GENTECH archive


BRIDGES Weekly Trade News Digest - Vol. 3, Number 25 28 June, 1999



For a more complete list of events, please refer to ICTSD's web calendar

WTO Meetings

An updated list of forthcoming WTO meetings is posted at Please bear in mind that dates and
times of WTO meetings are often changed, and that the WTO does not always
announce the important informal meetings of different WTO bodies.

Secretariat with participation from staff of the International Monetary
Fund and the World Bank. This seminar takes place in the context of
consultations between the three bodies to achieve greater coherence in
global economic policy-making.
 For information contact WTO, (41-22) 739-5111, web:

DISPUTE SETTLEMENT BODY - on Review of the Dispute Settlement
 For information contact Nuch Nazeer, WTO, (41-22) 739-5393.

systemic implications of regional trade agreements for the multilateral
trading system and free trade agreements between a number of Eastern
European and Middle Eastern states, including Turkey, Israel, Hungary,
Estonia, the Czech Republic, and the Slovak Republic.
 For information contact Lucie Giraud, WTO, (41-22) 739-5075.

2 July: COUNCIL FOR TRADE IN GOODS - on availability and management of
integrated database on market access, and on trade facilitation informal
 For information contact Luis Ople, WTO, (41-22) 739- 5374.

7 July: WTO GENERAL COUNCIL SPECIAL SESSION - preparations for 3rd
Ministerial Meeting.
 For information contact Peter Pedersen, WTO, (41- 22) 739-5848.

7-8 July: COMMITTEE ON TRADE AND DEVELOPMENT. Members will discuss
concerns and problems of small economies; review of the application of
special provisions in favour of developing country and LDC Members;
possible inputs by the CTD to the 3rd WTO Ministerial Meeting; recent
developments in trade of developing and least-developed countries; and
technical cooperation.
 For information contact Lucie Giraud, as above.

Members will discuss the operation of transparency provisions; a US
complaint on an EC ban on antibiotics in feed; SPS Agreement and
developing countries; monitoring the use of international standards;
technical assistance and cooperation; and work of observer organisations
such as CODEX.
 For information contact Peter Ungphakorn, WTO, (41-22) 739-5412.

7-8 July: COUNCIL FOR TRIPs. Members will conduct a review of the
provisions of article 27.3(b) and will discuss, inter alia, observer
status for international intergovernmental organisations, review of
legislation of the Kyrgyz Republic and Latvia, and technical cooperation.
 For information contact Peter Ungphakorn, as above.


28-30 June, Montreal: CONVENTION ON BIOLOGICAL DIVERSITY: Intersessional
Meeting on the operations of the Convention.
 For information contact the CBD Secretariat, World Trade Centre, 393 St
Jacques Street, Office 300, Montreal, Quebec, Canada, H2Y 1N9, tel: (1-
514) 288-2220, fax: (1-514) 288-6588, email:, web:

23-24 July, Singapore: 32nd ASEAN Ministerial Meeting.
 For information contact the ASEAN Secretariat, 70A Jl. Sisingamangaraja,
Jakarta 12110, Indonesia, tel: (62-21) 726-2991/724-3372, fax:
739-8234/724-3504, web:

13-17 September, Maastricht, the Netherlands: FAO/NETHERLANDS CONFERENCE
objective of the conference is to develop practical ways for society, at
different scales, to promote sustainability by increasing the awareness of
the multiple functions of agriculture and land in its diverse and
interdependent social, economic, biological and physical environments.
 For information contact Lucas Janssen, FAO/SDRN, Viale delle Terme di
Caracalla, 00100 Rome, Italy, fax: (39- 6) 57053369 or 57055246, email:, web:

22-24 September, Hampshire, UK: DOWN TO EARTH - AN INTERNATIONAL
by the Project Integra and supported by the United Nations Environment and
Development-UK Committee, Onyx Aurora - Integrated Waste Management, and
Hampshire County Council.
 For information contact Conference Administration, Index Communications
Meeting Services, tel: (44-1794) 511331/511332, email:

Sponsored by: The Dante B. Fascell North-South Center, University of Miami
Unit for Sustainable Development and Environment, Organization of American
States, and ICTSD. Supported by the United States Agency for International
 For information contact Sherry Tross, Program Director, North-South
Center, University of Miami, 1500 Monza Ave., Coral Gables, FL 33146, US,
tel: (1-305) 284- 8974, fax: 284-6370, email:


North-South Agenda (Paper Thirty-Six), April 1999. By examining the link
between export-led industrialisation, the feminisation of labour, and the
growth of female-headed households in the Dominican Republic, this paper
explores the social consequences of export-led industrialisation and
whether they act as a deterrent to sustainable development.
 To order contact the Dante B. Fascell North-South Center, P.O. Box
248205, Coral Gables, Florida 33124-3027, tel: (1-305) 284- 6868, fax:
284-6370, web:

ENVIRONMENTAL AGENCIES ON THE NET. This site provides highlights of what
environmental agencies around the globe are putting online. The World Bank
has also compiled lists of the agencies in most countries primarily
responsible for environmental issues at the national level. As the list
shows, different countries organise their environmental monitoring and
regulatory systems differently. Some create a separate environmental
agency while others house environment in a Ministry or Sub-Ministry.
 To view, please visit

available via the Internet at, or
may be ordered from IISD, tel (1-204) 958-7710, fax: (1-204) 958- 7710,


The Seattle Host Committee (SHO) is offering NGO meeting space
reservations for the Seattle WTO meeting. If you are interested in
reserving space and using their service visit their website at and click on the "NGO" link. The website also
allows visitors to follow some of the SHO agenda.

Table of Contents                           

- EU Holds Meetings With Trading Partners: U.S., Mexico, Egypt
- GM Crop (Dis)Approvals: EU, Brazil, Andean Countries
- WTO Agriculture Committee Addresses Developing Country Concerns
- U.S. Outlines Agricultural Trade Agenda
- Australia Proposes Jobshare For Headless WTO
- EU Says Freer Services Good For Developing Countries
- Tension Building In Southern African Trade Relationships
- Seeing The Forest For The Trees: Forest Labels and Concerns In Central
- In Brief
- WTO In Brief
- On The Move
- Events & Resources


Trade observers will keep a keen eye on Rio de Janeiro this week as EU and
Southern Cone Common Market (Mercosur) officials meet on 28-29 June. The
two sides are expected to launch bilateral free trade talks when they

Meanwhile, EU and U.S. officials met at an EU-U.S. summit in Bonn last
week. Environmental and consumer groups criticised the summit for giving
more access to representatives of business interests than consumer and
environmental interests, despite the setting up - at the behest of the
U.S. and EU - of the Transatlantic Environment Dialogue (TAED) intended to
take a role in EU-U.S. summits (see BRIDGES Weekly Trade News Digest, Vol.
3, No 18 May 10, 1999).

The EU and the U.S. last week side-stepped ongoing trade disputes over
beef and bananas, opting for a more co-operative tone on issues such as
food safety and ways to avert future trade wars. EU and U.S. officials
said they would create an "early warning system" that could help avert
future trade battles. Officials left details vague but said the intent is
"to improve the capacity of each side to take the other side's interests
into account at an early stage when formulating policy."

An EU-U.S. joint statement said however that, "Both sides re-affirm that
the processes proposed hereafter are without prejudice to the parties'
rights and obligations relating to international dispute settlement,
notably under the rules of the WTO." The two sides also agreed to pursue a
pilot program for simultaneous regulatory approval of genetically modified
organisms as a way to head off what U.S. officials say could be the source
of "major trade disputes of the next century."

The EU and Mexico met earlier this month for their sixth round of talks
toward a bilateral free trade agreement. The two sides made progress
toward concluding an agreement by year's end. The EU agreed to eliminate
tariffs on 80 percent of Mexican manufactured goods immediately with
tariffs on the remaining 20 percent phased out by 2003. Mexico agreed to
eliminate tariffs on 47 percent of EU manufactured goods immediately, and
to eventually extend duty-free access to all EU manufactured goods by
2007. The two sides will meet again next month to discuss agriculture and
rules of origin.

The EU and Egypt earlier this month reached a provisional trade and
association agreement. Environmentalists in both the EU and the Middle
East worry that the agreement could have adverse environmental effects for
Egypt, if European industries locate in Egypt and possibly overwhelm
Egypt's scarce natural resources. The EU is Egypt's largest trading
partner, accounting for over 40 percent of Egyptian exports.

  "EU and U.S. pledge trade co-operation," INTERNATIONAL HERALD TRIBUNE,22
June 1999;
  "US and EU promise to make a new start," "Consumer groups attack G8
'bias'", FINANCIAL TIMES, 22 June 1999;
  "U.S.-EU summit outlines early warning system, falls short on services,"
INSIDE US TRADE, 25 June 1999;
  "Les Etats-Unis et l'Europe veulent prevenir les conflits," LE FIGARO,
22 June 1999;
  "EU, U.S. pilot project would offer simultaneous regulatory approval of
  "E.U. accepts more gradual drop in Mexican tariffs," DOW JONES NEWSWIRE,
23 June 1999;
  "Recent EU-Egyptian trade and association agreement: setting the stage
to pollute the pyramids," FRIENDS OF THE EARTH PRESS RELEASE, 24 June
1999; ICTSD Internal Files.


EU environment ministers last week approved revisions to the EU's EU
regulatory scheme for approving genetically modified organisms(GMOs). (See
BRIDGES Weekly Trade News Digest Vol.3, No.15-16, 26 April 1999.) The
revised 1990 Directive on the Deliberate Release of Genetically Modified
Organisms (90/220) calls for a 10-year (renewable) licensing period for
each GMO seed authorisation, requires labelling of products containing
GMOs above a certain threshold, calls for expanded public consultations on
licensing decisions, phases out the use of antibiotic genes in GMO
products, and calls for post-marketing monitoring of GMO products. The
environment ministers also asked the European Commission to study further
the issue of liability in the event that a GMO product causes
environmental or health damage.

Greece, France, Italy, Denmark and Luxembourg expressed strong support for
a suspension of GMO approvals until changes to the existing GMO
legislation are implemented, a process likely to take several years as the
legislation makes its way through the European Commission and Parliament
for approval. While ministers ultimately rejected the formal moratorium
proposal, one is effectively in place, since no new authorisations have
been delivered for a long time, nor are likely to be in the near future.

Despite EU-U.S. pledges of increased co-operation around biotechnology
(see related story in this issue) the U.S. warned last week that the EU's
stance toward GMOs would be the "make or break" issue in the new round of
global trade talks.

The U.S. warned it would complain to the WTO if it could not work out an
alternative solution with the EU. The European Commission said last week
that its revised approval process for GM crops was WTO-compatible.

Europe's biotech industry warns the EU delay in approving licences for
GMOs will essentially paralyse the industry there. Farm observers warn
that Europe's farmers could be left behind as well, as U.S. and other
farmers benefit from increased yields and potentially lower production
costs as a result of utilising GMO crops.

In related news, a Brazilian court issued an 18 June ruling prohibiting
the planting and/or marketing of genetically modified Roundup-Ready soy,
overturning a prior decision (reported on in BRIDGES Weekly Trade News
Digest, Vol. 3, Number 20 May 24, 1999). In a suit brought by the
Brazilian Institute for Consumer Defence, the court required the Monsanto
and Monsay corporations to submit an environmental impact study prior to
any commercial-scale release of Roundup-Ready soy into the environment.
Monsanto, which had expected to start planting the beans in September for
harvesting early in the year 2000, said it would contest the ruling.

A meeting of experts in biosafety from Andean countries and UNESCO,
meeting in Ecuador earlier this month, warned that the countries of the
Andean Community trade bloc must agree on safety mechanisms against the
risks posed by transgenic products, also pointing out that many of those
making decisions on GM products in the region lacked the necessary
training to do so.

  "GM food rules linger in political limbo," FINANCIAL TIMES, 24 June
  "EU set for moratorium on new modified food products," FINANCIAL TIMES,
26 June 1999;
  "U.S. warns that biotechnology will "make or break" new trade round,"
  "La bataille des OGM: les Europeens sont divises face aux Americains,"
LE MONDE, 24 June 1999;
  "Les OGM, prochaine source de conflit Europe-Etats Unis?" LE TEMPS, 25
June 1999;
  "EU ministers agree on tricter labeling of biotech crops," INTERNATIONAL
HERALD TRIBUNE, 26 June 1999;
  "Brazilian Courts Suspend Release of Biotech Soy," USUARIO UNIVERSO
ONLINE, 22 June 1999;
  "EU says its GM crop approval system WTO-compliant," REUTERS, 25 June
1999; Andean meet sounds alert on transgenics," IPS, 11 June 1999.


The WTO Committee on Agriculture met last week, both in formal and
informal sessions. A number of issues of interest to the sustainable
development community were discussed, including non-trade concerns of
developing countries; market access; and whether or not the due restraint
provision ("peace clause") should be prolonged beyond the current date of
2003 at which it is due to expire.

New positions beyond the prior opposition between the agricultural
"liberalisers" (mainly members of the Cairns group and U.S.) and the
"protectionists" (EU, Japan, et al.) seem to be emerging. Mauritius
submitted a paper to the Agriculture Committee's informal session last
week, on "Multifunctional Role of Agriculture in Small Island Developing
States" which raises the issue of dependency on a single crop (sugar),
environmental protection, development and living standards. This paper was
supported by the EU, Norway, Japan and Korea, who found some of their
concerns reflected in Mauritius' paper. Several Caribbean countries also
supported the paper. Argentina (a Cairns group member) warned Mauritius
against joining the "protectionists", pointing out that it was EU
subsidies and protectionism that enabled it to become a major sugar
exporter, harming Mauritius' and other LDCs' economies by depressing
prices. The U.S. and some Cairns group members expressed some sympathy
with Mauritius' paper, but did not agree with Mauritius' proposed
solution, saying that either existing and WTO-compatible  non-distorting
("green box") subsidies should be adequate, or small developing countries
should be given special treatment. India expressed doubt as to whether the
present "green box" approach covered the problems faced by the developing

In the area of market access, the EU submitted a paper on Special
Safeguards in Agriculture and the discussion reflected the familiar split
between those wanting to keep special safeguards provisions (EU, Japan,
Korea, Poland, Mauritius, etc) and the U.S. and the Cairns group who said
that regular GATT safeguards are adequate. Cuba, Dominican Republic, El
Salvador, Honduras, Nicaragua and Pakistan submitted a paper on developing
countries' problems in accessing developed countries' markets, which
mentions inter alia, high tariffs on sensitive products, tariff escalation
and SPS regulations. The U.S., Cairns group and other developing countries
supported this paper. Japan argued that tariffs and quotas in this sector
were the result of negotiations and balance had to be maintained. The EU
made a similar case.

The formal session of the Agriculture Committee heard replies to over 200
written questions on some 36 notifications and on seven other
implementation issues. By far the most attention was paid to domestic
subsidy notifications, in particular from the EU and Norway. Brazil also
expressed its concern about U.S. subsidies for soybeans.

There was also a discussion about derestriction of factual Secretariat
paper prepared for the informal Analysis and Information Exchange
sessions. Mexico again vehemently opposed releasing these papers, although
they contain only factual data and are compiled from unrestricted
notifications. All other speakers, including Colombia, Canada and Frank
Wolter, Director of WTO's Agriculture Division, urged Mexico to change its
mind, pointing out that these documents can be useful, including to
developing country governments and organisations such as FAO and UNCTAD
which have programmes for assisting developing countries.

"Trade: Agriculture talks about talks," SUNS, 25 June 1999; ICTSD Internal


U.S Secretary of Agriculture Dan Glickman last week outlined U.S.
agricultural trade objectives for the upcoming round of WTO farm talks.
Among these, the U.S. said it would seek expanded market access for
agricultural goods by raising the ceiling on minimum farm import quotas -
a policy directed at Japan's rice market. Earlier this year, Japan adopted
a rice tariffication scheme which allowed Japan to slow its mandatory
increase in foreign rice imports to 0.4 percent per year, while applying
tariffs on rice imports within a WTO prescribed range. (See BRIDGES Weekly
Trade News Digest Vol. 3, No. 1-2, 18 January 1999.)

The U.S. criticised Japan for its tariffication plan, arguing it would
unfairly shut out U.S. rice from the Japanese market. The U.S. vowed to
address this issue in the next round of trade talks. Australia and
Thailand - also rice exporters to Japan, are likely to press this issue as
well. Japanese smaller farmers unions and some non-governmental
organisations argued against tariffication when it was adopted earlier
this year, fearful that it would indeed pave the way for elimination of
rice tariffs altogether as pressure mounts on Japan in WTO trade talks.
These opponents argue that the policy would ultimately undermine Japanese
food self-sufficiency, and ignores the importance of protecting and
enhancing self-reliance of small farmers in Japan and other countries.

Mr. Glickman said also that the U.S. would work to reduce tariffs on
agricultural imports and push for elimination of export subsidies. He
criticised the EU for maintaining export subsidies. Developing countries,
joined by the Cairns Group and Mercosur among others, will also take aim
at EU export subsides, as the subsidisation of EU agribusiness and other
large-scale farmers puts smaller farmers in developing countries at an
unfair competitive disadvantage.

Also last week, an editorial in THE AUSTRALIAN called on the EU and U.S.
to open their markets to agricultural exports from the world's poorest
countries. Since agriculture is the main source of export revenue for
these countries, increased trade would be an important complement to debt
forgiveness as a way for countries to lift themselves up from poverty. The
comments were made in response to the Group of Seven (G-7) highly
industrialised nations (Britain, France, Italy, Japan, Germany, Canada and
the U.S.) decision to expand by US$90 billion debt forgiveness for heavily
indebted poor countries.

  "U.S. releases farm policy goals under new round," DOW JONES NEWSWIRE,
23 June 1999;
  "U.S. farm policy under new round targeted at rice," KYODO NEWS
INTERNATIONAL, 23 June 1999;
  "Rich nations must accept the poor's farm exports," THE AUSTRALIAN, 24
June 1999.


Nearly a year into the process of selecting a new WTO Director-General
(D-G), WTO Members remain far apart on choosing between the two remaining
candidates: former New Zealand premier Mike Moore and Thailand's Deputy
Prime Minister Supachai Panitchpakdi. A new proposal has been put forward
by Australia at the APEC meeting in Auckland this week that the two
candidates share the post for three years each. The WTO General Council
(WTO's governing body between Ministerial Meetings) will next meet early
in July to decide on a new Director-General. Meanwhile in Geneva rumour
has it that the issue will be left to Ministers when they meet at the end
of the year at Seattle for the Third WTO Ministerial Meeting.

The selection process has deeply divided WTO Members, and they have missed
numerous deadlines for reaching consensus on a new leader. At the heart of
the division is the WTO consensus process which critics charge allows
larger trading powers to yield undue influence over WTO affairs. Indeed, a
number of WTO Members warn that the consensus process, as it has played
out in the D-G selection, has aggravated the perception that the WTO is
non-transparent and undemocratic, and thus lacking legitimacy.

In the D-G case, the Chair of the WTO General Council must gauge Member's
positions regarding candidates and advise WTO Members as to which
candidate has the "most" support, proposing that candidate be appointed as
the next D-G. WTO Members agreed last year to the following criteria for
selecting a candidate for the post. The candidate must 1) be the
preference of a majority of Members; 2) gather support from a broad
geographic spectrum of the membership; and, 3) be acceptable to every
Member of the organisation.

WTO Members, particularly Mr. Supachai's supporters, have argued that the
D-G appointment process has been riddled by lack of transparency and
fairness. In April, General Council Chair Ambassador Ali Mchumo of
Tanzania said that by a margin of 62-59 Mr. Moore enjoyed a lead among D-G
candidates and called on Mr. Supachai to bow out of the race. Supporters
of Mr. Supachai disagreed, arguing that the race was too close to call.
Kenya then put forward its own proposal calling for consensus to be
reached around Mr. Supachai. (See BRIDGES Weekly Trade News Digest Vol. 3,
No. 17, 3 May 1999.)

The Kenyan proposal was opposed by a number of WTO Members, most notably
the U.S., and Mr. Mchumo, who argued the Kenyan proposal could not be
considered as the proposal for reaching consensus around Mr. Moore was
made first and was still alive, and to consider the Kenyan proposal would
violate the selection process agreed to by Members last year.

Supporters of Mr. Supachai said that equity and fairness demanded that the
Kenyan proposal be given equal consideration as Mr. Mchumo's proposal
around Mr. Moore. Further, the Association of Southeast Asian Nations
(ASEAN) chastised Mr. Mchumo, noting that his job was to manage the
selection process and not to advocate on any one candidate's behalf.

In May, Australia tried to break the impasse by proposing an informal
ballot initiative through which Members could "vote" (in a kind of secret
ballot straw poll) for one of the two candidates, and the one who gained
the most votes would then be appointed by consensus. This met with
objections from the U.S. and other supporters of Mr. Moore that voting
would violate WTO rules. Since developing/smaller countries make up the
majority of the WTO's 134 Members, larger Members worry that voting in the
WTO could lead to a number of smaller countries outweighing the major
players on an issue, observers note. Another, earlier, controversial
suggestion was that since on a trade-weighted basis, Members supporting
Mr. Moore carried more weight than those supporting Mr. Supachai, that
weight should be given consideration.

At a WTO General Council meeting on 16 June, General Council Chairman Ali
Mchumo of Tanzania said an informal poll now showed as many as 80 WTO
members supported Mr. Moore for D-G. Supporters for Mr. Supachai
immediately questioned the figures. By 18 June, Mr. Mchumo announced that
it was not possible to reach consensus on either Mr. Moore or Mr.
Supachai, and thus took the decision to postpone the decision until early
July for Members to consult on how to end the impasse.

Mr. Supachai said he would not withdraw from the D-G race as a matter of
principle. "The point is there is now a debate on the transparency and
fairness of the selection process," Mr. Supachai said. His supporters
called again for a transparent process of informal balloting or
"quantitative verification" in the D-G selection as a way to quickly bring
the selection process to a close.

Observers warn that the deadlock around a new D-G threatened the WTO's
credibility and could jeopardise the important agenda-building process in
the months before the Third WTO Ministerial scheduled for 30 November- 3
December in Seattle, Washington. The D-G impasse could also affect the
launch of the proposed Millennium Round of global trade talks.

Meanwhile, Geneva diplomats joke that the WTO is now more than ever a
"Member-driven organisation" since it has no head, or that while it may be
embarrassing for the WTO to be headless, what would be even more
embarrassing would be for the organisation to function well without a head
for several months, indicating that the D-G post may be superfluous

  "End it now or start again, says Supachai," BANGKOK POST, 20 June 1999;
  "Will the WTO ever be the same?" FOCUS-ON-TRADE (FOCUS), June 1999;
  "Trade: WTO looking for a hoodiny?" SUNS, 28 May 1999;
  "WTO: Members pause leadership talks," FINANCIAL TIMES, 19 June 1999;
  "Poll shows growing support for Moore as WTO head, stalemate remains,"
INSIDE US TRADE, 18 June 1999;
  "Trade: Membership remains deeply divided on WTO head," SUNS, 17 June
  "Enough is enough," THE ECONOMIST, 12 June 1999.
  "Ruggiero calls for new world forum to address global challenges,"
INSIDE US TRADE, 16 April 1999. 


U.S. Trade Representative Charlene Barshefsky earlier this month said the
U.S. would push for increased liberalisation in global trade in services
in the proposed Millennium Round of global trade talks expected to launch
later this year. Ms. Barshefsky said the U.S. would push for deeper
liberalisation commitments in finance, telecommunications, distribution,
audio-visual services, construction, tourism, education and health. Ms.
Barshefsky said also that before the new round begins the U.S. wants to
forge an agreement on transparency in government procurement - relevant
because governments are large buyers of services.

At a WTO-sponsored meeting held in Bangkok earlier this month, Thai
officials expressed concern that developed countries were pressuring
developing countries to liberalise services in sectors in which developed
countries have a comparative advantage, e.g. in the telecommunications and
financial services sectors. Thailand's Deputy Prime Minister Supachai
Panitchpakdi warned that this could aggravate economic turmoil in Asia. An
EU trade official disagreed with the Thai analysis. "Services which are
imported create an infrastructure for the country," Michel Servoz, head of
the EU trade in services unit, said. "To be liberal in services is
something which is equally good for developing and developed countries,"
he said.

Developing countries are reported to want to protect services in certain
industries, including tourism, maritime transport and construction.

  "Sector fears talks won't include them," JOURNAL OF COMMERCE, 24 June
  "Barshefsky reveals U.S. push to broaden WTO services talks," INSIDE US
TRADE, 4 June 1999;
  "WTO liberalisation of services to benefit all-EU official," DOW JONES
NEWSWIRE, 18 June 1999;
  "Developing nations to get WTO say," AGENCE FRANCE-PRESSE, 18 June 1999.


The South African Development Community (SADC) will meet this week to
break an impasse in trade negotiations between its 14-members. SADC had
hoped to conclude free-trade talks by month's end toward a January 2000
launch for a SADC free trade area. The key issue between members is over
market access to the Southern African Customs Union (SACU), of which SADC
members South Africa, Swaziland, Namibia, Lesotho and Botswana are also

Zimbabwe proposed zero-tariffs on most products within the SADC region.
SACU members of SADC are counter-proposing tariffs of 30-50 percent on
SADC clothing exports to SACU, which Zimbabwe argues would effectively
block clothing exports to the SACU region. SACU rules-of-origin proposals
for SADC exports have also met with strong opposition from non-SACU SADC
members. SACU members argue that strict rules-of-origin rules are
necessary, most notably in the textiles and automotive sectors, to prevent
transhipment of products from Asia. A regional trade imbalance is also
aggravating tensions. Regional economic giant South Africa last year
exported US$3.4 billion to SADC countries, while its imports from SADC
countries totalled only about US$600 million.

Meanwhile, a report released earlier this month by the UN Conference on
Trade and Development (UNCTAD) said the free trade agreement recently
concluded between the EU and South Africa is likely to benefit the EU more
than South Africa. The UNCTAD report ("Free Trade Between South Africa and
the European Union: A Quantitative Analysis") said the agreement will
"have a negative impact on both the balance of payments and on government
revenue [of South Africa]." The report estimates that EU exports to South
Africa could increase by between 2.3 percent and 12.3 percent over 1996
figures as a result of the agreement, while South African exports to the
EU will only increase by 1.3 percent. The report notes that the EU
excludes nearly half of South Africa's agricultural exports from the free
trade agreement.

The EU-South Africa agreement could also aggravate trade relations between
South Africa and its SACU, SADC and Eastern and Southern African Common
Market (COMESA) trade partners. Critics within these groupings worry that
the seemingly lopsided market access deal struck in the agricultural
sector would allow cheap, subsidised EU agricultural exports to flow into
the SACU markets - posing a serious threat to agricultural sectors in SACU
countries and to COMESA and SADC, to which SACU countries belong. (See
BRIDGES Weekly Trade News Digest Vol. 3, No. 18, 10 May 1999, and Vol. 3,
No. 22, 7 June 1999.)

  "Africa politics: Squabbles delay negotiations on SADC free-trade area,"
  "Africa economy: SADC trade protocol delays," ECONOMIST INTELLIGENCE
UNIT, 21 June 1999;
  "EU-South Africa trade agreement to benefit EU, UN report claims,"


The Worldwide Fund for Nature (WWF) has forged an alliance with the World
Bank tying World Bank financial assistance to central African countries to
the adoption of sustainable forestry practices, as monitored by the WWF.
As part of this initiative, regional African leaders agreed earlier this
year to move toward sustainable forest management and to protect large
areas of the forest. Gabon, Cameroon,  both Congos and Guinea have
one-fifth of the world's tropical forest. Logging results in a loss of
10,000 acres (4,000 hectares) a year, a rate which could result in
complete deforestation and loss of forest-dwelling animal species by 2020.

Environmental groups argue that deforestation leads to greater poverty, as
former forestland remains idle. However, critics note, protecting forest
areas from harvesting leads to job loss and relocation of people from
towns near forests.  Many voices in the region take umbrage at the western
environmentalists' meddling. 

In related news, environmental ministers from the Democratic Republic of
Congo (DRC) and the Republic of Congo met earlier this month for
consultations on the two countries' forestry policies, including the
African Timber Organisation. The two countries agreed on the need to
exchange information and learnings regarding forestry and fisheries
management, and agreed to explore a common strategy to combat timber theft
in the Congo and Ubangui river regions.

Earlier this month, producers and users of British forest products
launched the UK Woodland Assurance Scheme (UKWAS). UKWAS is a forest
management audit scheme designed to qualify forest owners for various
certifications and eco-labels, such as the Forest Stewardship Council
(FSC) or the alternative Pan-European Forest Certification Scheme. UKWAS
is expected to assist a group of more than 95 UK retailers that have
pledged to source 100 percent of timber products from FSC-certified
sources by 2000.

  "Forest fears," THE ECONOMIST, 26 June 1999;
  "Environment ministers consult over forests," PANAFRICAN NEWS AGENCY, 14
June 1999;
  "Consensual UK forest certificate launched," ENVIRONMENT DAILY, 3 June


A grouping of Canadian and European business earlier this month launched a
roundtable around which common positions on bilateral trade issues will be
discussed. The grouping hopes to head off future EU-Canda trade disputes.
Towards that, the roundtable will urge EU and Canadian officials to pool
research on GMO safety and to construct a workable biosafety protocol.

 "Firms from Canada, Europe to launch talks about trade," WALL STREET
JOURNAL, 16 June 1999.

The U.S Senate last week rejected a bill that would have imposed quotas on
foreign steel imports. U.S. steel producers have accused foreign producers
of illegally dumping steel on the U.S. market. (See BRIDGES Weekly Trade
News Digest Vol. 3, No. 23, 14 June 1999.)

 "U.S. gets it right for steel, now for lamb," DOW JONES NEWSWIRE, 22 June

Trade data from Asian countries released this month indicate that Asian
intra-regional trade is on the rise, pointing to an economic recovery in a
region struggling since its economic crisis started in 1997.

  "Intraregional trade is picking up in Asia, " WALL STREET JOURNAL, 23
June 1999.

The International Institute for Sustainable Development (IISD) in
collaboration with the World Wildlife Fund (WWF-US) have released a report
examining NAFTA Chapter 11 (which deals with investors' rights and
expropriations), from the perspective of sustainable development. 

  "NAFTA: Barrage of environment-related lawsuits forecast," IISD PRESS
RELEASE, 22 June 1999.

Leaders from Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan last week
postponed the creation of the long-anticipated Central Asian Economic
Community. The four countries are unable to agree on tariffs and currency

 "World Trade: Free trade zone postponed," FINANCIAL TIMES, 25 June 1999.


On 22 June the European Commision met with civil society organisations,
members of the European Parliament and EU Member State representatives in
its process of engagement with civil society in the build up to the WTO
new round of negotiations. Issues covered included the EU's proposed
measures for developing countries, and the EU's proposal  for greater
coherence of trade and financial policies through better co-operation
between the WTO and International Financial Institutions.  At the meeting,
NGOs expressed dissatisfaction at how the EC's process of engagement with
them has been managed, saying inter alia that there is a lack of clarity
in the EC^Rs objectives in the process and that information provided at
the meetings is often selective and unreliable.

 "Commission meeting with civil society organisations to discuss EU
proposals for WTO round," EUROSTEP NEWS UPDATE, 25 June 1999.

Australia last week said it would request a WTO dispute settlement panel
to consider its complaint that South Korea is illegally obstructing
imports of Australian beef. The U.S. filed a similar complaint against S.
Korea earlier this year.

 "Australia to take S. Korea to WTO over beef import limits," DOW JONES
NEWSWIRE, 23 June 1999.

The International Council of Chemical Associations (ICCA), representing
companies accounting for about 80 percent of world chemical production,
last week called for the complete elimination of tariffs on chemicals by
all WTO Members by 2010.

  "Elimination of tariffs by WTO Members sought," FINANCIAL TIMES, 25 June


The Commission for Environmental Co-operation (CEC) last week announced
the appointment of Ms. Janine Ferretti to a three-year term as the new
Executive Director of the Secretariat of the CEC. Ms. Ferretti, a
Canadian, has served as the CEC's Interim Executive Director since 1998.

 "CEC announces executive director," CEC PRESS RELEASE, 22 June 1999.

U.S. Agriculture Secretary Dan Glickman last week appointed Kathleen Ann
Merrigan as the new administrator of the U.S. Department of Agriculture's
Agricultural Marketing Service. Since 1994, Ms. Merrigan has worked as a
senior analyst with the Henry A. Wallace Institute for Alternative
Agriculture. Agriculture specialists in the U.S. have referred to her as
an "organic agriculture leader."

 "Merrigan named administrator of USDA's agricultural marketing service,"

BRIDGES Weekly Trade News Digest) is published by the 
International Centre for Trade and Sustainable Development 
(ICTSD) with support from the Institute for Agriculture and 
Trade Policy (IATP). This issue has been researched by Hugo 
Cameron and Marie Chamay; written by Judy Brienza (IATP) 
and edited by Caroline Dommen, The 
Director is Ricardo Melendez-Ortiz, 
ICTSD is an independent, not-for-profit organization based 
at: 13, ch des Anemones, 1219 Geneva, Switzerland. Tel: (41 
22) 979 9492; Fax: (41 22) 917 8093. Excerpts from BRIDGES 
Weekly Trade News Digest) may be used in other publications 
with appropriate citation. Comments and suggestions are 
welcomed an should be directed to the Editor or 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: and at 
the IATP web page: