scoop.co.nz Ambassador Mary Beth West, Deputy Assistant Secretary of State for Oceans and Fisheries Statement before the Subcommittee on Fisheries Conservation, Wildlife, and Oceans, House Committee on Resources Washington, DC May 22, 2003

Mr. Chairman and Members of the Subcommittee:

Today s meeting is taking place against the backdrop of profound changes that have reshaped international fisheries in the past decade. We face a world in which the fishing capacity of the fleets operating in many key areas has outpaced the reproductive capacity of the fish stocks in those areas. The past decade has seen a growing incidence of fishing vessels that do not abide by agreed rules. Serious concerns have also arisen about the effects of fishing operations on other marine life and on the marine environment as a whole.

To confront these daunting challenges, the United States has negotiated, and is working with others in the international community to implement, a wide range of instruments designed to promote sustainable fisheries worldwide. Some of these are global in scope, others are regional and still others are bilateral. Some have binding legal force, others are voluntary in nature. Effective implementation of these agreements and arrangements presents the best chance of meeting the challenges we face in the field of international fisheries.

My statement today begins with a brief summary of the general situation as we see it and then reviews a number of more specific issues, with a particular focus on those for which the Administration believes congressional action is necessary or desirable. In some cases, the testimony of my colleagues from the Department of Commerce and the Department of the Interior will elaborate on these specific issues.

General Situation

In 2002, the Food and Agriculture Organization of the United Nations (FAO) reported that global production from capture fisheries and aquaculture is currently the highest on record. Worldwide, the tonnage of fish caught in the oceans and inland areas has remained relatively stable in recent years, while the tonnage of fish produced by aquaculture has continued to increase markedly. International trade in fish products has also risen tremendously.

These trends mask a number of very serious problems, however. Many of the world s primary fishery resources are under stress. A number of key fish stocks have collapsed from overfishing and environmental degradation (such as cod in the Northwest Atlantic), while others have become depleted (such as Atlantic bluefin tuna). While stocks in the Pacific Ocean are generally thought to be in somewhat better shape, increasing fishing effort on a number of those stocks gives us reason to be concerned.

In 2002, FAO estimated that, among the major marine fish stocks or groups of stocks for which information is available, about 47% are fully exploited, while another 18% are overexploited. An additional 10% of such stocks have been depleted or are recovering from depletion. In short, there are relatively few major fisheries that can absorb additional fishing effort. Meanwhile, we see a growing demand for fisheries products and many vessels looking for new places to fish.

Many factors have contributed to this situation. Most international management of fisheries relies upon open access approaches that can create incentives toward overfishing. Moreover, improvements in fishing technology, coupled with substantial government subsidies to fishers, have greatly increased harvesting capacity worldwide. To make matters worse, environmental degradation has spoiled some fish habitat. The ability of vessels to operate outside governmental controls, including by adopting flags of convenience, has rendered fisheries enforcement less than effective in many circumstances. The use of certain kinds of fishing gear and fishing techniques has also led to serious concerns about the bycatch of other species (including some endangered species) and harm to the marine environment.

Fortunately for the fish, and for the fishers whose livelihoods depend on them, we have worked to create a network of agreements designed to address these critical problems. Building on the general international law framework for these matters established in the 1982 United Nations Convention on the Law of the Sea, the past decade has witnessed a veritable explosion of new agreements and standards for the conservation and management of fisheries worldwide. Some of the important instruments are:

• The 1995 UN Fish Stocks Agreement * The 1993 FAO Compliance Agreement * The 1995 FAO Code of Conduct for Responsible Fisheries * Four FAO International Plans of Action on specific matters * The 1996 Inter-American Sea Turtle Convention * The 1999 Agreement on the International Dolphin Conservation Program * The 2000 Central and Western Pacific Tuna Convention (not yet in force)

Much remains to be done to ensure effective implementation of the full range of these instruments. Working with Congress, U.S. constituent groups, and our partners in the international community, we hope to realize the goal of sustainable fisheries worldwide.

Now, I would like to turn to a number of specific issues that we are confronting:

Specific Issues

Bilateral Issues with Canada

Relations with Canada over fishery issues are better than they have been in many years. The 1999 Pacific Salmon Agreement appears to have resolved long-standing problems and has allowed the Pacific Salmon Commission to function effectively once again. The agreements on Yukon River salmon, on the amendments to the 1981 Albacore Treaty, and on managing the transboundary Pacific whiting stock, described below, are noteworthy achievements as well.

The 1981 U.S.-Canada Albacore Treaty allows vessels of each country to fish for albacore, without limitation, in waters of the other country. In 2002, the United States and Canada agreed to amend the Treaty to provide for limits on such fishing. Such changes are necessary to limit a recently fast-growing Canadian fishery in U.S. waters and also to permit future management of the stock by both sides. President Bush transmitted the amendment to the Treaty to the Senate in January 2003 and we are hopeful that the Senate will act favorably on this matter in the near future. In addition, we need legislation to implement the Treaty, both in its existing form and as revised. Such legislation was introduced in the 107th Congress (H.R. 1989). The Senate passed this legislation in November 2002, but the House did not take action on the bill before final adjournment. We hope that Congress will pass the legislation in the very near future.

Most recently, U.S. and Canadian delegations have reached consensus on the text of an agreement to manage and share the valuable transboundary stock of Pacific whiting, also known as Pacific hake. Disagreements over sharing arrangements have led to overfishing in the past, as the United States took 80% of the allowable harvest, while Canada took more than 30%. This agreement, once it enters into force, should remedy that problem effectively. We look forward to working with Congress in developing implementing legislation for this agreement.

The United States and Canada reached agreement on a management regime for salmon fisheries on the Yukon River in Alaska and the Yukon Territory in March 2001. U.S. and Canadian officials concluded the agreement through an exchange of notes in December 2002. As this is an executive agreement, it did not require Senate advice and consent to ratification, nor was any additional legislation needed to implement to agreement. However, as described in the testimony from the Department of the Interior, there is an on-going need for the authorization and appropriation of funds to implement the Agreement, including for the Restoration and Enhancement Fund established under the Agreement, as envisioned in H.R. 2048. In that respect, I would note that the Administration has some minor technical suggestions on that bill, which we have already provided to the staff of this Subcommittee.

Finally, I would note that we are exploring ways to gain greater access for U.S. vessels to ports in Atlantic Canada. We are also engaged in efforts to resolve a dispute over lobster fishing in waters around Machias Seal Island off the coast of Maine.

Sport Fishing around the Revillagigedo Islands

We are very much aware of congressional interest in this issue, as reflected in the draft Resolution introduced by Mr. Cunningham of California. That resolution would urge the Administration to continue discussions with the Government of Mexico in order to obtain permits for the San Diego based long-range sportfishing fleet to fish in the waters around the Revillagigedo Islands. In fact, over the past year, the Department of State, through our embassy in Mexico City, has raised this issue to senior levels in the Government of Mexico, including with the Secretary of the Environment and other senior officials in his Department and other agencies involved in this issue. Throughout this period, we have stressed our interest in seeking to obtain permits for these vessels in a manner consistent with applicable Mexican law. Our discussions with Mexico on this issue will continue. The Department of Commerce will soon present a report requested by the Congress on the substance of these discussions and the status of this issue.

Fishermen s Protective Act Reauthorization

The Administration supports reauthorization of the Fishermen s Protective Act, as envisioned in H.R. 2048. This Act has provided compensation to owners of U.S. fishing vessels that have been seized by foreign governments on the basis of claims to jurisdiction that the United States did not accept. Although there have not been claims under the Act for several years, there is always the prospect that such situations could arise again in the future.

Bilateral Issues with Russia

Relations with the Russian Federation over fisheries issues in the North Pacific Ocean and Bering Sea are contentious. The failure of Russia to ratify the 1990 Maritime Boundary Treaty continues to create uncertainty, while corruption and lack of government resources have led to serious overfishing in Russian waters. A large-scale overhaul by the Government of the Russian Federation of its bureaucratic structure for managing fisheries is at present complicating efforts to address these matters. We are nevertheless actively looking for new ways to cooperate with Russia to improve this situation, including through the development of two new agreements, one on cooperation in marine science and the other on fisheries enforcement.

Regional Fishery Management Organizations

The United States is a member of more than a dozen international fisheries commissions and related organizations. These organizations adopt measures to conserve and manage fisheries under their auspices, conduct related scientific research and provide venues for undertaking new policy initiatives in the field of marine conservation.

Funding to support U.S. participation in these organizations comes from appropriations to the International Fisheries Commissions account. Specifically, this account covers the U.S. share of operating expenses of nine international fisheries commissions and organizations, one sea turtle convention, the International Whaling Commission, two international marine science organizations, and travel and other expenses for non-Federal U.S. Commissioners.

In recent years, Congress has appropriated roughly $20 million for this account annually. For FY 03, the Administration requested $19.78 million. Congress appropriated only $17.1 million. In the Conference Statement accompanying the FY 2003 Omnibus Appropriations Bill, no funding was allocated for the operating expenses of the Pacific Salmon Commission and five other commissions. The Administration is in the process of submitting a notice to Congress on reprogramming funds within the International Fisheries Commission. The reprogramming will allow for the smallest feasible amount of funding so the Pacific Salmon Commission may continue operations and full funding of the smaller commissions. The Great Lakes Fisheries Commission and the International Pacific Halibut Commission will both be taking reductions in order to have all fish commissions in this account operating this fiscal year.

For FY 2004, the Administration s budget request for International Fisheries Commissions amounts to $20.04 million, which includes $75 thousand for the Antarctic Treaty. We hope that Congress will appropriate the full amount.

International Commission for the Conservation of Atlantic Tunas (ICCAT). This commission manages tunas (and tuna-like species, such as swordfish) in the Atlantic Ocean. Key conservation issues facing ICCAT include maintenance of rebuilding programs for North Atlantic swordfish, pressing for greater compliance with ICCAT rules, cracking down further on IUU fishing of ICCAT species, reviewing ICCAT s practice of managing eastern and western bluefin tuna as separate stocks, and pressing for measures to conserve sea turtles and sharks incidentally captured in these fisheries. Recent attention has been focused on the EU s activities in ICCAT, and in fact a coalition of environmental groups and several state governors submitted a request to certify the EU under the Pelly Amendment to the Fishermen s Protective Act of 1967 for diminishing the effectiveness of ICCAT. We are working closely with the Department of Commerce on this issue.

Northwest Atlantic Fisheries Organization (NAFO). This Commission manages a wide variety of fisheries on the high seas of the northwest Atlantic Ocean, many of which remain seriously depleted. Some stocks, however, are rebounding after years of sharply restricted fishing, including yellowtail flounder. U.S. priorities in NAFO include seeking greater access for U.S. vessels to such recovering stocks and modifying the NAFO system for allocating quotas more generally. The United States has taken an active role in NAFO and held many positions of leadership in the organization; however, we are considering the proper balance between our level of participation in NAFO and the benefits we accrue there. The Department of Commerce witness will also address this issue in more detail.

Western and Central Pacific Fisheries Commission (WCPFC). Negotiations to establish a Western and Central Pacific Fisheries Commission concluded in September 2001. The United States and 18 other States have signed the Convention that will create the WCPFC, but it has not yet entered into force. The area covered by this Convention encompasses the last major area of the world s oceans not covered by a regional management regime for tunas and other highly migratory species. This region produces more than half the world s annual tuna catch. The United States is actively participating in the WCPFC Preparatory Process.

One key issue that we hope to see addressed under this new Convention is that of excess fishing capacity -- too many vessels catching too many fish. While the stocks of tuna in the Western and Central Pacific are not currently considered to be over-fished, excess capacity complicates adoption and implementation of effective conservation and management measures and has significant implications for the economic viability of these fisheries in the longer term.

This Convention, which enjoys strong support from the tuna industry and conservation organizations, will require Senate advice and consent to ratification. New legislation to implement the Convention will also be necessary before the United States could become a party to it. We look forward to working with the Committee on such legislation.

Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR). The 24-member Commission for the Conservation of Antarctic Marine Living Resources governs the harvesting of marine resources in the Southern Ocean. Concern has grown over the illegal harvesting of Patagonian toothfish, a high-value, long-lived fish species marketed in the U.S. as Chilean sea bass. CCAMLR designed an innovative catch documentation system in 2000 and, at its last meeting in November, adopted changes to distinguish better between legal and illegal catches and is instituting a list of fishing vessels which have engaged in IUU fishing. CCAMLR also is moving towards an internet-based document and tracking system to reduce the possibilities for fraud.

Other Commissions. The United States participates in a number of other international fisheries commissions as well. Two of them, the International Pacific Halibut Commission and the Great Lakes Fishery Commission, involve Canada as the only other member. Two others, the North Atlantic Salmon Conservation Organization and the North Pacific Anadromous Fish Commission, have missions to conserve salmon stocks in their respective regions, including by ensuring that such stocks are not fished on the high seas. Finally, we are a longtime member of the Inter-American Tropical Tuna Commission, which regulates tuna fishing in the Eastern Pacific and is involved with our efforts to protect dolphin stocks in that region, as discussed below.

South Pacific Tuna Access Agreement

This Treaty, which allows U.S. vessels to fish for tuna in the waters of 16 Pacific Island States, entered into force in 1988 and was amended and extended in 1993 for a 10-year period, through June 14 of this year. In 2002, the United States and the Pacific Island Parties concluded negotiations to extend the operation of this Treaty for an additional 10-year period, through June 14, 2013. The amendments to the Treaty and its Annexes will, among other things, enable use of new technologies for enforcement, streamline the way amendments to the Annexes are agreed, and modify the waters that are open and closed under the Treaty. President Bush submitted the amendments to the Treaty to the Senate for advice and consent in February 2003. Minor amendments to Section 6 of the South Pacific Tuna Act of 1988, Public Law 100-330, will be necessary to take account of the Amendment to paragraph 2 of Article 3, Access to the Treaty Area, which permits U.S. longline vessels to fish on the high seas of the Treaty Area.

The Treaty provides considerable economic benefit to all parties, with the value of landed tuna contributing between $250-$400 million annually to the U.S. economy. Nearly all of this fish is landed in American Samoa and processed in two canneries located there, one of which is owned by U.S. interests. These canneries provide more than 80% of private sector employment in that territory.

Issues Relating to Particular Species

Whales and International Whaling Commission (IWC) issues. The United States supports the IWC s commercial whaling moratorium, and opposes lethal scientific /research whaling, whaling within the sanctuaries established by the IWC, and international trade in whale products. We continue to support aboriginal subsistence whaling. In addition, we support active work on science and progress on the Revised Management Scheme (the management scheme that would apply if the commercial moratorium were ever lifted). In 2003, the United States will continue to monitor the whaling activities of Japan and Norway. We will also monitor the activities of Iceland, which is now a member of the IWC with a reservation to the moratorium on commercial whaling. In particular, we are concerned that Iceland may begin a research whaling program later this summer. The United States is disappointed that Iceland has joined the IWC with a reservation to the moratorium, but we recognize Iceland as a party to the International Convention for the Regulation of Whaling. We are also monitoring international trade in whale products since Norway resumed such trade during 2002, sending about 38,000 kilograms to Iceland. This year Norway may export whale products to Japan and the Faroe Islands. The next IWC meeting is scheduled for the week of June 16-19, 2003 in Berlin, Germany.

Sea turtles. Section 609 of Public Law 101-162 prohibits the importation of shrimp and products of shrimp harvested in a manner that may adversely affect sea turtle species. By May 1 of each year, the Department certifies to Congress those nations meeting criteria set forth in the statute relating to the protection of sea turtles in the course of shrimp trawl fishing. In 2003, we certified 39 nations and one economy (Hong Kong) as meeting the requirements of Section 609. Haiti did not meet certification requirements for 2002 and Indonesia remained uncertified from the previous year. Earlier in 2003, we removed Honduras and Venezuela from the list of certified countries.

The United States is a leading participant in two groundbreaking international agreements to protect sea turtles, one in the Americas and another in the Indian Ocean region. Although both regimes are just getting off the ground, they hold considerable promise for reversing the declines of these endangered species. The Department of State leads the U.S. delegation to meetings held pursuant to these agreements. Congress has supported these agreements through the appropriations process.

We are also working with NOAA Fisheries and the international community in a variety of fora to address the specific problem of the bycatch of sea turtles in longline fisheries. In 2002, the Department participated in the Second International Fishers Forum, hosted by the Western Pacific Fisheries Management Council in Hawaii. The Department also helped sponsor and participated in the International Technical Expert Workshop on Marine Turtle Bycatch in Longline Fisheries in February 2003 in Seattle. In February 2003, we secured a commitment of FAO to convene an international technical consultation among members of FAO on the bycatch of sea turtles in longline and other commercial fisheries. The Department views this as the next step in a global campaign to seek solutions to this serious problem. In advance of that meeting, however, we are considering ways to work within some regional fisheries management organization (RFMOs), such as the Inter-American Tropical Tuna Commission (IATTC), to provide input from those organizations into that process.

Tuna/dolphin. Following enactment of the 1997 International Dolphin Conservation Program Act, the United States and other countries whose vessels participate in the purse seine tuna fishery of the Eastern Pacific Ocean entered into negotiations to create an effective, binding agreement to protect dolphins from harm in this fishery. The resulting 1999 Agreement, which built on an earlier voluntary regime, has been a solid success, bringing observed dolphin mortalities down to extremely low levels through the use of proper incentives for vessel captains and a strong oversight program that includes mechanisms for transparency otherwise unknown in the field of international fisheries. Under the resulting 1999 Agreement and the earlier voluntary regime, dolphin mortalities have been reduced more than 98% from as recently as 1987.

We are aware of concerns regarding the level of compliance with this Agreement by some fishing countries. While the level of reported infractions represents a small percentage of overall activity under the Agreement, the Departments of State and Commerce are working with the other participants in the International Dolphin Conservation Program to address these concerns and to ensure that compliance with the Agreement is at the highest possible level. It should be noted, however, that the other countries whose vessels operate in this fishery entered into the 1999 Agreement with the expectation that the United States would adopt a new definition of dolphin-safe tuna. However, the International Dolphin Conservation Program Act made such a change in definition contingent on the outcome of certain studies and a finding by the Secretary of Commerce, a matter that remains in litigation.

FAO Initiatives

The United Nations Food and Agriculture Organization (FAO) Committee on Fisheries (COFI) held its 25th meeting in Rome February 24-28, 2003. Major achievements include a strong work program for the next biennium on illegal, unreported and unregulated (IUU) fishing within FAO, agreement on the need for a government meeting on sea turtle interactions with fishing gear, and the adoption of a strategy to improve fisheries data collection and reporting. In addition, FAO made progress on the U.S. led initiative to foster cooperation between FAO and CITES, though outstanding divisions led COFI to establish an open-ended informal group to continue work on this issue.

The United States is leading an effort in FAO to strengthen implementation of the four FAO International Plans of Action (IPAO), in particular the IUU and capacity reduction Plans. In support of the IPOA on IUU fishing, we are now in the process of finalizing the U.S. national plan of action on IUU, which will serve as a model for other countries. We are also contributing resources and technical expertise to an FAO conference on fisheries enforcement to be held in Malaysia in 2004, one goal of which is to provide practical training for and increased cooperation between fisheries enforcement professionals in developing countries. Working through the U.S. Joint Subcommittee on Aquaculture, the United States will be actively engaged in the new FAO work program on aquaculture with a view to improving the environmental and economic sustainability of the sector. Our colleagues in the Department of Commerce will be discussing U.S. activities relating to capacity reduction efforts in the FAO and elsewhere.

FAO will host a major conference on deep-sea fisheries in New Zealand in December 2003. Deep-sea fisheries take place in some of the least understood ecosystems on the planet. Although available technology allows fishing vessels to operate around previously unreachable seamounts and oceanic ridges, very few international agreements are in place to provide a basis for managing these fisheries effectively, and very few if any management measures for these fisheries have been adopted.

WTO and fish subsidies

The Administration is pleased with the progress being made at the WTO on reducing or eliminating subsidies that contribute to overfishing, given the correlation between certain forms of subsidies to the fisheries sector and problems of overcapacity and IUU fishing. On the details of the negotiations and the U.S. strategy for achieving our objectives in the Doha Development Agenda, we will defer to the Department of Commerce.

White Water to Blue Water Initiative

This partnership initiative, launched in 2002 at the World Summit on Sustainable Development, involves U.S. federal agencies, the United Kingdom, France, Canada and the Netherlands, Caribbean governments, the Caribbean Environment Program, CARICOM, other international organizations, non-governmental organizations and the private sector. The partnership initiative is designed to integrate the management of watershed, coastal, and marine resources in the Wider Caribbean region, beginning with upstream sectors (watersheds, inland forests, agricultural areas and population centers) and extending through wetlands, mangrove swamps and coral reefs into the ocean. It aims to improve capabilities of coastal States to manage watershed and coastal-marine ecosystems for sustainable development. We also seek to promote regional coordination among the partners to increase economies and efficiencies. National teams from government, civil society, and the private sector will participate in a March 2004 conference in Miami designed to identify new partnerships and provide technical training. We hope that the initiative may later be adapted for other regions, such as Africa and the South Pacific.

Conclusion

Thank you very much for this opportunity to address the Subcommittee. I would be pleased to try to answer any questions that you may have. [End]

Released on May 23, 2003

May 28 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's real gained for the fourth day in six on investor expectations of new capital flows as local industrial companies and banks sell bonds abroad.

The real rose 0.5 percent to 3.0120 per from 3.028 yesterday. The real has gained 18 percent against the dollar in 2003, the best performance of the 16 most widely traded currencies. Mexico's peso strengthened.

Brazil's Banco Votorantim SA, the finance arm of the Votorantim cement, mining and industrial group, said it plans to sell at least $100 million of two-year bonds. Banco Bradesco SA, Brazil's third-largest commercial bank, yesterday said it plans to sell $50 million of 18-month bonds, and Cia. de Saneamento Basico do Estado de Sao Paulo, the country's largest water and sewerage company, said it plans to sell $200 million of debt in the next two weeks.

The capital flows are still coming,'' said Flavio Farah, head of the Treasury department at the Sao Paulo unit of Westdeutsche Landesbank Girozentrale. There seems to be a growing feeling the real will hold around 3 to the dollar for the near term.''

Brazilian banks have received the bulk of the more than $5 billion borrowed overseas by corporate Brazil this year. They have taken advantage of low rates abroad, benchmark U.S. Treasury debt yields are at their lowest in more than 40 years, to buy Brazilian government bonds paying yields at four-year highs.

The U.S. 10-year Treasury bond, a benchmark for U.S. borrowing, yields 3.42 percent while the benchmark Brazilian rate is 26.5 percent. Thirteen-month Brazilian, fixed-rate notes were sold to yield 23.54 percent yesterday.

Meirelles

Investor expectations that Brazilian yields may remain high were supported by Brazilian central bank President Henrique Meirelles today, who told a congressional committee in the capital, Brasilia, that inflation has not yet ``controlled.''

The 12-month inflation rate in April was 16.8 percent, almost twice the government's 8.5 percent target for 2003. Meirelles' comment raised investors expectation rates may not decline after central bank monetary policy meetings next month.

Meirelles is just following a synchronized speech: that they won't bow to pressure unless inflation subdues effectively,'' said Sandra Utsumi, chief economist with BES Securities do Brasil in Sao Paulo. In a way, they are saying `This may not be the right time to cut rates.'''

Interest rates rose in the futures market.

The overnight interest-rate futures contract for Jan. 2 settlement, the most-traded on Sao Paulo's BM&F futures and commodities exchange rose 4 basis points to 24.17 percent. The contract reflects interest-rate expectations for the end of December. A basis point is 0.01 percentage point.

Brazil's 8 percent bond maturing in 2014 rose a quarter cent to 89 cents on the dollar, pushing the yield down to 10.73 percent, according to J.P. Morgan Chase & Co.

Mexico

Mexico's peso rebounded from its biggest decline in four months to rise on investor expectations an economic rebound in the U.S. will boost demand for Mexico's exports from its biggest customer.

The peso strengthened 0.5 percent to 10.3720 per dollar after declining 1.8 percent to 10.4225 yesterday, its largest one-day loss since Jan. 21.

The peso on March 6 fell to a record low of 11.2644 per dollar on investor concern U.S. growth might stall this year amid indications the Mexican economy might contract. The U.S. buys about 85 percent of Mexico's exports, accounting for a quarter of its $600 billion economy, and is behind about 70 percent of the foreign investment flow into Latin America's largest economy

The currency fell yesterday after yields on the government's benchmark 28-day Treasury notes fell to 4.91 percent, 1 basis point above the record low reached two weeks ago, prompting some investors to seek higher returns in other markets.

Regional Currencies

Argentina's peso declined for the fourth day in five, losing 0.6 percent to 2.8825 per dollar from 2.8650 per dollar.

Chile's peso weakened for a second day, losing 0.5 percent to 713.85 per dollar, while Colombia's peso fell for a third day, shedding 0.5 percent to 2,879.50 per dollar.

Peru's new sol weakened 0.1 percent to 3.4948 per dollar from 3.4920 per dollar yesterday after President Alejandro Toledo declared a 30-day state of emergency, calling in the army to reopen roads blocked by farmers and to put an end to a strike by 300,000 teachers. Venezuela fixed its bolivar at 1,598 per dollar earlier this year. Last Updated: May 28, 2003 17:27 EDT

onebusiness.nzoom.com Opec Secretary General Alvaro Silva said on Wednesday that the cartel could consider output cuts to keep oil prices within its preferred price range of $US22 to $US28 per barrel.

"If we need to cut to keep the prices within the band, we will consider doing that," Silva told reporters at an event at the Central University of Venezuela in Caracas.

Opec is scheduled to meet on June 11 in Qatar to decide on production policy. Opec has also invited rival exporters - Russia, Norway, Mexico, Oman, Angola, Egypt and Syria - to its conference in Doha.

Oil prices dipped from recent five-week highs Wednesday as traders eyed the return of Iraq's exports after the US-led war on Baghdad.

US crude futures settled 77 cents lower at $US28.58 a barrel on Wednesday after Iraqi oil officials said exports could be restarted in two to three weeks.

Opec agreed in April to cut oil production by 2 million bpd beginning June 1, after several cartel members earlier in the year increased output ahead of the invasion of Iraq.

"If these measures are not sufficient, it is possible we will take additional measures to keep the market balanced," Silva said.

Venezuelan Oil Minister Rafael Ramirez on Wednesday said the cartel could reduce its production ceiling by up to 1 million bpd if Opec decides to reduce quotas in June.

Iraq's de facto oil minister, Thamir Ghadhban, said over the weekend he expected Iraq to pump 1.4 million bpd, about half of prewar capacity, by mid-June.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 28, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: Venezuela's National Teachers' Federation Social Documentation & Analysis Center announced that the cost of the basic food basket reached 395,019 bolivares, reflecting a 41,143 bolivar (11.6%) increase even before May comes to an end. This figure represents a little more than double the minimum wage, an indication of the deterioration of real salary levels in the Venezuelan economy.

The cost of the food basket is expected to rise again when the government begins relaxing the controls it has imposed on the foreign exchange market and prices. The potential increase in the cost of certain goods, because producers must revise their prices, will have yet another impact on consumer prices.

This situation is most dramatically reflected in the number of members of the Economically Active Population (EAP), estimated at 11 million, who are unemployed; they represent 20.4% of the total, meaning about 2.5 million workers have no formal jobs. Another very high proportion, in the neighborhood of 55%, are doing informal or part-time labor, and the unemployment rate is expected to reach 30% by the end of 2003.

Under any circumstances, inflation is projected at about 50% by the end of this year, meaning that Venezuelan consumers will see their purchasing power collapse and the lower-income population will be hardest hit by the deterioration of real salary levels, given the weakness of the Venezuelan labor market.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 28, 2003 By: Patrick J. O'Donoghue

Federation of Chambers of Industry & Commerce (Fedecamaras) has been discussing the 19-clause agreement  reached after 7 months of government-opposition negotiations. Hard-liners, such as former Fedecamaras president Vicente Brito, gung-ho Venezuelan Ranchers Federation (Fedenaga)  president, Jose Luis Betancourt and Agricultural Producers Federation (Fedeagro) Jose Manuel Gonzalez. 

Acting Fedecamaras president, Albis Muniz admits that the business sector is divided on the agreement scheduled to be signed on Thursday. Speaking to members of the Venezuelan-Canadian Chamber of Commerce, Munoz says the political and sociological process is complicated and the solution is a slow process. 

"We in Venezuela have been too hasty because we are accustomed to expect immediate results and expect others to do things for us." 

Munoz says the agreement is aimed at maintaining a bridge with international opinion and suggests a National Pact similar to the Moncloa agreement that has ensured 13 years of economic growth and social benefits in Spain. 

Fedecamaras representative at the negotiations table, Rafael Alfonzo has been telling businessmen that he has his reservations about aspects of the agreement. 

The Movimiento Federal, of which some prominent Fedecamaras businessmen, are members has reject the agreement outright, alleging that the government has secured the support of international bodies and there is no guarantee that the recall referendum will go through.

Historian Jorge Olavarria has welcomed the agreement and criticizes those who call it the least of evils. "Once the agreement has been signed, the opposition can move forward and start collecting signatures demanding a recall referendum ... what are we waiting for?"