IN THIS ISSUE:
* WTO Ministers Likely to Leave Many Empty Brackets in Cancun
* U.S. Wants Tailor-Made Deal to Come out of Doha Round
* EU Puts Agriculture and Investment at Top of Its Cancun Agenda
* Protestors Could Snarl Access to WTO Meeting in Cancun
* OECD Steel Talks Aim at Putting Caps on Domestic Subsidies
* U.S. Trade Honeymoon with China Is Nearing Its End
* Panel Orders ITC to Reexamine "Threat of Injury" Ruling on Lumber
* BRIEFS: Export Enforcement, Export Prices, Steel, GSP
WTO MINISTERS LIKELY TO LEAVE MANY EMPTY BRACKETS IN CANCUN
Trade ministers at the World Trade Organization (WTO) Ministerial in Cancun Sept. 10-14 are expected to agree on a broad plan to keep the Doha Development Agenda going for another 18 months, but will avoid putting specific numbers on the goals and targets the talks should seek for global trade liberalization. Ahead of the meeting in Mexico, trade officials from several participating countries stressed the interim nature of the ministerial and played down any expectations that the WTO would try to solve the most difficult issues facing the round.
Before leaving for the meeting, officials from the U.S., European Union (EU), Canada and Australia all claimed they were seeking ambitious results for the Doha Round but not necessarily from the Cancun session.Weeks before Cancun, WTO members gave up trying to agree in advance on a Ministerial Declaration that the trade ministers could endorse at the meeting. The draft declaration prepared by WTO General Council Chairman Carlos Perez del Castillo, Uruguay's ambassdor to Geneva, still includes many bracketed parts that either are empty or provide ministers will alternative choices. Del Castillo has identified four main areas that will take the most work to resolve. These are agriculture, non-agriculture market access, special and differential (S&D) treatment for developing countries, and the so-called Singapore Issues involving government procurement, trade facilitation, competition and investment.
It will be
left to ministers to define the "modalities" or framework for continuing
talks on agriculture, what formula to use for cutting industrial tariffs,
what promises to make to developing countries to keep them from blocking
agreement on a ministerial declaration, and whether to launch new negotiations
on the Singapore issues.
U.S. WANTS TAILOR-MADE DEAL TO COME OUT OF DOHA ROUND
Washington's goals for the WTO Ministerial in Cancun are to keep the Doha Round going, avoid a fight over specific commitments that could derail the meeting and maintain enough flexibility in all sectors to keep everyone involved in the talks until their scheduled end in December 2004. Ahead of the meeting, U.S. trade officials repeatedly stressed that Cancun is an interim step in negotiations and no one should expect final resolution of the major issues.
"Coming out of the meeting, you should not expect detailed algorithms of formulas of how one is going to cut tariffs," one senior U.S. trade officials said on background. "What we are looking to have are frameworks for negotiations that will enable us to get an ambitious result. But after Cancun, we are still going to have to negotiate the specific magnitudes of tariff cuts or cuts in domestic subsidies in agriculture," he said.While striving to appease developing countries with key concessions, such as the Aug. 29 agreement to make it easier for poor countries to obtain cheaper drugs, the U.S. opposes a broad waiver of WTO obligations as part of the special and differential treatment given these countries (see WTTL, Sept. 1, page 1).
"Our apporach
here is to bring them as much as possible into the same framework of market
access improvements as developed countries, but giving them a fair degree
of flexibility to deal with the specific sets of issues and situations
they face," a U.S. trade official said. "We want to avoid coming
out with a bifurcated WTO system with one system and rules for developed
countries and a different set for developing countries," he added.
EU PUTS AGRICULTURE AND INVESTMENT AT TOP OF ITS CANCUN AGENDA
The European Union (EU) may be going to the WTO Cancun Ministerial with a longer list of objectives than any other member. The numerous goals appear intended to give Europe bargaining chips to use to assure achievement of its two principle aims -- its ability to reform its farm programs at its own pace and new rules to keep markets open for European investors.
Investment is one of the four Singapore issues that WTO ministers in Cancun must decided on whether to launch new negotiations. This is an important issue for EU officials because they are concerned that European firms may face discrimination in countries that have bilateral or regional agreements with the U.S. or where American firms have commercial advantages.To make investment talks more acceptable to more countries, the EU has proposed a "bottom-up" approach similar to the way the General Agreement on Trade in Services (GATS) works. Its concept would seek to adopt a general set of rules on how foreign investment should be treated and let countries identify the specific sectors to which they will apply these rules.
Even though the EU was able to negotiate a compromise deal with the U.S. on agriculture, it still faces strong demands from developing countries to cut its domestic supports and eliminate all export subsidies. Along with Washington, Brussels has offer to eliminate "some" export subsidies on products that are most important to developing countries. EU Farm Commissioner Franz Fischler said the EU won't identify the products for which it is ready to eliminate export subsidies until developing countries first indicate the products of interest to them.
The EU also
will seek to expand farm talks to include geographical indications, and
especially to "clawback" protection for European foods that have become
the subject of trademarks in third-countries. Such trademarks have
prevented European firms, such as producers of Parma ham, from selling
their products in countries such as Canada with their own product name.
PROTESTORS COULD SNARL ACCESS TO WTO MEETING IN CANCUN
Fear of Mexican security measures and restricted access to key venues near the Cancun Convention Center may keep anti-trade protestors from disrupting the 5th WTO ministerial the same way they did the Seattle Ministerial in 1999, but the geography of Cancun makes it vulnerable to disruption by any size crowd. Ahead of the meeting, anti-globalization websites were calling for more than 10,000 protestors to gather at the resort or in nearby Cancun City. The actual size of the gathering probably won't be known until the ministerial actually starts.
While visa and hotel restrictions imposed by Mexico may limit the attendance of international protestors, a large contingent of Mexican farm and student groups was planning to be in the streets at the meeting. One website said Via Campesino, a Mexican farm organization, was trying to bring 5,000 to 10,000 people to the resort.Cancun is a long arm of land, similar to Miami Beach, which is attached to the mainland by narrow causeways. One main road runs parallel to the beach front, linking almost all hotels being used by attendees. The Convention Center and main official hotels for ministers are at one end of the resort, and there will be limited access to this sector. Protests anywhere along the length of the beach area could stop traffic to the center, the airport or to Cancun City.
According to
one website, protests will start on Sept. 9 as WTO delegates and observers
begin to arrive for the meeting. A Mass March Against War and Free
Trade was planned for Saturday, Sept. 13.
OECD STEEL TALKS AIM AT PUTTING CAPS ON DOMESTIC SUBSIDIES
Efforts to place disciplines on the subsidization of national steel industries are now turning toward the concept of using a sliding scale to cap the level of aid that developing and developed countries can provide to steel producers. During the latest talks Sept. 4-5 in Moscow, a subgroup of participants involved in the talks reacted favorably to proposals for using such a sliding scale as part of the "special and differential" treatment offered to developing countries, as well as for the subsidy exceptions that all countries might be eligible to use.
he talks, under the auspices of the Organization for Economic Cooperation and Development (OECD), are seeking an agreement that would reduce global steel production capacity and impose disciplines on future subsidies. Only 15 of the 40 countries involved in the negotiations sent participants to the Moscow meeting. A full meeting of the disciplines subcommittee is planned for Oct. 6-9.The details for determining the level of the cap, which apparently would vary on a country-by-country basis, are yet to be worked out. Such factor as GDP, export levels or steel production might be considered in determining each country's cap. The concept, however, calls for an ad valorem limit on the amount of subsidies that could be given to domestic firms. Countries would be allowed to distribute those limited funds anyway they wanted. No limit would be placed on subsidies that assist the permanent or partial closing of steelmaking capacity.
U.S. TRADE HONEYMOON WITH CHINA IS NEARING ITS END
The second anniversary of China's accession to the WTO could mark the end of Washington's tolerance for Chinese trade and currency policies that are making exports from China the boogeyman of international trade. Though Bush administration officials say there is no change in their China policy, complaints have intensified, and business sources suggest the rhetoric could turn into actual trade actions in 2004 as the U.S. presidential election comes closer.
Treasury Secretary John Snow signaled the new attitude toward China during his Sept. 2-3 visit to Beijing and his open call for the Chinese to allow their currency to float. Commerce Secretary Don Evans will head to China in October and is likely to repeat U.S. concerns about the value of the renminbi, as well as about Beijing's failure to enforce intellectual property rights, open insurance markets and ease restrictions on distribution rights and entry into various service sectors.China's unfair currency manipulation has now become a major complaint of U.S. manufacturers, especially with the U.S. trade deficit with China on tract to reach almost $130 billion in 2003. A group of firms that have formed the Coalition for a Sound Dollar is considering the filing of a Section 301 complaint with the U.S. Trade Representative's (USTR) office seeking an investigation to determine whether China has violated its WTO obligations by using its fixed exchange rate to offset normal trade flows. Frank Vargo, vice president of the National Manufacturers Association, which is part of the coalition, told reporters Sept. 3 that no decision has been made on whether to file a case.
Commerce Assistant Secretary for Market Access and Compliance William Lash will go to China Sept. 10 as part of a regular dialogue the U.S. has had with the Chinese since Beijing's accession to the WTO. U.S.-China contacts were interrupted in the spring and summer because of the SARS outbreak, he told WTTL. "We're trying to get them back on track," he said.
"We are not
trying to demonize China," he told WTTL. "Quite the contrary.
We are trying make sure China lives up to its obligations like any other
WTO member," he said. Lash's office serves as the central clearing
point at Commerce for U.S. industry complaints against China. Although
there has been a steady stream of complaints about various sectors, the
main issue being raised by American firms lately has been Chinese exchange
rates, he reported.
PANEL ORDERS ITC TO REEXAMINE "THREAT OF INJURY" RULING ON LUMBER
The main tent pole holding up the U.S. antidumping and countervailing duty cases against softwood lumber from Canada was chopped down Sept. 5 by a NAFTA panel which ruled the International Trade Commission (ITC) erred in finding a "threat of injury" from these imports. The panel affirmed the ITC on three of the five complaints that Canadian lumber producers raised but remanded the case for reexamination of decisions on threat and cross-cumulation.
Because Canadian imports were covered by a bilateral agreement for over a decade, the ITC couldn't find current injury in the case. Instead, it foresaw the threat of injury with the end of the U.S.-Canada Softwood Lumber Agreement.The NAFTA panel criticized the ITC analysis of the threat issue on five points, claiming the Commission didn't ensure that "other sources" of injury weren't attributed to the imports. The panel said the ITC failed to consider: conditions in the U.S. industry, the role of third-country imports, the growth of engineered wood products, constraints on domestic timber supplies, and the cyclical nature of the industry. The panel said it was troubled by ITC's lack of analysis.
* * * BRIEFS * * *
EXPORT ENFORCEMENT: BIS Sept. 3 announced settlement agreement with Seattle, Washington, freight forwarder, Expeditors International of Washington, which agreed to pay $5,000 civil fine. Agency had charged firm with facilitating export of commercial air conditioners in 1996 to Realtek Semiconductor, Taiwanese company that was subject to denial order at time of shipment. Realtek settled case with BIS in December 2002 and is no longer subject of denial order.
EXPORT PRICES: ITA is seeking public comment on idea of deducting Section 201 duties and CVD duties from Export Price and constructed export price in antidumping investigations. Agency says deduction of duties from EP and CEP is required by law.
BARIUM CARBONATE: ITC Sept. 4 voted 4-0 in final determination that imports of dumped barium carbonate from China are injuring U.S. industry.
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