From iatp@igc.apc.org Wed May 29 17:50:05 1996 Date: Tue, 28 May 1996 13:49:23 -0700 (PDT) From: IATP To: Recipients of conference Subject: Trade News 5-28-96 TRADE NEWS Produced by the Institute for Agriculture and Trade Policy May 28, 1996 Volume 5, Number 11 _________________________________________ - U.S. PROPOSES TRADE-LABOR LINK - OECD PROPOSES WTO LINK - MARITIME TALKS NEAR DEADLINE - U.S. PROTESTS HIGH TECH DUTY HIKES - WTO TO HEAR BEEF COMPLAINT - EU QUESTIONS U.S. TRADE POLICY - JAPAN-U.S. INSURANCE TALKS _________________________________________ WTO NEWS SUMMARY _________________________________________ U.S. PROPOSES TRADE-LABOR LINK In mid-May, the U.S. called for governments to firmly link trade and labor standards when the World Trade Organization (WTO) meets in Singapore in December. The push was immediately denounced by several developing nations. Deputy U.S. trade representative Booth Gardner said any agreement reached in Singapore should be strictly limited to five "core areas": freedom of association; the right to organize and bargain collectively; a prohibition on forced labor; the elimination of exploitative forms of child labor; and non- discrimination in employment or occupation. "It's going to take a lot of effort," Gardner said. "There's a lot of ambivalence on the part of various member states. But we're going to work the issue very hard." Speaking on behalf of the Association of South East Asian Nations (ASEAN), the Philippines said the seven- member group was against the inclusion of labor standards, corruption, bribery, or competition policy. Egypt also said labor conditions were not within the scope of the WTO. Developing nations fear a link between trade and labor represents a veiled attempt by rich nations to undermine their comparative advantage and lower labor costs. John Zarocostas, "U.S. Call for Trade-Labor Linkage Sparks Protest By Poorer Nations," JOURNAL OF COMMERCE, May 16, 1996. OECD PROPOSES WTO LINK The Organization for Economic Cooperation and Development (OECD) is seeking closer links with the World Trade Organization (WTO) by offering to conduct research to support the work of the global trade body. The OECD's offer could help to fill a gap at the WTO, where member governments have failed to approve funding for an increase in the institution's modest research facilities. But the OECD's proposal could face resistance from the WTO. One trade diplomat in Geneva said: "Any suggestion that the OECD should become some kind of think tank for the WTO is not the kind of statement we would be pleased with. It's much too strong and one-sided." Speaking on the condition of anonymity, the diplomat said that poorer countries fear that the OECD does not necessarily reflect their interests. They are particularly concerned by a U.S.-led initiative to negotiate a multilateral agreement on investment within the OECD, which they fear may be imposed on the WTO next year. Gillian Tett and Guy de Jonquieres, "OECD Will Seek Higher Profile on Trade Promotion," FINANCIAL TIMES, May 20, 1996. MARITIME TALKS NEAR DEADLINE Negotiators in the World Trade Organization's (WTO) effort to liberalize maritime services have scheduled two rounds of multilateral talks and a high-level meeting in the next five weeks in an attempt to complete the negotiations by the June 30 deadline. No country has publicly discussed delaying the deadline, despite a growing belief among WTO officials and delegates that there is no chance to conclude an agreement under the current schedule. In the talks, the European Union (EU) has been pressing other countries for improved commitments in the hope of getting the U.S. to table an offer. The U.S. has insisted on major improvements in the offers of most other countries before a U.S. offer is tabled, while other countries have charged the U.S. with stalling the talks by not tabling its offer first. "WTO Maritime Group Agrees to New Schedule in Effort to Meet Deadline," INSIDE U.S. TRADE, May 17, 1996. U.S. PROTESTS HIGH TECH DUTY HIKES On May 22, the U.S. complained to the World Trade Organization (WTO) that European Union (EU) members Ireland and Britain ignored international commitments by Brussels, and imposed higher import duties on high technology products. The U.S. informed the WTO's Goods Council that Local Area Network computer equipment appears to have been re-classified by Ireland into a higher duty telecommunications category. Similarly, Britain re-classified personal computers with a television capability. The U.S. claims these duty hikes put U.S. exports on a less favorable footing in a trade area worth hundreds of millions of dollars annually. The EU counters that it is not its policy to re-classify products in order to increase tariffs or to seek protection, and is adamant that no U.S. rights have been weakened. The U.S. and EU will hold bilateral talks in early July to examine Washington's concerns. John Zarocostas, "U.S. Protests Duty Hikes on High-Tech Equipment," JOURNAL OF COMMERCE, May 23, 1996. WTO TO HEAR BEEF COMPLAINT Last week, the World Trade Organization (WTO) agreed to establish a dispute settlement panel to examine a complaint by the United States that the European Union's (EU) ban on imports of hormone-treated beef is contrary to global free trade rules. The EU's measure, introduced in January 1988, costs U.S. exporters more than $100 million annually in lost sales. The U.S. immediately retaliated by imposing the same amount of extra import duties on a list of EU farm products. "WTO to Examine Beef Complaint," JOURNAL OF COMMERCE, May 21, 1996. _________________________________________ BILATERAL/REGIONAL AGREEMENTS _________________________________________ EU QUESTIONS U.S. TRADE POLICY On May 21, the European Union's (EU) trade commissioner Sir Leon Brittan launched a strong attack on U.S. trade policy, suggesting that its recent conduct has set back global economic liberalization and jeopardized the multilateral trading system. Brittan was particularly critical of U.S. legislation which provides for legal actions against companies with investments in Cuba. He called the Helms-Burton Act "extra-territorial and expropriatory" and said it breached U.S. international obligations. He added that the Helms-Burton Act was one of a number of recent "checks and setbacks" to international trade policy, which included the near- failure of last year's World Trade Organization (WTO) talks on financial services, the inconclusive outcome last month of WTO telecommunications negotiations, and lack of progress in efforts to liberalize maritime trade. Though Brittan did not name the U.S., EU officials said his comments were directed at Washington, which he held largely responsible for recent problems. Guy de Jonquieres, "Brittan in Fierce Attack on U.S. Trade Policies," FINANCIAL TIMES, May 22, 1996. JAPAN-U.S. INSURANCE TALKS In mid-May, Japan and the U.S. failed to bridge differences over Tokyo's deregulation of its insurance market despite a June 1 deadline to resolve the dispute. "There are still considerable differences between our views," an official from Japan's Ministry of Finance said. Negotiators said that although the two nations did not reach agreement in their talks, they would be holding more discussions to try to meet their self- imposed deadline. The U.S. charges that Japan has liberalized one small sector of the insurance industry in which foreign firms have been some inroads while keeping restrictions in most other areas. Japan says the market is already open and that it should only take two to three years for foreign firms to compete on equal terms. Edwina Gibbs, "Japan, U.S. Still Far Apart in Deregulation Talks," JOURNAL OF COMMERCE, May 16, 1996. _________________________________________ RESOURCES _________________________________________ ARE THERE TRADE-OFFS WHEN AMERICANS TRADE?, by Susan Aaronson. This excellent new book by presents all sides of the trade debate in a highly readable format. To order, call 1-800-765-3131 ($9.95 plus shipping). A version of this book for high schoolers, TRADE IS EVERYBODY'S BUSINESS, is also available for the same price. Editor's Note: The next issue of Trade News will appear the first week of July. __________________________________________ 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