BRIDGES Weekly Trade News Digest

Lead Stories
EU MINISTERS REACH DEAL ON CAP REFORM, TRADING PARTNERS RESPOND CAUTIOUSLY	After a 16-hour negotiating marathon concluding more than a year of heated internal debate, EU farm ministers finally agreed on a compromise deal outlining the future of the European Common Agricultural Policy (CAP) on 26 June in Luxembourg. While trading partners, such as the US, New Zealand and Brazil have cautiously welcomed the EU's decision, many civil society groups rejected the reform plan as being half-hearted and not going far enough to curb over- production in Europe or to halt dumping of agricultural products on developing countries.
AGRICULTURE: WTO MEETING TAKES STOCK OF PROGRESS, DISCUSSES WAY FORWARD	The WTO Committee on Agriculture (CoA) special negotiating session met for a formal meeting on 1 July, following a number of informal meetings after Members failed to meet an end-March deadline for agreeing on negotiating modalities (see BRIDGES Weekly, 2 April 2003, http://www.ictsd.org/weekly/03-04-02/story1.htm). The session met to take stock of developments and agree on a progress report to the next Trade Negotiations Committee (TNC) meeting on 14-15 July. During the most recent informal meetings, held between 26 and 28 July, delegates discussed, inter alia, special safeguards and special products for developing countries, and the draft report to the TNC.
GMO UPDATE: EU TRACEABILITY AND LABELLING ONE STEP CLOSER; CODEX ADOPTS STANDARDS; US CONTINUES AGGRESSIVE BIOTECH STANCE	The European Parliament on 2 July adopted in its second reading two Commission proposals on the labelling and traceability of genetically modified (GM) food and feed (see BRIDGES Trade BioRes, 11 December 2002). Specifically, they approved the thresholds adopted by the Environment and Agriculture Ministers in late-2002, i.e. a threshold of 0.9 percent, below which GM products would be exempt from labelling, and 0.5 percent for the adventitious presence of GM organisms (GMOs) that are unauthorised but have nevertheless been assessed as risk-free. They also amended the draft regulations to allow EU member states to impose "appropriate measures" to avoid the unintended presence of GMOs in other products.
US RUMOURED TO CONSIDER CHANGE IN TACTIC ON TRIPS & HEALTH	According to trade sources, the US is considering changing its approach to the discussions on paragraph 6 of the Declaration on the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs) and public health, shifting its focus from disease coverage to eligibility. This change reflects the position of US pharmaceutical industries, which have reportedly called on the US government to limit the use of the paragraph 6 solution to the world's poorest countries and to implement strong measures that prevent diversion of cheap drugs to developed country markets.
DSU UPDATE: ANTIDUMPING, US-ANTIGUA/BARBUDA GAMBLING, INDIA-US TEXTILES	On 27 June, a WTO arbitrator gave the US time until 27 December this year to implement an earlier WTO ruling against its Continued Dumping and Subsidy Offset Act, upheld by the Appellate Body (WT/DS217/14, available at http://docsonline.wto.org). The ruling called for the repeal of the law, which provides US companies with anti-dumping fines collected from foreign exporters judged to be selling products at artificially low prices (see BRIDGES Weekly, 22 January 2003). The US Continued Dumping and Subsidy Offset Act of 2000, also known as the 'Byrd Amendment,' has resulted in hundreds of millions of dollars being handed over to US companies -- notably steel, candles and pasta firms. The formal complainants to the case included the EU, Australia, Brazil, Chile, India, Indonesia, Japan, South Korea, Thailand, Canada and Mexico. According to them, the 'Byrd Amendment' punished exporters twice, first by fining them and secondly by giving these fines to US competitors.

In Brief	WTO in Brief
Strategy Devised To Increase Capital Flows To Africa New Environment Charter In French Constitution US Promotes Free Trade Deal With Middle East Hong Kong, Mainland China Sign Free Trade Pact India And China Agree To Work In Concert At WTO

Events        &        Resources
Events	3 July, Brussels, Belgium: BRIEFING SESSION ON INVESTMENT RULES, SUSTAINABLE DEVELOPMENT AND THE WTO. This IISD/RIIA briefing session, part of the EU Civil Society Dialogue, will focus first on experiences with the bilateral investment treaties, and the NAFTA's investment provisions, asking whether there are lessons for the WTO negotiations, and what the relationship would be between the existing treaties and a WTO agreement. It will then ask: what are the elements of a positive agenda? That is, what sort of investment rules and institutions would foster quality investment? And what would be the challenges faced by the WTO in trying to broker an agreement with such a focus? The briefing session will highlight the outcome of discussions held during a meeting in London in April. For further information and registration, visit: http://trade-info.cec.eu.int/civil_soc/intro1.php.
Resources	THE NORTHERN WTO AGENDA ON INVESTMENT: DO AS WE SAY, NOT AS WE DID. By Ha-Joon Chang and Duncan Green (South Centre/Catholic Agency for Overseas Development, June 2003). The authors review the history of investment regulation in successful economies and argue that investment negotiations should not be included in the Doha Agenda at the next ministerial in Cancun. The authors stress that when they were net recipients of foreign investment, all of today's developed countries imposed regulations on foreign investment in order to ensure that such investment contributed to their long-term national development. One common factor is that they all took a strategic approach to foreign investment. Such a strategic approach also meant that their policy stances changed over time, according to their evolving economic structure and external conditions. The paper is available at: http://www.cafod.org.uk/policy/doaswesay200306.pdf.
BRIDGES Weekly Trade News Digest is made possible in 2001-2003 through the generous support of the Government of the United Kingdom (DFID). Additional support is provided by ICTSD's core donors: the Governments of Finland, Denmark, the Netherlands and Sweden; Christian Aid (UK), MISEREOR, NOVIB (NL), Oxfam (UK) and the Swiss Coalition of Development Organisations (Switzerland). The Weekly also benefits from support for the BRIDGES series of publications including: the Rockefeller Foundation, the John D. and Catherine T. MacArthur Foundation and Swiss Development Cooperation.