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<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" rowspan="2" width=215 BGCOLOR="#CC3366" TEXT="#080000" background="0440ce82dkcfyw.png"> <div> <I><B><U>If you have a hand in trade, you need an eye on Washington.</U></B></I></div> <bR> <div> <B>Washington Trade Daily</B><I><B> gives you the information you need about international trade in Washington, Geneva and around the globe -- when you need it, not days later.</B></I></div> <bR> <div> <B>WTD</B><I><B> is mailed electronically every evening.</B></I></div> <bR> <div> <I><B>A one-year subscription costs only $785 for 260 issues; $400 for six months or $1,750 for two years and two months. </B></I></div> <div> <I><B>Take a look at the sampe issue and the latest calendar on the next page.  If you like what you see, ask for a FREE four-week trial subscription by e-mailing us at trigtrig@aol.com. </B></I></div> <bR> <bR> </td> <td valign="top" colspan=2 height=95 BGCOLOR="#CC99CC" TEXT="#080000" background="043265f3.png"> <div> <I><B>Welcome to WTD</B></I></div> <DIV ALIGN="LEFT"></DIV> <div> <A HREF="id2.htm" TARGET="_top" TITLE="Calendar"><U><I><B>Calendar</B></I></U></A><I><B> </B></I><B>       </B><B> </B><I><B> </B></I><A HREF="id3.htm" TARGET="_top" TITLE="Free Trial"><U><I><B>Free Trial</B></I></U></A><I><B>       </B></I><I><B> </B></I><A HREF="id4.htm" TARGET="_top" TITLE="Who We Are"><U><I><B>Who We Are</B></I></U></A><I><B>        </B></I><A HREF="id6.htm" TARGET="_top" TITLE="Trade Links"><U><I><B>Trade Links</B></I></U></A></div> <bR> <bR> <bR> <bR> <div> </div> </td> </tr><tr> <td valign="top" height=385 colspan=2 BGCOLOR="#FFFFFF" TEXT="#080000"> <div>     <FONT SIZE="7" COLOR="#000000" FACE="Times New Roman" ><B>          </B></FONT><FONT SIZE="7" COLOR="#000000" FACE="Times New Roman" ><B>Washington Trade Daily</B></FONT></div> <div>             Volume 17, Number 170                                                               Friday, August 25, 2008</div> <div> _______________________________<U>Trade Reports International Group___________________________</U>                                                                                                                </div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <I><B>Stemming Deterioration in Geneva</B></I></div> <div>      Concerned with the rapid deterioration of what was presented to members at the ill-fated Doha Development Agenda mini-ministerial meeting late last month, US Trade Representative Susan Schwab told visiting World Trade Organization Director General Pascal Lamy that negotiators should get back to the table – and “the sooner, the better” – to improve the situation (WTD, 8/21/08).</div> <div>      The USTR met with Mr. Lamy Thursday evening and for two-and-a-half hours on Friday, when all the unresolved issues were discussed – including the agricultural special safeguard mechanism for developing countries.  That issue broke up the Geneva meeting after nine days of negotiating.</div> <div>      Ms. Schwab described the Lamy meeting to reporters on Friday as “rather productive.”</div> <div>      Members not as aware as they should have been in July now know that the United States is serious about crafting an agricultural special safeguard mechanism that truly addresses import surges and emergencies – and does not turn into another tool for nations to take back tariff commitments previously made, Ms. Schwab told reporters after the meeting.</div> <div>      Agricultural exporters – especially those in developing countries – would be severely harmed by a poorly written special safeguard mechanism, Mr. Schwab continued.  </div> <DIV ALIGN="LEFT"></DIV> <div> <B>Significant Deterioration</B></div> <div>      The chief US trade negotiator talked to Mr. Lamy about significant deterioration in other areas of the July ministerial – where some “surprising” progress was made.  She pointed to the latest summary of the state-of-play of the nonagricultural market access talks – presented last week by negotiations chair Don Stephenson – as moving away from what was on the table during the ministerial.  She particularly noted new language on sectorals – which was never reviewed by ministers in July.</div> <div>      Discussed as well were US concerns over preference erosion issues and “cotton” – as was the “Group-of-Seven” process.  The USTR told Mr. Lamy that she would leave it up to him to decide how to proceed.  The United States, Ms. Schwab told reporters, “is not wedded to the G-7” process.  Instead, Washington wants a representative group of nations to participate that are truly interested in moving the negotiations forward to an ambitious end.  She suggested that next month’s high-level meeting would be a test of how sincere members are in arriving at significant results.  “Grandstanding” is not going to work, she added.</div> <div>      Full negotiating modalities could be achieved – including another ministerial meeting – before the end of the year if those criteria are met, the USTR told reporters.</div> <div>      A week earlier, Mr. Lamy had similar conversations with India minister of commerce and industry Kamal Nath.</div> <div>                                    </div> <bR> <bR> <DIV ALIGN="LEFT"></DIV> <div> <I><B>A Commitment to Re-engage</B></I></div> <div>      All the key players in last month’s Doha Development Agenda mini-ministerial meeting – including the United States and India – want to re-engage, World Trade Organization Director General Pascal Lamy told WTD on Friday (see related report this issue).</div> <div>      Mr. Lamy met late last week with US Trade Representative Susan Schwab and chief White House economic advisor Dan Price.  On Friday, he also held sessions with the US Chamber of Commerce, the National Association of Manufacturers and the Coalition of Service Industries.</div> <div>      Tentative plans call for a senior-officials meeting in Geneva during the first or second week of September – starting immediately with the ministerial-breaking issue of the special safeguard mechanism for developing countries, Mr. Lamy told WTD and <I>Inside US Trade</I> in a special interview following those meetings.  There is “quasi unanimity” from members that what was on the table last July should be consolidated and re-packaged for another go.</div> <div>      There are no preconditions for that meeting – including the call by the United States to engage only on the original July 28 proposal put on the negotiating table by Mr. Lamy.</div> <div>      Whether the senior officials’ meeting will break the ice-jam that developed late last on the special safeguard mechanism cannot now be predicted, Mr. Lamy said.  His job is to help participating countries get the derailed talks back on track, he stated.</div> <div>      If agreement cannot be readily reached on the special safeguard mechanism – which USTR Schwab described on Friday as possibly no more than a mechanism to allow members to get out of previous commitments made on tariff reductions – there would be little reason to see breakthroughs on a half-dozen issues left pending in July.</div> <DIV ALIGN="LEFT"></DIV> <div> <B>Simple Questions, Simple Answers</B></div> <div>      The Director General asked two simple questions to trade leaders during his Washington and earlier visit to New Delhi – are the two government politically willing to re-engage in negotiations and are they ready to address the unexpected controversy over the special safeguard mechanism.  The answers to both questions were positive, he said.</div> <div>      The controversy that arose over the special safeguard mechanism took many by surprise at last month’s ministerial.  Politically, agricultural safeguards is an important issue for India; in the United States increasing market access abroad – that could be thwarted by a badly written safeguard agreement – is of crucial importance.  The United States and India remain the primary protagonists on the issue – and they need to settle their differences, the Director General suggested.</div> <div>      Mr. Lamy told WTD that India’s Nath has indicated his willingness to negotiate on the special safeguard mechanism – as is USTR Schwab.  “I think members need to step back a bit and revisit this concept of the special safeguard mechanism,” the Director General suggested.  Give-and-take on the issue has continued since the July 30 collapse, he said.</div> <div>      A general recognition among members that what was left on the negotiating table is well worth completing is sparking renewed enthusiasm, Mr. Lamy stated.  Brazil, Australia and even Indonesia are in a positive mood on resumption, he said.</div> <div>      If the special safeguard mechanism can be successfully tackled, negotiations would move to the other four outstanding issues in an original list of 17 – “cotton”, nonagricultural market access negotiations, tariff simplification and TRIPS-related issues of Geographical Indications and generic protection under the Convention on Biodiversity.  Special TRIPS facilitator Norwegian foreign minister Gahr Store is continuing his informal contacts among members on the latter issue, Mr. Lamy said.</div> <div>      Much of the tariff erosion debate has been stabilized, Mr. Lamy stated, with only a few issues relating to US treatment of textile products from some non-preferential producers remaining.</div> <DIV ALIGN="LEFT"></DIV> <div> <B>‘Cotton’</B></div> <div>      Mr. Lamy did not indicate whether he received any special assurances from the United States on the “cotton” issue, but told WTD that Washington knows fully that it remains a “make-or-break” issue in the round.  He suggested that details on product-specific caps in the “amber” box of agriculture spending and the parameters of the “blue” box first need to the settled.</div> <div>      The United States is ready to engage on “cotton,” the Director General confirmed.</div> <div>      Finishing the negotiations this year – or even reaching full modalities – cannot be predicted, Mr. Lamy said.  There is no deadline.  “Substance comes first,” he stated.</div> <div>      Brazilian President Lula da Silva has asked India whether it is prepared to participate in a ministerial in Brazil to finalize modalities – so negotiations can be concluded this year, WTD has learned.</div> <div>                </div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <I><B>A Stay-Tough Business Attitude</B></I></div> <div>      US business groups Friday echoed the Bush Administration’s concerns about lowered ambitions in the ongoing World Trade Organization Doha Development Agenda talks (see related report this issue).</div> <div>      Executives of the US Chamber of Commerce, the National Association of Manufacturers and the Coalition of Service Industries met separately Friday with WTO Director General Pascal Lamy.  The WTO chief was here for discussions with US Trade Representative Susan Schwab on restarting the stalled Doha negotiations in the wake of a failed ministerial meeting last month.</div> <div>      US Chamber President Tom Donohue said he urged Director General Lamy to fight for the Doha round by pressing key countries to get back to the negotiating table.  Progress was made at the July ministerial and that progress needs to be continued.  But he warned “there are no shortcuts to a good deal that business will support and Congress will approve.  The path forward is to raise ambition in each area of the negotiations, especially manufacturing, services and agriculture.”</div> <div>      NAM President John Engler lamented the “weakness” of proposed tariff-cutting formulas and said a final deal will only be possible if big emerging countries like Brazil, China and India participate in sector-specific agreements.  “There can be no conclusion to the Doha Round unless there is an ambitious result in cutting manufactured goods trade barriers around the world – both in tariffs and non-tariff barriers,” he said in a statement.</div> <div>                                    </div> <bR> <bR> <DIV ALIGN="LEFT"></DIV> <div> <I><B>Around the Globe</B></I></div> <div>            World trade negotiators need to bounce back quickly from a failed meeting in July to have any chance of reaching a deal by the end of the year, the head of the <U>World Trade Organization</U> said on Friday according to a Reuters news service report (see related report this issue).  “The good news is that they want to re-engage,” WTO Director General Pascal Lamy said in an interview, referring to India and the United States, whose differences on agriculture led to the collapse of world trade talks last month in Geneva.</div> <div>      The Geneva meeting foundered because of sharp differences between the United States and China and India over a “special safeguard mechanism” to help developing countries protect their farmers from a surge in imports.  “It became a huge issue because of the politics on both sides ... I wouldn't say if we solve the SSM, the rest will fall in place. But what I'm pretty certain is if we don't solve this, the rest will not fall into place,” Lamy said.</div> <div>      As a practical matter, the fast-approaching Nov. 4 U.S. presidential election is probably the deadline for reaching an agreement this year, Lamy said.  “I think that's the view” of the Bush administration, Lamy said. “It's also the view by others that the more time passes, the more the ability of an administration to contract” a deal diminishes, he said.  Some WTO members suspect the real reason talks collapsed last month was because the United States did not want to deal with developing country demands for deeper and faster cuts in US cotton subsidies than for other commodities.  “I know there are a lots of conspiracy theories running on this ... To be frank, I don't suspect the US broke on the SSM not to have cotton on the table. They know cotton has to be there” as part of the deal, Lamy said.</div> <div>      He also argued the overall agricultural package was big enough to satisfy US demands that other countries pay for cuts in US trade-distorting farm subsidies by opening their markets to more imported farm goods.  The deal also allows the United States, like other countries, to shelter its most sensitive agricultural commodities from deep tariff cuts, he said.</div> <div> <B><U>Campaign 2008</U></B></div> <div>                     <U>Barack Obama</U> has chosen longtime Senator Joe Biden as his running mate, a ticket that could have significance for <U>Canada</U> in terms of the veteran Democrat's understanding of international affairs and the pair's desire to make changes to NAFTA, the Canadian Press news service reported from Denver (WTD, 8/15/08).  On Canada-US trade issues, a more protectionist Obama-Biden presidency could spell trouble for Canadian exporters.</div> <div>      While the 65-year-old Biden supported NAFTA in the 1990s, he now agrees with Obama that the trade pact needs to be amended. Republican presidential hopeful John McCain, on the other hand, supports NAFTA and is a strong free-trader.</div> <div>      “The idea that we are not willing to take the prime minister of Canada and the president of Mexico to the mat to make this agreement work is just a lack of presidential leadership,” Biden said during his own short-lived presidential run last summer. “I would change it.”  Biden's strength, however, is his expertise on international relations. He has served as chairman of the Senate Foreign Relations Committee, and his addition to the ticket seems clearly aimed at silencing critics who accuse of Obama of being weak on international affairs.</div> <div>                     Attempts to isolate and punish <U>Russia</U> for its military actions in Georgia will backfire, given Russia's economic muscle and key role in mediating international disputes, senior Russian officials said Friday according to a report by the <I>Moscow Times </I>newspaper (WTD, 8/21/08).  Top officials in President George W. Bush's administration have said Russia's continued military presence in Georgia could jeopardize its membership in the Group of Eight and its bid to join the World Trade Organization, among other things.</div> <div>      “We are a big economy today,” said Vladislav Reznik, chairman of the State Duma Financial Markets Committee. “Whether they like it or not, we have to be reckoned with.” Yevgeny Fyodorov, chairman of the Duma's Economic Policy and Entrepreneurship Committee, was even more blunt.  “It's a political bluff,” he said. “It's an absolute certainty that the Americans won't [impose any sanctions] because they themselves would suffer.”</div> <div>      In the latest US warning, Commerce Secretary Carlos Gutierrez said all of the United States' efforts to help Russia “integrate ... into the world community” were “at risk,” according to an interview published Saturday in Germany's <I>Der Spiegel</I>.  Of the two presumptive US presidential nominees, Republican Senator John McCain has been by far the most strident in his anti-Russian rhetoric during the Georgia crisis, reiterating his call for Russia to be thrown out of the G8 and for Moscow's WTO bid to be blocked.  Senator Joe Biden, who was named Democratic candidate Barack Obama's vice presidential running mate on Saturday, has been more tempered in his criticism of Russia, restricting himself to saying there would be “consequences” for US-Russian ties from the conflict.</div> <div>      Yury Afanasyev, the top trade official in charge of WTO accession talks at the Russian mission in Geneva, said he had not received any signs that the United States planned to withdraw its support of Russia's bid to join the global trade body. “I am hoping US officials will have enough common sense not to link WTO issues with politics,” he said by telephone from Geneva.  The next meeting to consider Russia's WTO bid has been scheduled for Sept. 18, Afanasyev said.  If the United States moves to reconsider its support for Russia's WTO bid, Moscow will retaliate, Afanasyev said.</div> <div>                     The <U>Association of Southeast Asian Nations</U> is set this week to finalize a free trade agreement with <U>India</U> and hold talks with <U>Australia</U> and <U>New Zealand</U>, signalling the importance of regional pacts amid fading hopes for a global trading regime, Agence France-Presse news service reported from Singapore (WTD, 8/8/08).  ASEAN economic ministers, meeting in Singapore from Monday to Friday, are expected to put the final touches on an ASEAN-India trade in goods pact agreed on by senior officials earlier this month.</div> <div>      ASEAN economic ministers will also hold talks with their counterparts from Australia and New Zealand in an effort to have a trade agreement ready for signing by December, a Southeast Asian diplomatic source said.  Australian Foreign Minister Stephen Smith said recently Canberra hoped to conclude the talks with the 10-member ASEAN in Singapore, but the source said this might not be possible because certain issues still have to be resolved.  But the source added the issues, one of them concerning the rights of New Zealand's indigenous peoples, were minor. He was confident a deal will be reached in time for the ASEAN Summit in Bangkok in December.</div> <div>                     <U>Mexico</U> registered a trade deficit in July that was much wider than expected as a big jump in imports offset record revenue from oil exports, Dow Jones news service reported from Mexico City.  Exports last month grew 22.3 percent from July 2007 to $27.68 billion, while imports expanded 23.3 percent to $28.76 billion, for a deficit of $1.08 billion, the National Statistics Institute reported. Mexico had a $277 million trade surplus in June, and had registered a $695 million deficit in July 2007.   July's deficit brought the accumulated trade balance for the first seven months of the year to $3.6 billion, Inegi said.</div> <div>                     The <U>euro</U> zone's current account deficit widened in June as imports rose and income from overseas investments fell, Dow Jones news service reported from London. Figures released by the European Central Bank Friday showed the current account was in deficit by $12.1 billion, more than the $8.1 billion in May.  The euro-zone deficit in trade in goods narrowed, but the surplus in trade in services fell, while deficits on income flows and current transfers widened.  On a seasonally-adjusted basis, exports rose, but so too did imports, leaving the euro-zone deficit in trade in goods at $3 billion, narrower than the $3.2 billion in May.</div> <bR> <bR> <div>    — <IMG SRC="0460c040.png" border=0 width="12" height="4" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"><FONT SIZE="2" COLOR="#000000" FACE="Arial" >  —</FONT></div> <bR> <div> <I>Sign up for WTD’s special email alert system which keeps you informed of major trade-related news throughout the day.  Simply email WTD your email address and we will add you to the list.  </I></div> <div> <I>Email:  wtdtrade@cs.com</I></div> <bR> <div> <I><B>WTD now has available for sale compact disks for all of 2005  and 2006 – for $35 each.</B></I></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <I><B>To order call 301-946-0817, fax us at 301-946-2631 or e-mail us at </B></I><FONT SIZE="2" COLOR="#0000FF" FACE="Arial" ><A HREF="mailto:trigtrig@aol.com" TARGET="_top" TITLE="mailto:trigtrig@aol.com"><U><I><B><U>wtdtrade@cs.com</U></B></I></U></A></FONT></div> <bR> <div> <B>On the Web......</B></div> <div>                     </div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>Asia-Pacific Economic Cooperation</B></div> <bR> <div> <B><U>DDA.</U></B>  Asia-Pacific Economic Cooperation forum statement on the Doha Development Agenda.  (available at:  <FONT SIZE="2" COLOR="#0000FF" FACE="Arial" ><A HREF="http://www.apec.org" TARGET="_top" TITLE="http://www.apec.org"><U><U>http://www.apec.org</U></U></A></FONT> )  issued:  8/22/08.</div> <bR> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>China</B></div> <bR> <div> <B><U>Export Controls.</U></B>  Commerce Department statement on export control regulation violation on shipment of semiconductors to China from Taiwan.  (available at:  <FONT SIZE="2" COLOR="#0000FF" FACE="Arial" ><A HREF="http://www.bis.doc.gov/news/2008/bis_press08222008.htm" TARGET="_top" TITLE="http://www.bis.doc.gov/news/2008/bis_pre"><U><U>http://www.bis.doc.gov/news/2008/bis_press08222008.htm</U></U></A></FONT> )  issued:  8/22/08.</div> <bR> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>Doha Development Agenda</B></div> <bR> <div> <B><U>Negotiations.</U></B>  National Association of Manufacturers statement on the Doha Development Agenda.  (available at:  <FONT SIZE="2" COLOR="#0000FF" FACE="Arial" ><A HREF="http://www.nam.org" TARGET="_top" TITLE="http://www.nam.org"><U><U>http://www.nam.org</U></U></A></FONT> )  issued:  8/22/08.</div> <bR> <div> <B><U>Negotiations.</U></B>  US Chamber of Commerce statement on the Doha Development Agenda.  (available at:  <FONT SIZE="2" COLOR="#0000FF" FACE="Arial" ><A HREF="http://www.uschamber.com" TARGET="_top" TITLE="http://www.uschamber.com"><U><U>http://www.uschamber.com</U></U></A></FONT> )  issued:  8/22/08.</div> <bR> <div> <B><U>Negotiations.</U></B>  Asia-Pacific Economic Cooperation forum statement on the Doha Development Agenda.  (available at:  <FONT SIZE="2" COLOR="#0000FF" FACE="Arial" ><A HREF="http://www.apec.org" TARGET="_top" TITLE="http://www.apec.org"><U><U>http://www.apec.org</U></U></A></FONT> )  issued:  8/22/08.</div> <bR> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>Export Controls</B></div> <bR> <div> <B><U>China.</U></B>  Commerce Department statement on export control regulation violation on shipment of semiconductors to China from Taiwan.  (available at:  <FONT SIZE="2" COLOR="#0000FF" FACE="Arial" ><A HREF="http://www.bis.doc.gov/news/2008/bis_press08222008.htm" TARGET="_top" TITLE="http://www.bis.doc.gov/news/2008/bis_pre"><U><U>http://www.bis.doc.gov/news/2008/bis_press08222008.htm</U></U></A></FONT> )  issued:  8/22/08.</div> <bR> </td> </tr></table></body>