In Brief

6 March 2001

AG EXPORT CREDIT TALKS STALL AT OECD. Talks within the Organization for Economic Cooperation and Development (OECD -- an economic grouping of predominantly developed countries) aimed at harmonising the terms of use of agricultural export credit programs have stalled and it is uncertain whether they will resume at the next OECD meeting in April, Jetty Kiely, a farm trade official with the EU's delegation, said on 16 February. Originally, the OECD had intended to reach an agreement on this issue by the end of 2000 and then take the agreement to the WTO where it could be broadened to include other countries. However, as OECD members failed to meet the deadline, they are expected to ignore the issue in the upcoming April meeting and wait for the WTO to deal with it in the next round of WTO talks. OECD negotiations had broken down at the end of last year due to differences between the US and other members of the Cairns Group of agriculture-exporting countries (see BRIDGES Weekly, 21 November 2001). Member nations had discussed limiting repayment terms for export credit programs to 18 months at their last meeting, but failed to reach an agreement when Canada and Australia demanded a 12-month limit. The US, which has repayment limits for export credit programs of three and ten years, fears that an 18-month repayment ceiling would make the US program much less effective. "Pact on reducing US farm export credit terms unclear, aide says," BRIDGE NEWS, 16 February 2001.

CALLS FOR TIGHTER SANCTIONS AGAINST MYANMAR. US Senator Thomas Harkin has asked for tighter legislation against Burma on textile imports. He has vowed to introduce legislation to ban all apparel and textile imports from Myanmar over the Asian country's human rights abuses. Harkin was reacting to reports from the US embassy in Myanmar revealing that US companies such as FILA, Jordache and Arrow Gulf have increased manufacturing and purchases from Myanmar, where working conditions such as forced labour, seven cents-an-hour wages, and 24 hour a day factory work are reportedly in effect. Said Harkin, "it's outrageous that 403 million dollars from American apparel imports last year alone went straight into the coffers of Burma's brutal military regime". A release from Markin's office said that garment manufacturers in Hong Kong, South Korea, and Taiwan subcontract orders that cannot be filled under their own US quota restrictions to factories in Myanmar. In a related development, trade union leader Bill Jordan of the International Confederation of Free Trade Unions (ICFTU) told reporters that the ICFTU has urged the international community to review its relations with Myanmar so as to stop aiding forced labour practices of the military leadership. Jordan, in Japan for a meeting hosted by Japanese Trade Union Confederation on forced labour in Myanmar, said, "Myanmar has remained unrepentant despite the stance taken by the International Labour Organization (ILO) against forced labour." In November 2000, the ILO adopted a resolution noting the "persistence" of Myanmar's systematic forced labour and "severe violations of human rights". The resolution resulted from a 1998 ILO commission of inquiry that found widespread and systematic use of forced labour in Burma. "Trade union leader urges world to review trade with Myanmar," KYODO NEWS INTERNATIONAL, 1 March 2001; "US Senator to file legislation banning apparel, textile imports from Myanmar," AFP, 1 March 2001.

EU LIFTS TEXTILES QUOTAS ON SRI LANKA AND BOSNIA. Effective 1 March 2001, the European Union removed all quotas on textile imports from Sri Lanka and Bosnia. In return, Sri Lanka has bound all tariffs for the entire textiles and clothing sector at the WTO and has lowered a number of tariff peaks from 25 to 10 percent. The agreement, which was initialled in November 2000 and approved by the EU Council of Ministers on 26 February, is the first one under negotiating directives adopted by the EU Council of Ministers aimed at seeking improved market access to the EU for exporting countries. These negotiating directives are conditioned on exporting countries similarly making improvements in access to their own markets for textiles and clothing products. However, as part of the November 2000 agreement, the EU reserved the right to grant better terms to countries with which it negotiates bilateral agreements on textile trade. In a statement, EU Trade Commissioner Pascal Lamy said, "The agreement with Sri Lanka shows that the EU is ready and willing to do more to open its market for textiles and clothing to countries that are themselves ready to make concrete and tangible improvements on market access for EU exports in the sector." "EU removes textiles quotas for Sri Lanka in market access deal", EU DG TRADE PRESS RELEASE, 1 March 2001; "EU lifts quotas on Sri Lanka, Bosnia textiles", REUTERS, 1 March 2001.

CONSUMER AND PRODUCER COUNTRIES SIGN COCOA PACT.Cocoa producing and consumer countries reached a new market-stabilisation agreement at the second session of the cocoa conference on 28 February. Both producers and consumers cleared up the issues of: how to treat alternative substances used instead of cocoa in chocolate-making; a definition of the "sustainable cocoa economy"; and how cocoa consumption can be promoted. The last gathering in November 2000 failed to agree on items needed to finalise a pact to replace a 1993 accord that runs out on 30 September 2001. The new pact does not contain provisions for market intervention or price regulation that similar commodity pacts did in the 1960s and 1970s. However, in order to ensure that cocoa markets are not caught by surprise, the pact includes mechanisms for monitoring the world development of supply and demand. The pact also establishes a special ICCO (International Cocoa Organisation) consultative group, which will include representatives from both industrialised consumer states and producers, all developing countries, to advise the ICCO on market developments and help plan projects that would give producer countries a more profitable role. Laurent N'Guessan, spokesman for the producers and a delegate for the world's biggest cocoa producer and exporter, Côte d'Ivoire, said that his group was "cautiously satisfied", and referred to the pact as "more of a moral agreement" which puts a burden on consumer countries to help producers to develop. "But we are still concerned as to how far this moral duty will be carried out by the private sector in the consumer countries," he added. "New global cocoa agreement reached," UPI, 2 March 2001; "New cocoa pact aims to help farmers, officials say," REUTERS, 2 March 2001.

G8 UNDERLINE WILLINGNESS TO REACH AGREEMENT ON CLIMATE CHANGE. At their meeting in Trieste last weekend, environment ministers from the G8 countries -- the world's seven leading industrialised countries and Russia -- unanimously expressed "concern about the seriousness" of global warming. In a formal declaration, the ministers committed themselves "to strive to reach agreement on outstanding political issues and to ensure in a cost-effective manner the environmental integrity of the Kyoto Protocol." The Trieste statement reiterated that countries should achieve the bulk of their emissions reductions through cuts at home, rather than by buying the right to pollute from other countries and via other flexible mechanisms. "We commit to take the lead by strengthening and implementing national programmes and actions to reduce greenhouse gas emissions," said the G8 countries, which together produce more than half of the world's pollution. Christine Todd Whitman, head of the US Environmental Protection Agency (EPA), provided a clear and welcome signal to G8 partners that Washington was serious about global warming. "The president has said global climate change is the greatest environmental challenge that we face and that we must recognise that and take steps to move forward," she said. Environmental groups welcomed the ministers' final declaration. "The bridge has been built amongst the world's greatest polluters to pave the way for the conclusion of the Kyoto Protocol this summer," said Jennifer Morgan, director of the World Wildlife Fund's Climate Change Campaign. As announced by COP-6 President Jan Pronk last week, climate change negotiations are set to continue on 16-27 July in Bonn, Germany, at the resumed COP-6. "G8 renew pledge to tackle global warming," REUTERS, 6 March 2001; "G8 in new push for accord on global warming," FT, 5 March 2001.

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