Bridges Weekly Trade News Digest • Volume 7 • Number 35 • 23rd October 2003
Islamic States Consider Creating Free Trade Area
NEW REPORTS ON GM CONTAMINATION
A new report published by the UK government on 16 October shows that conventional varieties of oilseed rape, maize and sugar beet are contaminated with GM straits in a much faster way than previously expected. The report shows that bees can pollinate conventional oilseed rape with pollen from GM oilseed rape over a distance of 26 km. The report was originally commissioned to assess the impact on farmland wildlife of planting the herbicide-resistant GM crops. With regards to wildlife, the report shows that in GM beet fields there were 60 percent fewer weed seeds, less butterflies and fewer bees and in GM oilseed rape there were 80 percent fewer weed seeds and also less butterflies. The report concludes that this ultimately could lead to a decline in bird populations. In a press release Margaret Beckett, the UK environment minister said: "The trials demonstrate the precautionary approach which the government has taken on GM crops [...] the results will be considered as part of the comprehensive risk assessment undertaken for every GM crop". The results of the report will now be passed on the Advisory Committee on Releases to the Environment that will advise the government on the implications of the report. Concurrently with the release of the report Monsanto, a biotechnology firm, declared that it would close its research plant in Trumpington, Cambridge.
In related news, a new report sponsored by a group of Mexican farmers and indigenous communities, has revealed that Mexico’s traditional maize crop is far more contaminated with DNA from genetically modified (GM) maize than previously thought. The study tested 2000 maize plants from 33 communities in nine Mexican states as positively contaminated with the DNA from GM maize, including with DNA from the StarLink variety, which was developed by US-based Aventis, and is only allowed for animal feed in the US due to concerns that it causes allergic reactions in humans. So far four government-sponsored studies have been undertaken in Mexico over the past two years to examine whether maize in Mexico, which is the centre of origin for maize, is contaminated by GM maize. Each study found various degrees of contamination, despite a moratorium on the planting of GM maize.
"Farm-scale evaluations of GM crops - results published," DEFRA, 16 October 2003; "Maize Rage in Mexico," ETC Group, 10 October 2003; "Mexican Maize Meets Banned Variety," IPS, 14 October 2004; "New Research Highlights Dangers of Modified Crops," Friends of the Earth, 14 October, 2003.
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JAPAN, MEXICO TO CONTINUE FREE TRADE TALKS
Japan and Mexico failed to agree on a free trade deal as planned during a visit by Mexican President Vicente Fox to Japan on 16 October. However, Japanese Prime Minister Junichior Koizumi — speaking at a news conference after an Asia-Pacific Economic Cooperation Summit held from the 20-21 October — said he wished to continue bilateral trade talks with the Mexican President. Koizumi signed an initial agreement during a trip to Mexico in October 2002 and wanted to conclude the free trade pact, the Japan-Mexico Economic Partnership Program, before Fox’s visit to Japan this month. However, the parties were unable to agree. Japan did not want to lower tariffs on pork and orange juice, fearing the repercussions from powerful farm lobbyists a few weeks before elections. Both countries were also divided over Mexican car exports and Japanese corporate bids for Mexican government contracts.
Mexico hoped a signed trade deal can boost its economy, which was forecasted to grow by around 2 percent this year. Signing this free trade deal was also important for Japan, especially to its industrial groups, which export five times more to Mexico than Japan imports. Japan also does not want to be left behind after the breakdown of talks in Cancun, after which many countries started focussing on bilateral or regional negotiations. For the moment, Japan only has one free trade agreement, with Singapore. The pact is uncontroversial, and with a country that exports few politically sensitive products such as agricultural or steel.
"Japan-Mexico Free Trade Talks Falter," THE NEW YORK TIMES, 17 October 2003; "Japan, Mexico FTA talks to resume soon-Koizumi," REUTERS, 21 October 2003; "Japan, Mexico split over farm products," ASSOCIATED PRESS, 13 October 2003.
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US CONSIDERS IMPOSING TRADE SANCTIONS OVER ICELANDIC WHALING
In order to assess whether to impose trade sanctions against Icelandic fish exports, the US Commerce Department is currently reviewing Iceland’s whaling practices under the Pelly amendment of the US Fishermen’s Protection Act from 1962. The Pelly amendment allows the US to impose sanctions on nations whose action diminish the effectiveness of an international conservation programme. In this case, the Commerce Department is considering whether Iceland’s whaling practices diminish the effectiveness of the International Convention for the Regulation of Whaling under which a moratorium on commercial whaling was endorsed in 1986 that allows, however, for whaling for scientific purposes. This year, Iceland has hunted 38 minke whales under its scientific research programme. The Icelandic government believes that if the US imposed trade sanctions against Iceland’s fish exports, they would be in violation of WTO trade rules. The US government, if applying trading sanctions, might do so with reference to Article XX of the GATT Agreement, which allows countries to take measures to protect human, animal or plant life or health. Approximately two-thirds of Iceland’s exports are derived from marine resources. The US in 2002 bought nearly 12.7 percent of the total exports. Iceland is therefore worried that potential trade sanctions could hurt both the domestic industry, its economy and harm the international perception of Iceland.
Although the US has previously reviewed trade sanctions under the Pelly agreement, the last time trade sanctions were actually imposed on a foreign government was in 1994 when Taiwan was found to hinder the effectiveness of the International Convention on Trade in Endangered Species of Wild Flora and Fauna (CITES). The Commerce Department is expected to come to a decision within the next two weeks.
"Iceland urges US to halt Whaling Review that could lead to Sanctions," Inside US Trade, 10 October 2003; "Iceland Finishes First Scientific Whaling Season," High North Alliance, 7 October 2003.
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MIXED REVIEW ON AFRICAN DEVELOPMENT AND NEPAD
UN Secretary General Kofi Annan released a report on 14 October on the New Partnership for Africa’s Development (NEPAD) initiative. The report states that Africa has made strides in implementing the continents development plan by increasing spending on health and education, but the continent still suffers from trade inequality, brain drain and turbulent armed conflicts. Under-Secretary-General Ibrahim Gambari said the highlight of the report was that official development assistance has increased from 17.7 billion dollars in 2001 to around 18.6 billion in 2002. The UN report however also states that the modest increase in aid is more than offset by trade inequalities stemming from "huge agricultural subsidies paid to farmers in the developed countries" that depress commodity prices and harm African exporters. On the substantial debt of many African countries, pledges to reduce or cancel debts have come from Australia, Canada, China, Germany, Japan, Kuwait and the UK. The report underscores NEPAD’s African Peer Review Mechanism, created in July 2003 in an effort to improve governance and reduce corruption. Since its inception, 16 member states have volunteered to have their economic and political performance monitored by other African governments, with Nigeria as the next country in line to be evaluated by NEPAD through the mechanism.
NEPAD was created in the summer of 2001 during the 37th Summit of the Organisation of African Unity (OAU) to develop an integrated socio- economic development framework for Africa. The authority of the NEPAD implementation process lies with the Heads of State and Government Summit of the African Union, formerly known as the OAU.
For further information on NEPAD visit: http://www.nepad.org
"Africa’s Gains Offset By Trade Imbalance, Wars, UN Says," UN WIRE, 15 October 2003; "Africa making Strides But Still Suffers From Disadvantages, UN Official Says," UN PRESS RELEASE, 14 October 2003.
Participants at the OIC (Organisation of Islamic Conference) Business Forum, a two-day session held in conjunction with the 10th OIC Summit, which took place from the 11-18 October in Putrajaya, Malaysia, suggested the creation of an Islamic Free Trade Area (IFTA). In the Forum Declaration issued at the end of the meeting, delegates encouraged governments to re-formulate their policies to this effect, create an Islamic common market and institutionalise the forum as part of future OIC Leaders Summits. The declaration also suggested that the Islamic Development Bank start financing a formulation of a group of experts to investigate sub-regional cooperation possibilities.
Malaysian Prime Minister Datuk Seri Dr Mahathir Mohamed, Chair of the OIC Summit, noted at a press conference after the closing ceremony of the Summit at the Putra Convention Centre, that the formation of IFTA is "an idea that we should seriously consider". Although business leaders felt that an IFTA would encourage trade and investment between member states, the Prime Minister commented that countries needed to achieve a certain level of economic development before such an agreement could be realised.
The OIC is an inter-governmental organisation grouping of fifty-six States, established in 1969 by the Kings and Heads of State and Government of Islamic States to encourage cooperation and dialogue. The OIC leaders will meet again in 2006.
"Consider IFTA proposal - Dr Mahathir," UTUSAN MELAYU, 17 October 2003; "OIC Summit Overview: Call for unity," SM NEWS, 19 October 2003; "Proposal for formation of Islamic Free Trade Area," NEWS STRAIGHT TIMES, 16 October 2003.
FOREST GOVERNANCE CONSIDERED AT CONFERENCE IN CAMEROON
The Africa Forest Law Enforcement and Governance Process (AFLEG) Ministerial Conference took place from 13-16 October 2003 in Yaounde, Cameroon. The meeting was co-hosted by the Government of Cameroon and the World Bank. Participants included governments, international organisations, non-governmental organisations and the private sector, representing 39 countries. The conference comprised presentations on issues such as the harnessing of natural resources for growth, forest governance and legal frameworks, information and monitoring tools, and multilateral and bilateral initiatives. In addition, working groups met to discuss the implications of illegal activities in the forest sector, institutional reforms and immediate strategies, marketplace and trade issues, and tenure and related governance issues. A Ministerial Declaration was issued at the end of the conference, underlining the need for institutional and policy reforms relating to FLEG. The declaration concludes with an indicative list of actions, focusing on national level implementation, legislation and policy reform, capacity building, information, law enforcement and monitoring, wildlife resources, forest management practices, financing, and markets and trade.
For daily reports and a full summary of the meeting see IISD’s Sustainable Developments report at http://www.iisd.ca/linkages/sd/sdyao/.
"Africa Forest Law Enforcement And Governance Ministerial Conference: 13-16 October 2003," IISD, 16 October 2003.
CONSUMERS INTERNATIONAL HOLDS 17TH WORLD CONGRESS
Consumers International held its 17th World Congress in Lisbon, Portugal from 13-17 October. The Congress, which meets every three years, brought together 600 consumer leaders from 110 countries to discuss the theme of "the future of consumer protection: representation, regulation and empowerment in a world economy". Participants stressed that the increasing impacts of global trade — coupled with evermore powerful corporations — had led consumer groups to look for innovative approaches in consumer protection. They debated new challenges such as sustainable consumption in plenary sessions, fringe meetings, training sessions and workshops. Jorge Sampaio, President of Portugal, speaking in the opening session, posed the question of "who better than an organised consumer can act against threats that harm human rights and health?".
"Consumer International 17th World Congress: The Future of Consumer Protection," CONSUMER INTERNATIONAL PRESS RELEASE, 14 October 2003; "World Congress," CONSUMER INTERNATIONAL PRESS RELEASE, 14 October 2003.