From iatp@igc.apc.orgFri Apr 28 23:16:27 1995 Date: Fri, 28 Apr 1995 12:08:47 -0700 (PDT) From: IATP To: Recipients of conference Subject: Trade News 4-27-95 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy Volume 4, Number 7 April 27, 1995 _________________________________________ Headlines: - RUGGIERO HAILS ROLE OF DEVELOPING COUNTRIES - U.S. TO USE WTO TO OPEN FOREIGN FOOD MARKETS - CANADA, EU END FISHING DISPUTE - EU ADOPTS ANTITRUST ACCORD WITH US - EU TO INVESTIGATE CLAIMS EAST ASIA IS DUMING VCRS - MEXICO CITES UNFAIR STEEL TRADE _________________________________________ WTO NEWS SUMMARY _________________________________________ RUGGIERO HAILS ROLE OF DEVELOPING COUNTRIES On April 25, Renato Ruggiero, the first head of the new World Trade Organization (WTO), said that developing countries should play a bigger role in the global trade body. Citing the positive role developing countries--especially the countries of East Asia--played in pulling the industrial countries out of the last global recession, Ruggiero said expanding their participation was a "priority issue" that the trade body needed to address. Ruggiero also said that he was optimistic about the prospects of China and Taiwan joining the WTO, which has 128 present and pending members. "I hope that we can find a good solution in good time for both these countries," he said, adding that the applications by the two countries would be treated separately. China failed to become a WTO member by January 1, 1995, when the trade body was launched because the United States, the European Union (EU), and Japan blocked Beijing's bid on the grounds that it had not gone far enough in liberalizing its economy. Taiwan's early entry into the WTO has been controversial because of China's opposition. "New WTO Head Hails Role of Developing Countries," REUTERS, April 25, 1995. U.S. TO USE WTO TO OPEN FOREIGN FOOD MARKETS The Clinton administration has decided to shift to a markedly more aggressive policy to fight trade barriers based on local health and safety regulations that limit U.S. food sales in foreign markets. According to U.S. trade officials, the government has decided to take big food trade disputes straight to the WTO, skipping efforts to resolve disputes on a bilateral basis. The new policy could potentially affect hundreds of millions of dollars worth of sales of a wide array of U.S. food products, ranging from hot dogs to kiwi fruit to wheat. The shift in U.S. policy is based largely on new WTO rules that say a nation's health-related regulations that are applied to agricultural imports cannot be used as disguised trade barriers, but have to be based on scientific findings. Referred to as the sanitary and phytosanitary measures, or "S&P" rules, these regulations were approved after years of often bitter debate in the Uruguay Round of world trade negotiations. It now falls to the WTO to enforce the measures. The first test of the new rules could come in May, when a tense dispute between the U.S. and South Korea over meat imports comes to a head. Unless South Korea changes its food codes by April 30 to enable more U.S. hot dogs and other products into that country, Washington has said that it will take the case to the WTO. U.S. trade officials have charged that Seoul's government-mandated shelf life times for meat products are too short, not based on science, and have effectively cost U.S. pork and beef producers over $200 million in lost sales in 1994 alone. Also expected to be challenged under the new rules is the EU's hormone meat ban, which prohibits any U.S. meat produced with growth hormones from being sold in Europe. Mark Magnier, "WTO Test Case Held Goal in U.S.-South Korea Flap," JOURNAL OF COMMERCE, April 12, 1995; Maggie McNeil, "WTO Rules Hoped to Boost U.S. Food Sales Abroad," REUTERS, April 19, 1995. _________________________________________ BILATERAL/REGIONAL AGREEMENTS _________________________________________ CANADA, EU END FISHING DISPUTE On April 16, Canada and the EU agreed to settle a tense dispute over fishing rights in international waters off Canada's east coast. Canadian Fisheries Minister Brian Tobin said the agreement provides for effective conservation measures, including tougher enforcement of fishing quotas in the North Atlantic Ocean. The pact also gives the EU a larger share of the turbot catch in the disputed waters. Under the new agreement, Canada and the EU will each receive 10,000 metric tons of a 27,000-ton turbot quota set by the Northwest Atlantic Fisheries Organization, which regulates fishing in the North Atlantic. The remaining catch will be divided among the organization's other members, including Russia and Japan. As part of the settlement, the two sides also agreed that independent inspectors will be allowed to board vessels fishing in the disputed zone to ensure that the trawlers are complying with the quotas and other fishing regulations. The inspectors will have the authority to seize vessels and levy fines if necessary. Canada had claimed that European trawlers, particularly Spanish and Portuguese vessels, were taking too much turbot from the Grand Banks fishing grounds off the coast of Newfoundland and were endangering the stocks of fish, which are also known as Greenland halibut. Rosanna Tamburri, "Canada, EU End Dispute Over Fishing," WALL STREET JOURNAL, April 17, 1995; Clyde H. Farnsworth, "North Atlantic Fishing Pact Could Become World Model," NEW YORK TIMES, April 17, 1995. EU ADOPTS ANTITRUST ACCORD WITH U.S. On April 20, the EU formally adopted an agreement with the United States allowing their antitrust authorities to cooperate on major competition cases. The agreement has been in force for almost four years but was challenged in court by France because it was signed by the European Commission alone and not EU states as a whole. The European Court of Justice agreed with France in August 1994 that the agreement should have been signed by the EU's Council of Ministers, but did not annul it. The EU's April 20 action responds to France's concerns and puts the agreement into full effect. The agreement provides for the exchange of information, on the condition of confidentiality, on cases which might affect competition on both sides of the Atlantic. "EU Adopts Accord with U.S. on Antitrust Cooperation," JOURNAL OF COMMERCE, April 21, 1995. EU TO INVESTIGATE CLAIMS EAST ASIA IS DUMPING VCRS Last week, the European Commission announced that it will launch an investigation into allegations that videocassette recorders from East Asia are being dumped on the European market. The move follows complaints from Philips of the Netherlands, which manufactures VCRs in Germany and Austria in a joint venture with the Grundig Corporation. It has asked the Commission to examine the prices of products imported from Singapore and South Korea. The complaint about dumped products from Singapore is particularly sensitive since Thomson Consumer Electronics, a French state-owned company, produces VCRs in Singapore in a joint venture with Toshiba of Japan. "This could lead to the ironic situation that a state-owned European company is being investigated for dumping products in its own market," said a Brussels-based consultant. Formal notification of the investigation of VCR dumping is expected to be published in the Commission's official journal over the next two weeks. Emma Tucker, "Europe to Investigate East Asia Video Recorder 'Dumping' Claims," FINANCIAL TIMES, April 19, 1995. _________________________________________ WORLD TRADE ROUND-UP _________________________________________ MEXICO CITES UNFAIR STEEL TRADE Trade investigators in Mexico's commerce agency have issued preliminary unfair trade findings and will continue investigating plate steel imports from the United States, Brazil, Canada, South Korea, Venezuela, and South Africa. In announcing their decision on April 18 in a 39-page finding, commerce investigators said they would not impose compensatory duties while they continued studying the complicated case. Mexican steel makers Altos Hornos de Mexico and Hylsa petitioned the Secretaria de Comercio y Fomento Industrial on August 4, 1993. They claimed illegal trade practices and subsidies were harming domestic producers, citing a period between January and December 1992. The products involved in the trade dispute are commonly known as plate steel, heavy plate steel or medium plate. The steel dispute was first accepted by the commerce ministry in October 1993. In addition to steel makers in South Korea, Canada, South Africa, Brazil and Venezuela, U.S. steel companies Bethlehem Steel Corporation, LTV Steel Company, National Steel Corporation, and U.S. Steel, a subsidiary of USX Corporation, are affected. Mexican officials warn that they reserve the right to impose compensatory duties and could do so retroactively for the three months prior to the date of imposing penalties. Kevin G. Hall, "Mexico Cites Unfair Trade, Continues Steel Inquiry," JOURNAL OF COMMERCE, April 19, 1995. _______________________________________________ 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.