GENTECH archive


BRIDGES Weekly Trade News Digest - Vol. 3, Number 3 January 25, 1999




5 February 1999: Council for Trade in Goods.
 For information contact Nuch Nazeer, WTO, tel: (41-22) 739-5393.

8-10 February 1999: Textiles Monitoring Body.
 For information contact Luis Ople, WTO, tel: (41-22) 739-5374.

9 February 1999: Council for Trade in Services.
 For information contact Nuch Nazeer, WTO, as above.

10-12 February 1999: Committee on Regional Trade Agreements.
 For information contact Hans-Peter Werner, WTO, (41-22) 739-5286.

16 February 1999: General Council.
 For information contact Nuch Nazeer, WTO, as above.

16-17 February 1999: Council for TRIPs.
 For information contact Nuch Nazeer, WTO, as above.

18-19 February 1999: Committee on Trade and Environment.
 For information contact Hans-Peter Werner, WTO, as above.


 For more information contact Sabrina Varma, tel: (44-171) 354-0883.

28-29 January 1999, The Hague, Netherlands: CONFERENCE ON FOREIGN DIRECT
INVESTMENT AND THE ENVIRONMENT, organised by the OECD's Centre for
Cooperation with Non-Members and the Environment Policy Committee as part
of the Emerging Market Economy Forum.
 For information contact the CCNM at 2 rue Andri-Pascal, 75775 Paris Cedex
16, France, tel: (33- 1) 45-24-83-60, fax: (33-1) 45-24-91-77.

5-7 February 1999, Brussels: CONFERENCE ON THE SOCIAL, GENDER AND
Coalition of Development Action (ICDA), World Wide Fund for Nature
(WWF-International), Oxfam UK, and Greenpeace are jointly hosting this
 For information contact ICDA at 115 Rue Stivin, B-1040 Bruxelles BELGIUM,
fax: (32-2) 230-0348, e-mail:   web:

on matters related to Consumption and Production Patterns, including
recommendations for sustainable consumption for inclusion in the UN
Guidelines for Consumer Protection (ECOSOC resolution 1997/53) and
 For information contact Zehra Aydin-Sipos, Division for Sustainable
Development, tel: (1-212) 963-8811, fax: (1-212) 963- 1267, e-mail:, web: 


 After two years of internal deliberation, the World Bank's Multilateral
Investment Guarantee Agency (MIGA) has released a draft of its new
information disclosure policy and its environmental and social policies
and procedures. Released via MIGA's web site
( in December 1998, the policies are
publicly available in draft form for a 45-day public comment period.
 A Friends of the Earth/Bank Information Center analysis of the draft is
also available by contacting Friends of the Earth by e-mail at
All comments and letters should be sent by 5 February 1999 to:
 MIGA Policy Development Group, 1818 H Street, NW Washington, DC 20433
USA, or fax: (1-202) 522-2630.

 This paper has been released by Foreign Policy In Focus, a joint project
of the Interhemispheric Resource Center and the Institute for Policy
Studies. Written by Aileen Kwa, Focus on the Global South, Bangkok; edited
by Martha Honey (IPS) and Tom Barry (IRC). Key points include: the WTO
agenda and implementation of the WTO agreements; the position of the least
developed countries (LDCs) in the multilateral trade system; and sources
of inequality in the WTO.
 For more information or to order a copy contact Erik Leaver, In Focus
Communications Director, at Box 4506, Albuquerque, NM 87196, tel: (1- 505)
842-8288, e-mail:, web:

WTO TRADE POLICY REVIEW OF ARGENTINA is now available on the WTO website.
The review is headed: "Argentina realizes gains from economic reforms but
could gain even more from multilateral liberalization." To download go to

Vadevelde), American Journal of International Law, (Vol. 92, No.4,
December 1998).
 To order, call (in U.S.) 1-800-917-7377.
 Can also be ordered online from, or from Foundation  Press


Over the last year, ICTSD has launched several new publications and
resources. For copies of these, please contact ICTSD at the address below.

PUENTES entre el Comercio y el Desarrollo Sostenible is the Latin American
version of BRIDGES Between Trade and Sustainable Development (ICTSD's
Monthly publication). PUENTES is published five times a year, in
collaboration with the Fundacisn Futuro Latinoamericano, in Quito,

PASSERELLES entre le commerce et le developpement durable is the French-
language version of BRIDGES Between Trade and Sustainable Development.
PASSERELLES is published five times a year in collaboration with ENDA-
tiers monde, in Dakar, Senegal.

RECOMMENDED READINGS: Together with IUCN-The World Conservation Union,
ICTSD has prepared lists of ten top readings in each of ten subject areas
related to trade and sustainable development. Each list contains summaries
of books, articles and other resources, which together, contain a thorough
and varied introduction to the issues. Subject areas covered include:
Trade and Multilateral Environmental Agreements, Intellectual Property
Rights, Eco-labelling and certification, and TBTs and PPMs.

CD-ROM ON TRADE AND THE ENVIRONMENT: Together with Cultura Ecologica
(Mexico), ICTSD has produced a CD-ROM containing the main WTO Agreements,
multilateral environmental agreements that contain trade provisions, and
regional trade agreements relating to the Americas. The documents are
organised in a user-friendly fashion and include a Web address at which
the original text and related information can be found. 

Please also note that all ICTSD staff email addresses are now harmonised.
Addresses are in the form of first initial (or initials, if applicable)
and last name, followed by the domain <>. The
central ICTSD email address is now: <> Please update your
address books accordingly.

Table of Contents                           

- Ruggiero Seeks Truce in Banana War
- EU Moves Closer To CAP Reform
- Clinton Supports Millennium Round
- U.S. Warns On GMO Trade Under Biosafety Accord
- EU, Mexico Meet To Negotiate Free Trade Accord
- India Heal Thyself With Regulation of Medicinal Plants
- In Brief
- WTO In Brief
- Events & Resources
- New ICTSD Publications/New ICTSD Emails


As BRIDGES Weekly Trade News Digest went to press, U.S. and EU negotiators
were to decide on a last-ditch proposal put forward by WTO Director
General Renato Ruggiero to stop the EU-U.S. banana dispute from escalating
into a damaging trade war between the two trade powers.

Mr. Ruggiero's plan would require the U.S. to postpone its proposed
request for WTO authorisation of its retaliatory sanctions regime until
after a WTO dispute settlement panel determines whether the revised EU
banana import regime complies with the spirit of a 1997 WTO ruling. (That
decision is expected by March, although WTO rules give the panel 90 days
to decide, ie until April.) The second part of Mr. Ruggiero's plan
requires the EU to agree to a parallel panel to decide on the size of the
U.S. retaliatory regime.

It was unclear at press time whether either side could muster the
political will to agree to the proposal. The Clinton Administration is
under heavy pressure from Congress and U.S.-based Chiquita Brands to
impose the retaliatory regime no later than March 3. The EU has thus far
refused to accept WTO arbitration on sanctions, arguing that the
retaliatory measures violate Article 23 of the DSU, which prevents members
from unilaterally deciding whether a violation of WTO rules has occurred.
However, the EU was reportedly willing to consider Mr. Ruggiero's proposal
as a way to end the conflict.

Earlier in the week the U.S. rejected as "eleventh hour desperation
tactics" an EU request to the WTO General Council to answer two questions
on the dispute. In an effort to block the expected U.S. request for
approval of its retaliatory regime when the DSB meets January 25, the EU
asked the General Council to rule 1) whether the U.S. has the ability
under the WTO to request retaliation at this juncture in the dispute; and
2) whether the proper interpretation of WTO rules is that the window of
time members have to act under Article 22 (dealing with imposition of
retaliatory measures) should begin after a ruling from a panel on Article
21.5 (dealing with the determination of compliance with a ruling). The EU
said that its request for General Council clarification should be
addressed before the DSB takes up the U.S. request for authorisation of
its retaliatory regime.

In this dispute which tests the limits of WTO rules, the EU request is
another first. WTO rules allow for such a request, although the right had
not been exercised before. The General Council must oblige the EU request,
although it is not officially scheduled to meet until mid-February. A
three-quarters majority of WTO members are required to decide on the
interpretation of WTO rules. Also last week, Japan, India, Indonesia,
South Korea and six central European states said they would side with the
EU and reject an U.S. request (should it still be made January 25) for WTO
authorisation of its retaliatory regime.

 "EU and U.S. close to truce in trade war," FINANCIAL TIMES, January 23,
 "EU seeks to head off U.S. retaliation request in banana fight," INSIDE
US TRADE, January 22, 1999;
 "Brussels seeks to block U.S. banana export sanctions," FINANCIAL TIMES,
January 22, 1999;
 "EU takes banana row to WTO Council," REUTERS, January 22, 1999.


The EU last week moved closer to approving reforms to its Common
Agriculture Policy (CAP) before WTO talks on agriculture begin later this
year. Germany, Spain and France softened opposition to the proposed reform
package. France last week agreed to a "degressive payments" scheme to
reduce direct payments paid to agricultural producers. Germany also
signalled a policy shift toward CAP reform, determined to conclude a
reform deal by March.

Failure to pass CAP reform could force the EU to take a defensive
position against WTO agricultural exporting members (led by the Cairns
Group) expected to press hard for EU concessions in upcoming WTO talks on
agriculture. EU Trade Commissioner Sir Leon Brittan has warned that
so-called blue-box subsidies (WTO-compliant direct payments to farmers
only partially coupled with farm production) could come under attack from
the U.S. and the Cairns Group in agriculture talks. Sir Leon stressed that
to protect these subsidies, the EU must make concessions in other areas
via CAP reform. Sir Leon argued that CAP reform would result in lower EU
intervention prices for agricultural goods, and subsequently to lower EU
export subsidies.

Sir Leon noted that the U.S. may be less keen to press for reductions in
blue box subsidies in WTO agriculture talks given the effects of the Asian
financial crises on U.S. agriculture exports, forcing the U.S. to provide
billions of dollars in market loss payments to farmers. Sir Leon
questioned whether the U.S. would be willing, when the time comes, to
fully expose U.S. farmers to world market forces.

Sir Leon noted that CAP reform was crucial to keeping EU agricultural
exports competitive on the world market. "[The current CAP] is clearly at
odds with the fact that the EU is not just the biggest importer of
agricultural products in the world, but also its second largest exporter.
Such an approach therefore is wholly negative and short sighted."

 "Brittan calls for CAP reform before WTO negotiations begin," INSIDE US
TRADE, January 8, 1999;
 "Hopes raised for EU farm reform deal on time," REUTERS, Janaury18, 1999;
 "Agenda 2000: la France entre dans la danse," LE FIGARO, January 20,


U.S. President Bill Clinton last week called for a new round of
multilateral trade negotiations and for measures geared toward
"institution-building" at the WTO. The Clinton Administration favours a
global trade round to last about three years, shorter than previous trade
rounds such as the Uruguay Round that took  seven years to complete. The
U.S. would call for the launch of a new round when it hosts the Third WTO
Ministerial in November-December this year.

The EU and Japan have already called for a Millennium Round of trade
talks. The U.S. risked being politically embarrassed at the Third
Ministerial, playing host to trade ministers but not supporting a global
trade round.

Included on the U.S. Millennium Round agenda are agriculture (talks for
which are already scheduled to begin late this year), elimination of
discriminatory trade barriers against genetically modified food products,
trade in services, further work on protection of intellectual property, a
permanent ban on electronic commerce duties, and government procurement.

Further, the Clinton Administration said it would require that the talks
ensure that labour and environmental standards are protected and that the
WTO is more open and accountable. "We must ensure that ordinary citizens
in all countries actually benefit from trade, trade that promotes the
dignity of work, the rights of workers, the protection of the
environment," Mr. Clinton said.

The Clinton Administration faces a major domestic hurdle to its Millennium
Round agenda in that the president has been unable to win renewal of so
called fast track negotiating authority. Fast track is critical to U.S.
credibility at the negotiating table since trading partners are reluctant
to negotiate with the U.S. if hard work can become unravelled in the

Democrats will not pass fast track without labour and environment linkage
and Republicans vigorously oppose such linkage. Democrats have proposed a
moderated version of fast track in which Congress would have the right to
"check in" on trade negotiations, although such an approach could meet
opposition from U.S. trading partners. The Clinton Administration,
meanwhile, said that Millennium Round agenda could be achieved with or
without fast track.

The Clinton Administration also announced that it would push for
"institution building" at the WTO. Institution-building priorities include
technical assistance to  least developed countries; customs reform; trade
and environment collaboration; better collaboration with the International
Labour Organisation; and co-operation between the International Monetary
Fund, World Bank, and WTO to improve world financial systems. U.S. Trade
Representative Charlene Barshefsky noted also that the U.S. would focus on
reforming the Dispute Settlement Understanding (DSU) in ways that promote
compliance, noting that the current banana dispute highlights the need for
such reform.

 "Clinton Calls for New Global Trade Round Including Intellectual
Property, Procurement," INTERNATIONAL TRADE REPORTER, January 20, 1999;
 "Back on the fast track," FINANCIAL TIMES, January 21, 1999;
 "Clinton seeks consensus on freer trade," JOURNAL OF COMMERCE, January
21, 1999;
 "Barshefsky indicates support for three-year WTO talks," INSIDE US TRADE,
January 22, 1999.


As negotiators ready for the final round of biosafety accord negotiations,
scheduled for Feb. 14-23 in Cartagena, Colombia, the U.S. warned that the
accord should not interfere with trade in genetically modified organisms.

As part of the Convention on Biological Diversity (CBD) adopted at UNCED
in 1992, it was agreed in 1995 that an international protocol on biosafety
was needed to complement the CBD, to ensure the safe transfer, handling,
use and disposal of living modified organisms (LMOs, often referred to as
genetically modified organisms, or GMOs). At present there are no binding
international agreements addressing situations where LMOs cross national
borders. (See BRIDGES Weekly Trade News Digest, Vol. 2, No 33, August 31,

The U.S. wants to narrow the scope of the protocol to include only GMOs
that would be planted in the environment, and object to proposals made by
a number of African and other developing countries to control imports on
fruits, vegetables and even processed foods which contain GMOs. The U.S.
argues that these products would be consumed directly by animals or humans
and thus pose no risk to other (e.g. plant) species in the importer's
environment. Ethiopia and other African countries also support labelling
of products containing GMOs, a proposal with some support from the EU, but
which is opposed by agricultural exporting nations including the U.S.,
Canada, Australia, Argentina and Chile.

Even if the labelling and import restriction provisions are included in
the biosafety protocol, the Clinton Administration has said that the
protocol cannot supersede countries' WTO obligations, and is reportedly
pushing for language to this effect to be included in the protocol. U.S.
and international environmental groups last month said in a letter to U.S.
Vice President Al Gore that to include such language would undermine
multilateral environmental policy. The groups urged instead that, since
the WTO has admitted that it is not an expert on environmental matters,
"the prudent recourse for the WTO would be to request the advice of the
Protocol as to how to resolve a complaint related to the Protocol," rather
than proceeding within the vacuum of WTO dispute settlement rules.

 "Whether Biosafety Protocol Will Cover GMO Products or Organisms Is Key
 "Environmental letter on Biosafety Protocol," INSTITUTE FOR AGRICULTURE
AND TRADE POLICY, December 21, 1999; "U.S. fights to reduce impact of
Biosaftey Protocol on GMO trade," INSIDE US TRADE, January 8, 1999.


Trade officials from the EU and Mexico met last week in Brussels for the
second round of talks toward achieving a bilateral trade accord. The EU is
Mexico's second largest trading partner after the U.S., and is eager to
gain a stronger foothold in the US$185 billion Mexican market. The free
trade agreement would help diversify Mexico's trade base, at present
dominated by trade with the U.S. The agreement would give the EU
trade-parity with the U.S. and Canada and Latin American countries, in

Last week's talks got off to an auspicious start amid Mexico's
announcement that it would impose emergency trade measures to close the
gap on a budget shortfall of US$500 million, brought on by collapsed
prices for Mexican oil exports.

Talks between the two sides began in November 1998 with the goal of
concluding an agreement with two years. The two sides will meet next at
the end of February.

 "EU, Mexico to continue negotiations aimed at creating free-trade
accord," WALL STREET JOURNAL, January 18, 1999;
 "New import duties may weigh on EU-Mexico trade talks," DOW JONES
NEWSWIRE, January 19, 1999;
 "Tariff hike clouds start of EU-Mexico trade talks," REUTERS, January 19,


India - home to more than 7,500 species of medicinal plants, is a leading
supplier (along with China and Brazil) to the booming global market for
medicinal plants, estimated to be worth US$60 billion annual. However,
while the plants may provide a cure for what ails humans and animals,
booming trade in medicinal plants could bring serious ills to the
environment which fosters them.

"Not less than 75 percent of medicinal plant collection is from the wild
and this inevitably leads to the destruction of biodiversity and genetic
stocks," according to an Indian trade official. According to a study by
the Exin Bank of India, medicinal plant collection leads to the
deforestation of 165,000 hectares (about 425,000 acres) every year. At
present nearly 100 medicinal plant species in India face extinction.

To maintain its position as a leading supplier of medicinal plants,
observers note that India must adopt regulatory policies to encourage the
sustainable commercial-scale cultivation of medicinal plants, lest 25
percent of its entire plant species become extinct within 50 years. At the
same time, indigenous cultures must be protected as they play a
significant role in the identification of new medicinal plants. Financial
and technical support from foreign companies will also help promote
sustainable commercial cultivation.

"India sees its opportunity as medicine returns to roots," FINANICAL
TIMES, January 20, 1999.


Worldwatch Institute last week released its millennium-edition STATE OF
THE WORLD report, predicting an environmentally-based economic decline in
the next century unless resources are shifted to foster a sustainable
economic model in which energy, water, land, and materials are used much
more efficiently. Deforestation, falling water tables, and accelerating
climate change could undermine economies in the 21st Century, as energy
and protein needs are expected to double to accommodate the world's
 "New century to be marked by growing threats, opportunities,"

Venezuelan President-elect Hugo Chavez strongly reiterated last month that
he wants to negotiate his country's entry into South America's Mercosur
trade bloc, but also stressed that such a move wouldn't affect his
country's relations with the Andean Community. Brazil has been one of the
principal promoters of Venezuela's eventual inclusion in
 "Venezuela's Chavez reiterates he wants talks with Mercosur," DOW
JONES, December 19, 1998.

UNCTAD and the International Chamber of Commerce (ICC) last week announced
an initiative to boost investment in six of the world's least developed
countries. The project aims to provide information on investment
opportunities in the participating countries (Bangladesh, Ethiopia,
Madagascar, Mali, Mozambique and Uganda) and to build capacity in the
countries' government agencies to address investment issues. The
initiative will also identify best-practices and optimal conditions for a
favourable investment climate.

"Business works with UNCTAD to boost investment in Africa," UNCTAD PRESS
RELEASE, January 19, 1999.

Brazil's currency devaluation earlier this month could strain relations
within the Mercosur trade block (comprising Brazil, Argentina, Uruguay and
Paraguay). Economists warn of temporary trade barriers being erected
within the block to protect against cheap Brazilian exports. Argentine and
Brazilian officials were scheduled to meet January 25 to try and diffuse
tensions over the devaluation's effects on Argentina's economy.

"Brazil's falling currency strains relations with Argentina, others within
Mercosur,"JOURNAL OF COMMERCE, January 21, 1999.

China slashed import tariffs on 1 January, on forestry products to as
little as zero, and reduced tariffs on toys and certain garments in an
effort to promote price stability in furniture and paper products. Prices
on furniture and paper products surged recently amid a shortage of these
goods, brought on after China last August closed logging operations
located around the country's biggest rivers to stop environmental
degradation blamed for devastating floods.

"China slashes import tariffs on timber, toys, garments," AGENCE
FRANCE-PRESSE, January 15, 1999.


The U.S. this week is expected to raise objections to safeguard provisions
outlined in the patent regime India put forward last month to comply with
a 1998 WTO ruling (see BRIDGES Weekly Trade News Digest Vol. 3, No 1-2,
January 18, 1999). The U.S. objects to India's requirement of compulsory
licensing, which the U.S. argues is only allowed when a product patent
regime is in place, not for a process patent regime such as the one India
put forward. Compulsory licensing would allow India to give companies
licence to produce an otherwise patented good if it is necessary to
protect public health and nutrition.
 "U.S. objects to EMR provisions," ECONOMIC TIMES (India), January 15,

In response to global economic turmoil and a proposed new round of WTO
negotiations, the WTO is looking for ways to accelerate its accession
process. The EU is reported to favour a so-called "accession round" of
intensive accession negotiations. WTO Director General Renato Ruggiero has
proposed extending provisional status to countries, affording them the
benefits of WTO membership while they remain formally outside the WTO
system. Currently 30 countries have membership applications pending.
 "Global economy: WTO seeks to speed up accession process," ECONOMIST
INTELLIGENCE UNIT, January 19, 1999.

BRIDGES Weekly Trade News Digest) is published by the 
International Centre for Trade and Sustainable Development 
with support from the Institute for Agriculture and Trade 
Policy.  Editor: Caroline Dommen, ICTSD, Geneva Executive 
Center, 13 ch. des Anemones, 1219 Geneva, Switzerland; 
email:; tel: (41-22) 917 8497; fax: (41-
22) 917 8093. Executive Director: Ricardo Melindez-Ortiz, 
address as above, email:

Excerpts from BRIDGES Weekly Trade News Digest) may be used 
in other publications with appropriate citation. Comments 
and suggestions are welcome and should  be directed to the 

To subscribe send email to: Leave the 
subject line blank. In the body of the message say: 
subscribe tradedev

BRIDGES Weekly Trade News Digest) can be found at the ICTSD 
web page: