TRADE WEEK IN REVIEW AND RECENT PUBLICATIONS December 23, 1993 Volume 2 Number 226 Headlines: NEGOTIATORS CAN STILL MAKE CHANGES IN GATT KANTOR PROMISES TO ENVIRONMENTAL CHANGES IN GATT MALAYSIA CRITICIZES GATT FARM ACCORD U.S. TO BENEFIT FROM THIRD WORLD MARKETS CANADA SAYS GATT WILL BOOST JOBS GEPHARDT TO SUPPORT GATT EEA TO BE WORLD'S LARGEST TRADE BLOC U.S. DEMANDS CHIPS TALKS WITH JAPAN ___________________________________________________________ GATT News Summary ___________________________________________________________ NEGOTIATORS CAN STILL MAKE CHANGES IN GATT GATT negotiators have until February 15, 1994 to make any clarifications, final tariff and non-tariff concessions and commitments in agriculture and initial commitments in services. Only changes to the text that improve market access can be made. U.S. President Bill Clinton has promised to seek greater market access on audio-visual and financial services. EU negotiators also vowed before the GATT talks were completed last week to complete product-by-product tariff line negotiations with all GATT members. They were only able to conclude bilateral talks with approximately 20 nations before the December 15 deadline. Most developing countries were forced to agree to the pact before discussing the terms of the global trade accord. Sources: John Maggs, Keith Rockwell, "Changes Still Possible in Tariff, Quota Cuts," JOURNAL OF COMMERCE, December 17, 1993; Chakravarthi Raghavan, "Uruguay Round Balance Sheet -- After Ten Years," SUNS, December 17, 1993. ___________________________________________________________ KANTOR PROMISES ENVIRONMENTAL CHANGES IN GATT As part of the White House's campaign to encourage environmental organizations to support the Uruguay Round, U.S. Trade Representative Mickey Kantor told environmental groups recently that the Clinton administration will seek new environmental provisions in GATT. So far, even the environmental groups that supported NAFTA, including the World Wildlife Fund (WWF) and the National Wildlife Federation (NWF), have been critical of GATT. Among other things, they are pressing for greater transparency in GATT dispute settlement panels so that citizens can participate and monitor challenges to national environmental laws. "We are struggling not to oppose the Round," said David Schorr, trade policy specialist for WWF. "But we are disappointed with insufficient concrete progress in the Round." Schorr is pressing for the establishment of a permanent body that "places environmental issues at the core of the world trading organization." In a speech earlier this week, Kantor outlined next year's trade agenda, saying the administration would focus on improved trade with Japan and China. Kantor said he plans to "put meat on [the] bones" of a trade outline reached with Japan last year, and that the U.S. will pursue agreements with China on semiconductors and textiles. The administration has also promised to seek new GATT agreements on competition policy and worker rights. Sources: Nancy Dunne, "Clinton Woos Environmentalists," FINANCIAL TIMES, December 22, 1993; "Kantor Says United States Still Has Ambitious Trade Agenda," UPI, December 20, 1993. ___________________________________________________________ MALAYSIA CRITICIZES GATT FARM ACCORD Malaysia is dissatisfied with the outcome of farm talks in the Uruguay Round of GATT talks. "We would like to express regret that the package was more to benefit the major industrialized countries, particularly in respect to the interest of developing countries in agriculture," said Primary Industries Minister Lim Keng Yaik. Malaysia is one of the Third World's biggest commodity producers, primarily for exports of palm oil, timber and rubber. Lim said the U.S.-EU agreement on agriculture was a "setback" in efforts to liberalize international agriculture trade, and that industrial nations had not shown willingness to reform their agriculture sector. "The U.S. and EC were locked in a battle until the last moment, they unilaterally agreed on the accord on their own terms and threw them on us," Lim said. He has called for compensation to developing countries affected by the reduction in benefits. Sources: "Malaysia Slams EC-U.S. Farm Pact Under GATT," REUTER, December 18, 1993; Martin Khor, "Malaysia: Mixed Reactions on Uruguay Round," SUNS, December 20, 1993. ___________________________________________________________ U.S. TO BENEFIT FROM THIRD WORLD MARKETS According to an article in the NEW YORK TIMES, the longest-lasting benefit for the United States of the Uruguay Round will be the resulting growth in many of the world's poorest nations. The article says developing nations should grow two or three times as fast, on average, during the 1990s as the economies of industrial nations, thus creating new and bigger markets. "If two billion people get richer and smarter, will they buy more or less of our stuff?" asks economist David Rolley of DRI/McGraw-Hill. Currently, $4 of every $10 spent on jets, tractors, grain, movies and other U.S. exports go to destinations outside Canada, Japan and Europe, despite high import barriers in Asia and Latin America. Source: Sylvia Nasar, "GATT's Big Payoff for the U.S.," NEW YORK TIMES, December 19, 1993. ___________________________________________________________ CANADA SAYS GATT WILL BOOST JOBS Canadian Trade Minister Roy MacLaren praised the GATT deal, saying it will lead to an increase in exports and jobs for Canadians. "As Canada competes throughout the world, (the deal) will provide the all-important and much improved rules of the road," said MacLaren. Canadian officials expect the accord to open access to $125 billion in goods and services for Canadian business and government. They speculate that further GATT negotiations could bring an additional $175 billion to Canadian business. Jim Moore, vice president of the Canadian Exporters Association, said Canadian businesses will continue to focus on sales to the U.S. market in the short-run, but expect to boost exports globally in years to come. "What we see is Canadian firms building on the North American market as a launching pad to exploit opportunities opened up by the GATT accord, especially in Asia," Moore said. Sources: "Trade Deal Will Boost Exports, Jobs: Ottawa," MONTREAL GAZETTE, December 16, 1993; Leo Ryan, "Canada Exporters See Trade Surge Under GATT, But U.S. Still Priority," JOURNAL OF COMMERCE, December 17, 1993. ___________________________________________________________ GEPHARDT TO SUPPORT GATT U.S. House Majority Leader Richard Gephardt (D-Missouri) announced Tuesday that he would support the GATT accord when it is submitted to Congress for a vote next year. President Clinton welcomed Gephardt's decision, saying, "The majority leader's support will help make it possible to implement the agreement expeditiously, with a strong base of Congressional support." Gephardt, a strong opponent of NAFTA, promised to be active in writing the implementing legislation and to ensure that U.S. anti-dumping laws are preserved under the accord. Representative Sander M. Levin (D-Michigan) joined Gephardt in announcing his support for GATT. Sources: "Gephardt Backs GATT Pact," NEW YORK TIMES, December 22, 1993; "U.S. House Leader to Support GATT," REUTER, December 21, 1993. ___________________________________________________________ EEA TO BE WORLD'S LARGEST TRADE BLOC The European Union ratified the world's largest trade treaty last week creating the European Economic Area (EEA). The new agreement links all twelve members of the European Union and five members of the European Free Trade Association to create a free trade market of 375 million consumers. The EEA includes: Belgium, Britain, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Iceland, Norway, Finland, Sweden and Austria. The treaty will go into effect January 1, 1994, one year behind schedule. Source: "EU Ratifies Accord With Neighbors for World's Largest Free- Trade Zone," JOURNAL OF COMMERCE, December 16, 1993. ___________________________________________________________ U.S. DEMANDS CHIPS TALKS WITH JAPAN The United States plans to request "emergency consultations" with Japan over falling sales of U.S. semi-conductors in the Japanese market. Under the 1991 Semi-Conductor Arrangement, Japanese companies must reserve at least 20 percent of the Japan semi- conductor market for imports. Deputy U.S. Trade Representative Charlene Barshefsky said the U.S. share of Japan's chip market for the third quarter of 1993 is believed to have fallen to 18.5 percent, down from 20.2 percent during the first quarter. Barshefsky said the U.S. plans to present "a variety of steps" during the special talks "which we believe they can take to rectify the situation." Sources: Keith Bradsher, "Chip Fight Persisting With Japan," NEW YORK TIMES, December 18, 1993; Nancy Dunne, "U.S. Seeks Chip Talks With Japan," FINANCIAL TIMES, December 20, 1993. ___________________________________________________________ Recent Publications on International Trade ___________________________________________________________ For copies of the following, contact the authors or organizations listed. "Feeding the Crisis: U.S. Food Aid and Farm Policy in Central America," Rachel Garst and Tom Barry, UNIVERSITY OF NEBRASKA PRESS, 1990. 275 pages. Inter-Hemispheric Education Resource Center, Box 4506, Albuquerque, NM 87196. (505) 842-8288. Fax: (505) 246-1601. $12.95. "The Need for A Global New Deal," John Cavanagh, Robin Broad, and Peter Weiss, THE NATION, December 27, 1993. 4 pages. 72 Fifth Ave., New York, NY 10011. (212) 242-8400. $4 prepaid. "Concept Paper on the Development of a Participatory Approach to USAID's Strategic and Program Planning and Implementation," DEVELOPMENT GAP, October 31, 1993. 19 pages. 927 Fifteenth St., NW, 4th Floor, Washington, DC 20005. (202) 898-1566. Fax: (202) 898-1612. E-mail: dgap@igc.apc.org. Contact organization for prices. "Summary of Testimony on the Effects of Structural Adjustment Programs," PACIFIC ASIA RESOURCE CENTER, July 1993. 4 pages. Development Gap, 927 Fifteenth St., NW, 4th Floor, Washington, DC 20005. (202) 898-1566. Fax: (202) 898-1612. E-Mail: dgap@igc.apc.org. Contact organization for prices. Testimony was presented at the Tokyo International Peoples' Tribunal to judge the G-7. "The Chrysler Worker Study: Third and Final Report," A. Statham, et al., UNIVERSITY OF WISCONSIN-PARKSIDE, 1992. 99 pages. Institute for Agriculture and Trade Policy. $10.50. The authors in this study track the effects of the Chrysler plant closing in Kenosha, Wisconsin in 1988 on nearly 800 of the laid-off workers. "How the World Works," James Fallows, ATLANTIC MONTHLY, December 1993. 26 pages. Box 2547, Boulder, CO 80322. (800) 234- 2411. $5. The author surveys the world's largest economies and their use of economic and trade rules which he suggests are not the academic rules of free trade. "Political Beliefs in an Era of Economic Decline: Farmers' Attitudes Toward State Economic Intervention, Trade, and Food Security," Linda Lobao and Pamela Thomas, OHIO STATE UNIVERSITY, 1992. 20 pages. Institute for Agriculture and Trade Policy. $3. "The Case Against NAFTA," MULTINATIONAL MONITOR, Vol. 14, No. 10, October 1993. 36 pages. P.O. Box 19405, Washington, DC 20036. (202) 387-8030. Fax: (202) 234-5176. $3. ___________________________________________________________ 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 ___________________________________________________________