7:42 AM Oct 28, 1993

US TOBACCO LOCAL CONTENT LAW ASSAILED

Geneva 27 Oct (TWN) -- Brazil on behalf of Argentina, Colombia, El Salvador, Guatemala, Thailand, Venezuela and Zimbabwe again brought up in the GATT Council Wednesday the US legislation restricting the amount of imported tobacco that can be used in the manufacture of cigarettes in the US.

This provision was included in the Omnibus Budget Reconciliation Act of 1993.

Brazil on behalf of these countries had raised the issue at the last Council meeting.

Since then, these countries have held official consultations with the US in the GATT, a preliminary to raising a dispute and getting a panel set up.

Brazil reported Wednesday that after a first round of consultations between 4-11 October, a series of questions have been addressed to the US and seeking specific replies and for which answers were still awaited. Brazil in the meanwhile that the legislation would be modified to bring it in line with US obligations in GATT.

The US confirmed the fact of consultations and said it had received from Washington some answers to the questions and was awaiting more information.

The European Community said it was also an exporter of tobacco to the US and had affected. The US law, the EC said, was a clear violation of the GATT obligations under Art III and V, and the US should bring its law into compliance.

Another complaint was by the US against Philippines where a legislation has been passed, the Magna Carta for small farmers, under which agricultural products being produced in sufficient quantities locally should not be imported.

The US said this violated GATT.

The Philippines said the new law did not represent any reversal of the Philippines policy of trade liberalisation. The views expressed in the Council would however be conveyed to the authorities.

In other actions, the Council agreed to observer status for the former Yugoslav Republic of Macedonia, and set up two separate working parties to look into the request for accession from Belarus and Croatia.

Under other business, Canada raised a complaint against Italy over the standards and testing procedures that restrict imports of bovine semen from Canada.

The EC responded that new directives were being issued by the Commission for harmonisation of standards and this should resolve the problem.

The GATT spokesman said this subject occupied about 3-4 minutes of the Council, but could not give any figures of the 'trade involved'.