TRADE WEEK Friday, June 3, 1994 Volume 3, Number 22 ____________________________________________________ Headlines: GATT CHIEF SAYS WTO NOT THREAT TO NATIONS' SOVEREIGNTY JAPAN'S FOOD SELF-SUFFICIENCY TO DROP SUTHERLAND WELCOMES CHINA MFN RENEWAL EU FARMERS CALL FOR FLEXIBLE GATT RULES ITALY BACKS 1ST WTO CANDIDATE JAPAN CITES U.S. AS No. 1 INT'L TRADE VIOLATOR RESOURCES ____________________________________________________ GATT News Summary ____________________________________________________ GATT CHIEF SAYS WTO NOT THREAT TO NATIONS' SOVEREIGNTY In a push to secure GATT approval this year, top trade chief Peter Sutherland reiterated his call for quick ratification of the trade pact, while assuring GATT members that the new World Trade Organization (WTO) would not encroach on nations' sovereignty. Sutherland called members' claims that the global trade organization would threaten sovereignty "unfounded." "The WTO will not have the power to impose new trade policy obligations," he said. Sutherland, however, noted during a speech May 30 that the WTO would have wider powers in resolving bilateral trade disputes than the GATT. Sources: "GATT's Sutherland Says WTO Will Not Encroach on Members' National Sovereignty," AFX NEWS, May 30, 1994; "WTO Will Not Encroach on Member States, Says Sutherland," EUROPEAN REPORT, June 1, 1994. ____________________________________________________ JAPAN'S FOOD SELF-SUFFICIENCY TO DROP Japan's food self-sufficiency is expected to decline under GATT as relatively cheap foreign rice is allowed to enter the country, said Japanese Prime Minister Tsutomu Hata. "With the enforcement of the minimum access scheme for rice, food self-sufficiency will fall with the inflow of cheap and competitive foreign rice," Hata told Parliament's Lower House Budget Committee. Japan agreed last December to import 4 to 8 percent of its annual 10 million ton rice consumption once GATT is implemented. Japan's food self-sufficiency rate is currently at 46 percent, according to the country's Agriculture Ministry. Source: "Japan's Food Self-Sufficiency to Fall -- Hata," REUTER, June 1, 1994. ____________________________________________________ SUTHERLAND WELCOMES CHINA MFN RENEWAL U.S. President Bill Clinton's decision to renew Most Favored Nation trade status will significantly aid China's bid to become a founding WTO member, according to GATT Director-General Peter Sutherland. China is currently negotiating domestic quota and licensing restrictions on more than 700 products to qualify for WTO membership. "Had that issue (of MFN) not been satisfactorily resolved with the United States it would have had a negative impact on the negotiations," Sutherland said during a Hong Kong radio interview. The next working party on Chinese GATT accession is scheduled for the end of June. Sources: "GATT Chief Welcomes Likely MFN Renewal," REUTER, May 26, 1994; Tony Walker, Louise Lucas, "China Liberalizes in Drive to Join World Trade Body," FINANCIAL TIMES, May 27, 1994; "China's MFN Renewal Seen as Spurring GATT/WTO Talks, But Entry Still Elusive," BNA, June 1, 1994. ____________________________________________________ EU FARMERS CALL FOR FLEXIBLE GATT RULES COPA and the COGECA, Europe's associations of farmers' unions and cooperatives, called on Farm Commissioner Rene Steichen to establish "flexible" GATT implementation rules. "They must be simple, easy to administer and not involve additional financial burdens, " the two unions said in a letter to Steichen. Steichen told EU farm ministers Monday that he would soon present a general proposal for implementing the farm portions of the Uruguay Round GATT agreement. Meanwhile, in an attempt to salvage their party's farm votes, EU ministers announced Monday that they would further postpone agriculture price and quota reduction decisions until after EU Parliament elections June 9-12. Ministers, already four months behind schedule to outline price and subsidy cuts for cereals, beef and dairy products as called for under 1992 Common Agriculture Policy reforms and they Uruguay Round, worry that farm program cuts could significantly hurt support for members of their party running in Parliament elections. Sources: Peter Blackburn, "EU Farm Leader Attacks Price Package Delay," REUTER, May 31, 1994; "Steichen Backs Global Approach on Farm Agencies," REUTER, May 30, 1994; "EU Farmers Seek Flexible Execution of GATT Accord," REUTER, June 1, 1994. ____________________________________________________ ITALY BACKS 1ST WTO CANDIDATE The Italian government announced this week that it would nominate Renato Ruggiero to head the World Trade Organization. Ruggiero, currently a director of Fiat and formerly Italy's trade minister between 1987 and 1991, was reportedly the first to espouse the idea of a more powerful GATT successor during the Uruguay Round negotiations. An article in the FINANCIAL TIMES indicates that Ruggiero could become the EU's official WTO candidate. EU Trade Commissioner Leon Brittan, who had been rumored as a potential candidate, announced Tuesday that he has no plans to seek the WTO post. Brittan "has no interest in the job and can foresee no circumstances whatsoever under which he would be interested," said Peter Guilford, the Commissioner's spokesperson. Brittan reportedly remains an unofficial candidate for the European Commission presidency, currently held by Jaques Delors. Sources: Frances Williams, Ian Rodger, "Brittan Says No to Job as WTO Chief," FINANCIAL TIMES, June 1, 1994; Frances Williams, "Ruggiero Backed to Head WTO," FINANCIAL TIMES, June 2, 1994. ____________________________________________________ JAPAN CITES U.S. AS No. 1 INT'L TRADE VIOLATOR Japan's Ministry of International Trade and Industry (MITI) accused the United States of "breeding vigilantes" through unfair trade practices. "The United States is without parallel in imposing measures that force its trading partners to abide by unilateral judgements, and shows no signs of abandoning this practice," the MITI panel said in its annual "Report on Unfair Trade and Policies by Major Trading Partners." The U.S. violated international trade rules in 10 out of 12 areas examined by the MITI panel. The EU was found guilty in four areas, South Korea in five and Canada, Australia, Hong Kong and Singapore in only a few. The MITI panel presenting the report also made an appeal to Japan's major trade partners to comply with global trade rules, rather than set national or bilateral rules. Sources: Satoshi Okada, "U.S. Forces Unilateral Trade Policy -- Japan MITI Panel," REUTER, May 31, 1994; Peter Landers, "Japan -- Unfair Trade," AP, May 31, 1994. ____________________________________________________ RESOURCES ____________________________________________________ For copies of the following, please contact the authors or organizations listed: "China: A Most-Favored Nation?" Brendan Harrington and Rob Johnson, THE CARGILL BULLETIN, Vol. 2, No. 2, May 1994. 8 pages. The Cargill Bulletin, P.O. Box 5625, Minneapolis, MN 55440. (612) 742-6000. $US12/year. "The NAFTA and GATT negotiations were about opening markets. The China MFN [Most Favored Nation] debate is about closing them and could interrupt that progress. The sensible course is to grant China permanent, unconditional MFN status and to work to win China's entry into the GATT, where it would be subject to global rules and disciplines that would improve its trade behavior and support its transformation into a freer society worthy of membership in the global community." "Growth, Trade and Environmental Values," ed. Ted Schrecker and Jean Dalgleish, WESTMINSTER INSTITUTE FOR ETHICS AND HUMAN VALUES, 1994. 227 pages. Westminister Institute for Ethics and Human Values, 361 Windermere Road, London, Ontario, N6G 2K3. (519) 673-0046. Fax: (519) 673-5016. $US12.50. Chapters include "The Environmental Implications of NAFTA: A Legal Analysis," "Harmonization and Risk Assessment in the North American Free Trade Agreement," "Emerging Trade Agreements and Their Impact on Agriculture," and "Issues in Environmental Protection: A Third World Perspective." "Greening the GATT," Ronnie Hall, LINK, No. 59, March/April 1994. 4 pages. Friends of the Earth International, P.O. Box 19199, 1000 GD Amsterdam, The Netherlands. (31-20) 622- 1369. Fax: (31-20) 639-2181. E-mail: foeintsecre@gn.apc.org or foeint@hacktic.nl. Contact Friends of the Earth International for subscription information. "The Global Garment Industry: Industrial Model of the Future," ECONOMIC JUSTICE REPORT, vol. 5, no. 1, April 1994. 8 pages. Ecumenical Coalition for Economic Justice (ECEJ), 11 Madison Avenue, Toronto, Ontario, Canada M5R 2S2. $US2.00/issue. $US25.00/year includes other ECEJ documents. 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