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Date: Fri, 5 Feb 1999 15:15:29 -0600
From: NAFTA Monitor <
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Subject: NAFTA & Inter-American Trade Monitor Vol. 6, Number 2
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Date Posted: 02/05/1999
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NAFTA & Inter-American Trade Monitor - Vol. 6, Number 2 February 05, 1999
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Table of Contents
- PROBLEMS WITH NAFTA-NEWS LIST
- CANADIAN BGH BAN CONTINUED
- U.S. BLINKS ON BANANAS
- YANOMAMI CHARGE BIO-PIRACY
- TRADE AND BIO-SAFETY AGREEMENTS
- MEXICAN BUDGET CUTS AG EMPHASIS
- CORN TRQ EXCEEDED
- TOUGH TIMES FOR TRADE LEGISLATION
- RESOURCES
PROBLEMS WITH NAFTA-NEWS LIST
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CANADIAN BGH BAN CONTINUED
In mid-January, Health Canada officials ruled that
a ban on the use of recombinant bovine
somatotrophin, the bovine growth hormone
known as BGH or rBST, will continue. The
Canadian ruling came three months before a
temporary European Union ban on rBST is due to
expire.
While the panel considering BGH health risks to
humans found no conclusive evidence of risk,
another panel found that BGH does adversely
affect the health of dairy cows, causing a 50
percent increase in lameness, an 18 percent
increase in infertility, and a 25 percent increase in
mastitis. "It's a decision that's based on more than
nine years of comprehensive review," said Joel
Weiner, an acting director of the Health Protection
Branch.
The Canadian government asked for reports from
two outside panels after its own scientists testified
before a Canadian Senate committee that they had
been pressured by the chemical industry and
politicians to approve BGH. Health Canada
scientists agreed with the findings of the two
panels and with the continuance of the ban on
BGH.
Ray Mowling, a vice president of Monsanto
Canada said that his company, which has invested
millions in BGH research and development, will
respond to the decision and charged that the
investigative reports were full of errors. Mowling
noted that Monsanto has the right to appeal the
decision to the department or to take the case to
court or to challenge the ruling under NAFTA.
BGH was approved for use in the United States in
1993 and has been used in Mexico and Brazil
since 1988. The U.S. Center for Food Safety
(CFS) and other consumer groups have petitioned
the U.S. Food and Drug Administration to reverse
its 1993 decision. The Codex Alimentarius, an
international food standards agency, will meet this
summer to consider approval of BGH.
"Canada Upholds Hormone Ban; Could Rekindle
Debate With US," ASSOCIATED PRESS,
January 19, 1999; Mark Bourrie, "Canada Rejects
Bovine Growth Hormone," INTERPRESS
SERVICE, January 17, 1999; Kelly Morris,
"Who's Crying Over Spilt Milk?" THE LANCET,
January 23, 1999; Barry Wilson, "BST Decision
Called Good and Bad," WESTERN
PRODUCER, January 28, 1999; Scientists'
Complaints About BST Dismissed," WESTERN
PRODUCER, January 7, 1999; Barry Wilson,
"BST Rejected; Issue Not Dead," WESTERN
PRODUCER, January 21, 1999; Barry Wilson,
"Dairy Producers Call BST Rejection a Victory,"
WESTERN PRODUCER, January 21, 1999;
"Hormone Refused Over Cow Health Issues,"
WESTERN PRODUCER, January 21, 1999; Ed
Maixner, "U.S., Canada Divided on Safety of
BST to Cows," FEEDSTUFFS, February 1,
1999.
U.S. BLINKS ON BANANAS
Half a billion dollars in U.S. trade sanctions
against half a billion dollars of European Union
exports, scheduled for implementation on
February 1, have been postponed until at least
March 3. The delay, characterized as a victory by
U.S. officials, came after a week of lobbying by
Japan, Canada, India and other countries not
directly involved in the U.S.-EU banana dispute.
The other countries argued that the U.S. request
for sanctions could not be considered until after a
WTO panel had ruled that the EU's amended
banana regime was illegal.
The United States says that the European Union's
new banana regime, adopted after WTO rulings
ordering the EU to end unfair discrimination
against U.S. distributors of Latin American
bananas, does not constitute full compliance with
WTO rulings. The EU says it does.
The European Union formally notified the WTO
disputes settlement panel that it intends to ask for
a ruling on U.S. imposition of sanctions under
Section 301 (of the U.S. Trade Act) at the
February meeting of the dispute settlement body.
The EU move came after the United States sought
WTO approval of its sanctions in late January.
Frances Williams, "US Postpones EU Sanctions,"
FINANCIAL TIMES, January 30, 1999; "EU
Mounts WTO Challenge to U.S. Trade Sanctions
Law," REUTERS, January 29, 1999; "Legal Gaps
in WTO Fan Flames of EU/US Banana Dispute,"
INTERPRESS SERVICE, January 13, 1999;
Chakravarti Raghavan, "US-EC Raise Stakes in
Banana War," INTERPRESS SERVICE, January
22,1999; Chakravarti Raghavan, "US-EC Banana
Saga Continues With No Compromises,"
INTERPRESS SERVICE, January 28,1999; Earl
Moxam, "Caribbean Bands Together in Banana
Dispute," REUTERS, January 28, 1999; Robert
Evans, "WTO Chief Pushes for End to Banana
Trade Deadlock," REUTERS, January 29, 1999;
"WTO Members Avert Procedural Crisis on
Bananas; Will Meet Again Today," INSIDE US
TRADE, January 29, 1999.
YANOMAMI CHARGE BIO-PIRACY
The Venezuelan Ministry of the Environment
signed a contract with the University of Zurich in
January, permitting the university access to
genetic resources in the Yanomami area.
Guillermo Guevara, coordinator of the
Organization of Indigenous Peoples of the
Amazon State (ORPIA), denounced the
agreement because it was arrived at without
notification to or approval of the Yanomami
population that lives in the zone. Guevaro said
that the agreement amounts to theft of the
ancestral knowledge and bio-diversity of the
community, because the university plans to patent
life forms developed by the indigenous people
over generations.
"ORPIA hasn't endorsed the agreement because it
considers that it's another version of plundering
our land's bio-diversity and our people's ancestral
heritage," said Guevaro. "Amazon Basin
Indigenous Community (COICA) groups have
taken a decision against the westernized patent
system. (Cartagena Decision No. 391)."
The agreement provides for payments to
indigenous groups that cooperate with the
university's activities and to the Ministry of the
Environment.
Mireya Tabuas, "Biopirataria Suiza en Area
Yanomami," EL NACIONAL (Caracas), January
26, 1999; "Yanomami Indian Elders Accuse Swiss
University of Hidden Agenda," VENEWS,
January 27, 1999.
TRADE AND BIO-SAFETY AGREEMENTS
Some 150 signatories to the Convention on
Biological Diversity are negotiating a Biosafety
Protocol that would affect trade in products
containing genetically modified organisms. The
United States has not ratified the Convention on
Biological Diversity, so it cannot vote on the
Protocol, which is scheduled for adoption in
February.
The United States wants to keep the scope of the
protocol narrow, so that it applies only to GMOs
that might be planted in the environment, not to
food or other products that will be consumed
directly by animals or humans. A number of
developing countries want the protocol to provide
for labeling of any products containing GMOs.
The purpose of the protocol is ensuring the safety
of existing species by restricting import of
agricultural products that might threaten those
species. A December 14 industry letter to
President Clinton objects to the inclusion of food,
beverage and consumer products in the biosafety
protocol, alleging that such inclusion would
conflict with WTO rules proscribing any
regulation not based on science.
A December 21 letter signed by more than 70
NGOs and individuals advocated agreement to a
"rigorous protocol based on the Precautionary
Principle, which the United States endorsed at the
1992 Earth Summit."
"U.S. Fights to Reduce Impact of Biosafety
Protocol on GMO Trade," INSIDE US TRADE,
January 8, 1999.
MEXICAN BUDGET CUTS AG EMPHASIS
Measured as a percentage of the country's Gross
Domestic Product, Mexico's 1999 agriculture
development budget is at the lowest level in the
last 25 years and is 20% less the 1998 agricultural
development budget. The 1999 Mexican federal
budget calls for agriculture to receive
approximately four percent of total expenditures,
compared to 5.18 percent in 1998 and up to 10
percent in past decades.
The lower agricultural development budget comes
as staple food prices are being allowed to rise. The
quasi-public company LICONSA, which assists
the poor with low-cost milk, increased its milk
prices from 2.00 to 2.50 pesos per liter in mid-
January. Lifting of price controls resulted in tortilla
prices increasing from 3 pesos per kilogram to as
much as 7 pesos at the beginning of January. Corn
tortillas account for about half of the daily caloric
intake of poor Mexicans. By late January, corn
flour producer and tortilla association
representatives said they would voluntarily limit
the price of tortillas to 3.5 pesos per kilogram.
"Lower Ag Budget for 1999," FUTURES
WORLD, January 21, 1999; "LICONSA
Increases Milk Prices to the Poor," FUTURES
WORLD, January 21, 1999; Ginger Thompson,
"Tortilla Rises: Must Belts Tighten?" NEW
YORK TIMES, January 4, 1999; John Ward
Anderson, "Tortilla Price Hike Hits Mexico's
Poorest: Five Years After NAFTA, Trickle-Down
Has Yet to Trickle," WASHINGTON POST,
January 12, 1999; Dudley Althaus, "Malnutrition
Gnaws at the Children of Mexico," HOUSTON
CHRONICLE, December 27, 1998; Robert
Randolph, "Mexico Untethers the Price of Corn
Tortillas," JOURNAL OF COMMERCE, January
8, 1999; "Voluntary Pact Ends Tortilla Price
Surge in Mexico," MILLING AND BAKING
NEWS, January 19, 1999.
CORN TRQ EXCEEDED
According to Mexico's Secretariat of Commerce
and Industrial
Development (SECOFI), import certificates for
5.862 million metric tons (MMT) of U.S. corn
were issued for 1998. The NAFTA tariff rate
quota (TRQ) is only 2.815 MMT of U.S. corn.
Not all of the import certificates were used,
however. SECOFI said that 4.375 MMT of corn
was imported from January-November and
estimates that the final 1998 figure will be no
more than 5 MMT. The United States was
apparently the sole supplier of imported corn to
Mexico in 1998.
On December 11, SECOFI's Corn Allocation
Committee decided to delay the initial allocation of
1999 import permits until January, in order to
obtain more information on the results of Mexico's
corn harvest, which was delayed due to late rains.
According to the Foreign Agricultural Service of
the U.S. Department of Agriculture, U.S. corn
exports are expected to increase by about 5.8
million tons in 1999 to a global total of 43.5
million tons, but the average price for export corn
for 1998-1999 will probably fall 13 percent to $98
a ton.
"Mexico Reports 1998 Corn Imports Exceed
NAFTA TRQ," FUTURES WORLD, January 13,
1999; "Farmers Seek Spark in Grain Export
Bottom Line," JOURNAL OF COMMERCE,
January 27, 1999.
TOUGH TIMES FOR TRADE LEGISLATION
In addition to seeking fast-track trade negotiating
authority, the Clinton administration trade agenda
for 1999 includes initiatives ranging from new
trade preferences for Africa and the Caribbean
Basin to the opening of a new round of global
trade negotiations to reduce tariffs in Seattle in
November. Fast-track authority would allow the
president to negotiate trade deals that the Senate
would have to accept or reject without
amendment.
U.S. public opposition to expanded trade has
increased with recent expansion in steel imports
from Japan, Russia, Korea and Brazil. Japan's
steel exports to the United States grew 500
percent last year. The 1998 U.S. trade deficit is
forecast at a record-breaking $170 billion, and
some analysts predict a1999 deficit approaching
$300 billion.
Fast-track negotiating authority still faces an uphill
battle in Congress, where Democrats and a few
Republican allies want to see inclusion of labor
and environmental protection provisions. Even if
the fast track legislation authorized inclusion of
such provisions in trade agreements, other
countries could be expected to oppose their
inclusion. Mexico, for example, continues to
oppose any environmental protection provisions in
trade agreements, arguing that dialogue with
environmental and other groups is best done on a
domestic level and has no place in international
trade accords.
Jim Lobe, "Clinton Faces Tough Fight for Trade
Agenda," INTERPRESS SERVICE, January 27,
1999; Kevin G. Hall, "Mexico Adamant About
Keeping Environment Out of Trade Talks,"
JOURNAL OF COMMERCE, January 26, 1999;
Kevin Galvin, "Clinton Seeks Trade Authority,"
ASSOCIATED PRESS, January 28, 1999;
"Industry Groups Cautious on Push for Fast
Track This Year," INSIDE US TRADE, January
29, 1999; "Lott Urges CBI Action This Year;
USTR to Hold Off on Proposal," INSIDE US
TRADE, January 29, 1999; William Roberts,
"Executives Lobby to Pass Fast-Track,"
JOURNAL OF COMMERCE, January 28, 1999;
William Roberts, "Clinton Seeks Consensus on
Freer Trade," JOURNAL OF COMMERCE,
January 21, 1999.
RESOURCES
The AGRIBUSINESS EXAMINER: Monitoring
Corporate Agribusiness From a Public Interest
Perspective. A.V. Krebs, Editor\Publisher.
Weekly newsletter available by email. Send
request to:
[email protected]. No subscription
fee, but donations may be sent to A.V. Krebs,
P.O. Box 2201, Everett, Washington 98203-0201.
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NAFTA & Inter-American Trade Monitor is produced by the
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