October 27, 2005

Chirac threatens to veto world trade deal (Sophie Louet and William Schomberg, 10/27/05, Reuters)

French President Jacques Chirac warned Europe’s leaders on Thursday he would torpedo a global trade deal if EU negotiators made further sacrifices in farm protection measures to keep the talks alive.

A day before Brussels tries to revive negotiations by putting a revised farm offer to key trading nations, Chirac told EU leaders Paris was prepared to exercise its veto right to block the required unanimous European approval of any agreement.

Chirac told a news conference he had made clear at a summit that France reserved the right not to approve any agreement that went beyond a 2003 reform of Europe’s agricultural spending.

“It’s out of the question for us to take any further step,” he said. “It’s a red line of what would be acceptable for us.”

Why not just drop France from the deal and let them subsidize the whole world’s truffle consumption, or whatever they grow there?


October 25, 2005

Lost in the Woods (LAWRENCE HERMAN and GARY HUFBAUER, 10/25/05, NY Times)

AS Secretary of State Condoleezza Rice continues her talks in Ottawa today, she may find that the most acrimonious disagreement between Canada and the United States is not a question of hard power – issues like Afghanistan, Iraq and nuclear nonproliferation – but of softwood. A quarter-century-old dispute over Canadian lumber exports, which Washington claims are unfairly subsidized, has escalated to the point where it now threatens broader relations between the two countries.

If it remains unresolved, the softwood war might also spill over into the December ministerial meeting of the World Trade Organization, where Washington and Ottawa have long worked together to expand free trade. What kind of example does it set for the rest of the world if the United States and Canada – close neighbors, each other’s largest trading partner and crucial allies – cannot resolve their own trade disputes?

American and Canadian lawyers, lobbyists and negotiators have been fighting on and off over Canadian lumber exports to the United States since the 1980’s. In 1982, a coalition of 250 American lumber mills claimed that Canadian provinces were subsidizing lumber exports by charging set “stumpage fees” – the price forest companies paid when harvesting standing timber – while American mills were paying open market prices. While the fight over things like stumpage fees is complex enough, it got a sharp twist in 2000 when Congress passed an amendment giving American companies injured by foreign trade the punitive duties imposed by the United States, which in the case of Canadian lumber exports now amount to about $5 billion.

Never mind that the right of the United States to impose such duties is in dispute…

Even if the trade dispute is moronic and the duties foolish, we can’t cede our right to act in our own perceived national self-interest.


October 21, 2005

France digs in heels on farm subsidies (Tom Wright, OCTOBER 20, 2005, International Herald Tribune)

France on Thursday dug in on its refusal to permit new cuts in European farm supports that are needed to advance global trade talks, irking the United States and raising questions about whether a blueprint to lower trade barriers around the world can be completed before a crucial set of talks scheduled for December in Hong Kong.

The showdown put Peter Mandelson, the European Union’s chief trade negotiator, under renewed pressure to find a way to open European farm markets after the United States last week offered to cut agricultural subsidies to restart the round of trade talks, known as the Doha round for the city in Qatar where they began in 2001. [...]

Developing countries led by Brazil are anxious to overhaul this system, which they say encourages overproduction and crushes the livelihood of their farmers as agricultural products subsidized by rich countries depress global food prices.

The United States also sees an opportunity to reduce some $19 billion worth of agricultural subsidies, as corporations and a growing body of U.S. farmers complain that the backlash against these subsidies has caused trading partners to seal off market access to a variety of U.S.-made goods.

Getting Europe to reduce its barriers would open up markets for American farm exports. But European farmers, supported by $60 billion in annual subsidies, are vehemently opposed to any change in the current system.

In countries like France, politicians often view farm reform with suspicion, equating it with attempts to undermine the French way of life.

Nicolas Sarkozy, the French interior minister, said Thursday in an opinion piece published in the French business newspaper Les Echos that further reform was “not acceptable.” He said it would mean a dismantling of Europe’s Common Agricultural Policy, which dictates farm subsidies across the EU, and would put “an end to Europe’s status as an agricultural power.”

The Australian trade minister, Mark Vaile, lashed out at that stance, saying, “France and other EU members have taken the EU to the brink of collapsing the round.”

Rather than adjusting to the most dysfuntional person in the room, why not leave him in his room by himself while the rest of us get on with life?


October 19, 2005

Tables may be turned on US over Kyoto (Lisa Plit, 9/29/05, Business Day)

ALTHOUGH the US, the world’s leading carbon polluter, remains outside the Kyoto Protocol, its hand could well be forced in the not too distant future. Having declined to ratify Kyoto, the US is not obliged to meet the emission reduction targets the protocol lays down, ostensibly on the grounds that it would hurt the US economy.

By staying out, the US could gain significant economic advantage over its industrialised counterparts that are party to the protocol as they will, in the short term, incur major implementation costs.

Not surprisingly, these countries are so peeved that they may turn to the World Trade Organisation (WTO).

The General Agreement on Trade and Tariffs, predecessor to the WTO, contained a provision that could be used to provide some protection for the environment. It recognised that, in exceptional circumstances — including the need to protect human, animal or plant life or health, and to conserve exhaustible natural resources — international trade could be

The WTO founding documentation states that while “trade and economic endeavour should be conducted with a view to raising standards of living”, it should allow “for the optimal use of the world’s resources in accordance with the objective of sustainable development”. It should also seek to protect and preserve the environment and enhance the means for doing so “in a manner consistent with their respective needs and concerns at different levels of economic development”.


September 24, 2005

Mandelson extends olive branch on subsidies (James Kanter, 9/24/05, International Herald Tribune)

Europe will have to be prepared to curb subsidies to Airbus if a settlement is reached with the United States in the dispute over government aid to the aircraft maker and its chief rival, Boeing, the top European trade negotiator said Friday.

The candid warning from the European Union’s trade commissioner, Peter Mandelson, to his own side signaled a desire to restart talks with Washington, even as a dueling lawsuits at the World Trade Organization inched forward Friday. [...]

If talks do restart, “then European government funding will have to adapt to the outcome of those negotiations,” he added, referring to the millions in development loans provided to Airbus – aid that Washington insists be cut off.

Any settlement is preferable to ceding power to the WTO.


August 7, 2005

U.S. sovereignty slip-sliding away (Henry Lamb, 8/06/05,

It began in 1994. All the attention was focused on the new WTO emerging from the Uruguay round of GATT negotiations. Little attention was paid to the Summit of the Americas meeting in Miami. The assembled ministers agreed to create a Free Trade Agreement of the Americas and that it would be completed by January 2005, entering into force by December 2005.

For ten years, 34 governments have been conducting negotiating sessions throughout the Americas, fashioning a new trade agreement that will swallow up both NAFTA, the North American Free Trade Agreement, and CAFTA, the Central American Free Trade Agreement, and, quite literally, much of the U.S. Constitution.

The final draft agreement addresses every aspect of trade in the Western Hemisphere and requires that every dimension of the agreement be “WTO compliant.” Chapter II contains two provisions that should disqualify the document immediately from any serious consideration by the U.S. Congress.

Article 4.2 contains this language:

4.2. The Parties shall ensure that their laws, regulations and administrative procedures are consistent with the obligations of this Agreement. The rights and obligations under this Agreement are the same for all the Parties, whether Federal or unitary States, including the different levels and branches of government. …

This language requires that existing laws – at every level of government – be conformed to the requirements of the agreement. It requires that all future laws conform as well. The effect of this agreement takes away law-making power from duly elected representatives of the people and gives it to unelected bureaucrats, most of whom represent foreign nations.

This language is consistent with the WTO, NAFTA and CAFTA, all of which were approved by Congress. Both NAFTA and the WTO have required revisions of dozens of domestic laws. CAFTA will do the same, and the FTAA will continue to take away laws that the peoples’ representatives have enacted.

This process is transforming the meaning of national sovereignty.

While freer trade is a laudable goal, we should only free it unilaterally or bilaterally, not transnationally.


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