Jun 7, 1988

MAJORS ASKED TO CLARIFY STAND ON TROPICAL PRODUCTS.

GENEVA, JUNE 3 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Third world countries in GATT have pressed the three majors – United States, the Economic Community and Japan – to clarify their stands and make their offers for liberalisation of access to their markets for third world exports of tropical products.

The Uruguay Round Negotiating Group on Tropical Products held this week a round of informal, "pre-negotiation" multilateral consultations, during which individual product lists submitted by countries were discussed.

According to the time-table of the group, after another round of multilateral consultations in the week of June 27, the group will hold a formal meeting on July 6.8 to assess the outcome and agree on a basis for holding negotiations in September-October.

While some participants felt the exercise this week had been useful, many others had contrary views.

Participants said that while there was general agreement not to repeat the process next time, there was no agreement on what should be done and how the negotiations could be moved forward.

The chairman of the group, Paul Leong Khee Seong of Malaysia, at a formal session Friday evening is reported to have suggested that in the next round of consultations they should look specifically at issues relating to products and examine some of the general proposals.

Earlier on the informal discussions, he is reported to have put forward a "non-paper" (unattributed proposals on paper that would not bind anyone) in which he would appear to have suggested that third world countries at the next round should indicate what their "contributions" to liberalisation in this sector would be.

This is a viewpoint being pressed by the U.S. and EEC.

A number of third world participants disagreed with the suggestion and said they could not agree to consultations on this basis. But a few like Malaysia supported the chairman’s idea.

At the formal meeting, Mexico reportedly again put forward the idea of a checklist, and this was supported by a few others. The chairman suggested that perhaps this idea could be looked at in the second round of consultations.

The EEC again spoke of the need for "contributions" by the third world countries and wanted them to be more forthcoming in the next round. The U.S. wanted responses to its own ideas. Both also sought responses to their questions to individual countries about the nature of their import regimes on specific products.

Colombia reportedly noted that it had provided information, but this was only for information and not for negotiations.

India said that it would provide the information sought, but this was without prejudice to its stand about the approach to the negotiations, namely, that the focus should be liberalisation of tariff and non-tariff barriers by the industrial countries.

The suggestion by India, supported by Brazil, Mexico and Pakistan, that the Secretariat should prepare a check-list of suggestions made in the consultations as a basis for further work was objected to by the United States and the EEC.

Some participants expressed their concern that this procedure, which was being adopted and followed in other negotiating groups, was being blocked here by the U.S. and EEC.

A number of third world participants at the consultations expressed their "disappointment" at the positions of the three majors, and their lack of positive response to a long-standing issue.

Tropical products is one sector which has been identified as a sector of interest to the third world countries, and the possibility of early accords and agreement has been envisaged for this sector in the Punta del Este declaration.

According to participants, in this week’s multilateral consultations, none of the three majors put forward any "offers" or moved towards formulating a basis for negotiations.

Also, the U.S. and EEC which have addressed queries to third world countries about their import regimes in tropical products, reportedly pressed these countries to indicate their own "contributions" to the negotiations by way of liberalising their own imports.

At one stage, Mexico reportedly pointed out that for a long time, over 25 years now, this sector had been identified as of special interest to the third world countries and one where trade liberalisation would benefit the third world countries. The stands of the U.S. and EEC were in conflict with this.

The EEC reportedly argued that the principle of GATT was not to benefit the third world countries, but for trade liberalisation to benefit the best competitors.

Other third world country reportedly said that for a long time the list of products under the category of tropical products had been selected and identified from the viewpoint of their export interest to the third world countries and "fullest trade liberalisation" had been sought to benefit the third world countries.

If the idea were to approach trade liberalisation in this sector in a general way, there would have been no need to list the sector separately. All the problems could have been dealt with in the tariff, non-tariff, and agriculture groups.

Earlier, Sri Lanka reportedly suggested that in the next round of multilateral consultations, the group should address possible elements for a common basis for negotiations.

But before they could move forward in this direction, the three majors should give some clarifications of their stands.

Any "contribution" by third world countries could come at a later stage. But the industrial countries, and the three majors in particular, should indicate their "offers".

Sri Lanka had tabled in April, on behalf of a number of countries, an indicative list of products and modalities for negotiations.

In the informal consultations Friday, Sri Lanka delegate would appear to have addressed specific questions to each of the three majors.

Japan, the Sri Lanka delegate reportedly noted, had been rather silent. Its idea of detailed negotiations on a request and offer basis could come at a later stage, but could not be the basis now when the effort was to reach early results in time for the mid-term review in December.

Japan should provide a consolidated list of offers on the basis of the various indicative request lists. It could either make an offer at bilateral negotiations or make a multilateral offer and negotiate multilaterally.

The United States had been asking in the consultations why the third world countries were not responding to its proposals and ideas, and why no replies were being given to its request for information on the import regimes in third world countries.

Sri Lanka reportedly said that the U.S. proposal was "simply out of line" with the proposals for "fullest liberalisation", which would mean elimination or reduction of tariff and non-tariff barriers.

The U.S. interpretation of non-tariff barriers appeared to include domestic support measures.

However, it was the general understanding that the negotiating group on tropical products was dealing with market access issues. All requests had been put forward on that basis, and even the data collection had been done in the same way.

Even pragmatically, it would not be possible to extend data collection to other measures.

The group should now address only market access questions. Other issues could be addressed after the Montreal meeting.

The U.S. should therefore delink issues of "support" and "trade-distorting" measures from "market access" questions. Alternatively, the U.S. should address these aspects in the agriculture negotiating group.

The entire negotiations in the group had been based on a set of seven product groups, long identified as of export interest to the third world.

In its proposals, the EEC had taken out several product and sub-product groups, and linked them with agriculture.

Among the products thus excluded by the EEC are vegetable oils and oilseeds, and such products like manioca.

The Sri Lanka delegate reportedly said that trade-distortive measures could be addressed in the agriculture negotiations, but all the products taken out by the EEC must be put back so that there could be the same basket of products whose market access issues could be negotiated in the group.

Clarifications were also sought on the EEC’s conditions, such as "contributions" by others, etc.

Were these merely subjective criteria of the EEC to assess the overall package or where they condition for EEC action, Sri Lanka reportedly asked.

If it was the former, it was an "internal matter" for the community and hardly one to be put on the table.

The EEC Representative reportedly clarified that these were mainly criteria for internal assessment, but that they had put it on the table so that other would know the basis on which the EEC would make its own assessment.