Nov 2, 1985

LARGE CONSENSUS CLAIMED FOR PRIORITY TO GOODS IN NEW ROUND.

GENEVA, OCTOBER 31 (IFDA/CHAKRAVARTHI RAGHAVAN)— The senior officials' group in GATT has concluded discussions on the subject matter of a proposed new round of MTNs in GATT, with a large degree of consensus on need for priority for issues in trade in goods, according to Third World delegates.-

In presenting this assessment Thursday evening, Amb. Paulo Nogueira Batista of Brazil said it was clear that most Contracting Parties did not place much emphasis on or priority for the issue of services, being raised by the U.S.-

Batista was addressing a press conference along with his colleagues from Argentina, Egypt, India and Yugoslavia.-

The senior officials group, set up by a decision of the GATT Contracting Parties at their special session on October 2, is holding its third round of meetings, and is due to take up Friday the issue of "modalities" for a new round.-

The group is due to hold another session on November 11-12 to agree on its report to the annual session of the CPs.-

At its meetings Wednesday and Thursday, the group discussed among other things the issue of services, and questions relating to the competence and jurisdiction of the general agreement to deal with issue of "services".-

Batista said that the U.S. position on the services issue was that it was within the jurisdiction of GATT, that services should be included in a new round and that this was a priority question.-

"There was very little support for all the three points of the U.S. position", Batista told newsmen.-

While there was a small number who supported the us view on competence, many others argued that it was not within GATT competence, and "a great majority" did not see it as a priority issue.-

Indian delegate, S. P. Shukla said if the U.S. argument, that services could be considered in GATT since one of the objectives spelt out in the preamble was "raising standards of living", was to be accepted then almost anything can be brought into GATT - multilateral financial flows, education, population control, etc.-

And it was not a question like the GATT MTN code on government procurement, where international trade in goods was affected by government policies and which countries may or may not join, but whether the issue of services could be negotiated within GATT at all.-

Batista said that the discussions in the senior officials group had been on substance, and had brought out a great degree of consensus on the issues of standstill and rollback, on the need for priority treatment to the safeguard issue, and the need for liberalisation of trade in textiles.-

The five delegates said that before even any decision on setting up a preparatory Committee could be taken, there would have to be guarantees at the highest levels of governments of each Contracting Party on the standstill issue.-

Mere declarations at the level of delegations as in the past were no longer credible.-

"We cannot embark on any negotiations under constant threat from major trading powers of protectionist actions and restrictions", they added.-

The Brazilian delegate said that for Brazil, as a seriously indebted country, a precondition for any new round would be a commitment on the part of industrial countries "to negotiate at a political level the question of debt".-

Outlining the Brazilian stand at the senior officials group Thursday, Batista had said that before a decision on setting up a preparatory committee, "a firm and credible individual commitment by creditor developed CPs should be undertaken at the highest political level to accept to engage in inter-governmental negotiations on the settlement of the debt problems of the developing countries".-

There should also be firm and credible individual commitments by all developed CPs, at highest political level

-- To pursue convergent macro-economic policies conducive to non-inflationary growth and strict fiscal discipline,

-- To start a process of review and reform of the international financial and monetary system in appropriate fora to be agreed upon by all interested countries, and

-- To agree to pursue in GATT an in-depth examination of all effects of exchange rate fluctuations on international trade.-