Trade Week in Review and Resources Friday, April 8, 1994 Volume 1, Number 14 ____________________________________________________ Headlines: FINAL GATT STATEMENT TO EXCLUDE LABOR WHITE HOUSE EXPECTS LITTLE OPPOSITION FROM CONGRESS GATT PROTESTS CONTINUE IN INDIA S. KOREA AG MINISTER FIRED OVER GATT HOSOKAWA STEPS DOWN U.S. SETS RETALIATION DATE ON CANADIAN WHEAT RESOURCES ____________________________________________________ GATT News Summary ____________________________________________________ FINAL GATT STATEMENT TO EXCLUDE LABOR GATT delegates reached a compromise Thursday in a dispute over labor standards that threatened to disrupt next week's Uruguay Round signing ceremonies in Marrakech, Morocco. "Everything ended in harmony," said GATT Director-General Peter Sutherland. The United States had sought to include a statement linking labor issues and trade in the final ministers declaration, but developing countries argued that worker's rights have nothing to do with trade, and that the U.S. was using them as a protectionist tool. Under the compromise, the Uruguay Round document will not contain language pertaining directly to the trade-labor link. Instead, delegates attending the day-long meeting in Geneva, agreed unanimously to include the following in the final ministers' declaration: "In statements which have been made in the course of this meeting, Ministers representing a number of participating delegations stressed the importance they attach to their requests for an examination of the relationship between the trading system and internationally-recognized labor standards." Developing countries won language in the final WTO section of the GATT text that essentially gives them the right to veto any attempt by other world trade members to bring up labor standards. "Committee will make all its decisions by consensus," the final document states. According to the NEW YORK TIMES: "Developing countries will be well placed to block any moves to weaken their wage advantages in trade." Ambassadors from Asia, Africa and Latin America expressed satisfaction with the compromise. Sources: Clare Nullis, "GATT-Trade," AP, April 7, 1994; "GATT Members Postpone Labor Discussions," UPI, April 7, 1994; "Draft Elements for Inclusion in the Concluding Statement by the Chairman of the Ministerial Meeting," TRADE NEGOTIATIONS COMMITTEE, April 7, 1994; Alan Riding, "U.S. Envoys Gain a Forum for Labor Issues in Trade," NEW YORK TIMES, April 8, 1994; Robert Evans, "Compromise Deal Reached on GATT Trade-Labor Row," REUTER, April 7, 1994; "U.S., Third World Resolve Trade-Labor Dispute," REUTER, April 7, 1994. ____________________________________________________ WHITE HOUSE EXPECTS LITTLE OPPOSITION FROM CONGRESS White House officials anticipate only minor obstacles when Congress votes on the Uruguay Round. "There will naturally be controversies in Congress in the months ahead," said a senior Clinton administration official. "But there are political upsides to GATT as well, so I don't see any really big challenge to passing this thing." Clinton has hinted that he would like Congress to vote on the pact before Congressional elections this November. Others are not sure Congress will vote on the issue this year. The Congressional agenda is packed with controversial agenda items, including Clinton's health care reform bill. "There are so many distractions, I'm not sure a vote is possible this year," observes Michael Aho of Prudential Securities. In addition, Congress will need to agree on how to recover the lost federal income resulting from GATT. "The administration is panicked about how to pay for it as they also have to find money for health care," said a Senate aide. The Clinton administration has made several proposals to recover the $13 billion worth of tariff revenues lost under GATT during the first five years, but they have been met with strong opposition from lawmakers. Sources: Lyndsay Griffiths, "Congress Sees No Showdown Over GATT," REUTER, April 5, 1994; Bob Davis, "Unexpected Obstacles Are Threatening to Delay or Derail Congressional Approval of GATT," WALL STREET JOURNAL , April 8, 1994. ____________________________________________________ GATT PROTESTS CONTINUE IN INDIA Thousands of Indians took to the streets this week for a series of protests against GATT, while members of Parliament met for a special two-day legislative session to discuss the Uruguay Round accord. Two hundred people were injured and 350 arrested as more than 100,000 people gathered for a rally organized by India's left wing party Tuesday. Right wingers reportedly assembled even more people to attend Wednesday's rally in New Delhi, where they burned an effigy of former GATT Director-General Arthur Dunkel. "The GATT treaty is against the interests of people and severely compromises the economic sovereignty of the country," said Lal Krishan Advani, head of the opposition right wing Hindu Bharatiya Janata Party. Advani urged opposition parties to join together in fighting Indian Prime Minister P.V. Narasimha Rao's decision to sign the GATT accord next week. Sources: "Indian Hindu Party Urges Opposition to Resist GATT," REUTER, April 6, 1994; Steven Wagstyl, "Protests Grow in India Over GATT Accord," FINANCIAL TIMES, April 7, 1994; "GATT-India: Government Under Fire," INTER-PRESS SERVICE, April 1, 1994; "Protest in India," ST. PAUL PIONEER PRESS, April 6, 1994. ____________________________________________________ S. KOREA AG MINISTER FIRED OVER GATT South Korean President Kim Young-sam dismissed Agriculture Minister Kim Yang-bae over a political row fostered by Seoul's farm concessions in GATT talks. Kim Yang-bae's ministry had been criticized for breaking a promise not to revise portions of the Uruguay Round accord. Details of the revision have not been made public, but opposition politicians have accused the government of agreeing to a secret deal with the U.S. to cut farm tariffs. The main opposition Democratic Party vowed to block passage of the Uruguay Round when South Korea's National Assembly votes on it later this month. Source: "South Korean Farm Minister Dismissed Over GATT," REUTER, April 4, 1994. ____________________________________________________ Other Trade News ____________________________________________________ HOSOKAWA STEPS DOWN Japanese Prime Minister Morihiro Hosokawa resigned Friday amid speculation about his personal financial dealings, which have delayed House deliberations on Japan's fiscal 1994 budget. "I will resign [because] I feel I am responsible for the stalemate in the Diet," Hosokawa said during a press conference Friday afternoon. Japanese Foreign Minister Tsutomu Hata, who is a candidate to replace Hosokawa, announced that Japan's basic policies will not change. "I am confident that Japan will keep its consistency with its present policy on various issues," Hata said. Hata told reporters he would still travel to Marrakech, Morocco next week to sign the GATT accord, and to meet with U.S. Trade Representative Mickey Kantor on U.S.-Japan trade policy. Sources: "Hosokawa to Resign," THE DAILY YOMIURI, April 8, 1994; "Japan's Basic Policy Will Not Change - Hata," REUTER, April 8, 1994; "Japan Hopes for Trade Talks With U.S.," UPI, April 7, 1994. ________________________________________________________ U.S. SETS RETALIATION DATE ON CANADIAN WHEAT The United States is prepared to initiate retaliatory trade action against Canada if negotiators fail to resolve disputes over Canadian exports by April 22. U.S. Agriculture Secretary Mike Espy and his Canadian counterpart Ralph Goodale are scheduled to meet during GATT signing ceremonies next week. U.S. Senator Byron Dorgan (D-North Dakota) said the Clinton administration could restrict Canadian wheat imports under Section 22 of the U.S. trade law or under Article 28 of GATT. Canadian officials have vowed to respond similarly if the U.S. carries out its threat. Sources: "April 22 Is D-Day in Wheat Row," AGWEEK, April 4, 1994; Ian Elliott, "Canada to Retaliate if U.S. Imposes Trade Sanctions," FEEDSTUFFS, April 4, 1994; "U.S.-Canada Ag Trade Dispute Moving to Marrakech," Farming Today, UPI, April 4, 1994. ________________________________________________________ RESOURCES For copies of the following, contact the authors or organization listed. "Citizens Trade Campaign packet," PUBLIC CITIZEN, March 22, 1994. Ca. 80 pages. 215 Pennsylvania Avenue SE, Washington, DC 20003. (202) 546-4996. Fax: (202) 547-7392. $5. Articles, letters, press releases and other materials for organizing against GATT. "The Trade and Environment Act of 1994: Views on the Environmental Reform of U.S. Trade Law," Stewart Hudson, NATIONAL WILDLIFE FEDERATION, March 22, 1994. 10 pages. 1400 16th St. NW, Washington, DC 20036-2266. (202) 797-6668. Fax: (202) 797-5486. $3 students and Non-Governmental Organizations; $10 for others. The author invites comments to this draft version. "The World Market For Dairy Products; 1993," THE GENERAL AGREEMENT ON TARIFFS AND TRADE, November, 1993. 102 pages. Centre William Rappard, Rue de Lausanne 154, 1211 Geneva 21, Switzerland. (022) 739-50-19. 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