Bridges Weekly Trade News Digest • Volume 8 • Number 1 • 14th January 2004
G8 Targets Social Issues, Employment
LEADERS DISCUSS TRADE AT AMERICAS SUMMIT
The heads of state of 34 countries of the Americas met at a Special Summit in Monterrey, Mexico from 12-13 January to discuss, among others, efforts to combat poverty, promote social development, and achieve economic growth with equity. Trade issues featured high on the agenda, in particular in relation to the Free Trade Area of the Americas (FTAA). While US President Bush spoke out in favour of free trade and an expedient completion of the controversial FTAA, other leaders, in particular Venezuelan President Chavez, Brazilian President Da Silva, and Argentinean President Kirchner called for a focus on social issues. Chavez called for a "new moral architecture" in the region "favouring the weakest," including the establishment of a humanitarian fund and Da Silva rejected "a perverse model that wrongly separated the economic from the social, put stability against growth and separated responsibility from justice". In their final, watered-down Declaration of Nuevo León, the leaders — on the subject of trade — reaffirmed their commitment to the Doha round of trade talks, recognised the essential role of agricultural trade, and supported the agreement by ministers at Miami in November 2003 to conclude the FTAA "in the established timetable" (for information of the FTAA Summit see BRIDGES Weekly, 26 November 2003). The leaders also agreed to hold anti-graft discussions.
To access the Declaration of Nuevo León, visit http://www.oas.org/main/main.asp?sLang=E&sLink=http://www.oas.org/documents/SpecialSummitMexico
ICTSD reporting; "Bush lays into the left at Americas summit but agrees concessions," THE GUARDIAN, 14 January 2004; "Leaders agree to back trade area for Americas - In concession to Brazil and Venezuela, accord does not include deadline," BALTIMORE SUN, 14 January 2004; "Modest gains for Bush at Summit of Americas - Sweeping promises, sharp divisions as 34-nation meeting ends," SAN FRANCISCO CRONICLE, 14 January 2004.
SOUTH ASIAN NATIONS AGREE FREE TRADE DEAL
The foreign ministers of the countries in the South Asian Association for Regional Cooperation (SAARC) signed a framework agreement for free trade on 6 January at their 12th summit in Islamabad, Pakistan. The seven countries involved — Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka hope to improve economic cooperation and development in the region, populated by 1.4 billion of which 40 percent live on less than a dollar per day, through the South Asia Free Trade Agreement (SAFTA). The trade accord will enter into force in 2006, with India, Pakistan and Sri Lanka cutting tariffs to between zero and five percent within seven years, and the other parties within ten years. Increased cooperation under the SAARC, which has been in existence for 18 years, has been hampered by the tense relations between India and Pakistan. The new free trade deal was seen by observers as a sign of improved relations between these two key members, and its prospects as depending on those relations. Pakistani Prime Minister Mir Zafarullah Khan Jamali, who chaired the final session of the meeting, said the signing of the SAFTA agreement represented a "historic milestone" for the South Asian region. Others were more cautious, with Sri Lankan President Chandrika Bandaranaike Kumaratunga noting that "the conclusion of SAFTA may not automatically lead to enhance intra-regional trade. We need a number of trade facilitation measures in order that we achieve the benefits of SAFTA. Let us never forget that in spite of our geographic proximity and similarity of economic infrastructure, that intra-SAARC trade still remains at an extremely unsatisfactory five percent, compared for instance, with 38 percent within ASEAN".
To view a copy of the agreement, visit http://www.dawn.com/2004/01/07/top6.htm
"South Asian leaders ink framework agreement on free trade," HI PAKISTAN, 6 January 2004; "South Asia free-trade pact agreed," BBC, 6 January 2004; "SAFTA alone not enough to boost intra-regional trade - CBK," SRI LANKA DAILY MIRROR, 7 January 2004; "Hopes high for South Asian trade bloc to emerge from summit," CHANNEL NEWS ASIA, 5 January 2004.
WORLD BANK STUDY DETAILS EFFECTS OF NAFTA AT TEN
The World Bank released a report on the tenth anniversary of the North American Free Trade Agreement (NAFTA) in late December 2003, highlighting some of the agreement’s impacts on Mexico. The report — entitled "Lessons from NAFTA for Latin America and the Caribbean Countries: A Summary of Research Findings" — estimates that although global exports, foreign direct investment and per capita income have increased, partially due to NAFTA, the agreement alone "is not enough for Mexico to achieve economic convergence with Canada and the US". The report recommends reforms to improve macroeconomic stability, the improvement of institutions and the investment climate, and the establishment of educational and innovation systems that foster technological and productivity growth. Guillermo Perry, World Bank Chief Economist for Latin America and the Caribbean noted that "the most developed and competitive regions and sectors have clearly benefited from the trade liberalisation, while those lagging behind have not". While technologically advanced businesses and larger agricultural enterprises in Mexico were able to increase exports, those less advanced or smaller generally reaped fewer benefits from the agreement.
The Carnegie Endowment for International Peace recently released a similar report (see BRIDGES Weekly, 26 November 2003).
To access the study visit http://wbln0018.worldbank.org/LAC/LAC.nsf/ECADocbyUnid/32E02C48D1A7695685256CBB0060CA65?Opendocument
"Lessons from NAFTA for Latin America & the Caribbean," WORLD BANK RELEASE, 17 December 2003; "World Bank says NAFTA gave Mexico a healthy boost," REUTERS, 17 December 2003.
Labour ministers from the Group of Eight (G8) industrial nations met in Stuttgart from 14 -16 December 2003 at a meeting on "Growth and Employment: The Future of the Working Society in a Changing World" to tackle social and employment issues. In a joint statement, the group recognised "the need for increased collaboration by international institutions with respect to the impact of global policy issues on employment policy" and suggested the development of an inter-institutional dialogue forum comprising the UN International Labour Organisation (ILO), UN Conference on Trade and Development (UNCTAD), the WTO, World Bank, and International Monetary Fund (IMF). The G8 labour ministers encouraged the WTO to continue its efforts to move forward on the Doha round of trade talks, underlining the importance of world trade and economic integration in its contribution to global growth and employment creation.
The Canada, France, Germany, Italy, Japan, Russia, the UK, and the US make up the G8. In addition, representatives from the ILO, the European Commission and the OECD were present at the meeting, and ministers held consultations with the business community and trade unions. The G8 Heads of State will meet this year in the US.
"ILO Director-General welcomes G8 call for stronger social and employment dimension of globalisation," ILO PRESS RELEASE, 17 December 2003; "Fair Employment Tops G-8 Labour Ministerial Meeting", UN WIRE, 18 December 2003.
CLOSER TRADE LINKS IN SOUTH AMERICA
On 16 December 2003, the MERCOSUR countries Argentina, Brazil, Paraguay and Uruguay and three members of the Andean Community (Colombia, Ecuador and Venezuela) signed an Economic Complementary Agreement envisaged to create a free trade area between both blocks, to come into effect on 1 July this year. The agreement concluded a process that began in 1995, and will include a tariff reduction schedule for goods with phase-out periods of ten to 15 years, depending on the level of development of the member countries. It also includes language referring to other trade disciplines such as antidumping, countervailing and compensatory measures, sanitary and phytosanitary measures, rules of origin, and contemplates a dispute settlement mechanism.
Also on 16 December, Peru concluded its negotiations with MERCOSUR to become an associated member. Bolivia is already an associated member of MERCOSUR. These two agreements, along with the Complementary Agreement between MERCOSUR and Colombia, Ecuador and Venezuela — although limited in scope — provide a stepping stones for South American regional integration, something Brazil actively has been supporting in the recent months.
"Nace en Montevideo el área de libre comercio de Suramérica," EL TIEMPO, 17 December 2003; "Perú es aceptado en el MERCOSUR," EL MERCURIO, 17 December 2003; "Se conformó un poderoso bloque sudamericano," LA REPÚBLICA, 17 December 2003.
ELEPHANTS STILL POACHED FOR ILLEGAL IVORY TRADE
Undercover investigators from the WWF and the wildlife trade monitoring network TRAFFIC recently discovered that Nigeria, Ivory Coast, and Senegal are selling illegal ivory in record volume. The investigators found ivory that had been poached illegally equalling the amount from over 760 elephants — more elephants than live in the wild in these three countries. The ivory came mainly from the Democratic Republic of Congo, Cameroon, Central African Republic and Gabon, were the elephant population is being threatened. Conservation groups believe that only 400-600,000 elephants, which is between one to twelve percent of the population 70 years ago, remain in all of Africa. Passed in 1989, the Convention on International Trade in Endangered Species (CITES) banned the sale of ivory obtained by poaching and listed elephants as an endangered species. However, CITES is being inadequately implemented in these three African nations. Susan Lieberman, director of WWF’s International Species Program, believes that "not only is there a lack of political will to implement CITES… [but] corruption is preventing effective controls on the ivory trade".
The report is available at http://www.panda.org/downloads/species/westafricanivoryreport.pdf
"Illegal Ivory Trade Thrives in West Africa," ENS 15 December 2003; "Green Groups Accuse Three African States Over Ivory," REUTERS, 17 December 2003.