US and European leaders met at a 2 May summit in the hope of staving off a looming trade war between the two largest economies in the WTO. While no tangible resolution of various trade frictions emerged from the summit itself, the leaders pledged to intensify efforts to address these. The areas of contention include the US' March 2002 imposition of a 30 percent safeguard tariff on various steel imports (see BRIDGES Weekly, 16 April 2002) and a $US4 billion US 'Foreign Sales Corporation' (FSC) tax subsidy for exporters that the WTO has already ruled illegal (see BRIDGES Weekly, 16 January 2002). A further complication is the recent farm bill passed by the US House of Representatives that would result in an over- 60 percent increase in agriculture spending and subsidies to US farmers. Sources see this latter issue as posing an even greater potential for disgruntlement in light of the Doha mandate -- which looks to, inter alia, negotiate "reductions of, with a view to phasing out, all forms of [agricultural] export subsidies; and substantial reductions in trade-distorting domestic support." Others close to the issues await reactions to the upcoming WTO ruling over the actual sanction value coming from the FSC dispute as a potential indication of how the two economic giants will move ahead with their grievances (see BRIDGES Weekly, 20 February 2002, ).

On the sidelines of the summit, US Trade Representative Robert Zoellick and EU Trade Commissioner Pascal Lamy met on 3 May at a retreat to discuss the "bigger picture" in international trade. Sources indicate one item likely to have seen airtime at the 3 May meeting is a strategy to help ensure the successful conclusion of the comprehensive new round of trade negotiations launched last November in Doha. At time of press, specific details of their discussions were not available.

"No Consensus Reached in U.S.-EU Trade Talks" AP, 2 May 2002; ICTSD Internal Files.

CIVIL SOCIETY GROUPS CALL FOR TRANSPARENCY IN GATS 'REQUEST-OFFER' PROCESS

In a 7 May open letter to EU Trade Commissioner Pascal Lamy and members of the EC's 133 Committee (the EU body dealing with trade negotiations), a group of over 90 civil society groups called for greater transparency and more assessment of the upcoming services negotiations at the WTO. The letter follows the recent leak of draft requests put forward by the EU under the auspices of the continuing negotiations on the WTO's General Agreement on Trade in Services (GATS) as mandated by paragraph 15 of the Doha Declaration (see BRIDGES Weekly, 23 April 2002). The letter cites that the 'request-offer' process currently underway -- whereby WTO Members bilaterally exchange lists of services sectors they are interested in seeing liberalised, and conversely willing to liberalise themselves -- "has so far been undertaken entirely [...] under conditions of total opacity." The groups go on to demand the publishing of all EU requests to other WTO Members by 30 May. Furthermore, they asked that this process of transparency be institutionalised and that negotiations do not proceed until a "full evaluation and impact assessment" of the implications of the current and proposed GATS obligations are conducted. Copies of the letter and the leaked requests can be found at http://www.gatswatch.org.

"Open Protest Letter To EU Trade Commissioner Lamy And EU Member States," FRIENDS OF THE EARTH EUROPE, 7 May 2002; "Open Letter To Commissioner Lamy and EU Member States On EU General Agreement On Trade In Services (GATS) Requests," GATSWATCH, 7 May 2002.