lacks updated equipment, which will make it difficult for them to compete with U.S. and Canadian companies operating in Mexico. Mexico's farming industry is also expected to suffer in competition with the United States and Canada for powdered milk, chicken, meat and eggs commodities. The National Rural Credit Bank announced last month that it would provide loans to Mexican farmers in an attempt to help them adjust to economic integration. Sources: "Trade-NAFTA," REUTER, December 8, 1993; "NAFTA, Crisis for Textile, Electronics, and Agriculture Industries," EQUIPO PUEBLO/RMALC, December 1, 1993. ___________________________________________________________ Recent Publications on International Trade ___________________________________________________________ For copies of the following, contact the authors or organizations listed. "Uruguay Round in GATT and Trade Related Issues", INTERNATIONAL COALITION FOR DEVELOPMENT ACTION, October 1993. 37 pages. 115 Rue Stevin, 1040 Brussels, Belgium. (32) 2-230-04-30. Fax: (32) 2- 230-03-48. E-mail: geo2:icda. Contact organization for prices. This resource provides a summary of issues involved in the Uruguay Round of GATT negotiations. "Equity Growth and Participation: The Information Age," DEVELOPMENT, 1993:3. 88 pages. Society for International Development, Palazzo Civilta del Lavoro - EUR/Rome 00144, Italy. (39-6) 592-5506. Fax: (39-6) 591-9836. E-Mail: s.i.d.@agora.stm.it. Contact organization for prices. "Green Revolution: Cuba's National Experiment with Organic Agriculture," Peter Rosset and Medea Benjamin, eds., GLOBAL EXCHANGE, 1993. 2017 Mission St., Rm. 303, San Francisco, CA 94110. (415) 255-7296. Fax: (415) 255-7498. $11.95. "Betraying the National Interest," Kevin Danaher, Rachel Schurman and Frances Moore Lappe, GLOBAL EXCHANGE, 1993. 170 pages. 2017 Mission St., Rm. 303, San Francisco, CA 94110. (415) 255-7296. Fax: (415) 255-7498. $8.95. The authors conclude U.S. foreign aid has been used to support elites opposed to majority interest in developing countries. "When Living is a Luxury," Maggie Black, NEW INTERNATIONALIST, No. 250, December 1993. 2 pages. P.O. Box 1143, Lewiston, NY 14092. (416) 946-0406. Fax: (416) 946-0410. $3.50. The author investigates World Bank operations in Africa and its reluctance to provide funds to treat AIDS patients. "Trade Protection and Industrial Revitalization: American Steel in the 1980's," Robert A. Blecker, Thea M. Lee, and Robert E. Scott, ECONOMIC POLICY INSTITUTE, 1993. 84 pages. Public Interest Publications, P.O. Box 229, Arlington, VA 22210. (800) 537-9359. $10. ___________________________________________________________ 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 ___________________________________________________________