WTO Ministerial Section • Volume 2 • Number 18 • 18th May 1998
EU-U.S. work to reach agreement on transatlantic issues
EU and U.S. negotiators this past weekend were to be on round-the-clock call as the two sides work furiously to reach agreement on the long- running trade dispute over U.S. sanctions laws. The EU-U.S. summit to be held Monday prompted the mad-dash at resolution: the summit was originally to focus on the proposed New Transatlantic Marketplace (NTM) which would expand free trade between the two trade powers. However, the proposal was put on hold last month after European trade ministers agreed that resolving long-standing disputes with the U.S. over Helms- Burton and Iran-Libya Sanctions (ILSA) laws was a “precondition” for moving expanded EU-U.S. trade forward. Both sides agreed that the summit was an important deadline for reaching an agreement in the dispute. The U.S. laws are attempts to curb foreign investment in expropriated property in Cuba and energy development in Iran and Libya.
An April 28 draft of a EU-U.S. agreement on the Helms-Burton dispute showed that the EU has dropped its demand for a ban on U.S. unilateral sanctions, although there was no agreement in the draft as to how sanctions would be put in place. If a deal is reached this week, it will probably include an agreement on common “disciplines” on investment in expropriated property and common “principles” on trade sanctions against third parties. The EU is reportedly pushing for “secure and lasting” waivers from all forms of US extra-territorial legislation.
The NTM was not doomed solely over Helms-Burton: the U.S. was lukewarm towards the proposal because it did not include agricultural liberalization. The U.S. is pushing for reform of the EU Common Agricultural Policy, especially with regards to subsidies. Meanwhile, farm groups from the U.S., Europe and Canada last week issued a joint statement in time for the EU-U.S. summit and the WTO ministerial, decrying the global impact of increased trade liberalization by the EU and U.S.on small farmers. The groups claim that liberalization has forced farmers to sell their crops at below production prices. The groups argue that in Canada, agricultural food exports have doubled since 1989 while farm income has decreased by 41 percent during the same period.
The groups claim that liberalization has forced thousands of smaller, family farmers out of business, and provokes a “neo-dumping” of farm products by increasing the share of world trade for the EU and US while at the same time causing a price collapse throughout the world. The groups called for a shift toward “sustainable family farm based agriculture,” that includes among other provisions that the WTO abolish the five percent minimum market access rule in recognition of a country’s right to protect its market from unwanted food imports. The group also called for the elimination of direct or indirect export subsidies and aggressive export policies so that domestic food needs would be first met by domestic producers, as well as for the institution of income support polices linked to production.
“Helms-Burton: EU and U.S. Head For Tough Talking,” FINANCIAL TIMES, May 15, 1998; “U.S., EU struggling to arrive at new trade agenda for summit,” INSIDE U.S. TRADE, May 15, 1998; “Joint statement on WTO- agricultural policies,” Coordination Paysanne Europeenne, May 18, 1998.