Trade Week in Review and Recent Publications
Friday, Febuary 11, 1994
Volume 3, Number 6
Headlines:
CONGRESS MAY CONSIDER GATT THIS YEAR
TAIWAN WILL IMPORT RICE AFTER GATT ENTRY
BRITTAN: GATT PROVIDES DIRECTION FOR EU FARM POLICY
FORUM SET TO DISCUSS WTO RULES
LITTLE PROGRESS EXPECTED FROM U.S.-JAPAN SUMMIT
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CONGRESS MAY CONSIDER GATT THIS YEAR
The White House announced Tuesday that it would submit GATT
implementing legislation to Congress for a vote sometime this year.
U.S. Trade Representative Mickey Kantor said the decision to submit
the legislation this year was made after the Japanese government
suggested that the Diet would be willing to do the same. "The
Japanese have now indicated that it is not only possible but probable
that they will ratify this agreement in 1994," Kantor said. "That
being the case, it was our judgment ... that the United States should
not be the lone country in the world holding up (the agreement)."
Japan had originally stated that it would not be able to approve the
Uruguay Round of GATT until 1995 because of concerns over the
soon-to-be created World Trade Organization (WTO). The global
trade pact was scheduled to go into effect in July 1995, but media
reports indicate the implementation date may be moved up to
January 1, 1995 in light of the U.S. and Japanese decisions.
Senator Daniel Patrick Moynihan (D-New York), who chairs the
Senate Finance Committee, supported the administration's
announcement. "If we don't (approve the agreement this year), we
might be the only country holding up the rest of the world, which we
don't want to do," Moynihan said Tuesday. But he cautioned that the
subsidies code might block passage of the accord this year.
Congressional leaders have also questioned how the U.S. will make up
the $11 billion lost over five years as a result of lower tariffs under
the Uruguay Round. Pay-as-you-go budget rules state the
administration must recover any lost tariff revenues by either
raising taxes or other tariffs, or by reducing mandatory spending. A
growing number of House Republicans opposed to raising taxes
support a proposal to waive current budget rules. But Kantor told
the Senate Finance Committee that the administration would "have to
pay for the tariffs ... We're already looking for offsets," he said. "It
will be very difficult. We have a very tight budget."
Sources: "Kantor Calls for GATT This Year, Promises to Pay,"
CONGRESS DAILY, February 8, 1994; "Sen. Moynihan Says Senate
Finance Will Vote on GATT Agreement This Year," BUREAU OF
NATIONAL AFFAIRS, February 9, 1994; "Spending Plan Stresses
Exports, Sticks to Budget Rules," CONGRESS DAILY, February 7, 1994;
"GATT Budget Waiver Gaining Ground Among GOP," CONGRESS DAILY,
February 1, 1994.
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TAIWAN WILL IMPORT RICE AFTER GATT ENTRY
Taiwan approved several trade reform plans to ensure it gains
entrance to GATT. The cabinet's GATT strategy committee agreed
Monday to partially lift the country's two-decade old ban on foreign
rice by gradually increasing rice imports. Taiwan, which consumes
1.6 million tons of rice per year, will allow imports equal to 4 percent
of its domestic consumption over 10 years. The committee also
voted to change fees levied on users of its ports and to alter its
tobacco and liquor import tax system. Officials said Taiwan expects
to enter GATT sometime this year.
Sources: "Taiwan Plans to Ease Rice Ban," WALL STREET JOURNAL,
February 9, 1994; "Taiwan Cabinet Committee Passes GATT Trade
Reforms," REUTER, February 8, 1994.
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BRITTAN: GATT PROVIDES DIRECTION FOR EU FARM POLICY
EU Trade Commissioner Leon Brittan said provisions outlined in the
Uruguay Round GATT text will provide Europe with one of several
policy tools needed to push farm reforms in a more sustainable
direction. "It is good news that the GATT Round put environmental
aids in the Green Box," Brittan said during a speech on the future of
EU farm policy. "That should make it easier to steer Union policy in
the environmental direction in the future." Brittan said that as the
EU begins to eliminate support prices and other agriculture subsidies,
farmers will need to be granted direct aid to sustain income levels
and to meet consumer demands for a more environmentally-friendly
farming system. This approach for EU farm policy, Brittan said, will
ensure "a more balanced, more sustainable agriculture, one which
meets the challenges of rural development, of the environment and
of our obligations to our neighbors."
Under GATT, the European Union is obligated to cut domestic farm
programs costs by 20 percent over the next six years. The EU is,
however, allowed to make direct government payments to farmers
and to continue subsidizing some research and conservation
programs. UK National Farmers' Union (NFU) President David Naish
said GATT would force the UK to pursue one of two directions, either
to cut back on production or to accept reduced income supports.
"Neither route can be contemplated with other than a deep sense of
foreboding," Naish said.
Sources: "Brittan on Speech on GATT and the Future of Farming,"
REUTER, February 8, 1994; "Final Agriculture Text of the Uruguay
Round of the General Agreement on Tariffs and Trade, Summary of
Key Provisions," IATP, January, 1994; "UK Farmers Face More Output,
Price Cutbacks - Union," REUTER, February 8, 1994.
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FORUM SET TO DISCUSS WTO RULES
A team of trade and environment representatives established a
forum this week to discuss and set policy principles for the new
World Trade Organization (WTO). Richard Blackhurst, director of
Economic Research at GATT, Konrad von Moltke of the World Wildlife
Federation and former United Nations official Mohammed Sahnoun
participated in the first round of talks. Blackhurst described the
forum as a "give-and-take dialogue that has largely been missing
from the trade and environment debate."
Source: Robert Evans, "Expert Team Sets Trade and Environment
Principles," REUTER, February 8, 1994.
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OTHER TRADE NEWS
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LITTLE PROGRESS EXPECTED FROM U.S.-JAPAN SUMMIT
Few analysts expect the United States and Japan to make significant
progress on trade matters during today's summit between U.S.
President Bill Clinton and Japan Prime Minister Morihiro Hosokawa.
Negotiators failed to break the impasse over market access for U.S.
autos and auto parts during a series of meetings held earlier this
month. "Everything has come to an impasse," Hosokawa said
Thursday. Japanese Foreign Minister Tsutomu Hata flew to
Washington Thursday in an unsuccessful attempt to unlock the
stalled talks The United States continues to push for quantitative
market access goals. But Japan is refusing such proposals, calling
them managed trade. "The U.S. should understand that putting up a
certain quantitative goal and trying to achieve it ... isn't something
that can happen in the real business world," said Japanese
ambassador to the U.S., Takakazu Kuriyama.
Hosokawa released Japan's draft 1994 budget and economic stimulus
package today and is expected to bring it to Washington as an
"offering" to push talks forward. But U.S. officials have already
dubbed the package a "moderate step." The Clinton administration
hinted earlier that it would consider trade sanctions against several
key Japanese trade sectors, including semiconductors and
telecommunications, unless significant market access offers are made
during this weekend's summit.
Sources: William Dawkins, "Tokyo Lays Groundwork for U.S. Talks,"
FINANCIAL TIMES, February 10, 1994; Michiuyo Nakamoto, "Japan
Resists U.S. Pressure on Trade," FINANCIAL TIMES, February 10,
1994; "Administration Contemplating Japanese Trade Sanctions,"
CONGRESS DAILY, February 9, 1994.
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CENTRAL EUROPE WILL SPEED UNION
Senior Central European trade officials signed a declaration late last
week to speed up trade liberation under the Central European Free
Trade Agreement (CEFTA). The agreement, which took effect in
March 1993, will eliminate 54-60 percent of designated tariffs by
January 1, 1998. Officials also voted to expand the scope of the
accord to include new items for tariff reduction. Representatives will
vote on the new items by April 1. Items not included in the plan
include: agriculture, textiles, metals and automobiles. The JOURNAL
OF COMMERCE reports that expert panels will immediately begin
discussions on how to resolve conflict over these items. CEFTA was
signed by the Czech Republic, Hungary, Slovakia and Poland in
December 1992 with the aim of establishing a free trade zone by
2001.
Source: Michele Kayal, "Nations Agree to Speed Up Central European
Free-Trade Move," JOURNAL OF COMMERCE, February 7, 1994.
_______________________________________________________
RESOURCES:
"Recent Trade Liberalization in Developing Countries: The
Effects on Global Trade and Output," Susan Hickok, FEDERAL
RESERVE BANK OF NEW YORK, Volume 18, Number 3, Autumn 1993.
First copy free. Public Information Department, 33 Liberty Street,
New York, NY 10045-0001. Tel: (202) 720-6134.
Third World Resurgence, THIRD WORLD NETWORK, Number 41,
KDN PP6738/1/93, January, 1994. Contact organization for price. 87
Cantonment Road, 10250 Penang, Malaysia. Fax: 60-4-368106.
This issue includes the following articles on the completion of the
Uruguay Round of the General Agreement on Tariffs and Trade:
"Uruguay Round Ends but Pressures on South Will Continue,"; "Order
or Disorder After the Uruguay Round,"; "Third World Loses Out in
GATT Deal," ; "Indian Government Fails to Protect National Interests,";
"World Reactions to GATT Deal".
"List of World Bank-Financed Projects With Potential For
NGO Involvement," WORLD BANK, December, 1993. Free. Arthur
Thomas, International Economic Relations Division, Operations Policy
Department, 1818 H Street, N.W., Room No. T-8102, Washington, D.C.
20433. (202) 473-1151. Fax: (202) 676-0576.
_______________________________________________________
EVENTS:
"Founders of the Bretton Woods Institutions," October 15-17,
1994, Bretton Woods, New Hampshire. The conference will bring
together many of the founders and key leaders of the Bretton Woods
system to reflect on the past 50 years of work and to discuss the
system's future. Contact IATP for more information.
"1994 Global Market Series," WORLD ECONOMIC DEVELOPMENT
CONGRESS. $850.00 each conference. 1000 Winter Street, Suite
3700, Waltham, MA 02154-9419. (800) 767-9499 or (617) 487-
7900. Fax: (617) 487-7937 or (617) 487-0146.
Upcoming conferences include: "Anticipating the New Cuba," March
17-18, Tampa, Florida; "Investing in Vietnam: Understanding Asia's
Next Tiger," May 19-20, San Francisco, California; "Post-Election South
Africa: Investing in the Future," June 2-3, New York, New York;
"Investing in China: Strategies for Sustaining Growth," June 23-24,
New York, New York.
_______________________________________________________
Editors: Kai Mander, Gigi DiGiacomo, Steven Suppan
Institute for Agriculture and Trade Policy (IATP)
1313 5th Street, SE, Suite 303
Minneapolis, MN 55414
tel: (612) 379-5980 fax: (612) 379-5982
email: [EMAIL PROTECTED]
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