RNM UPDATE 0311

June 6, 2003

Prepared by the Communications Division of the Caribbean Regional

Negotiating Machinery (CRNM), this electronic newsletter focuses on the RNM,
trade negotiation issues within its mandate and related activities.

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- FTAA MINISTERIAL DIALOGUE PLANNED

- G-8 LEADERS COMMIT TO GLOBAL TRADE TALKS
- DEVELOPED COUNTRY SERVICES OFFERS UNDER FIRE
- EMERGING OBSTACLES TO MULTILATERAL SERVICES TALKS
- LABOR RIGHTS A STUMBLING BLOCK FOR CAFTA APPROVAL
- WTO BRIEFING
- NEWS BRIEFS
- UPCOMING EVENT

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FTAA MINISTERIAL DIALOGUE PLANNED

The United States will host an informal Free Trade Area of the Americas (FTAA)
ministerial dialogue of about thirteen Trade Ministers from June 12 to 13 in Maryland.
Issues on the agenda include: a review of the goals of the FTAA; core elements for
economic success and political support for the process; major elements for a successful
Miami Ministerial; differences in levels of development and size of economies; and, the
Hemispheric Cooperation Programme (HCP).

CARICOM countries scheduled to be represented at the meeting are Jamaica and

Trinidad & Tobago. Caribbean Regional Negotiating Machinery (RNM) Director-
General, Ambassador Dr. Richard Bernal, will also attend.

G-8 LEADERS COMMIT TO GLOBAL TRADE TALKS

Group of Eight (G-8) leaders - from Britain, Canada, France, Germany, Italy, Japan, the
United States and Russia - meeting recently in Evian-les-Bains, Switzerland reaffirmed
their commitment, June 2, to "delivering on schedule" (by the end of 2004) the goals set
out in the Doha Agenda, launched November 2001. They also committed to ensuring
that the Fifth WTO Ministerial Meeting in Cancun, Mexico took "all decisions necessary
to help reach that goal".

In an "Action Plan for Global Trade" issued on the occasion of the Summit they pledged
to pay "particular attention to those areas of interest to developing countries" and to
provide leadership in ongoing global trade talks so as to improve access to markets for all
WTO members, particularly for the poorest. A commitment was also made to work with
WTO members to achieve further substantial opening of trade in agriculture, non-
agricultural goods and in services. They agreed to address public health concerns faced
by developing nations with insufficient or no manufacturing capacities in the
pharmaceutical sector before the WTO's Ministerial meeting this September. G-8 nations
also agreed to improve their preferential trade agreements and programs with developing
countries so as to increase market opportunities and provide impetus to regional
integration and trade between developing countries.

Absent from the Text were concrete proposals on how to accomplish these pledges. The
action plan also did not mention a European Union (EU) proposal, pressed by President
Jacques Chirac, for a temporary suspension of developed countries' subsidies on farm
exports to African countries. In addition, no references were made to trade disputes
between G-8 members; notable in recent weeks the United State's WTO challenge to the
EU's moratorium on authorizing new genetically modified crops.

DEVELOPED COUNTRY SERVICES OFFERS UNDER FIRE

The services liberalization offers tabled by developed countries were criticized by

developing countries late May. Some maintained the offers provided for insufficient
market access. These countries insisted there was an 'imbalance', in particular, in the US
services offer and its demands of the developing countries. At the close of the WTO's
special session of the Services Council, May 22, some developing countries informed
developed countries that failure to improve their offers will lead them to offer limited
market access in return.

US and EU concessions for increased commitments regarding foreign nationals to seek

temporary employment in their markets remains a major point of contention for
developing countries. Some developing nations have criticized the market opening
opportunities, for their nationals, offered by developed countries. They maintain no new
provisions for increased access to foreign services professionals were made.

EMERGING OBSTACLES TO MULTILATERAL SERVICES TALKS

Services talks at the WTO have met with major points of divergence between developed
and developing countries in late May. Two areas threaten to add to prevailing
divergence. These are safeguard protection and a reduction in subsidies in the services
sector. Some developing countries have been particularly vocal about negotiations
leading to agreement on a services safeguard and limits on trade-distorting subsidies
provided to services sectors. Developed countries, led by the US, are resisting this. A
decision is set to be made before the September WTO Ministerial whether the safeguard
and subsidies issues will be taken up by Trade Ministers there.
LABOR RIGHTS A STUMBLING BLOCK FOR CAFTA APPROVAL

The Central American Free Trade Agreement (CAFTA) between the US and Central
America - Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua - will face
difficulties in winning congressional approval unless it offers stronger protection for
labour rights than the trade agreements the US concluded with Singapore and Chile,
respectively. This is the view expressed by a US Congressional representative in
comments made at a Washington-based think tank May 19.

Enforcement issues regarding labour rights laws in Central American countries were
cited as the reason for having stronger protections for such rights in the bilateral trade
pact. Such a pact must include a commitment for these countries to improve their labour
standards, the Congressional representative said. These sentiments have been expressed
after the US Administration tabled in the CAFTA negotiations similar text used in the
Chile bilateral trade agreement.

WTO BRIEFING

Troubled global trade talks were dealt yet another blow as two more deadlines were
missed without a deal on cuts to tariffs on industrial goods and reforming the WTO's
dispute settlement system.

These new deadlocks emerged after a draft modalities text released by the Chair of the
WTO negotiating group on market access for non-agricultural goods, May 16, received
mixed reviews by members. Some noted it was not 'bold' enough, still others indicated
the formula proposed for tariff cuts was 'confusing'. The text called for non-linear cuts in
reducing import tariffs for industrial and consumer goods and eventual elimination of
tariffs in seven product-specific sectors. It was discussed May 26 to 28 when the
negotiating group met for what was supposed to have been the final date for approving
market access modalities for non-agricultural goods. Having failed to meet the end-of-
May target for agreement on a blueprint for tariff cuts in industrial goods the Chair of the
Group has acknowledged that core modalities on reducing industrial tariffs would
hopefully be achieved by the end of the Fifth WTO Ministerial.

The May 31 target date for agreement on how to change multilateral dispute settlement
rules was also missed. There was lukewarm reception for a draft dispute settlement text
issued May 16, by the Chair of the dispute review process, that outlined a possible
agreement on reform of WTO rules for settling trade disputes. It met with criticism at a
May 20 special meeting of the WTO's Dispute Settlement Body. The US and the EU
were especially disapproving of the proposed amendments to the WTO's Dispute
Settlement Understanding (DSU); the US expressed a similar view regarding a new
Chairman's draft of the DSU changes, dated May 28.
NEWS BRIEFS

Cuba withdraws CPA Application

On May 19 Cuba announced its intention to withdraw its application to join the Cotonou
Partnership Agreement (CPA).

Opposition to Multilateral Investment Pact

On May 20, on the occasion of a conference jointly organized by India's Department of

Commerce and the United Nations Conference on Trade and Development (UNCTAD),
India's Minister of Commerce and Industry questioned the need for a multilateral
framework on investment in the WTO. He also warned against developing countries
being coerced or compelled to take decisions in areas of vital importance to them.

The EU has been actively pushing for a decision at the WTO's up-coming Ministerial to
launch negotiations on the Singapore issues, i.e. investment, competition policy, trade
facilitation, and transparency in government procurement, as part of the Doha Round
mandate.

World Bank warns of WTO Ministerial 'Collapse'

Citing missed deadlines for key negotiating issues in the WTO the World Bank's chief
economist - Nicholas Stern - said in late May, on the occasion of a three-day meeting of
the Bank's annual conference of development economists in Bangalore, India, that Doha
Agenda talks face a serious risk of collapse unless developed countries take action to heal
a rift over agricultural subsidies. "Movement on sufficient scale and speed has yet to
materialise and success at Cancun is at serious risk"; action was needed in the next few
weeks, he said.

LDC Trade Ministers push Trade Strategy

The Second Trade Ministers Meeting of Least Developed Countries (LDCs) was held in
Dhaka, Bangladesh June 2. The Ministerial was preceded by a meeting of Senior
Officials May 31 to June 1.

The event advanced a common position on trade issues for the Fifth WTO Ministerial
Meeting in Cancun, Mexico this September and identified/reviewed issues of common
interest to the forty-nine country grouping in the Doha Agenda. The temporary
movement of workers from poor to developed nations featured prominently as did
financial assistance for trade-related technical cooperation and technology transfer in
issues advanced at the meeting. The Ministerial Meeting adopted a charter of demands -
called the Dhaka Declaration - to present in Cancun, including unrestricted market
access and easier movement of labour to developed countries.
UPCOMING EVENT

Greater Caribbean Business Forum

The Association of Caribbean States (ACS), the Ministry of Foreign Trade of Cuba and
the Cuban Chamber of Commerce will convene the Fourth Business Forum of the
Greater Caribbean in Santiago de Cuba, June 10 to 11, 2003.

The event will bring together business people and government officials from twenty-eight
Countries. The annual Business Forum presents opportunities for business people to
trade and meet with government officials from English, Spanish, French and Dutch-
speaking countries and strengthen business relations in the region. The Fourth Forum of
Trade Promotion Organisations (TPOs) will precede the Business Forum on June 9,
2003. It will bring together the TPOs of the twenty-eight ACS countries to review the
yearly ACS work programme and find possible areas of cooperation with a view to
expanding trade in the ACS.

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For More Information Contact:

Nand C. Bardouille
Tel: (246) 430-1678

email: nand.bardouille@crnm.org