Sep 23, 1988

U.S., JAPAN TABLE SOME OFFERS ON TROPICAL PRODUCTS.

GENEVA, SEPTEMBER 21 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The United States, Japan and the Nordic countries have put forward this week some "offers" in the Uruguay round negotiating group on tropical products, according to GATT sources.

The U.S. offer is said to cover products in about 130 individual tariff lines, and that of Japan 144 tariff lines.

The U.S. has also claimed that its offer covered 75 percent of the value of agricultural tropical products in the seven categories of such products long identified in GATT as of export to the third world and the subject of discussions in the group.

Some other industrial countries, including Canada, Australia and Hungary, have reportedly said they are "about" to submit their own offers list.

There was no immediate reaction from third world participants. Some of them said that before making an assessment they would have to study the "offers" carefully, and see what products are covered in the offers and what have been left out, and the real tariff or non-tariff concessions being offered.

Malaysia, in some preliminary comments on behalf of the Asian group of countries, is however reported to have wondered about the products not covered in the offers, and referred in this connection to rice, tapioca and bananas, which are excluded from the Japanese offer.

Some participants privately suggested that the offers of the United States did not substantially change its original stand.

U.S. tariffs on many of these products, another participant noted, are already low on unprocessed raw materials, and the U.S. stand hitherto in tying these negotiations to the negotiations on agriculture and to concessions by third world countries had merely helped other industrial countries to stonewall.

The U.S. offer now might simply help to force the hands of these countries.

In a position paper circulated to the UNCTAD trade and development board, the Group of 77 have complained that negotiations in tropical products had so far only witnessed attempts by industrial countries to reinterpret the mandate by insisting on "a fair degree of burden-sharing" and "contribution by developing countries".

The G77 also complained that the industrial countries are insisting that liberalisation should cover tropical products exported by them, and had arbitrarily sought to exclude a number of recognised tropical products form the coverage.

A preliminary reading of the offers of the U.S. and Japan do not indicate that they have met these objections or changed their stance on these.

The G77 paper also complained that some industrial countries had gone so far as to link the progress in this sector to the agriculture sector where lack of progress was mainly due to differences among industrial countries.

While appearing to move away from this, the U.S. has now made clear that any advance implementation of early agreements on tropical products would depend on a satisfactory outcome at Montreal on agriculture.

The G77 also complained that third world countries were unjustifiably being asked to undertake commitments top phase out export restrictions on tropical products.

This is a demand of the EEC, and so far the EEC has now given up this demand in the group.

In the Uruguay round GATT negotiations on goods, tropical products, recognised for over 25 years as a separate sector of primary export interest to the third world countries, has been accorded special priority by the Punta del Este declaration in terms of progress in negotiations and early implementation of results.

With just a little over two months for the Montreal mid-term review, the tropical products group is still to arrive at a common negotiating basis, even though this was supposed to have been accomplished by end of 1987, according to the negotiating plan approved in February 1987.

At its July meeting, the negotiating group was still unable to reach agreement on a negotiating basis, but agreed to invite those participants who have not done so to deposit their "initial offers" and for others who have done so to elaborate on their requests and offers.

Consultations and negotiations covering all seven product groups covered by the mandate of the negotiating group are to be held from September to early November.

In the paper tabled Tuesday, while slightly moving away from its original stance in linking the negotiations to negotiations in agriculture, the U.S. still insisted that market access in agricultural tropical products should be covered by the tropical products group, while subsidies and health and sanitary regulations should be negotiated in the agriculture group.

While the U.S. objective continued to be one of elimination of all trade-distorting policies affecting tropical products (as in the area of agriculture), the U.S. was willing to eliminate "on an expedited basis" tariffs and all non-tariff measures affecting the trade of an agreed list of agricultural tropical products.

Attaching a list of such products, the U.S. said it however "expects all countries participating in these negotiations to eliminate their tariff and non-tariff measures affecting each of the products on the agreed list within the time period adopted by the negotiating group".

Other agricultural products not included on its list, the U.S. said, would continue to be considered for expedited treatment as in its original proposal, namely on an individual request basis.

As regards what was describes as "non-agricultural" tropical products (tropical plaiting products and products in the category of jute and hard fibres and natural rubber and tropical wood), the U.S. was willing to consider reduction of tariffs "to the maximum extent possible" on the basis of requests.

Negotiations on these products, it suggested, should aim at eliminating duties on unprocessed products, reduce and bind duties on processed and semi-processed products up to a specified percentage of their current bound rates, reduce and bind very high tariffs to a maximum rate, and eliminate very low tariffs at or below a specified percentage.

There would also be efforts to reduce to the maximum extent possible non-tariff measures, the U.S. said and added: "we expect to receive concessions or contributions in market access and other negotiating areas of interest to U.S. from participants benefiting from our liberalisation, consistent with the relevant provisions of the Punta del Este declaration".

The U.S. also made clear that advance implementation of these agreements (envisaged under the declaration) would be subject to the U.S. achieving "satisfactory results" at the mid-term review in the area of agriculture.

Following a satisfactory outcome of the mid-term review, the results on tropical products could be implemented on a provisional basis as soon as possible consistent with the statutory authority of the U.S.

The concessions, it added, would be bound only upon successful completion of the Uruguay round.