Jul 8, 1987

NORTH-SOUTH DIVIDE ON TROPICAL PRODUCTS.

GENEVA, JULY 6 (IFDA/CHAKRAVARTHI RAGHAVAN) – Third world and industrialised countries remain divided in the negotiating group on tropical products on scope and focus of the negotiations, according to third world sources.

The industrialised countries want what is described as "extended coverage", namely focus attention not merely on trade liberalisation by industrialised countries but all countries, including third world countries.

The third world countries on the other hand have been insisting on the "traditional approach", and focussing on issues that have long been of concern to third world countries in this area, and on which considerable preparatory work has been done but without ever moving to negotiations.

Third world sources said that no conclusions could be reached at the meeting of the group last week, and further consultations are to be held. This was the third meeting of the group.

The fourth round of meetings of the various negotiating groups are expected to take place in October, but the dates and overall calendar for meetings of the various negotiating groups are to be fixed by the Group of Negotiations on Goods (GNG), at the end of the current third round of meetings, after the GNG undertakes an overall assessment of progress.

At last week’s meeting, Sri Lanka, on behalf of a group of eight third world countries (Sri Lanka, Bangladesh, Colombia, Cuba, Egypt, India, Nigeria and Pakistan), reportedly submitted a paper giving an initial list of tropical products of export interest to them, and addressed to the eleven industrialised countries (treating the European Community as one).

Some 262 individual products were listed according to the new harmonised code used for customs purposes, and the 262 individual products were in seven basic tropical product groups.

The proposals seek the fullest trade liberalisation of tariff and all non-tariff measures affecting exports of these products, in their semi-processed and processed forms in the framework of the negotiations on tropical products.

The Asian group of countries reportedly tabled their own separate proposals for harmonisation of existing tariffs on tropical products and bringing tariffs on individual items down to the lowest tariff levels. They also wanted removal of non-tariff measures on a number of products of export interest to them.

The negotiating objective set by the Punta del Este declaration calls for "fullest liberalisation of trade in tropical products, including in their processed and semi-processed forms", an covering "both tariff and all non-tariff measures affecting trade in these products".

In calling for special attention to this area, the declaration said "contracting parties recognise the importance of trade in tropical products to a large number of less-developed contracting parties and agree that negotiations in this area shall receive special attention, including the timing of the negotiations and implementation of the results" as provided for in the general principles governing negotiations.

Third world countries at the meeting reportedly praised the work done so far by the GATT secretariat on the data base for the negotiations – covering the seven basic product groups and eleven major markets (with the EEC treated as one).

However, the industrialised countries reportedly said that there should be "wider coverage", and not only industrial markets but those of third world countries also should be covered.

One third world participant said that though each of them spoke individually, it was clear that they had taken a coordinated approach. The European Communities, U.S., Nordics, Japan, Canada and New Zealand – all spoke in the same vein, the participant said.

The EEC reportedly spoke of the need for participation in the liberalisation process by all participants, and with all of them "contributing" to the liberalisation.

Australia reportedly spoke of its own export interest in certain tropical products, and its intention to provide its own list of such products for the next meeting.

Colombia reportedly rejected the overall thrust of remarks of the industrialised countries, and pointed out that the tropical products had been listed as a separate item in the Uruguay round to take care of the interest of the third world counties, and not the interest of the industrialised countries.

Underscoring the long history of GATT work in this area (since late 1950’s) and lack of progress, the Colombian delegate reportedly noted that the subject was again brought on to the GATT work programme in the 1982 Ministerial declaration.

Further work and process of liberalisation was then blocked by industrial countries who raised questions about the "appropriate" negotiations specified in the 1982 work programme.

But now that "appropriate negotiations" had been provided for by the Uruguay round, participants should go ahead on the basis of considerably work already done in the GATT.

The concept of the negotiations yielding "balance of benefits" to all CPS was not intended to establish balance in each sector, but in the negotiations as a whole.

Tropical products was an area of interest to third world countries, and fullest liberalisation would benefit third world countries.

There might be other areas covered by the MTNS in goods where others would benefit, and where third world countries might have to make concessions. But the concept of balance of benefits in each sector, and thus in the tropical products sector, was not acceptable, Colombia reportedly added.

India reportedly noted that since the Kennedy round, tropical products had been traditionally identified as an area of specific export interest to the third world countries. None of the third world countries in the group had sought any "extended coverage" or enlarging the scope of the secretariat’s study or data base.

But there was now talk (from industrialised countries) of "contributions by all" for liberalisation of the trade in tropical products and for "extended coverage".

It was not clear, for example, what where the tropical products of interest to the Nordics or Japan where they wanted liberalisation through "extended coverage".

The request for "extended coverage" appeared to be a diversionary tactic, despite the assurances given about "special attention" to be given to fullest trade liberalisation in this area. The moves went beyond the negotiating basis and objectives established in the Punta del Este mandate.