From iatp@igc.apc.orgThu Apr 13 18:58:09 1995 Date: Thu, 13 Apr 1995 11:07:08 -0700 (PDT) From: IATP To: Recipients of conference Subject: Trade News 4-13-95 Trade News Produced by the Institute for Agriculture and Trade Policy Volume 4, Number 6 April 13, 1995 _______________________________________________ - SUTHERLAND WARNS COUNTRIES ABOUT MEDDLING IN WTO AFFAIRS - INDIA REJECTS WTO TRIPS AGREEMENT - VENEZUELA CHALLENGES US EPA RULES - US TO LODGE TEXTILE COMPLAINT - EU TO BEGIN TRADE TALKS WITH S. AFRICA - EU BANS JAPANESE FISH IMPORTS - WORLD TRADE HITS 18-YEAR HIGH IN 1994 _______________________________________________ WTO NEWS SUMMARY _______________________________________________ SUTHERLAND WARNS COUNTRIES ABOUT MEDDLING IN WTO AFFAIRS On April 3, outgoing World Trade Organization (WTO) director- general Peter Sutherland warned members that they would jeopardize the organization's future if they meddled too much in the conduct of its internal affairs. "The risk is . . . that member states may attempt to micro-manage the organization, in areas like appointments or the internal allocation of resources," Sutherland said. "Such a trend would have dangerous consequences for the integrity and impartiality which are absolutely essential to the WTO's credibility and effectiveness," he added. Sutherland, who will be replaced by Renato Ruggiero at the end of this month, did not spell out any specific instances of excessive intervention by governments in the operation of the WTO since it was established on January 1, 1995. But the United States angered many other governments last month when it offered the post of WTO deputy-director general to Kim Chul-su, who lost to Ruggiero in the contest to head the organization. Washington's decision, taken without international consultation, has required the WTO to create an additional deputy position for Chul-su. Guy de Jonquieres, "WTO Chief Warns Over Meddling," FINANCIAL TIMES, April 4, 1995. INDIA REJECTS WTO TRIPS AGREEMENT On March 24, the upper house of the Indian Parliament refused to ratify a Presidential decree to bring India's patent law into line with the Trade Related Intellectual Property (TRIPs) provision of the WTO. The action comes after three years of intense and sometimes violent protests by tens of thousands of India's citizens, led by farmers, against the TRIPs agreement of the Uruguay Round of global trade talks. Indian law prevents the application of patents to pharmaceuticals and agricultural products in the interest of protecting the health, nutrition, and livelihoods of India's citizens. The TRIPs provision of the WTO recognizes and enforces patents in these and other sectors. It is not yet clear if India will be denied membership in the WTO as a result of its Parliament's action, or if the WTO will bend its rules to accommodate the nation. Vandana Shiva, "Democracy Wins on Patent Laws Debate in Indian Parliament," PRESS RELEASE, THIRD WORLD NETWORK, March 27, 1995. VENEZUELA CHALLENGES US EPA RULES On April 10, the WTO set up a complaint panel to investigate charges by Venezuela that the United States is unfairly restricting imports of gasoline because of Environmental Protection Agency (EPA) rules. A member of the Organization of Petroleum Exporting Countries (OPEC), Venezuela contends that EPA rules requiring reformulation of gasoline sold in nine of the largest metropolitan areas discriminate against its exports by specifying cleaner gasoline than produced by many US refiners. Several other countries--notably Norway, members of the European Union (EU), Australia and Canada-- registered their interest in the gasoline dispute, reflecting the concern of their oil industries over US environmental rules. The WTO has 18 months to make and implement its finding as well as handle all appeals. Only a consensus in the WTO can block the process. Under the predecessor General Agreement on Tariffs and Trade (GATT), disputes often dragged on for years, and implementation of a panel finding was subject to a consensus, which meant securing an agreement even from the losing country. Bhushan Bahree, "WTO's Procedures to Be Put to Test in Gasoline Dispute," THE WALL STREET JOURNAL, April 11, 1995, US TO LODGE TEXTILE COMPLAINT Last week, the United States lodged a complaint with the textile monitoring body of the WTO saying it intends to restrict imports of nightwear and underwear from five Caribbean Basin countries--Costa Rica, El Salvador, Honduras, Jamaica, and Nicaragua. The complaint says the shipments are disrupting the US market. The US move follows rapid expansion in Caribbean Basin garment exports to the United States over the past few years and claims by the US textile industry that an increasing volume of garments made from non-US fabric are being exported to the US in violation of a special offshore assembly program under Section 807 of the US Tariff Code. Caribbean Basin producers will appear before the WTO's textile monitoring body to argue against the US claim. Canute James, "Caribbean Garments Focus of US Complaint," JOURNAL OF COMMERCE, April 5, 1995. _______________________________________________ REGIONAL/BILATERAL AGREEMENTS _______________________________________________ EU TO BEGIN TRADE TALKS WITH S. AFRICA On March 29, the EU announced that it would pursue a free trade agreement with South Africa. According to informed observers, however, the EU may disappoint the South African government with its decision not to negotiate trade within the framework of the 1975 Lome Convention, which governs the EU's relations with the 70- strong African, Caribbean, and Pacific (ACP) group of states. Apart from providing long-term funding and compensating for losses from falling commodity prices, the convention also allows many agricultural and manufactured products from the ACP into the EU at reduced or even zero tariffs with no reciprocity expected. "EU to Begin Trade Talks with South Africa," JOURNAL OF COMMERCE, March 30, 1995. EU BANS JAPANESE FISH IMPORTS On April 7, the EU announced an indefinite ban of Japanese fish imports because of hygiene concerns. The decision was taken after routine inspections indicated that sanitary conditions in Japan's frozen fish establishments were not sufficient. The ban will affect imports of about 6,000 tons of fish at a cost of about $15.2 million. According to an EU spokesman, the decision was not linked to other EU-Japanese trade disputes, and was not an effort to force open Japanese markets. Japan's Ministry of Agriculture, Fisheries, and Forestry said the move was an overreaction. "The EU officials who came to Japan inspected only a few processing sites. To ban all Japanese imports on the basis of the few places they saw is a strict measure," a ministry spokesman said. Lionel Barber, Michiyo Nakamoto, Frances Williams, "Brussels Bans Japanese Fish Imports," FINANCIAL TIMES, April 12, 1995. _______________________________________________ WORLD TRADE ROUND-UP _______________________________________________ WORLD TRADE HITS 18-YEAR HIGH IN 1994 Last week, the WTO reported that economic recovery in Europe and expanded trade throughout North and South America pushed international trade to an 18-year high in 1994. Africa and the Middle East were the world economy's only poorly performing regions, the WTO said. Worldwide exports rose 9 percent last year--more than double the 1993 increase and the highest rate since 1976. Worldwide merchandise sales jumped 12 percent, topping $4 trillion for the first time. Trade in commercial services such as banking and tourism was estimated at $1.08 trillion, 6 percent higher than in 1993. The WTO predicted that global imports and exports will rise 8 percent this year but said that turmoil in the currency markets might affect trade. "World Trade Hits 18-Year High, WTO Report Says," MINNEAPOLIS STAR TRIBUNE, April 4, 1995. RESOURCES "TRADING INDUSTRIES, TRADING REGIONS," edited by Helzi Noponen, Julie Graham, and Ann R. Markusen, The Guilford Press, 1993. Analyzing the impact of trade on regional development and employment, this volume presents a set of industry case studies in which the international locational choices of industries are linked to metropolitan and regional growth patterns. The case studies show how different areas in the United States are being affected by the shifting national and international locational patterns of domestic firms. In order to interpret the causes and extent of this restructuring, each study links the changing pattern of trade in the industry and the role of governments to the geography of plant openings and shutdowns around the globe. _______________________________________________ Trade News is produced by the Institute for Agriculture and Trade Policy, Mark Ritchie, President. Editor: Orin Kirshner. E- mail versions of Trade News are available free of charge for Econet/IATP Net subscribers. For more information about fax or mail subscriptions, contact: Institute for Agriculture and Trade Policy, 1313 Fifth Street S.E., Suite 303, Minneapolis, MN, 55414 Phone 612-379-5980. To learn more about IATP's contract research services, please contact Dale Wiehoff at dwiehoff@igc.apc.org.