Trade Week in Review and Resources Friday, May 20, 1994 Volume 3, Number 20 _________________________________________________ Headlines: CLINTON AIMS FOR GATT BILL THIS MONTH EU COMMISSION TO AID BUSINESS EXPORTS U.N. SAYS GATT WILL HURT THIRD WORLD S. KOREAN POLL REGISTERS GATT SUPPORT CLINTON LIKELY TO RENEW CHINA MFN U.S., JAPAN RESUME TRADE TALKS RESOURCES _________________________________________________ GATT NEWS SUMMARY _________________________________________________ CLINTON AIMS FOR GATT BILL THIS MONTH U.S. trade officials, nearly a month behind schedule for developing GATT implementing legislation, now hope to have a complete draft by the end of May. Administration officials say they may submit the bill to Congress for a vote before the mid-August recess. They still must find a way to pay for GATT before submitting a bill to Congress. The Clinton administration is planning to unveil a funding plan next month, according to U.S. Budget Director Leon Panetta. Panetta said he opposes waiving budget rules requiring the administration to cover tariff revenue losses as a result of GATT. Such a waiver would result in a $14 billion to $34 billion addition to the U.S. deficit. Panetta said Congress and the administration have made a concerted effort "in confronting the deficit issue." As part of his effort to promote GATT to the public and Congress, President Clinton proclaimed next week World Trade Week, with "U.S. Exports Equal U.S. Jobs" as the theme. In making the announcement, Clinton said, "In the past five years, exports of goods and services have been responsible for more than 40 percent of U.S. economic growth." Sources: "Administration's GATT Financing on Track," UPI, May 18, 1994; Bruce Stokes, "GATT's Overdue Bill May Cause a Ruckus," NATIONAL JOURNAL, May 7, 1994; "World Trade Week, 1994," WHITE HOUSE NEWS RELEASE, May 18, 1994. _________________________________________________ EU COMMISSION TO AID BUSINESS EXPORTS The European Commission has launched an initiative to inform and advise European industries about the implications of the GATT Uruguay Round. EU Commissioner Leon Brittan told members of a "Post-GATT" conference in Brussels earlier this month that companies must cooperate with governments and with the European Commission to find "winning strategies for new export markets." The Commission has published a booklet, "The Uruguay Round: Global Agreement, Global Benefits," to aid businesses in their quest for new markets. Brittan warned that different economic sectors will need to cooperate more under new GATT rules because remedies to trade obstacles "will not always be found rapidly by government to government negotiations," but rather by non-government regulators and market makers. Source: "UNICE Will Not Give Up GATT Free Trade Momentum," EUROPEAN INFORMATION SERVICE, May 10, 1994. _________________________________________________ U.N. SAYS GATT WILL HURT THIRD WORLD A United Nations agency said the Uruguay Round accord will erode the preferential tariff treatment developing nations receive under the General System of Preferences (GSP) and reduce their competitive advantage. "The particular competitive advantage that product coverage gives to GSP beneficiaries will be significantly diminished by the Uruguay Round reductions," states the report by the UN Conference on Trade and Development (UNCTAD). The report found that GSP tariff margins on imports will be reduced by about 9 percent in the U.S., 15 percent in Japan and 23 percent in the EU. UNCTAD is calling for an extension of GSP benefits to the 160 developing nations that receive preferential treatment. GSP was established by GATT members in 1968 to boost market access and development in the Third World. Source: Stephanie Nebehay, "Uruguay Round to Erode Tariff Margins for Poor States," REUTER, May 17, 1994; Frances Williams, "Pact Erodes Tariff Aid for Third World," FINANCIAL TIMES, May 18, 1994. _________________________________________________ S. KOREAN POLL REGISTERS GATT SUPPORT More than 74 percent of 700 South Koreans polled this week said they support formal ratification of the Uruguay Round GATT accord. Nineteen percent believe the agreement should be rejected. Under the pact, Seoul has agreed to open its rice market gradually to foreign imports. The decision to import foreign rice provoked protests from farmers and students during world trade negotiations. South Korea's main opposition party, which has the backing of the powerful farm lobby, has vowed to block GATT approval when South Korea's National Assembly votes on the pact. Source: "Majority of S.Koreans for UR Trade Agreements," REUTER, May 17, 1994. _________________________________________________ OTHER TRADE NEWS _________________________________________________ CLINTON LIKELY TO RENEW CHINA MFN Media reports indicate that President Clinton is prepared to renew Most Favored Nation (MFN) status for China, despite some opposition in Congress. According to the WASHINGTON POST, informed administration sources say President Clinton will renege on last year's pledge to withdraw most favored nation status if Chinese leaders failed to pass specific test showing their respect for human rights. Some congressional members expect Clinton to couple MFN renewal with a call for the creation of a bilateral human rights commission with Beijing. China has only partially fulfilled Clinton's seven human rights demands, which included accounting for political prisoners, allowing prisoners to be seen by the American Red Cross, easing the repression in Tibet, taking steps to begin adhering to the Universal Declaration of Human Rights, allowing the free emigration of certain dissidents, halting the jamming of Voice of America radio broadcasts and ending the export of prison-made products. Human rights groups say China has failed to make true strides toward acceptable human rights provisions. On Wednesday, a bipartisan group of lawmakers endorsed a report and videotape made by Hongda Harry Wu, a former Chinese prisoner, who found evidence that China is still exporting goods made by prisoners to the U.S. Senate Majority Leader George J. Mitchell (D-Maine) and Representative Nancy Pelosi (D-California) are preparing legislation to revoke at least some of China's trade privileges if Clinton fails to do so. But more than 100 House members, House Minority Whip Newt Gingrich (R-Georgia), signed a letter earlier this week supporting unconditional renewal of China's MFN. China has promised to restrict U.S. trade if Clinton decides to invoke penalties. Sources: Thomas Friedman, "China Will Yield on a Trade Issue," NEW YORK TIMES, May 18, 1994; Hobart Rowen, "China : Trade and Tradeoffs," WASHINGTON POST, May 19, 1994; Elaine Sciolino, "Pressures Rise Over China's Trade Status," NEW YORK TIMES, May 20, 1994; Kathy Chen, "China's Message to U.S. on Trade Status Is Clear: 'Hurt Us and We'll Hurt You'," WALL STREET JOURNAL, May 20, 1994. _________________________________________________ U.S., JAPAN RESUME TRADE TALKS The United States and Japan began exploratory talks Thursday in an attempt to end the stalemate over market access issues. U.S. Trade Representative Mickey Kantor said the two sides hope to strike a deal before they meet for an economic summit in July. "We'll expect good and serious and far-reaching and far-ranging negotiations," Kantor said. U.S. and Japanese business leaders met late last week to break the nations' impasse. The Japan-U.S. Business Council, a private sector group representing business leaders from the two countries, is planning to compile a list of ways Japan can improve market access for U.S. companies. Sources: "U.S., Japan to Resume Trade Talks Thursday," INVESTOR'S BUSINESS DAILY, May 17, 1994; "U.S. and Japan Set Meeting," NEW YORK TIMES, May 17, 1994; Michiyo Nakamoto, Emiko Terazono, "U.S.-Japan Business Chiefs in Trade Talks," FINANCIAL TIMES, May 13, 1994. _________________________________________________ RESOURCES _________________________________________________ "The Green Trade Debate," Steve Charnovitz, OVERSEAS DEVELOPMENT COUNCIL, March 1994, No. 1. 8 pages. Overseas Development Council, 1875 Connecticut Ave., N.W., Suite 1012, Washington, D.C. 20009. (202) 234-8701. $2.50/issue. $20/year (6- 8 issues). "Unless the environment-trade link is better managed, trade disputes will continue to occur, often pitting industrial against developing countries." "The Environment and Trade Initiative of 1994 (ETI '94): Views on the Environmental Reform of U.S. Trade Law," Stewart Hudson, NATIONAL WILDLIFE FEDERATION, April 19, 1994. 10 pages. NWF, 1400 16th Street, N.W. Washington, D.C. 20036-2266. (202) 797- 6800. Fax: (202) 797-6646. Email: nwfip@igc.apc.org. Free. "Trade Advisory Committees: Privileged Access for Polluters," Tom Hilliard, PUBLIC CITIZENUS CONGRESS WATCH, December 1991. 60 pages. Public Citizen's Congress Watch, 215 Pennsylvania Ave., S.E., Washington, D.C. 20003. (202) 5646-4996. $25. "Positioning GATT's Trade and Environment Work Program to Support Sustainable Development," Nevin Shaw and Aaron Cosbey, INTERNATIONAL INSTITUTE FOR SUSTAINABLE DEVELOPMENT, May 1994. 19 pages. International Institute for Sustainable Development, 6th Floor, 161 Portage Ave. E., Winnipeg, Manitoba R3B OY4. (204) 958-7700. Fax: (204) 958-7710. Email: iisd@web.apc.org. $US3. _________________________________________________ The following email services are offered by the Institute for Agriculture and Trade Policy: "trade.news" - includes weekly bulletins NAFTA Monitor and Trade Week "trade.library" - a storehouse of trade related documents, including analyses, reports, fact sheets, White House transcripts ... etc. "trade.strategy" - an open discussion of trade issues and events "eai.news" - a regular bulletin summarizing the latest news in Latin American integration and development "susag.news" - a regular news bulletin pertaining to sustainable agriculture "susag.library" - longer documents, studies and analyses on sustainable agriculture "susag.calendar" - a calendar of events "env.biotech" - a news bulletin about biotechnology If you are on EcoNet/PeaceNet, you may access these services by going to the "conferences" section. 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