WORLD BRIEFS

WORLD BRIEFS

MIDDLE EAST

KUWAIT

Major oil companies are drawing up proposals for production-sharing agreements in Kuwait. The proposals are highly controversial, however, and Kuwaiti planners may drop the term ''production-sharing'' in favor of ''oil technology exchange.''

Officials insist there will be no foreign ownership of the country's oil but note that about six output-sharing formulas for the oil sector are currently under study. In these formulas, foreign partners, in exchange for technology, will take their profit in cash, not oil.

Those in favor of production-sharing agreements argue that Kuwait needs foreign expertise to develop its more difficult northern fields by artificial recovery methods and water injection.

Opponents counter that Kuwait could buy the necessary technology without such agreements. They worry that the state would lose a significant amount of control over production policy in allocated fields.

CENTRAL/EASTERN

EUROPE

ROMANIA

Daniel Daianu, the finance minister, said he would scrap the previous government's plans to reform the income tax system.

This may seem alarming: The current arrangement is notoriously complicated, with some high rates but many loopholes for things like interest income.

Mr. Daianu plans more thorough reforms in 1998, including a greater use of indirect taxation and higher rates for the wealthy. The government's emphasis, he said, was on meeting budget commitments rather than granting tax breaks.

WESTERN EUROPE

REGIONAL

The European Commission is renewing its efforts to ensure that market benefits are enjoyed by companies and consumers throughout the European Union.

The commission, the EU's executive arm, has unveiled a ''single-market scoreboard'' on member states' performance in implementing EU legislation.

Most national governments have structures to allow businesses rapid redress when they encounter problems exercising their single-market rights, and the commission has proposed a fast-track procedure for taking action against the most serious breaches of the rules.

The scoreboard is designed to shame member states that have lagged in transposing single-market directives into national law, or that are dilatory in responding to infringement proceedings. The greatest problem areas are transport, public procurement and intellectual property.

Update editions will be published twice yearly, and contact points will soon be available at the commission's Internet site http://europa.edu.int.

ASIA-PACIFIC

HONG KONG

Until the government in Beijing rules explicitly on the legal status of arbitration decisions awarded in Hong Kong, businesses will increasingly look elsewhere to set up arbitration arrangements involving a Chinese counterparty.

Hong Kong's return to Chinese sovereignty last July left unclear the new special administrative region's status as an independent entity under international arbitral agreements.

In the absence of clarification from Beijing, the worry is that any dispute involving cross-border parties will be treated as a domestic issue - just as one between California and New York would be - and beyond the aegis of international arbitration authority.

Since one of the key attractions of arbitration in Hong Kong has been as a means to skirt China's slow-moving and often corrupt court system, foreign businesses with existing arbitration agreements are upset.

Any business drawing up contracts with a mainland party would do well to provide for arbitration outside of Hong Kong.

LATIN AMERICA/

CARIBBEAN

VENEZUELA-CHILE

Bilateral trade is expected to boom this year. The schedule of tariff reductions established in the 1993 free-trade agreement between Venezuela and Chile has been completed for virtually all items, including exports of chemicals and petrochemicals in the case of Venezuela and agricultural items in the case of Chile. Bilateral trade, which reached about $360 million in 1997, is likely to double in 1998.

NORTH AMERICA

CANADA

Canadian demand for natural gas will rise by 30 percent over the next 13 years, the Canadian Gas Association predicts in its latest forecast.

By 2010, 3.2 trillion cubic feet of natural gas will be consumed in Canada, up from 2.5 trillion cubic feet in 1997, it said.

Growth in demand will be greatest in Canada's industrial sector, driven in large part by the increased use of natural gas in power generation. A 41 percent increase in natural gas demand is forecast in the industrial sector over the next 13 years. By 2010, this sector will consume 1.92 trillion cubic feet of natural gas, representing 62.4 percent of Canadian demand.

By comparison, commercial demand will jump 17.6 percent to 555 billion cubic feet, while demand in the residential sector will increase 14.2 percent to 603 billion cubic feet, the association said.

Institutional cutbacks and the increased popularity of small and in-home businesses will affect the commercial market. An increase in energy conservation programs will also have an impact on growth in both the commercial and residential markets, it said.

AFRICA

SOUTH AFRICA

After almost 2 1/2 years of negotiations, there are high hopes that a free-trade agreement between South Africa and the European Union will be made by mid-1998. The two sides have already agreed on three central principles for the creation of a free-trade area.

Any deal must fully comply with World Trade Organization rules, respect sensitive interests and products and benefit the entire Southern African region.