GENTECH archive


BRIDGES Weekly Trade News Digest - Vol. 2, Number 43 Nov. 09, 1998




10-12 November 1998: Informal Meetings of the Heads of Delegations. The
four candidates for the position of WTO Director General, namely Roy
Maclaren (Canada), Supachai Panitchpakdi (Thailand), Mike Moore (New
Zealand) and Hassan Abouyoub (Morocco), will introduce themselves to, and
be questioned by, the Heads of Delegations during these meetings.
 For more information, contact: Nuch Nazeer, WTO, tel: (41) 22 739 5393.

11-12 November 1998: Committee on Sanitary and Phytosanitary Measures.
 For more information, contact: Lucie Giraud, WTO, tel: (41) 22 739 5075.

12-13 November 1998: Trade Policy Review of Trinidad and Tobago.
 For more information, contact: as above.

13 November 1998: Committee on Customs Valuations.
 For more information, contact: Luis Ople, WTO, tel: (41) 22 739 5374.

20 November 1998: Committee on Technical Barriers to Trade.
 For more information, contact: Lucie Giraud, as above.


NGO FORUM - THE MONTREAL PROTOCOL, 19-20 November 1998, Cairo, Egypt.
 This International NGO Forum will be held in parallel to the 10th meeting
of the parties to the Montreal Protocol (16-24 November 1998).
 For information contact: Dr. Emad Adly, The Arab Office for Youth and
Environment (AOYE), 14 Abou El Mahasen El Shazley, Mohandesen, Cairo,
Egypt; tel: (202) 304 1634; fax: (202) 304 1635; email:

DEVELOPMENT STRATEGY, 29 November-2 December 1998, Rome, Italy.
 This conference is organised by the Inter-Parliamentary Union with the
support of the Food and Agriculture Organisation of the United Nations
(FAO) and hosted by the Italian Parliament.
 For information contact: Inter-Parliamentary Union, C.P. 438, 1211 Geneva
19, Switzerland; tel: (41) 22 919 4150; fax: (41) 22 733 3141/919 4160;

ENVIRONMENTAL PERMITTING SYMPOSIUM, 17-19 February 1999, Research Triangle
Park, North Carolina, USA.
 This symposium is sponsored by the Air & Waste Management Association and
the U. S. Environmental Protection Agency.
 For information contact: Leo Stander, Operating Permits Group, Office of
Air Quality Planning and Standards (Mail Drop 12), U.S. Environmental
Protection Agency, Research Triangle Park, NC 27711, USA; tel: (1) 919 541
2402; fax (1) 919 541 5509; email:


Researchers on development problems are invited to present papers for the
9th General Conference of the European Association of Development (EADI)
that will take place in Paris, France on 22-25 September 1999.
 The subject of the conference is "Europe and the South in the 21st
Century: Challenges for Renewed Cooperation." Papers must pertain to this
topic and may refer to a particular developing country or to relations
between different countries. Abstracts must be sent to the EADI
Secretariat by 28 February 1999.
 For more information, contact: EADI Secretariat, 24 rue Rothschild, P.O.
Box 272, 1211 Geneva 21, Switzerland; tel: (41) 22 731 4648; fax: (41) 22
738 5797; email:; website:


"Trade and the Environment: A Comparative Study of EC and US Law," by
Damien Geradin, Universite de Liege, Cambridge Studies in International
and Comparative Law, 8, 1997, 256 pp.
 To order contact: Cambridge University Press, Gill Hale, tel: (44) 1223
325577, fax: (44) 1223 325151, email:

"The Changing International Law of High Seas Fisheries," by Francisco
Orrego Vicuqa, Universidad de Chile, Cambridge Studies of International
and Comparative Law, 9, forthcoming, 1999, 336 pp.
 This book examines the international law of high seas fisheries in the
light of the Third United Nations Conference on the Law of the Sea, the
State and international practice that followed and its influence on the
1995 Straddling Stocks Agreement.
 To order contact: Cambridge University Press, as above.

"Against the Grain: Biotechnology and the Corporate Take-over of Your
Food," by Marc Lapp and Britt Bailey, Common Courage Press, 1998, 175 pp.
 This book analyses both scientific and political aspects of biotechnology
and its implications for world food security.
 To order, contact: Common Courage Press, 1 Red Barn Road, Monroe, ME
04951, USA; tel: (1) 207 525 0900; fax: (1) 207 525 3068; email:

"The Monsanto Files: Can We Survive Genetic Engineering?," The Ecologist,
Sept./Oct. 1998.
 This article gives an overview of Monsanto's corporate history, examining
products such as Agent Orange, Roundup, recombinant bovine growth hormone,
and Terminator technology.
 To order, contact: The Ecologist, c/o Cissbury House, Furze View, Five
Oaks Road, Slinfold, W. Sussex RH13 7RH, United Kingdom; tel: (44) 1403
786 726; fax: (44) 1403 782 644; email

"Altered Genes - Reconstructing Nature: The Debate," Richard Hindmarsh et.
al. (eds.), St. Leonards, Australia: Allen and Unwin, 1998, 228 pp.
 This publication contains fourteen essays on biotechnology from writers
in New Zealand and Australia. It reviews, inter alia, Australian bio-
industrial development; agricultural biotechnology in Australia;
transgenic cotton; the human genome project; bioprospecting, biopiracy and
intellectual property rights.
 To order, contact: Allen and Unwin, P.O. Box 8500, 9 Atchison St., St.
Leonards, NSW 2065, Australia; tel: (61) 2 8425 0100; fax (61) 2 9906
2218; email: frontdesk@allen-


The World Wildlife Fund (WWF-US) is looking for a full time Program
Officer for a position with its Sustainable Commerce Program in its
Washington D.C. office.
 The program officer position will concentrate on two areas within the
Sustainable Commerce Program: (1) The North American Agreement on
Environmental Cooperation (NAAEC) Implementation Project; and (2) the
NAAEC Certification Policy and Public Procurement Project. In addition,
the Program Officer will assist the Sustainable Commerce Program in
expanding its linkages with WWF's Latin American and Caribbean regional
 For more information, contact: David Schorr, Director, Sustainable
Commerce Program, World Wildlife Fund (WWF-US); fax: (1) 202 778 9721;

Table of Contents                           

- WTO Top Spot: Four Candidates Ready For Action
- Opposition Building To MAI At WTO
- Climate Talks Underway In Buenos Aires
- WTO Committee on Trade and Development Meets
- U.S. Court Strikes Down Burma Law
- Report Calls Aquaculture Into Question, Nations Agree on Fishing
- GCC-EU Meet On Free Trade
- U.S., EU Vie for MERCOSUR Attention
- WTO In Brief
- In Brief


WTO members will try to reach consensus within the next few weeks on one
of four candidates vying to replace outgoing WTO Director-General Renato
Ruggiero. New Zealand's Mike Moore, Morocco's trade ambassador Hassan
Abouyoub, Thailand's Deputy Prime Minister Supachai Panitchpakdi and
Canadian International Trade Minister Roy MacLaren are all candidates for
the post.

According to THE ECONOMIST, New Zealand's Mike Moore is favourite. Moore
held various ministerial posts from 1984 - 1990, and diplomats in Geneva
see Moore as a highly qualified candidate due to his past activities in
the international trade arena. Moore was involved in the launching of the
Uruguay Round negotiations, and represented New Zealand at the first
ministerial meeting of the Asia-Pacific Economic Co-operation forum in
1989. The U.S. is reported to admire Mr. Moore's experience, as well as
his affinity for the American agenda, while the EU is reportedly wary of
electing a director from the Cairns group of agricultural exporting
countries, which has called repeatedly for liberalisation of agriculture.
No New Zealander has yet held a major international post, a factor which
could work in Moore's favour.

Canada's Roy MacLaren, again according to THE ECONOMIST, is considered the
next leading candidate. However, because a Canadian holds the top spot at
the Organisation for Economic Co-operation and Development (OECD), his
candidacy may not succeed at the WTO.

Thailand's Deputy Prime Minister Supachai Panitchpakdi is seen in some
reports as a viable candidate, one that could give voice to the developing
world. Mr. Supachai has said that the WTO must speed up efforts to
complete accession talks with China and Russia and adopt a more
flexible-negotiating stance with prospective developing country members.
Japan, Norway and the Association for Southeast Asian Nations (ASEAN) have
all endorsed Mr. Supachai. Norway offered its support of Mr. Supachai
saying, "We have to support the WTO as a global institution."

Morocco's trade ambassador Hassan Abouyoub is, according to the
INTERNATIONAL TRADE REPORTER, expected to draw support from Arab and
African countries. As a fluent French-speaker, he is also expected to win
backing from the Francophone world. However, other media report that
sub-Saharan Africa has no great affinity for him.

Observers in the South note that the next director general must be someone
who can bring legitimacy to the WTO as more than a forum for rich
countries' interests -- a person eager and capable of bringing forward the
views of the WTO's weakest members. They caution however that it is not
axiomatic that a person from the third world is the best person to achieve
this. Observers in the South note that a geographically-desirable
candidate could be used to push the first world agenda via a third world
figure, by bringing in a person incapable of effectively promoting major
third world issues, or a person from the third world who is more inclined
toward first world interests.

Mr. Ruggiero has announced his willingness to depart the WTO as early as
January if a replacement can be elected by consensus by mid- December. The
new director-general would be responsible for presiding over global talks
on agriculture, and a proposed new comprehensive trade round.

 "Norway says backing Thai deputy PM to lead WTO," REUTERS, October 24,
 "Who now?" THE ECONOMIST, October 24, 1998;
 "New Zealand Nominates Mike Moore, Morocco Pushes Abouyoub to Head WTO,"
Volume 1, Number 7 (October 1998).


The French withdrawal last month from Multilateral Agreement on Investment
(MAI) talks at the Organisation for Economic Co-operation and Development
(OECD) have left negotiators and MAI opponents trying to figure out what
is next for the embattled global investment agreement, talks for which
have been underway since 1995. Much of the talk around what's next centres
on the possibility of MAI negotiations moving to the WTO. Much of the
developing world, as well as environmental and consumer groups have
however expressed opposition to such a move.

The MAI has been vigorously opposed by labour, environment and citizens'
groups for not incorporating labour and environment standards and for its
lack of transparency. The OECD had also been strongly criticised for its
failure to include developing countries in negotiations; developing
countries led by India, Egypt, Pakistan and Malaysia have expressed strong
suspicion and opposition toward the MAI agreement and its presumed mandate
over developing countries.

With the future of the MAI in limbo, the developing world remains opposed
to the MAI at the OECD or WTO. "We are against the MAI (being discussed)
at the OECD," said Martin Khor of the Third World Network. "We are against
the MAI at the WTO even more. There will be a semblance of negotiations
with and participation by developing countries. But experience has shown
that the WTO is not democratic and not transparent." In addition, Mr. Khor
said decision making at the WTO is in reality controlled by a few
ultra-powerful members (e.g. the U.S., Canada, EU and Japan), that force
smaller economies to comply with their agenda.

Other voices in the South too are wary of a change of venue for the MAI.
According to the International South Group Network, the argument "that the
WTO is more 'democratic' because it allows the third world countries also
to participate is superficially valid, but the present balance of forces
within the WTO does not allow the South an adequate voice in it. Also, the
WTO has the force of automatic built-in sanctions mechanism that gives the
South little leeway once they sign on the dotted line. They [developing
countries] therefore have to be very vigilant about what they sign."

Meanwhile, a coalition of 60 non-governmental organisations last month
made a clear statement in opposition to MAI talks at the WTO. "Shifting
the investment issue to the WTO will place great pressure on developing
countries to negotiate and eventually join an agreement that would have
disastrous effects on their development prospects. Moreover, promises to
include environmental and social concerns are likely to be only an eyewash
to co-opt the public to accept the basic tenets of the MAI. The strong
enforcement capability of the WTO through its dispute settlement system
will also mean that all countries, especially developing countries, will
be forced to comply. We therefore call on all governments, OECD and
non-OECD alike, to reject any proposal to negotiate an investment
agreement in the WTO," the groups said in a joint-statement last month.

Others have called for any future MAI negotiations to take place at the UN
Conference on Trade and Development (UNCTAD), considered a 'fairer' forum
for developing countries. "UNCTAD is the obvious forum to look at now,"
says Nick Maybe, head of economic policy at the WWF. "It's in the UN
system and it has been looking at investment for many years. It's true it
has not [ever conducted] anything like this. Neither has the OECD--and
look at the job that it did. The UN has experience of negotiations and is
therefore a more appropriate than the OECD and WTO," Mr. Maybe said. Still
others are less keen on UNCTAD as the forum for investment talks--critics
have charged that UNCTAD has in recent years tended to favour the
interests of multinational corporations. 

 "FINANCE-DEVELOPMENT: activists castigate investment pact plans," IPS,
October 20, 1998;
 "OECD members likely to water down plans for investment pact," INSIDE US
TRADE, October 30, 1998; "MAI: the Reality of Six Months of 'Consultation
and Assessment,'" Corporate Europe Observatory (CEO), October 1998;
 "MAI  -  A Shift in OECD Strategy," SEATINI BULLETIN (Southern and East
African Trade, Information and Negotiations Initiative), Volume 1 No. 7;
 "Development: NGOs mobilising against WTO investment rules," SUNS,
November 4, 1998;
 "MAI principles alive 'n kicking, analysts say," IPS, October 27, 1998.


The Fourth Conference of the Parties (COP-4) to the UN Framework 
Convention on Climate Change began meeting November 2 in Buenos Aires. 
Delegates last week began discussions on implementation of the Kyoto 
Protocol, with the main focus on the use of flexible mechanisms in 
meeting emissions reduction goals and the role of developing countries 
in the implementation of the Kyoto Protocol. Talks are set to continue 
through November 13.

The Kyoto Protocol--adopted in December 1997 but not yet in force, 
requires industrial nations to collectively reduce greenhouse gas 
emissions to 5.2 percent below 1990 levels by 2008-12. The protocol 
allows countries to meet some of their reductions by purchasing unused 
greenhouse gas allowances from other industrialised nations. The 
Protocol also established a system for trading in greenhouse gases.

Last week, delegates began to address the question of flexible 
mechanisms; e.g. emissions trading and technology transfer schemes. 
African countries stressed that the use of flexible mechanisms be 
limited to an agreed amount since the primary objective of the 
initiative was to encourage domestic action. Developing countries 
stressed that whatever mechanisms are adopted, they should not 
exacerbate the economic disadvantage of a number of developing 

A key issue in the flexible mechanisms discussion for developing 
countries is the Clean Development Mechanism (CDM), which would 
establish a concrete platform for emissions co-operation between 
developed and developing countries. The CDM is supposed to transfer 
money and technology to developing nations to fund energy efficiency, 
resulting in cost-efficient greenhouse gas reductions. Developing 
countries last week pushed hard for a plan of action around CDM. Latin 
American countries, led by Honduras, suggested the swift creation of 
the CDM, calling for an "interim phase approach" to develop guidelines 
and rules. African countries stressed the importance of equity in the 
CDM and suggested focusing on infrastructure development in the 
continent. They also noted that debt relief initiatives in Africa would 
create an enabling environment for a wide range of CDM projects.

Environmental groups are wary of the large role flexible mechanisms 
could play in emissions reduction plans for developed countries. "While 
the Kyoto text authorises trading, it says that trading 'shall be 
supplemental to domestic actions' for reducing emissions. Does that 
allow a country to buy 85 percent of its permits abroad instead of 
requiring its own consumers and industries to curb emission at home?" a 
Resources for the Future statement asks. Others note that unlimited use 
of flexible mechanisms does nothing to encourage the development of new 
technologies, processes and consumer behaviours necessary to address 
climate change for the long term. The U.S. has proposed there be no 
limit on the use of emissions--allowance purchases in meeting emissions 
targets, arguing that this approach would allow for the most cost- 
effective means of achieving emissions reduction. It is possible that 
the U.S. would not ratify the Kyoto Protocol if caps on flexible 
mechanisms were included. 

 "Highlights from the Fourth UNFCCC Conference of the Parties," EARTH
NEGOTIATIONS BULLETIN, November 2-6, 1998;
 "CSE Dossier Statement On the Buenos Aires Conference," CENTER FOR
 "Blocks on the road to a climate deal," FINANCIAL TIMES, November 2,
 "Details expected to hang up climate talks," ENVIROWIRE, October 30,


On 2 November the WTO Committee on Trade and Development (CTD), chaired by
Ambassador Chowdhury (Bangladesh), held its 22nd session in Geneva. The
new concept of so-called small economies was discussed in the context of a
joint paper submitted by Barbados, Jamaica, Lesotho, Mauritius, Sri Lanka,
and Trinidad and Tobago. It requests the WTO to give more attention to
small economies, and Members discussed the possibility of establishing a
"small economies group." It remained unclear, however, what criteria
should be used to distinguish small economies from other economies and to
what extent they should be treated differently. This issue will be taken
up at the next meeting of the CTD in early December.

On the topic of the application of the special provisions in the
multilateral trading agreements and related ministerial decisions in
favour of developing countries (DCs), delegates agreed that the
Secretariat circulate a questionnaire to all Members asking for an update
on the application of the special provisions and a description of problems

The Committee discussed technical assistance activities for DCs carried
out in 1998. By the end of the year, the WTO Secretariat will have
organised and/or participated in over 280 different activities, which
represents roughly a 24 per cent increase over 1997. These activities
concerned primarily the human resource development and training, and were
carried out in close collaboration with other international organisations,
such as the World Bank, the International Trade Centre and UNCTAD and
regional development banks. A full report on WTO technical co-operation
activities during 1998 will be provided to the CTD early in 1999.

The next three-year plan (1999-2001) for technical co-operation
(WT/COMTD/W/48) was discussed and adopted. In 1999, the focus of the
Secretariat's technical assistance activities related to the Agreement on
Agriculture will remain on assisting Members in implementing their
specific commitments in the areas of market access, domestic support and
export competition. Technical cooperation under the SPS Agreement will
continue to take the form of national or regional seminars organised in
response to developing-country Members' requests, or at the initiative of
the Secretariat.

Concerning the Joint Integrated Technical Assistance Programme for
Selected Least-Developed and Other African Countries (JITAP) launched in
early 1996, a Joint ITC/UNCTAD/WTO Trust Fund with voluntary contributions
from a number of donor countries has been established that puts the
programme on a sustainable financial basis for 1999.

On the issue of evaluating the effects of technical assistance, Members
requested that the Secretariat prepare a paper on the subject of
electronic means of delivering technical assistance.

The Committee did not discuss the proposed High-Level Dialogue on Trade
and Development, which according to informed sources could take place
back-to-back with a High-Level Dialogue on Trade and Environment, in March
1999 in Geneva (See BRIDGES Weekly Trade News Digest, Vol. 2, No. 42,
November 2, 1998.)

ICTSD Internal Files.


A U.S. Federal Court last week struck down a Massachusetts state law which
imposes sanctions on firms doing business with Burma (Myanmar). The court
found the law unconstitutional because it intrudes on the federal
government's exclusive authority to conduct foreign affairs. The
Massachusetts law assesses a "pricing penalty" in the government bidding
process against foreign firms doing business with Burma - the state
instituted its penalty policy in protest against consistent, extensive
human rights abuses by the governing regime in Burma. (See also BRIDGES
Weekly Trade News Digests Vol. 2, No 35, September 14, and Vol. 2, No 31,
August 17, 1998). 

"The Massachusetts Burma Law was designed with the purpose of changing
Burma's domestic policy. State interests, no matter how noble, do not
trump the federal government's exclusive foreign affairs power," Chief
Judge Joseph Tauro wrote in his decision. 

The National Foreign Trade Council (NFTC), a coalition of more than 600
large U.S. companies, brought the suit against the Massachusetts law. The
EU filed an amicus brief on behalf of NFTC arguing that the law interferes
with U.S.-EU relations, and raises questions about the ability of the U.S.
to honour its trade obligations. 

The ruling is expected to help the EU and Japan in their complaint against
the Massachusetts law at the WTO. At the WTO, the EU and Japan contend
that the Massachusetts' and like laws violate the 1994 Government
Procurement Agreement, signed as part of the Uruguay Round of global trade
negotiations, which stipulates that government procurement
decisions--including at the state and local levels--must be made on
economic grounds only.

Massachusetts is considering an appeal to the Federal Court ruling. 

 "Federal district court strikes down Burma law," INSIDE US TRADE,
November 6, 1998;
 "Court strikes out Burma sanctions law," FINANCIAL TIMES, November 6,
 "Massachusetts sanctions struck down," JOURNAL OF COMMERCE, November 6,


A report published in the journal SCIENCE this month finds that shrimp and
salmon farming does not help protect the world's fish supply, refuting
earlier scientific claims that fish farming, also known as aquaculture,
provided an ecologically-sound alternative to ocean- fishing. In its
report, "Nature's subsidies to shrimp and salmon farming," researchers
found that fish farming endangers the environment. "The increasingly large
scale of these [aquaculture] industries, combined with other human
activities, now places substantial demands on ocean ecosystems, which in
turn result in the demise of fisheries and biological diversity," the
report said. The expansion of aquaculture operations between 1986-1996
increased the dependence on ocean fishing for fishmeal and fish oil for
feed. Further, aquaculture operations pollute the ecosystems that fish and
other marine life inhabit. "Shrimp and salmon farms discharge untreated
effluents laden with polluting nutrients, pesticides, and other chemicals
directly into ecologically fragile coastal waters," according to the

In other news, 81 nations and the EU have agreed to voluntarily limit
global fishing. The agreement was reached during the UN Food and
Agriculture Organisation (FAO) conference on fishing held late last month
in Rome. FAO estimates that most of the world's most valuable fish stocks
are already depleted or overfished. Nearly all the leading fishing
nations--including the U.S., Chile, Thailand and China, have fishing
overcapacity in excess of 150 percent. The countries agreed to voluntarily
limit fishing capacity, "where capacity is undermining achievement of long
term sustainability outcomes," in which case countries "should endeavour
initially to limit at present level and progressively reduce the fishing
capacity applied to affected fisheries". The countries emphasised the need
to improve data collection on fishing capacity, especially as regards the
characteristics of fleets, their mobility, and their effect on the
sustainability of the stocks that they exploit.

In related news, in a paper on subsidies in the fisheries sector submitted
to the WTO's Committee on Trade and Environment last week, the EC take the
position that subsidies do not necessarily lead to increased pressure on
fish stocks.

 "Fish farms criticised," IPS, November 2, 1998;
 "Study questions aquaculture benefits," JOURNAL OF COMMERCE, November 2,
 "International conference approves draft documents on the management of
fishing capacity, sharks and seabird bycatch," FAO PRESS RELEASE, November
9, 1998;
 "Commentaires de la Communauti europeenne sur le document du secretariat
du Comite du commerce et de l'environnement sur les subventions et les
aides a la peche," WT/CTE/W/99, November 6, 1998.


Foreign ministers for the Gulf Co-operation Council (GCC) met with EU
trade officials in Luxembourg late last month to revive talks for an EU-
GCC free trade agreement. The EU is the GCC's largest trade partner: the
Gulf states are the fifth-largest export market for EU products, while GCC
states are the largest supplier of oil. The GCC has complained since 1988
that it is the only trade bloc not to have a free trade agreement with the
EU. In April 1997, the two sides agreed to conclude a free trade agreement
within two years. Among issues to be worked out is the GCC unhappiness
with the fact that import tariffs make up 90 percent of consumer gasoline
prices in the EU, and its complaint that the EU aluminium import-tariff
scheme is applied unequally among trade partners. The EU has resisted free
trade negotiations with the GCC pending unified customs laws across
member- countries: individual tariff levels on like-products entering GCC
countries can at present vary between four and 20 percent. To address
this, the GCC announced in September a plan to fold 2,000 goods into a
customs union by early next century. The GCC plan would also allow
increased foreign ownership of GCC firms, in an effort to spur foreign
investment in the region.

The GCC includes Kuwait, Bahrain, Oman, Qatar, Saudi Arabia, and the
United Arab Emirates (UAE).

 "GCC aims to revive campaign for free trade accord with EU," AGENCE
FRANCE-PRESSE, October 25, 1998;
 "GCC customs officials OK unified law; inform WTO-Agency," DOW JONES,
September 29, 1998;
 "Gulf Arabs send unified customs proposal to WTO," REUTERS, September 28,


In a high-powered love triangle, the EU and US are rival suitors in the
courtship of the Southern Cone Common Market (MERCOSUR). As a trade
partner, MERCOSUR demands attention: the grouping of Argentina, Brazil,
Paraguay and Uruguay boasts a population of 200 million and annual
economic output of US$1 trillion. At stake for the EU and U.S. is improved
market access to MERCOSUR, on top of already healthy trade relationships.
The U.S. last year sent US$22 billion worth of exports to MERCOSUR, while
the EU managed about US$27 billion in exports to the group.

However, timing may be everything when it comes to winning the heart of
MERCOSUR. The EU seems to be in a better position than the U.S. to
conclude an agreement with the LatAm trade bloc first, and usurp U.S.
sales potential there. The EU has proposed a free trade accord with
MERCOSUR that would provide for free trade in both goods and services as
well as the free flow of capital and common rules ranging from government
procurement to intellectual property rights protection. Pending European
Council approval, the EU and MERCOSUR are expected to launch negotiations
in June 1999, with the goal of reaching agreement by 2004-5. MERCOSUR is
pressing for greater market access to EU agricultural markets, a move not
favoured at present by France and Germany. Further, a recent study by
Brazil's Getulio Vargas Foundation estimates an EU-MERCOSUR accord would
generate 5 percent annual economic growth for MERCOSUR.

Meanwhile, that same study estimates only 2.5 percent MERCOSUR economic
growth from a hemispheric-wide free trade agreement, the vehicle by which
the U.S. is negotiating free trade with MERCOSUR and the other hemisphere
economies, to be concluded by 2005. At the same time, the Clinton
Administration's inability to secure fast track negotiating authority (the
ability to negotiate free trade agreements on behalf of the U.S., subject
to an up-or-down vote in Congress) continues to threaten viable U.S.
participation in hemispheric trade negotiations. U.S. business groups have
expressed deep concern that lack of fast track could ultimately give the
EU an edge in concluding an agreement with MERCOSUR before the U.S.

As appealing as MERCOSUR is to the U.S. and EU, it faces its own
difficulties regarding free trade agreements. Brazil and Argentina,
feeling the effects of the global financial turmoil, may be forced to
divert resources away from free trade negotiations and toward other
pressing economic policies. Also, MERCOSUR has yet to develop a regime
dealing with intellectual property rights and government procurement.

In related news, Brazilian officials characterised as "disturbing" a new
bilateral trade agreement between Argentina and Mexico. Brazil worries
that Argentina will become an avenue through which cheap Mexican imports
will flow into Brazil, Paraguay and Uruguay, taking advantage of the
MERCOSUR customs union. A broader MERCOSUR-Mexico trade accord has been
stymied by differences between Brazil and Mexico.

 "US, EU race to negotiate free-trade pact with Mercosur," JOURNAL OF
COMMERCE, November 4, 1998;
 "Argentina-Mexico pact heightens tension in MERCOSUR," IPS, November 4,


At the meeting of the Council for Trade-Related Aspects of Intellectual
Property Rights on 17 September 1998, the Chair, Ambassador Major
(Hungary), called the attention to the upcoming 1999 review of Article
27:3 (b) of the TRIPs Agreement, saying that the next meeting of the
Council scheduled for 1-2 December 1998 will be a good opportunity to have
a first exchange of views on the way in which the review should be
undertaken. ICTSD Internal Files.

WTO Director-General Renato Ruggiero last week called for the creation of
a global environment body that could shape a multilateral environmental
policy better suited to resolve environmental policies in conflict with
each other and with global trade rules. Addressing a conference organised
by the Royal Institute of International Affairs (RIIA) in London, Mr.
Ruggiero said that building global trade policies in concert with
environmental issues would be made easier "if we could create a house for
the environment to help focus and co-ordinate our efforts." "WTO calls for
global green policy," THE GUARDIAN, November 1, 1998. ICTSD Internal

The number of disputes brought to the World Trade Organisation has topped
150 since it was created nearly four years ago, compared to 300 handled by
its predecessor over 47 years.The growing number of cases brought to the
WTO is seen as a sign of growing confidence among its 132 Members that
they can get justice from the body's independent panelists. "WTO's trade
dispute agenda swells," REUTERS, November 3, 1998.

The U.S. Court of Appeals last week upheld a 1997 anti-dumping rule that
prohibits the transfer of pollutants in the gasoline-refining process. In
August 1997, the U.S. Environmental Protection Agency lowered clean
gasoline standards to comply with 1996 WTO ruling that found U.S. rules to
discriminate against non-U.S. refiners. The old rules required foreign
refiners to meet a different standard for gasoline quality than domestic
refiners. The revised EPA rule upheld last week allows foreign refiners to
petition for individual baselines for pollutants, but allows the EPA to
monitor the average aggregate quality of imported gasoline for emissions
of nitrogen oxides. Should the aggregate-level exceed the base-1990
emissions level, the EPA is then allowed to reduce permissible nitrogen
oxide levels for subsequent imported gasoline to achieve a balance. A
domestic refiner and an importer brought the suit challenging the EPA
ruling, arguing that the EPA went beyond its mandate to protect air
quality when formulating the rule, and could in effect allow foreign firms
to import "dirtier gasoline" than domestic producers.
 "U.S. appeals court follows changes sought by the WTO," DOW JONES
NEWSWIRES, November 3, 1998.


A report released this month finds that developing countries have exceeded
industrialised nations in the use of anti-dumping measures. "The
International Use of Anti-dumping 1987-1997" (published this month in the
JOURNAL OF WORLD TRADE), finds that developing countries, collectively,
have launched at least half the anti-dumping investigations since 1993.
Mexico, Argentina and Brazil were cited as the heaviest users of
anti-dumping measures. However, on individual measure, three developed
countries, the U.S., the EU and Australia, still lead the pack by far as
the three most frequent and intensive users of anti-dumping within WTO
membership. The report notes that trade liberalisation, leaving developing
economies vulnerable to increased foreign competition, could have provoked
the use of anti- dumping measures in developing economies.

 "Environment: developing world leads in anti-dumping," FINANCIAL TIMES,
October 29, 1998. ICTSD Internal Files.

Japanese farm minister Shoici Nakagawa last week said the WTO, not the
regional Asia-Pacific Economic Co-operation (APEC) forum, is the
appropriate place to discuss fishery and forestry sector tariffs. Mr.
Nakagawa expressed the Japanese position in advance of a November 17-18
APEC ministerial meeting, where APEC-ministers are expected to press Japan
hard to lower trade barriers to its fishing and forestry sectors. Much of
the focus at the upcoming APEC ministerial will be on concluding an APEC
fast-track trade liberalisation program for a number of sectors, including
fisheries and forestry.

 "WTO should be forum for fishery, forestry talks: Nakagawa," KYODO NEWS
INTERNATIONAL, November 3, 1998.

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