Jun 18, 1991

U.S. ISOLATED IN WORKING GROUP ON BANNED AND HAZARDOUS GOODS.

GENEVA, JUNE 17 (CHAKRAVARTHI RAGHAVAN) – The issue of a GATT Agreement on Domestically Prohibited Goods and Other Hazardous Substances is to go to the GATT Council with the report of a Working Group dealing with this where sending the U.S. is the sole holdout blocking an accord.

The subject of trade in domestically prohibited goods and other hazardous substances has been before GATT since the 1982 Ministerial Session of the GATT Contracting Parties and the work programme adopted there.

But there has been resistance on the part of the Industrialised Countries to take actions to extend to their foreign trade the restrictions, of banning or severe restrictions, they may imposed in their domestic markets for health and other reasons.

After considerably delays and protracted discussions and consultations in a working group, chaired by the former British Permanent Representative to the UN in Geneva, Mr. John A. Sankey, a draft text has been evolved on which all others, excepting the U.S. are agreed.

The draft in fact provides essentially for notification procedures and transparency in GATT for international trade in domestically prohibited goods and other hazardous substances.

Any country banning or severely restricting on its domestic market any category of products is called upon to make a judgement whether it should extend the ban to the international trade and exports from the country.

It is also called upon to notify the GATT both of the ban or severe restrictions and the reasons and for the GATT secretariat to make these information available to other CPs.

The U.S. however has been opposed to the "coverage" of products proposed in this somewhat innocuous draft agreement, the measures to be taken by Contracting Parties that do ban or severely restrict products on their domestic markets, and proposals for consultations and dispute settlement which would keep open the possibility of using GATT's normal dispute settlement mechanisms.

At the meeting of the working group on Friday, the U.S. came forward with some proposals for amendments which would have severely restricted the "products" whose international trade would come under the agreement, confine the GATT requirements to those prescribed in the international instruments in this area to which a country is a party, and exclude GATT dispute settlement procedures.

One U.S. amendment would have defined the product coverage to "consumer products" but excluding "food products, drugs, medical devices, cosmetics, tobacco or tobacco products, firearms or ammunition, motor vehicles or motor vehicle equipment, pesticides, aircraft or boats".

The measures to be taken by GATT Contracting Parties would be confined to those provided for in the relevant international instruments dealing with products and listed in the annex.

The settlement of disputes arising out of the agreement would be along the lines of the GATT codes (where only the limited rights and obligations under the terms of the agreement would be looked into and not general GATT rights and obligations).

The U.S. proposal would appear to have come under some sharp criticism at the working group from the European Community, Nordics and the Africans.

While the EC and the Nordics found the U.S. proposals retrogressive, Cameroon reportedly said that it was precisely the exports of food, drugs, pesticides and other products banned in the country of origin or severely restricted on grounds of harmfulness to health or hazard that the African countries were trying to tackle and which the U.S. wanted to exclude.

None of the participants could also see any point of having a GATT agreement if the notification and transparency requirements were to be no more than those in the relevant international instruments.

As for the U.S. proposals on dispute settlement, several participants noted that the U.S. stand was diametrically opposite to what it had adopted so far in the GATT and in the Uruguay Round.

After some discussions, it was reportedly agreed that the working group (whose mandate is expiring) should report to the GATT Council where the matter could be dealt with. It was felt in informal consultations that the mandate of the working group, to negotiate and conclude the agreement, could be extended only if there was serious indication on the part of the U.S. to agree to the proposals.