Trade Week in Review and Recent Publications Friday, March 11, 1994 Volume 3, Number 10 ____________________________________________________ Headlines: CONGRESSIONAL LEADER CALLS FOR DELAYED GATT VOTE NEGOTIATORS DEBATE GATT PROPOSALS FRANCE WILL SET UP PANEL TO MONITOR GATT EU CONSIDERS EXPANSION TO EAST, CENTRAL EUROPE RESOURCES ____________________________________________________ CONGRESSIONAL LEADER CALLS FOR DELAYED GATT VOTE U.S. House Majority Leader Richard Gephardt (D-Missouri) said Thursday that President Bill Clinton should consider postponing a congressional vote on the Uruguay Round trade agreement until next year. Gephardt indicated that concerns over how to pay for the GATT trade accord could impede ratification. "We have a big money problem," Gephardt said. "I'm not convinced we have the ability to go through what will be a tough battle." Clinton has been working with members of Congress on how to recover the estimated $40 billion in lost federal revenues over 10 years as a result of lower U.S. tariffs under GATT. Under federal budget rules, the administration must offset any tariff losses. Administration officials are pushing for congressional approval of GATT by August 1994. Implementation of the Uruguay Round is scheduled for July 1995, but GATT Director-General Peter Sutherland has called for moving up implementation to January 1995. British Prime Minister John Major and President Clinton reportedly favor the earlier date. Sources: Peter Behr, "Gephardt Urges Delay on Trade Pact Vote," WASHINGTON POST, March 11, 1994; "Major Favors Moving Up GATT Date," UPI, March 1, 1994. ____________________________________________________ NEGOTIATORS DEBATE GATT PROPOSALS GATT Director-General Peter Sutherland and trade officials from more than 100 nations are intensifying talks on four key areas in advance of the Uruguay Round Ministerial Summit in Marrakesh. The issues include: elevating the status of GATT's successor, the World Trade Organization; moving up the effective date of the WTO; establishing a special GATT committee for trade and the environment; and admitting new members. Sutherland's proposal to raise GATT salaries 8 percent to match those paid to IMF and World Bank employees has been met with strong opposition from western GATT members. "With so many governments in the midst of retrenchments back home it would be hard to explain salary increases for GATT," one official said. GATT ambassadors from developing and industrialized nations say agreement to create a trade and environment committee may not be reached by the end of the Ministerial Summit on April 15. The U.S. wants the committee formed in time for GATT signing ceremonies. But one GATT official said a trade and environment committee could be established late in 1995. U.S. citizen and environmental groups reacted angrily to news that the formation of the committee would be postponed. The Community Nutrition Institute (CNI), a Washington-based citizen group, criticized Sutherland for requesting more staff money while disregarding calls for funding an environmental committee. "We should insist that any increase in GATT funding must go to support the trade and environment standing committee and its work program," said CNI Director Rod Leonard. In addition, many current GATT members say Sutherland's plan to admit 21 nations currently engaged in GATT accession talks immediately upon GATT ratification is not feasible. Negotiators are also wrangling over the details of individual tariff schedules. Talks have now entered the "verification stage" during which only technical changes are allowed. But reports indicate that Quad members -- the U.S., EU, Canada and Japan -- are continuing bilateral negotiations over tariff cuts on wood, white spirits, copper and aluminum, despite having submitted schedules last week. More than 60 schedules have been submitted by GATT member countries, but 22 are holding off until after Quad members resolve bilateral disputes. Least developed countries are not obliged to submit schedules at this stage, but all concessions must be completed by March 21. Sources: John Zarocostas, "Negotiations Intensify in Advance of Uruguay Round Summit," JOURNAL OF COMMERCE, March 7, 1994; Rod Leonard, COMMUNITY NUTRITION INSTITUTE MEMO, March 8, 1994; Nancy Dunne, "U.S. Losing Hope as Tariff Rows Continue," FINANCIAL TIMES, March 9, 1994; Robert Evans, "GATT Countries in Stand-Off Over Tariffs," REUTER, March 8, 1994; "Trade: Verification of Market Access Schedules," SUNS, March 3, 1994; Nancy Dunne, "Kantor Lashes Out at EU," FINANCIAL TIMES, March 10, 1994. ____________________________________________________ FRANCE WILL SET UP PANEL TO MONITOR GATT Government and private industry leaders in France agreed to form a committee responsible for monitoring the Uruguay Round. The committee will reportedly include 12 members of the European Parliament, eight farm union representatives and 10 government experts. Representatives from the national farmers' union, FNSEA, and the young farmers' group, CNJA, have already been chosen for the committee. Source: "France to Set Up Panel to Monitor GATT Treaty," REUTER, March 7, 1994. ____________________________________________________ Other Trade News ____________________________________________________ EU CONSIDERS EXPANSION TO EAST, CENTRAL EUROPE Six central and eastern European nations, which have been granted EU "associate" membership, began talks this week aimed at extending EU benefits. EU foreign ministers met Monday and Tuesday with their counterparts from Poland, Hungary, the Czech Republic, Slovakia, Bulgaria and Romania to discuss overhauling EU trade policies, aid programs, competition policy and the operation of the EU's Common Agriculture Policy. One plan proposes ending export subsidies for EU farmers shipping agricultural produce to Eastern Europe. Poland and Hungary have already announced they will apply for formal EU membership. Both hope to become members by the year 2000. Meanwhile, Asian traders and experts reportedly welcomed last week's announcement that Sweden, Finland and Austria would join the EU. Traders expect overall EU demand for Asian exports to rise once the three nations become formal members. "Enlargement will lead to trade expansion," predicted a Pakistani trade expert. "Given the recession in Europe at the moment, the economic boost from enlargement will be specially significant." Sources: Lionel Barber, "EU Seeks Faster Integration of East Bloc," FINANCIAL TIMES, March 7, 1994; Nicholas Doughty, "Poland to Join Hungary in Applying for EU Membership," REUTER, March 7, 1994; Nicholas Doughty, "Hungary Leads New Eastern Europe Pressure on EU," REUTER, March 6, 1994; Shada Islam, "Europe: Asians Say EC Enlargement Is Good News," SUNS, March 3, 1994. ____________________________________________________ RESOURCES ____________________________________________________ For copies of the following, contact the authors or organizations listed. "GATT Double Jeopardy: State Environmental Laws at Risk," SIERRA CLUB, February 1994. 15 pages. 408 C Street N.E., Washington, D.C. 20002. (202) 547-1141. Fax: (202) 547-6009. $2. This article includes thumbnail sketches of laws that can be challenged as non-tariff barriers to trade according to the Uruguay Round GATT. "Power, Poverty, Economic Integration and Bretton Woods," David Korten, THE HUMAN ECONOMY NEWSLETTER, December 1993. 2 pages. Human Economy Center, Economics Department, MSU 14, Mankato State University, P.O. Box 840, Mankato, MN 56002-8400. (507) 389-2969. Fax: 507-389-5497. Annual membership in the Human Economy Center includes a one- year subscription to the newsletter. Organizations: for-profit, $50/year; not-for-profit, $25/year. Individuals: $15/year; students: $8/year. "Global Change Q The Next Challenge," Peter Sutherland, NEWS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS, January 28, 1994. 8 pages. Information and Media Relations Division of the General Agreement on Tariffs and Trade, Centre William Rappard, 154 rue de Lausanne, CH-1211 Geneva 21, Switzerland. (41-22) 739-5111. Free. A speech to the World Economic Forum at Davos, Switzerland. "Selected Sources on Trade and Environment Issues," Timothy C. Weiskel, PACIFIC BASIN RESEARCH CENTER, 1993. 14 pages. Center for Science and International Affairs, John F. Kennedy School of Government, Harvard University, Cambridge, MA 02138. (617) 496- 2311. Fax: (617) 496-4019. Free. "Notice and Request for Public Comments on Environmental Issues in the Uruguay Round Agreements," Fred Montgomery, OFFICE OF THE U.S. TRADE REPRESENTATIVE, March 1994. 4 pages. Laura Kneale Anderson, Director for Trade and the Environment, Office of Environment and Natural Resources, Office of the United States Trade Representative, 600 Seventeenth Street, N.W., Washington, D.C. 20506. (202) 395-7320. 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