Bridges Weekly Trade News Digest • Volume 8 • Number 8 • 3rd March 2004

US-Morocco Free Trade Pact Concluded

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BIOSAFETY MEETING MOVES ON LABELLING AND COMPLIANCE MEASURES

The first Meeting of the Parties to the Cartagena Protocol on Biosafety (MOP-1), convening from 23 to 27 February in Kuala Lumpur, Malaysia, took the first step towards establishing an operational framework for the implementation of the Biosafety Protocol. The meeting made important progress on documentation requirements, compliance, liability and redress and the Biosafety Clearing House. Governments reaffirmed existing documentation requirements for shipments of living modified organisms (LMOs) for use in feed and food and for processing, which need to be labelled as "may contain" LMOs, as not intended for introduction into the environment and include a contact point and the name of the importer, exporter or other appropriate authority. In addition, the Decision expands on existing requirements by urging Parties and other governments to require information on the name of the organism and the transformation event or unique identifier code. An expert group will elaborate the documentation requirements further, including labelling thresholds and additional information, for the next MOP in 2005. Moreover, MOP-1 established a 15-member Compliance Committee, which will submit reports and make recommendations to the MOP. Many delegates and observers, including the usually critical non-governmental groups, generally welcomed the agreement reached in Kuala Lumpur. The US, in contrast, expressed disappointment "that countries are moving down a path away from practical steps very quickly in the direction that could have consequences," according to Deborah Mala of the US State Department’s Biotechnology Trade Policy Division.

A more detailed report of MOP-1 will be published in the forthcoming issue of BRIDGES Trade BioRes, available at http://www.ictsd.org/biores/index.htm.

ENB Vol. 9 No. 289; "Europe OKs new rules for biotech labels," AP, 27 February 2004.

On Tuesday 2 March, Morocco and the US concluded a free trade agreement (FTA) after thirteen months of talks. The agreement is similar to the agreements the US has reached with five Central American countries in the CAFTA and the Australian-US FTA. According to Robert Zoellick, US Trade Representative, "It’s a groundbreaking (agreement) that not only slashes tariffs, but also sets a new high standard for the protection of intellectual property rights, opens markets for services, ensures government transparency and provides effective labour and environment enforcement". More than 95 percent of bilateral trade in consumer and industrial products will become free of duties immediately, with all remaining tariffs to be eliminated within nine years when the accord comes into effect. The US will phase out all agricultural tariffs under the agreement, most in fifteen years. In response to Moroccan fears over the effects of cheap American imports on sensitive agricultural products, new tariff rate quotas will be applied to durum and common wheat, and quotas for US poultry and beef exports will be established, gradually increasing over time.

The Morocco deal will "send a powerful signal to the Middle East and the rest of North Africa that the US is firmly committed to supporting tolerant, open and more prosperous Muslim societies," according to Zoellick. Taib Fassi-Fihri, Moroccan Minister of Foreign Affairs and Cooperation, hopes the deal will be viewed as a sign of trust for a number of economic and human rights reforms undertaken by the country. Morocco is the second Arab country with which the US has been able to reach a free trade agreement. The first was with Jordan in 2001. The US exports an annual average of US$ 475 million worth in products — including aircraft, corn and machinery — to this Muslim North African nation. Moroccan exports to the US have been in the same range, consisting mainly of transistors, semiconductors, phosphates and other minerals.

To access the fact sheet outlining specifics of the agreement, please see: http://www.ustr.gov/new/fta/Morocco/2004-03-02-factsheet.pdf

"US Concludes Trade Pact With Morocco," AP, 2 March 2004; "US Completes Free Trade Agreement With Morocco," CROPDECISIONS, 2 March 2004; "US Morocco Reach Free Trade Agreement," THE NEW ZEALAND HERALD, 3 March 2004.

FIRST GLOBAL CONFERENCE TO DEVELOP ANIMAL WELFARE STANDARDS

The first Global Conference on Animal Welfare, organised by the OIE (International Animal Health Organisation) took place from the 23-25 February in Paris. The first of its kind, the meeting brought together 166 member countries, both developing and developed. Participants focused on developing international standards and guidelines on the welfare of animals, including in the areas of transport by sea, transport by land, humane slaughter for consumption, and the killing of animals for disease control. Due to the recent outbreak of avian flu in Asia, the issue of killing for disease control drew particular attention. The standards and guidelines are expected to be finalised by 2005. The conference sought to provide an introduction to the science of animal welfare and its application in the form of standards and principles, addressing concerns that standards are not scientifically based or used as a tool in order to restrict foreign competition. Animal welfare standards are rarely defined on an international level; WTO provisions currently take little account of such standards.

During the conference, the European Commission obtained official observer status at the OIE, which will allow the Commission to participate actively in future meetings. According to Health and Consumer Protection Commissioner David Byrne, European citizens care deeply about animal welfare. Italian consumer magazine "Il Salvagente" noted that "The food scares that have occurred all over the world, and increasing media interest in breeding techniques, have changed the requirement for minimum standards of animal welfare… Recent statistics have revealed that one in two EU citizens is suspicious of meat and other products of animal origin and has doubts about animal welfare conditions." In early March, Research Commissioner Philippe Busquin announced a EUR 43 million investment plan to improve the food supply chain, integrating animal welfare and food production objectives.

"EU Standards Are Flawed - Nicholson," FARMING LIFE, 31 January 2004; "EC Gains Animal Observer Status," FOOD PRODUCTION DAILY, 24 February 2004; "World Animal Welfare Standards Under Negotiation," ENS, 24 February 2004.

ENERGY SUBSIDIES IN THE SPOTLIGHT

UNEP’s Economics and Trade Programme recently completed a report on "Energy Subsidies: Lessons Learned in Assessing their Impact and Designing Policy Reforms". Based on case studies from a variety of developing and transition economies, the report shows that traditional subsidies to the fossil fuel sector often come at a significant cost to both the environment and state finances, and often do not effectively reach their (low-income) audience. On the other hand, well-targeted, temporary subsidies could support more sustainable energy production and use, as well as other development objectives. The report outlines methodologies for analysing the impact of subsidies and their reform. It provides lessons learned and provides guidance to policy-makers on how to design and implement energy subsidy reform.

In related news, the Global Forum on Sustainable Energy (GFSE) held its fourth meeting from 18-20 February in Vienna, Austria, on "Energy for sustainable development: reconsidering the role of incentive measures". With its focus on sustainable forms of energy and energy to support development goals, the meeting took stock of developments to date, and considered case studies and areas for action. Panellists noted, among other things, the tensions between the strong lobbies securing continued subsidies to traditional fossil fuel producers and the need for more resources for energy efficiency and renewable energy research and innovation. A concluding panel stressed that the environmental and social benefits of renewable energy are underestimated in the conventional energy debate, and stressed the need for necessary framework conditions — including legislation, policies, and incentives — to secure sustainable energy. The panel also noted that energy should be seen as part of an integrated system, and the need for an overall energy strategy. The meeting served as an input to the International Conference for Renewable Energies in Germany in June this year.

The UNEP report will be available shortly at http://www.unep.ch/etu/etp/index.htm.

A full IISD report of GFSE-4 is available at http://www.iisd.ca/sd/gfse4/

ICTSD reporting.

KENYAN FLOWER INDUSTRY WARY OF EC RESTRICTIONS

Kenyan officials have expressed concern that proposed restrictions on flower imports by the EC could have severe implications for its successful flower industry. Kenya has been the leading supplier of flowers to the region since 2001, holding 25 percent of the market. The flower industry employs over 500,000 people and has experienced steady growth over the last 30 years, even though Kenya’s economy as a whole has been on the decline. The concern, however, is that this could change as a result of measures notified by the EC to the WTO, which are designed to prevent the introduction of pests and diseases harmful to plants or plant products in its member countries. Under amendments to the EC Plant Health Directive (Council 2000/29/EC), all flower imports from developing and non-EC countries would have to pass inspections in their countries of origin, certifying that they are free of newly-classified disease causing organisms. According to the EC, the restrictions are designed to "protect humans from plant pests and diseases and to protect the EC against damage from imported pests". Furthermore, says the EC, they are consistent with "the standards, guidelines and recommendations of the International Plant Protection Convention of the United Nation’s Food and Agricultural Organisation (FAO)".

A senior assistant director in Kenya’s Department of External Trade, Elijah Manyara, said, "We have opposed this 100 per cent testing of our exports as the resultant delays will mean loss of quality, low price and shrinking of our markets". Mr. Manyara went on to call the new measures "discriminatory," citing the fact that some organisms listed under the notification exist in some EU member states, such as Portugal and Spain. However, addressing journalists after meeting with African Trade ministers and WTO officials in Mombassa in late February, EC Trade Commissioner Pascal Lamy sought to reassure his audience that these restrictions would not harm Kenya’s flower industry. Lamy pointed out that the restrictions were not new, and that Kenya’s flower industry had coped with the standards that came into effect in April 2003. He further noted that none of the organisms listed under the directive had been found in Kenya and that there was no cause for alarm.

ICTSD reporting; "Flowers: Kenya Faces New EU Threat," THE EAST AFRICAN, 16 February 2004; "Flowers: Kenya Satisfies EU’s Flower Rules" THE NATION (NAIROBI), 23 February, 2004.