Trade Week in Review and Recent Publications Friday, April 1, 1994 Volume 3, Number 13 ____________________________________________________ Headlines: LABOR STANDARDS JEOPARDIZE FINAL DEAL GATT TARGET DATE SET FOR JANUARY INDIA OPPOSITION PARTY WALKS OUT ON GATT U.S. MAY ATTACH 'FAST-TRACK' BILL TO GATT CARIBBEAN TRADE BLOC READY IN JULY U.S. ESTABLISHES TRADE & ENVIRO PANEL CANADA, U.S. FAIL TO END TRADE DISPUTE RESOURCES ____________________________________________________ LABOR STANDARDS JEOPARDIZE FINAL DEAL A row over labor standards is threatening to complicate GATT signing ceremonies and possibly delay ratification of the Uruguay Round. The United States has vowed not to sign the GATT agreements during this month's signing ceremonies in Marrakesh, Morocco unless the accord contains a formal commitment from GATT members to consider labor standards in the future World Trade Organization (WTO) working agenda. The U.S. has proposed adding the following language to the Uruguay Round text: "The Ministers recognize that the more open multilateral trading system resulting from the Uruguay Round should benefit workers around the world through the impact of increased trade on employment and income. They also expressed the view that trade gains should not come from the relaxation of social objectives and, in this connection, have agreed to undertake early consideration of the relationship between the trading system and internationally recognized labor standards." Leaders of the Group of 15 developing nations agreed Wednesday to reject the U.S. proposal. "We have decided to put up resistance if any pressure is applied to us," said Malaysian Prime Minister Mahathir Mohamad. The countries argue that higher labor standards would impede efforts to liberalize their economies. The G-15 also adopted a joint communique stating that "attempts to use environmental and social concerns for protectionist purpose and effect" undermine GATT agreements. GATT Director-General Peter Sutherland warned that introducing a social clause on the WTO agenda "would place the system at immediate risk of collapse." The GATT secretariat announced Wednesday that it would schedule a meeting next week to resolve the issue. Sources: "U.S. Labor Row With Developing Nations Could Delay GATT Deal," UPI, March 30, 1994; Robert Evans, "U.N. Body Backs Trade and Labor Link," REUTER, March 28, 1994; "Workers' Rights and Free Trade," FINANCIAL TIMES, March 28, 1994; "GATT Splits on Labor Standards," WALL STREET JOURNAL, March 31, 1994; Frances Williams, "U.S. Waves Flag for Workers' Rights in WTO," FINANCIAL TIMES, March 30, 1994; Robert Evans, "Storm Brew Over New GATT World Trade Pact," REUTER, March 30, 1994; Chakravarthi Raghavan, "Trade: U.S. Labor Standards Demand Unsettling Marrakesh?" SUNS, March 25, 1994; Hari Ramachandran, "G-15 to Oppose Human Rights, Labor Clause in GATT," REUTER, March 30, 1994. ______________________________________________________ GATT TARGET DATE SET FOR JANUARY Top trade negotiators agreed in Geneva Wednesday to make January 1, 1995 the target date for implementing the Uruguay Round. The date will be formally endorsed during ministers meetings this month. The Uruguay Round agreements were originally scheduled to take effect on July 1 1995, but Director-General Peter Sutherland pushed for the earlier date. The new deadline forces leading GATT nations to ratify the accord this year. Source: Frances Williams, "Uruguay Round Target Date Set for January 1995," FINANCIAL TIMES, March 31, 1994. _________________________________________________ INDIA OPPOSITION PARTY WALKS OUT ON GATT Members of India's opposition Janata Party walked out of parliament's lower house Wednesday to demonstrate disapproval of the GATT accord. The Party criticized the government for "selling out" the interests of India's farm and pharmaceuticals industries. Janata lawmakers argued that the prices of medicine in India would rise sharply under the GATT accord, as would the prices farmers would have to pay for seeds. Party supporters reportedly clashed with police outside the Parliament in protest over the GATT accord. Sources: "Indian Opposition Ridicules GATT Accord," UPI, March 30, 1994. ______________________________________________________ U.S. MAY ATTACH 'FAST-TRACK' BILL TO GATT The Clinton administration is reportedly discussing with Congress the idea of attaching a "fast-track" bill to GATT implementing language. The U.S. is planning on using "fast-track" to conclude future trade agreements with Asia and Latin America. Under fast-track, Congress must accept or reject any agreement without amendment. Source: "U.S. to Seek New 'Fast Track' Authority to Negotiate Trade Pacts, Official Says," BUREAU OF NATIONAL AFFAIRS, March 4, 1994. _________________________________________________ Other Trade News _________________________________________________ CARIBBEAN TRADE BLOC READY IN JULY Representatives from 24 countries are expected to sign a treaty this July to create the world's fourth largest trading bloc. The Association of Caribbean States would represent a total population of about 200 million, exports of $80 billion and imports worth $100 billion. Members are expected to include: the 13 Caribbean Community members (CARICOM), Mexico, Colombia, Venezuela, Cuba, the Dominican Republic, Surinam, Haiti, the Netherland Antilles, Martinique, French Guiana and Guadeloupe. Source: "New Caribbean Trading Bloc Expected This Summer," JOURNAL OF COMMERCE, March 28, 1994. __________________________________________________ U.S. ESTABLISHES TRADE & ENVIRO PANEL The Clinton administration announced plans to create a trade and environment panel comprised of 35 representatives of environmental, industry, agriculture and consumer groups. U.S. Trade Representative Mickey Kantor said the Trade and Environment Policy Advisory Committee (TEPAC) is necessary because "Environmental issues are becoming increasingly important in trade policy making." Source: "U.S. Sets Up Trade-Environment Panel," REUTER, March 30, 1994. _______________________________________________________ CANADA, U.S. FAIL TO END TRADE DISPUTE The U.S. and Canada failed to resolve a dispute over the volume and price of Canadian durum, wheat, barley, sugar products and peanut butter exports. Agriculture ministers discussed the matter on March 21, but left the meeting "agreeing to disagree." The U.S. threatened to impose sanctions on Canadian wheat last week if negotiators failed to resolve the issue, but Canada's Federal Agriculture Minister Ralph Goodale said the U.S. did not indicate that "anything of that nature was imminent." Meanwhile, Brazil announced Wednesday that it would raise import tariffs on wheat from 10 percent to 17 percent during the next harvest period. Tariffs will be imposed at the same percentage as the producer countries' subsidies. Argentina, whose tariffs are set under the Mercosul agreement, will be exempt from the rule. Sources: "Canada, U.S. Fail to Reach Agreement on Trade Disputes," STAR PHOENIX, March 22, 1994; Ian Elliott, "Espy, Goodale Report Only Slight Progress in Talks," FEEDSTUFFS, March 28, 1994. ____________________________________________________ RESOURCES ____________________________________________________ For copies of the following, contact the authors or organizations listed. "Uruguay Round: An Insider's Assessment," Clayton Yeutter, INTERNATIONAL ECONOMIC INSIGHTS, Vol. V, No. 2, March/April 1994. 4 pages. Institute for International Economics, 11 Dupont Circle NW, Washington, DC 20036-1207. (202) 328-9000 or 800- 229 ECON. Fax: (202) 328-5432. Nondiscounted subscriptions $60/year. "The final document is infinitely superior to the work produced in Brussels three years earlier." "Whatever happened to Third World debt?" LEFT BUSINESS OBSERVER, No. 62, March 7, 1994. 2 pages. Left Business Observer, 250 W. 85th Street, New York, NY 10024-3217. (212) 874-4020. Fax: (212) 874-3137. Email: dhenwood@panix.com. 11 issues/ year. Individual: $20/year. Institutions/high income: $50/year. "While debt reduction has been the mantra of the new policy, debt has still grown." "50 Years Is Enough!: Brave New World Bank," Juliette Majot, GLOBAL EXCHANGE, 1994. 8 pages. Global Exchange, 2017 Mission Street, Room 303, San Francisco, CA 94110. (415) 255-7296. Available only in bulk: 10 copies/ $4, etc. "The World Bank is an old temple of cold warriors; a highly centralized, secretive, undemocratic vestige of another time." "Comparative Analysis of Guidelines for Global Business," Pradeep Mehta et al , CONSUMER UNITY AND TRUST SOCIETY, March 15, 1994. 22 pages. Consumer Unity and Trust Society, 3B Camac Street, Calcutta 700 016, India. (91 33) 297391/ 292786. Fax: (91 33) 297665/ 762785. Contact organization for price. A comparison of ICC Guidelines, the OECD Declaration and UN Draft Guidelines. "Competitiveness: A Dangerous Obsession," Paul Krugman, FOREIGN AFFAIRS, Vol. 73,No. 2. March/April 1994. 16 pages. Reader Services, 58 East 68th Street, New York, NY 10021. Fax: (212) 861- 2759. $7.95/issue. $38/year. Reprints are available. 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