[I can't help but feel that demonstrators and unions are exacerbating pre-existing tensions 10-fold. Maybe there's not enough to break it yet, but a hopeful person can see the outlines of the end here: The US picking fights with the EU, Japan and the third world elite, and feeling forced to pick such fights because it needs to convince domestic opinion, until all major partners are furious at each other and the organization is torn apart. Strategically, this looks very promising from the anti-WTO point of view. You can see the avenue through which further protest can have immediate concrete effects on the establishment. Among other things, the spotlight of news it makes it much hard for the trade elite to put out two stories, one for domestic consumption and one for consumption abroad. And that in itself, by highlighting every difference of interest, exacerbates every tension.]
Financial Times; 02-May-2000
FRONT PAGE - FIRST SECTION: US begins proceedings at WTO against six nations: Action coincides with move to settle dispute with EU
The US yesterday said it would begin enforcement proceedings at the World Trade Organisation against six countries for various violations of international trade rules.
The moves, contained in three annual reports by the US Trade Representative's office, came as Stuart Eizenstat, deputy Treasury secretary, headed for Brussels to try to settle a transatlantic dispute involving billions of dollars of trade.
The actions announced yesterday were aimed at Denmark's protection of intellectual property rights, customs valuations practices by Brazil over textiles and by Romania over clothing, poultry and distilled spirits.
India's investment requirements in its automotive industry, the Philippines' local content requirements for motorcycles, cars and commercial vehicles and the patent regimes of Argentina and Brazil were also cited.
Charlene Barshefsky, US trade representative, delayed filing a long-expected complaint against the European Union for alleged subsidies to Airbus, the commercial aircraft consortium, but warned that she might bring a case in the near future.
At the same time, Mr Eizenstat briefed the US business community on the proposal he would take to Brussels to settle a WTO case lost to the EU.
A dispute settlement panel this year found against a US federal tax provision that allows US companies to reduce their tax liabilities by channeling export sales through foreign sales corporations.
The US business community has been in a ferment over the loss, regarding it as a violation of agentlemen's agreement reached between the US and EU in the 1980s in the settlement of an earlier dispute.
It has also hurt European companies, whose US subsidiaries have used foreign sales corporations.
"This is a huge issue," said Todd Malan, of the Organisation for Foreign Investment. "Companies on both sides of the Atlantic are very interested in making sure that it does not explode into a trade and tax war. The problem is the time line could not be worse."
The EU victory in the WTO requires a change in law by the US Congress during an election season, when tax legislation is very difficult to pass. Mr Eizenstat's plan has won support in Congress but even if it were acceptable to the EU it would take months for approval.
In addition to the proceedings begun yesterday, Ms Barshefsky threatened action against Japan over its flat glass sector and "a persistent pattern of discrimination that impedes access to Japan's public works market".
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