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8
August 2000
NEWS FROM THE REGIONS: NORTH AMERICA
Mexico Could Seek
WTO Panel on US Tuna Trade Ban
On 6 August, Mexico called for consultations with the US over concerns
that the US would not comply with its prior commitments to lift a trade
ban against Mexican tuna. Mexico indicated that it reserved the right
to take the issue to the WTO in the event it was not resolved. On 4
January 2000, the US Commerce Department announced that it would allow
the import of tuna harvested without incidental injury or death of
dolphins. However, the embargo remains in place. In a joint statement,
Mexico's Commerce Ministry, Environment Ministry and Foreign Ministry
said, "The US commitment to lift the embargo and modify the definition
of 'dolphin-free' tuna has not been complied with and, in a trial
before a federal court in San Francisco, the parties have agreed on
appeals processes that indicate that there will not be a decision from
the court until the middle of next year. For that reason, this grave
problem, which has existed for 12 years in spite of clear compliance by
Mexico, is still pending."
Sugar Dispute Remains Sticky Issue For US,
Mexico
Trade negotiators from the US and Mexico have missed a 1 August
deadline for resolving a dispute over Mexican sugar exports to the US.
At issue is a disagreement between the two countries over how to
interpret the North American Free Trade Agreement (NAFTA) regarding
market access for Mexican sugar to the US market. Mexico contends that,
commencing October 2000, it will be able to export an unlimited amount
of its excess sugar production duty-free to the United States under
NAFTA. The US counters that during NAFTA sugar negotiations, US and
Mexican trade negotiators exchanged letters that effectively limit
Mexico's duty-free sugar imports to the US at 250,000 tons.
The heavily protected US sugar market is currently struggling under
depressed sugar prices. The US Department of Agriculture on 1 August
proposed a scheme to pay US sugar farmers to voluntarily destroy sugar
crops in an effort to boost sugar prices. US sugar producers fear that
increased market access for Mexican sugar exports will drive prices
down further and force smaller producers out of business.
Mexico had previously threatened to take legal action under NAFTA
against the US if the sugar dispute was not resolved by 1 August. As
negotiations continue however, Mexico is looking to leverage the sugar
question against a US-Mexico dispute over market access to Mexico's
high-fructose corn syrup (HFCS) market. A WTO Panel ruled earlier this
year that Mexico violated WTO antidumping rules by imposing duties
against imports of US HFCS after considering the HFCS imports' impact
on only a part of Mexico's domestic sweetener industry. The US brought
the case to the WTO in May 1998. The Panel did not recommend that
Mexico withdraw the duties, but did call on Mexico to revise its
methodology with respect to how the duties are imposed.
"These issues cannot be unlinked," a spokesperson for the Mexican
Commerce Department (SECOFI) said. "A solution to the sugar situation
requires taking into account the fructose situation," the spokesperson
said. However, US producers of HFCS argue that sugar and HFCS are two
different products. Negotiations are expected to continue this week.
Canada,
Japan Discuss Bilateral FTA
In advance of the Group of Eight (G-8) summit meeting last month,
Canada and Japan discussed the possibility of a bilateral free trade
agreement (FTA). Japan has a long-held policy of shunning bilateral
accords in favour of multilateral agreements (e.g. WTO agreements), but
is reportedly looking at bilateral accords as a way to build momentum
for the stalled multilateral trade process. Japan has also been holding
talks with Mexico, Singapore and South Korea, amongst which talks with
Singapore have so far offered the most promise of succeeding.
Canada's Prime Minister Jean Chretien said the Japan-Canada talks were
not likely to progress pass the exploratory phase too soon. "The
problem [Japan faces] is their agriculture and forestry sector, which
is very protected. And there's no agriculture or forestry in Singapore,
of course," Mr. Chretien said, making reference to the Japan-Singapore
FTA talks.
Fox Hunting for
Mexico-Mercosur FTA?
Mexican President-elect Vincente Fox was expected to travel to Brazil,
Argentina, Chile and Uruguay from 6-11 August. Among a range of other
issues, in his talks with South American leaders Mr. Fox is expected to
discuss launching talks toward a Mexico-Southern Cone Common Market
(Mercosur) free trade agreement.
"Mexico Calls for "Urgent" Consultations On US Tuna Embargo, May Seek
WTO Panel," WTO REPORTER, 8 August 2000; "Mexico-US talks on sugar
limits continue past July 31 deadline for accord," INTERNATIONAL TRADE
REPORTER, 3 August 2000; Mexico, US continue sugar talks after
officials miss deadline," INSIDE US TRADE, 4 August 2000; "Mexico
extends talks with US over exports, tariffs on sugar," BLOOMBERG NEWS,
2 August 2000; "Canada, Japan eye free trade deal, problems seen,"
REUTERS, 21 July 2000; "Mexico's Fox aims for closer Mercosur, US
ties," REUTERS, 1 August 2000.
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