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Date: Fri, 12 Jun 1998 11:42:01 -0500
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Subject: NAFTA & Inter-American Trade Monitor Vol. 5, Number 12
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NAFTA & Inter-American Trade Monitor - Vol. 5, Number 12 June 12, 1998
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Table of Contents
- IPR AT ISSUE
- BIO-TECH CRITICS SPEAK
- HFCS DUTIES CHALLENGED
- U.S. TOMATO GROWERS VS CANADA, MEXICO
- RAIL UPGRADE FOR BORDER
- CANADA WATER TRADE
- BROOM CORN RULING
IPR AT ISSUE
On May 1, Colorado State University abandoned its application for U.S.
patent #5,304,718 on Apelawa quinoa. Bolivia's National Association of
Quinoa Producers (ANAPQUI) hailed the defeat of the patent as "a great
victory" for Andean farmers. Alejandro Bonifacio, a quinoa researcher in
Bolivia, noted that the Apelawa patent was named after a village on Lake
Titicaca where the CSU scientists first picked up seed samples and also
discovered a method of hybridizing quinoa that is used in 43 other
traditional Andean quinoa varieties.
Biodiversity concerns and indigenous rights conflict with intellectual
property protection in many developing countries. Twelve years ago,
Loren Miller, director of a small, California-based International Plant
Medicine Corporation, took a sample of Ayahuasca, a medicinal plant
cultivated by an Ecuadoran indigenous community. Back in the United
States, Miller patented the plant material, obtaining exclusive rights
under U.S. law to sell and breed new varieties from the plant. Miller
says his company is now working on development of psychiatric and
cardiac pharmaceutical drugs from the plant.
The Ecuador-based Coordinating Body for Indigenous Organizations in the
Amazon Region (COICA) has denounced the taking of the Ayahuasca since
the beginning of the conflict 12 years ago. COICA General Coordinator
Antonio Jacanamijoy charges miller with "an offense against indigenous
people" in patenting a sacred plant taken from an indigenous family. The
United States Senate has refused to ratify the United Nations Convention
on Biological Diversity, an agreement that recognizes the intellectual
property rights of indigenous peoples. Ecuador, and more than 100
nations, have signed the U.N. convention.
The U.S. International Intellectual Property Alliance (IIPA) urged the
U.S. Trade Representative to place Mexico on the Special 301 Priority
Watch List (the second-highest of four possible categories) at the
annual April 30 review, and to take other action under NAFTA. Instead,
the U.S. Trade Representative (USTR) continued to place Mexico on the
Other Observations List�(the lowest category), and said it would conduct
bilateral talks on intellectual property rights because "piracy and
counterfeiting remain major problems." The USTR called the copyright law
passed in Mexico in 1996 a step forward, but warned that there remain
"problems and ambiguities in the law." Mexico agreed to carry out new
measures to enforce protection for intellectual property rights by June
30, but cancelled a bilateral meeting that had been scheduled for June 4
to work out details.
The IIPA says that Mexico pirates more than half of video, audio,
business software applications and entertainment software, resulting in
more than $435 million in lost sales to U.S. producers during 1997
alone. In addition, Mexican small businesses suffer from competition
from pirates. The Mexican Video Association says that 3,500 of 8,000
registered independent video clubs have closed since 1994, due to
piracy.
"In Asia, piracy has been reduced through political will and good
enforcement, and that's what Mexico doesn't have," said IIPA President
Eric Smith. In 1997, the Mexican Federal Attorney General's office
seized 3 million cassettes - compared with 55 million pirated cassettes
sold and 30 million legal cassettes sold.
Reebok International Chief Executive Bob Meers warned that Reebok will
condition future investments in Mexico on better enforcement of IPR
laws. "It is probably the single largest determinant in deciding whether
we invest more money in our business in Mexico," said Meers.
Argentina, Ecuador, and the Dominican Republic were among the 15
countries placed on the Priority Watch List, while Colombia, and
possibly Ecuador, face "out of cycle" reviews of their IPR enforcement
activities. The USTR cited complaints about lack of adequate patent
protection for pharmaceuticals and inefficient border controls in
Colombia. Ecuador remained on the priority watch list despite passage of
new IPR legislation in April, since the legislation has yet to be signed
by the president or to take effect.
In a separate action, the USTR announced sanctions on Honduras, ending
duty-free shipment of about $5 million worth of Honduran fruits,
vegetables and other products, because of continuing failure of the
Honduran government to prevent piracy of U.S. television programs and
other copyrighted materials.
The USTR placed Canada on its "watch list" because of controversy over
recent changes to the Canadian copyright law, citing U.S. concern that
"U.S. performers and producers are denied national treatment with
respect to these provisions." NAFTA requires national treatment for
member nations in intellectual property laws.
A new rule that took effect on April 13 requires Customs inspectors to
notify trademark and copyright holders when suspect merchandise is
seized or detained at U.S. ports. Customs officials may also provide
company executives with samples of the questionable imports. Companies
say that the new regulation should be helpful to both Customs
enforcement and company defense of intellectual property rights.
"Mexico Cancels IPR Meeting: USTR Confident It Will Take Place," INSIDE
U.S. TRADE, June 12, 1998; "Administration Softpedals IPR Complaints
With NAFTA Trading Partners," INSIDE U.S. TRADE, May 8, 1998; Mary
Sutter, "Put Your Foot Down, Mexico Told," JOURNAL OF COMMERCE, May 4,
1998; "U.S., Mexico to Meet Next Week to Address Mexican IPR Steps,"
AMERICASTRADE, May 298, 1998; Mary Sutter, "Piracy Takes Toll in
Mexico," JOURNAL OF COMMERCE, April 7, 1998; Diego Cevallos, "Mexico:
Region's Fastest Growing Market for Counterfeit Products," INTERPRESS
SERVICE, March 13, 1998; Mario Gonzalez, "Trade-Ecuador: U.S. Threatens
Sanctions Over Patents, Again," INTERPRESS SERVICE, April 23, 1998;
Kevin G. Hall, "Microsoft Seeks to Tie Tech Loans to Piracy Purchases,"
JOURNAL OF COMMERCE, April 1, 1998; "U.S. Mulling NAFTA Retaliation
Against Canada Over Copyright Changes," INSIDE U.S. TRADE, April 3,
1998; Paula L. Green, "Trademark Holders Told If Customs Seizes Fakes,"
JOURNAL OF COMMERCE, 4/22/98; Danielle Knight, "Development Rights:
Battle Over Amazon Plant Patents," INTERPRESS SERVICE, March 25, 1998;
"Quinoa Patent Dropped, Andean Farmers Defeat U.S. University," ANAPQUI
PRESS RELEASE, May 22, 1998; "U.S. to Impose Sanctions on Honduran
Products," JOURNAL OF COMMERCE, April 1, 1998.
BIO-TECH CRITICS SPEAK
A major review of government biotechnology policies is underway in
Canada. A public opinion poll commissioned by the British Columbia
branch of the Consumers Association of Canada found three-quarters of
British Columbians to be concerned that some of the food they eat may be
genetically altered. According to the survey, 80 percent would choose
non-altered products if given a choice. Corn producers oppose labeling
of biotechnology-derived food products, except "where the genetic
alteration is known to cause allergenic problems, or where nutritional
composition has been changed significantly."
In Washington, the Alliance for Bio-Integrity and other plaintiffs filed
suit in May, charging that U.S. Food and Drug Administration policy,
which permits genetically altered foods to be marketed without testing
or labeling, violates the agency's legal duty to protect public health
and provide consumer information. The lawsuit challenges marketing of 33
genetically engineered whole foods, including potatoes, tomatoes, soy,
corn, squash and other fruits and vegetables. These foods are also
present in products ranging from soy-based baby formulas to corn chips.
Plaintiffs cite health and religious concerns.
The Grocery Manufacturers of America said in response to the lawsuit
that mandatory labeling of genetically engineered foods would mislead
consumers and hamper research, wrongly implying that the foods are less
safe than other food products. "There is no scientifically-valued
distinction between the safety of genetically-enhanced food and food
grown by traditional methods," insisted Dr. Stephen Ziller, GMA Vice
President for Scientific and Regulatory Affairs.
Use of genetic engineering in agriculture has increased dramatically in
the past two years, with farmers planting millions of acres of gene-
modified crops. The May 11th Monsanto announcement of intent to purchase
DeKalb Genetics Corp. and Delta & Pine Land Co. for $4.4 billion
highlights the demand for biotechnology and the increasing value of the
few agritech firms not yet acquired by the multinational mega-firms like
Monsanto, Dupont, Novartis, and Dow Chemical. Monsanto and Cargill also
plan a joint venture to create biotech-enhanced products for the grain
processing and animal food industries.
Kevin Carmichael, "Critics Complain About Biotech 'Consensus,'" WESTERN
PRODUCER, May 21, 1998; Emily Kelser, "Monsanto Sees Alliance With
Cargill Expanding," WESTERN PRODUCER, May 21, 1998; Emily Kelser,
"Monsanto Purchases Send Waves," WESTERN PRODUCER, May 21, 1998; Grania
Litwin, "Meddling With Nature Irks Advocate," VICTORIA TIMES COLONIST,
May 26, 1998; "Landmark Lawsuit Challenges FDA Policy on Genetically
Engineered Foods," ALLIANCE FOR BIO-INTEGRITY PRESS RELEASE, May 27,
1998; "Don't Turn Back the Clock on Enhanced Foods, GMA Says," GROCERY
MANUFACTURERS OF AMERICA PRESS RELEASE, May 27, 1998.
HFCS DUTIES CHALLENGED
The United States has requested World Trade Organization consultations
over Mexican antidumping duties imposed on U.S. high-fructose corn
syrup. The challenge claims that Mexico has wrongly classified HFCS as a
like product with sugar, that rules on public notice and explanations of
dumping determinations were not followed, that provisional dumping
duties were kept in force more than the maximum time authorize by
international rules, and that Mexico failed to safeguard confidential
information, instead making it available to the Mexican sugar industry.
In a related move in early May, the United States allocated rights to
import 200,000 metric tons of raw sugar to foreign countries other than
Mexico.
Mexican Commerce Secretary Herminio Blanco said that Mexico is seeking a
mutually agreeable settlement, not a dispute resolution panel, but
defended the duties as consistent with WTO regulations. Mexico is also
seeking access for more sugar to the U.S. market.
"U.S. Says Mexican HFCS Duties Amount to Broad Violation of WTO
Obligations," INSIDE U.S. TRADE, May 15, 1998.
U.S. TOMATO GROWERS VS CANADA, MEXICO
The Florida Tomato Exchange is seeking a U.S. Commerce Department
investigation of whether Canadian producers are dumping hothouse
tomatoes on the U.S. market at prices below the cost of production.
Tomato Exchange director of education and promotion Stephanie Johnson
noted that the exchange has observed increased imports and lower retail
prices, but said "We're just requesting they put together some facts to
make sure something that isn't supposed to be happening isn't
happening."
Canadian Denton Hoffman, general manager of the Ontario Greenhouse
Vegetable Producers Marketing Board said Canadians are not dumping
tomatoes and that he was quite aware of the Florida request "and I'm
looking at it with some levity."
Assistant Commerce Secretary Robert LaRussa is meeting with parties to
an agreement suspending a U.S. antidumping case against Mexican
tomatoes. His goals include increasing participation of Mexican growers
in the agreement and consideration of changes in floor prices or
possibly a split in the marketing season to winter and summer seasons.
Meanwhile, California tomato growers alleged that Baja California
growers are engaging in predatory pricing. The California Tomato
Commission has requested talks with its Mexican counterpart.
Tracy Rosselle, "Florida Suspects Canadian Dumping," THE PACKER, May 25,
1998; "Florida Tomato Growers Allege Unfair Pricing of Canadian
Imports," AMERICASTRADE, May 28, 1998; "Commerce to Consider Possible
Change to Tomato Agreement," AMERICASTRADE, May 28, 1998.
RAIL UPGRADE FOR BORDER
Union Pacific Railroad said in early May that it will spend $1.4 billion
during the next five years to strengthen its rail network between New
Orleans and the Mexico border, including $800 million in track and
signal improvements for existing routes and $600 million for increased
capacity. Rail traffic has been congested in this corridor, and the
Union Pacific plan was a response to a Surface Transportation Board
order to make route improvements.
Rip Watson, "UP Plans Rail Upgrade to Unclog Mexican Border," JOURNAL OF
COMMERCE, May 5, 1998.
CANADA WATER TRADE
The Nova Group, a small company from northern Ontario, has been granted
a provincial permit to draw 10,000 liters of water a day for five years
from Lake Superior, in order to bottle the water for export to Asia.
Barry Appleton, a Canadian trade attorney and an authority on NAFTA,
characterized the permit as "a fundamental change." Appleton said that
because there are no restrictions on exporting Canadian water, any ban
on export to the United States would amount to an illegal export quota
for Asia, in violation of the WTO.
Critics of NAFTA have long worried that Canada may be legally obligated
to divert water for export to the arid southwestern United States.
Scott Morrison, "Canada Water Could Become A Trade Good," FINANCIAL
TIMES, May 5, 1998.
BROOM CORN RULING
Rather than responding directly to a January NAFTA dispute settlement
panel ruling that the United Stats violated NAFTA when it imposed
emergency tariffs on broom corn brooms in 1996, U.S. Trade
Representative Charlene Barshefsky asked the International Trade
Commission for a study on how the broom corn industry has done since the
imposition of the tariff. The study will be completed by August 11.
Mexico may be entitled to a second round of retaliatory tariff increases
if the United States does not address the panel's findings. U.S.
strategy seems to make a speedyi resolution of the dispute unlikely. The
tariffs imposed on Mexican broom corn brooms in November 1996 amounted
to approximately a 33 percent tariff on over-quota imports.
"Barshefsky Sidesteps Direct Response to NAFTA Panel on Mexican Brooms,"
INSIDE U.S. TRADE, 5/15/98.
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NAFTA & Inter-American Trade Monitor is produced by the Institute for
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