BRIDGES Weekly Trade News Digest - Vol. 3, Number 5 February 08, 1999
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EVENTS & RESOURCES
For a more complete list of events in coming months, please refer to
ICTSD's web calendar at: http://www.ictsd.org/html/calendar.htm#event
11 February 1999: Dispute Settlement Body informal meeting to discuss the
ongoing review of the Dispute Settlement Understanding.
For information contact Nuch Nazeer, WTO, tel: (41-22) 739-5393.
17 February 1999: Dispute Settlement Body.
For information contact Nuch Nazeer as above.
1 March 1999: Sub-Committee on Least Developed Countries.
For information contact Lucie Giraud, WTO, tel: (41-22) 739-5075.
2 March 1999: Committee on Trade and Development.
For information contact Lucie Giraud, as above.
EVENTS & RESOURCES
For a more complete list of events in coming months, please refer to
ICTSD's web calendar at: http://www.ictsd.org/html/calendar.htm#event
11 February 1999: Dispute Settlement Body informal meeting to discuss
the ongoing review of the Dispute Settlement Understanding. For
information contact Nuch Nazeer, WTO, tel: (41-22) 739-5393.
17 February 1999: Dispute Settlement Body. For information contact Nuch
Nazeer as above.
1 March 1999: Sub-Committee on Least Developed Countries. For
information contact Lucie Giraud, WTO, tel: (41-22) 739-5075.
2 March 1999: Committee on Trade and Development. For information
contact Lucie Giraud, as above.
22-26 February 1999, New York: U.N. COMMISSION ON SUSTAINABLE
DEVELOPMENT AD HOC OPEN-ENDED WORKING GROUP ON TOURISM AND CONSUMPTION
AND PRODUCTION PATTERNS. For information contact the CSD Secretariat, 2
United Nations Plaza, New York NY 10017, U.S.A., fax: (1-212) 963- 4260.
23-26 March 1999: ECONOMIC SOVEREIGNTY IN A GLOBALISING WORLD: CREATING
PEOPLE-CENTRED ECONOMICS FOR THE 21ST CENTURY. Organised by FOCUS On
The Global South. For information contact Geoffrey Keele at tel: (66-
2) 218-7363, e-mail: email@example.com
THE AGRIBUSINESS EXAMINER. A weekly e-mail newsletter that monitors
corporate agribusiness from a public perspective. The 20 January issue
examines the possible U.S./European trade war over banana exports. It
also reports on Chiquita's past and present business practices. Free;
however, donations are encouraged. To subscribe, send your name and e-
mail address to The Agribusiness Examiner, A.V. Krebs, P.O. Box 2201,
Everett, Washington, U.S. 98203-0201, e-mail: firstname.lastname@example.org
THE WORLD TRADE ORGANIZATION: CONSTITUTION AND JURISPRUDENCE. By John
H. Jackson, June 1998. A Royal Institute of International Affairs
publication. Available through Plymbridge Distributors Ltd., U.K., tel:
(44) 1752- 202301, fax: 1752-202333, e-mail: email@example.com .
Also visit the RIIA at www.riia.org/iep.html
Table of Contents
- EU: CAP Reform Must Keep In Mind Effects On Developing Countries
- WTO Members Raise Possible New Issues for Millennium Round
- Dispute Settlement Body Meets Without Bananas
- EU-S. Africa Reach Compromise In Free Trade Talks
- South Asia To Speak With One Voice On Global Trade
- USDA Holds Hearing On Argentine Citrus Imports
- Alternative Africa Trade Bill Calls For Debt Relief
- In Brief
- WTO In Brief
EU: CAP REFORM MUST KEEP IN MIND EFFECTS ON DEVELOPING COUNTRIES
While EU members haggle between themselves over the terms of a revised EU
Common Agriculture Policy (CAP), European non-governmental organisations
(NGOs) warn that the EU must not craft its reforms in a vacuum of
EU-interests: EU members must consider the effects of its agricultural
policies on developing economies.
EU agriculture policy makers "have [failed] to incorporate a development
perspective into their policy planning and formulation processes,"
according to the Brussels-based NGO Liaison Committee. The European
Commission last week agreed to a compromise in CAP reform, which would
place a target level of spending around US$46 billion (US$1.13 = 1.00
Euro) annual. Proposed CAP reforms also call for price supports to be
replaced with direct payments to farmers: the EU holds that such payments
fall under the minimally trade distorting or "green box" category in the
The NGO Liaison Committee last month said they remain concerned that CAP
reform relies on an export orientation, allowing EU producers to maintain
an unfair competitive advantage in farm exports. "Through an export
oriented policy, the EU indirectly supports the trend for developing
countries to neglect their self-sufficiency in staple foods," said the
The Committee noted also that the EU export orientation "will increasingly
place small scale producers in developing countries in direct competition
with northern agri-business," putting producers in poor countries at "an
unfair competitive disadvantage."
The European Union (EU) is the world's biggest importer of agricultural
goods and the second largest exporter, after the United States. With WTO
talks on agriculture looming, the EU must take measures to address trade
barriers sure to be attacked by the U.S. and the Cairns Group of
agricultural exporting nations. Further, as the EU considers expansion of
its members to include agrarian economies such as Poland and Hungary, the
need for CAP reform is highlighted. The cost of the CAP to EU economies
has grown steadily, from US$27 billion in 1990 to US$42 billion in 1997,
accounting for nearly a third of the EU budget.
"EUROPE-DEVELOPMENT: Agricultural Reforms Dangerous for the South," IPS,
January 31, 1999;
"Bringing the bargaining down to earth," EUROPEAN VOICE, February 4-10,
"La France propose une reforme de la politique agricole commune," LE
MONDE, February 3, 1999;
"PAC-Paris propose de reduire les depenses agricoles europeennes," LA
TRIBUNE, February 3, 1999.
WTO MEMBERS RAISE POSSIBLE NEW ISSUES FOR MILLENNIUM ROUND
WTO Members met again in informal session on 2 February in the context of
the Special Session of the General Council (SS-GC), preparing for the
Third Ministerial Meeting which will take place in the U.S. at the end of
this year. Different delegations presented the new issues - beyond those
already mandated by the Built-in Agenda, at the end of the Uruguay Round -
that they would like to see on the agenda of the "Millennium Round" of
multilateral trade negotiations which will be launched by the Third
Some countries such as India and Egypt still oppose introducing new issues
on to the agenda of the Millennium Round, India saying that with the
Built-in Agenda issues of agriculture and services, the round will be as
comprehensive as it should get. Yet several WTO Members - such as Japan,
the EC and most East European countries - expressed their preference for
the forthcoming trade negotiations to be a "comprehensive round" (i.e.
covering a large enough number of trade sectors for States to make
cross-sectoral trade-offs). Canada has suggested that issues be
"clustered" to allow packages of early results to emerge. The U.S. has
also advocated an "early harvest" approach, of concluding negotiations in
each sector as soon as it is complete.
New issues mentioned at last week's meeting included industrial tariffs,
e-commerce, regional agreements, labour standards, and the environment.
India also submitted a detailed paper on TRIPs.
States who expressed an interest in negotiating on industrial tariffs
include the EU, U.S., Japan, Hungary (speaking on behalf of Eastern
European countries), Chile, New Zealand, Australia and Korea. New Zealand
as Chair of APEC for 1999 drew attention to the paper it has tabled on its
"accelerated tariff liberalisation initiative."
Hong Kong China and Hungary (on behalf of Eastern European countries)
mentioned e-commerce. Japan and Korea raised their wish for there to be
negotiations on regional trade agreements. The U.S., EU and Canada said
that they want the Millennium Round to look at labour standards. Cuba,
India, Pakistan, Egypt, Malaysia and Nigeria opposed this, saying that the
First Ministerial Meeting in Singapore had already dealt with the issue.
Several WTO Members welcomed the High-Level Symposium on Trade and the
Environment (HLS-TE). Amongst these, Hungary (on behalf of several Eastern
European countries) said it believes that the multilateral trading system
has the capacity to deal with environmental considerations and "enhance
its contribution to the promotion of sustainable development." Canada
hoped that the HLS-TE "will provide useful insights as to the interface
between trade and environment considerations in the upcoming WTO
negotiations. Our initial view is that it would be best to "mainstream"
trade and environment concerns across relevant negotiations." Canada
encouraged WTO Members to integrate policy formation between
trade/economic and environment ministries.
Also, in the context of trade and environment, Japan recognised the need
"for the WTO to respond appropriately to the various voices of civil
society." The U.S. and Canada mentioned need for improving relations with
civil society. The U.S. raised the issues of transparency, document
derestriction and WTO-NGO relations in some detail (the U.S. communication
- WT/GC/W/139 - is available via the WTO document dissemination facility
Last week WTO Members also discussed the organisation of future work in
the lead-up to the Ministerial. John Weekes, Chair of the General Council
is expected to submit a factual paper to the SS-GC on 25-26 February, to
which the Secretariat will append a checklist of issues raised by
delegations over the last few months. The calendar for the second phase of
Ministerial preparations (see also BRIDGES Weekly Trade News Digest, Vol.
2, No. 49, December 21, 1998) will probably be agreed on at the 25-26
February SS-GC. The second phase of preparations will last from March
until the WTO's summer break at the end of July, by which time it is
expected that the scope and objectives of the new round will have been
defined. The draft Ministerial Declaration must be ready by early
For a more detailed report of this and last week's informal meetings of
the SS-GC, see BRIDGES Between Trade and Sustainable Development, Vol. 3,
No. 1 (January-February 1999, forthcoming).
"International: Millennium Round," OXFORD ANALYTICA, February 1, 1999;
"Developing countries reject U.S. trade-labour link," REUTERS, February
"U.S. lays out two controversial goals for next WTO Ministerial," INSIDE
U.S. TRADE, February 5, 1999; ICTSD Internal Files.
DISPUTE SETTLEMENT BODY MEETS WITHOUT BANANAS
The work of the WTO's Dispute Settlement Body had been so bogged down in
banana-related issues in recent weeks that the other issues on its agenda
had been left aside. It thus convened on 1 February to deal with the
non-banana points on its agenda. At this meeting, the DSB set up three new
panels: on the complaint by the EU about Canada's patent protection of
pharmaceutical goods, on complaints by Japan and the EU against Canada for
its auto import tariffs, and on the EU complaint over the U.S.' 1916
The DSB last week also received the first formal request by the EC for a
panel to be set up to decide on the legality of U.S. countervailing duties
on steel, and heard reports on the status of the implementation of WTO
decisions in the case of India's patent protection of pharmaceuticals and
that of the EC's ban on hormone-treated beef. The EU said it has launched
a new scientific study aimed at determining whether its ban on
hormone-treated beef imports is justified. The EU said however that its
study would not be completed by the May 13 WTO deadline for compliance
with a 1997 ruling against its ban. The EU requested U.S. and Canadian
data on risks associated with growth hormones in an effort to expedite
completion of the study. Meanwhile, the Clinton Administration is
reportedly preparing a retaliation list against EU exports that the U.S.
would implement should the EU indeed meet the May 13 deadline.
Regarding implementation of the Appellate Body decision in the shrimp-
turtle case (See BRIDGES Weekly Trade News Digest, Vol.2, No. 39, October
12, 1998). India last week proposed a time-frame of 13 months from the
date of the adoption of the Appellate Body report, to comply with the
ruling. The U.S. subsequently confirmed this time-limit.
Also at the 1 February DSB meeting, a number of Latin American countries -
including Bolivia, El Salvador and Venezuela - complained that the
procedure Brazil had chosen to follow in requesting consultations on
preferential treatment by the EC of coffee from Andean Pact and CARICOM
countries excluded the possibility of third party interventions by
concerned Latin American countries (See WTO In Brief, BRIDGES Weekly Trade
News Digest, Vol. 2, No 48, December 14, 1998).
"Hormones add to WTO pressures," FINANCIAL TIMES, February 2, 1999;
"WTO sets up panel on Canada's patent protection of pharmaceutical
goods," AFP, February 1, 1999;
"WTO to form panel on Canada's auto import tariff," KYODO, February 1,
"WTO agrees to probe U.S. anti- dumping laws," DOW JONES, February 1,
"Parties in WTO shrimp- turtle case settle on 13 month compliance
period," AFP, February 1, 1999;
"U.S. preparing retaliation list against EU in beef hormone case,"
February 5, 1999; ICTSD Internal Files.
EU-S. AFRICA REACH COMPROMISE IN FREE TRADE TALKS
EU and South African negotiators late last month reached a compromise in
bilateral free trade talks bringing the two sides closer to implementing
an agreement covering 90 percent of the US$20 billion in annual trade
between the EU and South Africa.
Talks between S. Africa and the EU have been underway for almost four
years: the EU is keen to conclude an agreement before S. Africa's
presidential election in April 1999. The two sides had been stymied around
market access for wines and spirits, and agricultural products. Portugal
and Spain were strongly opposed to allowing market access for fortified
wines that South Africa has historically termed "port" and "sherry." The
compromise reached January 29 provides a five to eight year period during
which S. Africa will phase out the use of "port" and "sherry," on its
spirits exports worldwide, with a 12-year interim period for the use of
the terms "port" and "sherry" by S. African spirit producers for the
domestic market. In addition, the EU agreed to eliminate duties on imports
of S. African wine.
The other highly sensitive area of discussions was around agriculture. The
EU showed intense reluctance toward opening its market up to cheap S.
African farm exports. Farm exports account for almost half of all South
African agricultural exports to the EU. Under the agreement 72 percent of
agricultural trade between the two sides is to be liberalised (as soon as
January 2000), excluding about 300 "highly sensitive" goods the EU refused
to liberalise, including sugar and cereals.
The European Commission (EC) still must give unanimous approval to the
deal- the EC is scheduled to meet on the agreement February 22. The
spirits compromise still faces some opposition by Spain, whose wine
producers are demanding exclusive use of the term sherry.
S. Africa's cabinet approved the agreement last week. Economists within S.
Africa noted the agreement would be favourable for S. Africa for the most
part- boosting trade between S. Africa and the EU. Critics warn that the
agreement could negatively impact S. Africa's manufacturing sector, which
would face increased competition from EU imports.
It is unclear what impact the S. Africa- EU agreement would have on the
Southern African Customs Union (SACU), to which the agreement also
applies. SACU is comprised of South Africa, Botswana, Lesotho, Namibia and
Swaziland. South Africa is the group's most dynamic economy and as such
drives the trade structure of the group. Increased competition from EU
imports on the S. African market could undermine SACU's smaller members'
position with S. Africa, and/or the free trade agreement could aggravate
the anti-export bias S. Africa has been accused of imposing on SACU's
smaller members' industries.
"EU and South Africa close to trade deal," FINANCIAL TIMES, January 30,
"South Africa welcomes EU trade deal," REUTERS, February 2, 1999;
"Focus-S. Africa trade deal still faces EU scrutiny," REUTERS, February
"In Brief," EUROPEAN VOICE, February 4-10, 1999;
"EU and South Africa Finally Conclude Trade Agreement," PANAFRICAN NEWS
AGENCY, February 2, 1999.
SOUTH ASIA TO SPEAK WITH ONE VOICE ON GLOBAL TRADE
South Asian Association for Regional Co-operation (SAARC) commerce
ministers met last week in Dhaka, where they agreed to forge a common
stand on major global trade issues in advance of the Third WTO Ministerial
(to be held November 30-December 2, 1999 in Seattle, Washington). The
ministers said the common stance is necessary to ensure that regional
interests are "well protected." SAARC accounts for less than one percent
of world trade, although it ranks fourth in population globally.
Last week also marked the first SAARC Economic Co-operation Conference,
attended by SAARC commerce ministers and regional business leaders.
Regional business leaders at the conference called for the dismantling of
all non-tariff barriers to trade for SAARC intra-regional trade. SAARC
intra-regional trade accounts for only three percent of all South Asian
trade, which business leaders said was too low to give increased regional
economic co-operation momentum. The business leaders called for zero
tariffs on all "primary products," including forestry, agricultural and
horticultural products. The least developed SAARC countries (Bangladesh,
Bhutan, the Maldives and Nepal) would be allowed to apply a 10 percent
tariff on goods for a five-year period.
Meanwhile, Asia Pacific Economic Forum (APEC) ministers are to begin
meeting today (February 8) in New Zealand. Topics to be discussed at the
two-day meeting include work on mutual recognition agreements in the food,
telecommunications, and automotive sectors. New Zealand holds the rotating
chair of APEC this year.
The 21-member APEC forum last year voted to take discussions on regional
trade liberalisation to the WTO. APEC was to forge a free trade pact in at
least 9 of 15 sectors by 1999, but failed to reach agreement and thus
moved discussions to the WTO, opening up negotiations on nine sectors of
trade to global participation. Observers noted that the failure to reach
agreement on free trade within APEC and APEC's failure to take significant
action with respect to the Asian financial crisis calls into question the
forum's credibility and left many observers calling for its dissolution.
"Senior APEC officials to meet as trade doubts rise," REUTERS, February
"Business leaders call for removing trade barriers in South Asia," AGENCE
FRANCE-PRESSE, February 5, 1999;
"SAARC states to take united stance on major trade issues," AGENCE
FRANCE-PRESSE, February 5, 1999.
USDA HOLDS HEARING ON ARGENTINE CITRUS IMPORTS
The U.S. Department of Agriculture Animal and Plant Health Inspection
Service (Aphis) today (February 8) will conclude two days of hearings on
whether to ease import restrictions on Argentine citrus products. At issue
is lifting a ban on imports of oranges, grapefruit and lemons from a
region of northwestern Argentina-- on the basis that Argentina can prove
it can adequately suppress diseases and pests known to the region via its
post-harvest treatment of the citrus products.
Argentina is the world's second largest exporter of lemons. An estimated
5,000 to 25,000 metric tons of citrus product - mostly lemons -- could be
imported into the U.S. market if the ban is lifted. U.S. citrus growers
are opposed to lifting the ban, arguing that the imports threaten U.S.
citrus crops. Further, opponents to lifting the ban question Aphis
methodology and logic - claiming that the move could open the U.S. to
action at the WTO because it would not treat countries equally.
Aphis traditionally blocks all fruit and vegetable imports from areas
known to be infested with plant diseases or pests. The new so-called
systems approach, and the basis for allowing the Argentine imports, would
be to implement a process under which fruit and vegetables would be
allowed if it can be proven that the plant pests and diseases could be
Increasingly, phytosanitary standards are at the centre of trade disputes.
Over the past two years, the Department of Agriculture has moved on some
traditionally thorny cases involving pest infestation and imported fruit
from countries of growing regional trade importance.
"US finds slow progress in reform global of health/protectionism rules;"
"US looks to ease ban on fruit imports," JOURNAL OF COMMERCE, February 5,
ALTERNATIVE AFRICA TRADE BILL CALLS FOR DEBT RELIEF
The U.S. House Ways & Means trade subcommittee last week voted unanimously
to move the Africa Growth & Opportunity Act (AGOA) forward. The full Ways
& Means Committee could vote on the bill as early as this week, where it
is expected to receive full approval. It would then move to the full House
of Representatives and then to the Senate for a vote. The bill promotes
trade, investment, and increased development in Africa, and aims to
de-emphasise aid as the only means of cash flow from the U.S. to the
region. If voted into law, the bill could increase sub-Saharan Africa's
share of U.S. clothing imports from US$200 million to between US$1 to US$2
Meanwhile, Congressman Jesse Jackson, Jr. (D-Illinois) this week will
introduce an alternative Africa trade bill - the Hope for Africa Act,
focusing on debt relief and increased aid for sub-Saharan Africa. (Mr.
Jackson drafted the bill in partnership with Lori Wallach, director of
Public Citizen's Global Trade Watch.) Under Mr. Jackson's proposal, $230
billion in African external debt would be cancelled. Mr. Jackson's plan
also calls for China's textile quota to be transferred to African
countries- with strict protections against transhipment. Mr. Jackson
criticised the pending AGOA, warning it would aid multinational firms more
than African workers. The Hope for Africa Act also includes strong labour
and environmental provisions.
An African Growth & Opportunity Act passed the U.S. House last year, but
failed to get through the Senate where it faced opposition from senators
eager to protect U.S. textile interests. Textiles-state senators argued
the bill would lead to lost jobs for U.S. textile workers and leave the
door open to transhipments of Asian textiles through Africa. The bill was
killed after provisions were introduced requiring African textiles and
apparels be made with U.S. fabric. There is reported to be more Senate
support for the AGOA this year.
Mr. Jackson charged that "economic neo-colonialism" was behind the pending
AGOA and said it would be better to have no bill at all than to have the
AGOOA pass Congress. Congressional Black Caucus Dean Charles Rangel (D-New
York) admonished Mr. Jackson for this charge, noting that the AGOA had the
support of 40 African ambassadors to the U.S.
"House starts action on Africa bill with subcommittee mark-up," INSIDE US
TRADE, February 5, 1999;
"Jackson offers his own bill on Africa trade," JOURNAL OF COMMERCE,
February 5, 1999;
"Africa trade bill proposed in US," FINANCIAL TIMES, February 3, 1999;
"U.S. House Subcommittee approves Africa trade bill," DOW JONES, February
"Africa trade bill off to fast start," IPS, February 5, 1999.
UN Secretary General Kofi Annan last week urged multinational firms to
"uphold human rights and decent labour and environmental standards
directly, by your own conduct and your own business," when operating and
investing in poor countries. Mr. Annan noted that without a strong
commitment from multinationals to adhere to core standards it would become
increasingly difficult to make a persuasive case for more open markets.
"DEVELOPMENT: UN Chief Wants Global Pact with Business Leaders," IPS,
January 31, 1999;
"Annan urges firms to enforce values," INTERNATIONAL HERALD TRIBUNE,
February 1, 1999.
At the World Economic Forum held in Davos, Switzerland, Egypt's President
Hosni Mubarak said the current globalisation model has thus far failed to
serve the world's poor and should be rethought. Also at Davos,
demonstrators protested against "the concentration of power and wealth in
the hands of a few," fostered by globalisation. The Davos forum is an
annual meeting of government and business leaders held each year
celebrating the virtues of globalisation.
"Rubin Issues Warning at World Forum," ASSOCIATED PRESS, January 30,
"Egypt Leader Criticises Free Market," ASSOCIATED PRESS, January 31,
In a landmark seed piracy case that could determine how much influence
biotechnology companies have over global food supply, Monsanto is suing a
Canadian farmer for allegedly replanting a Monsanto seed variety for a
subsequent year's crop. Observers note that Monsanto's policy could
threaten farmers worldwide who depend on saved seed. Monsanto argues that
its no-replanting policy must be enforced so it can recoup the millions of
dollars it invested in developing higher yield and pest- resistant seed
varieties. The farmer argues that he never bought Monsanto seed product,
and blames any existence of Monsanto product on his land to
cross-pollination from neighbouringfarms.
"Farmers accused of piracy in a landmark gene case," THE WASHINGTON POST,
February 3, 1999.
The Committee on Agriculture (COA) at the UN Food and Agriculture
Organisation last month reported that a balanced approach must be adopted
to the use of biotechnology in developing countries, saying biotechnology
research and policy should also address the needs of the poor who depend
on agriculture. The COA said also that the growing demand worldwide for
organically produced food presents lucrative export opportunities for
organic growers in developing countries. The FAO said developing countries
should promote organic certification agencies so to build consumer
"La FAO est reservee sur l'usage des biotechnologies dans le
tiers-monde," LE MONDE, February 1, 1999.
WTO IN BRIEF
A group of 14 small WTO Members last week announced they would hold a
meeting May 28 in Budapest, Hungary to urge support for a new
comprehensive global trade round. The group said it would attempt to
reconcile differences between its members in advance of the Third WTO
Ministerial scheduled for late November. Included in the group are
Singapore, Morocco, Switzerland, Hungary, Uruguay, Argentina, Thailand and
the Czech Republic.
"Smaller WTO countries to hold trade talks in Hungary," REUTERS, February
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:
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