9:17 AM Dec 15, 1993


Geneva 15 December (Chakravarthi Raghavan) -- Trade Negotiators gathered at the informal heads of delegations meeting dispersed at about three am Wednesday morning, ending their final phase of intensive negotiations by approving all the outstanding agreements with agreed changes, along with related decisions and recommendations for adoption by the Trade Negotiations Committee.

Among the agreements thus approved were those on Services, Textiles and Clothing, Trade-related Intellectual Property Rights and a few others needing corresponding changes.

And they gathered again on Wednesday morning to set their seal on one or two incidental issues.

Also agreed upon, after the US lifted a reserve it had put on it, was for the creation of a multilateral trade organization. It is now to be called a World Trade Organization (WTO), as the US wanted.

Apart from confusion over acronyms -- there is a World Tourist Organization, with a WTO acronym long in the field (and perhaps giving rise to some quips like "Well, Turn Over" in terms of its powers over the developing world) -- the text as settled last week was approved.

A major last-minute obstacle, and one that could perhaps have resulted in a failure of the negotiations, was the one on Textiles and Clothing where US-EC demands on India and Pakistan was unacceptable to the latter and ultimately the US gave way.

The final run-through came after the United States and the European Communities who had forced the rest of negotiators and negotiations to a standstill during their mutual quarrels, settled on Tuesday morning what they called "the comprehensive agreement" on all outstanding issues between them and told the rest of the world to accept them and conclude the negotiations over the next 48 hours.

For the record, the two had said that they had only settled their own differences -- and that too in response to the repeated appeals from others to do so (a justifiable claim perhaps, given the plethora of statements and appeals from the level of junior diplomats at other meetings to heads of state/governments in their various conclaves) -- and that it was now for others to resolve the other differences and conclude the negotiations.

That the others had little choice excepting to fall in line became very quickly obvious almost across the board. Even the Japanese who had been dissatisfied with the US-EC deal thrust on them, gave way.

In the Trips agreement, a change pushed for by Canada and India, in relation to the right of any party to raise a "non-violation" dispute, was agreed to in that there would be a five-year moratorium on this, and the issue would be reviewed with any change needed decided by the Trips Council by consensus.

In the GATT dispute settlement, parties could claim nullification or impairment under Art. XXIII because of failure by a contracting party to carry out its obligations as well as "the application" by a cp of any measure, whether or not it conflicted with the provisions of the agreement.

India and Canada, supported by Brazil, Egypt, Pakistan and to some extent the EC, had been contending that this traditional GATT "non-violation" dispute over market access concessions could not apply to the TRIPs where only standards, norms and rules are provided for.

The US, supported by Australia, New Zealand and Hong Kong though had sought the retention of this right.

Also, in TRIPs, another textual change relates to the compulsory licensing of semi-conductors. The US had sought a change to provide that compulsory licences could be issued only for governmental purposes or for non-commercial activities (research etc). However, some of the developing countries insisted on adding the possibility of licensing for reasons of anti-competition activities of the enterprises and holders of these rights.

In services, the final agreement provides effectively for continuance of the negotiations over financial services for a further period until six months after the entry into force of the accords.

With the US having taken an MFN exemption for its two-tier approach, others who have some offers on the table could keep them and negotiate to persuade the US to change, and failing that, six months after entry into force, they would have the right to change their commitments.

The same was also applied to the movement of personnel, one of the modalities for supply of services.

As for maritime services, like in the case of basic telecommunications, there is expected to be a resolution or decision to enable a work programme to be set up.

As one negotiator put it, "we will not have any new round for a long time, atleast hopefully, but there will be a continuous engagement and pressure on individual issues for negotiations and new accords".

What it would do for developing countries remain to be seen.

As delegates wound up and while most negotiators publicly expressed satisfaction and about the gains, privately many of the developing country negotiators said in fact they had gained much less in terms of the market access openings, with probably the average tariff cuts in the main markets (US and EC) being very much less than the Montreal average target of one-third.

And while they have the satisfaction or confidence of having a system based on clear rules and one where the rights of the weak could have automaticity in enforcement, nevertheless the rules in areas where they have to take obligations (as in TRIPs) are clear and specific, while those where the majors are involved have some considerable leeway and discretion for national authorities.

How all these, and the various loopholes for maintaining domestic sovereignty in investigations and findings (as in antidumping) would turn out might depend on how the panels and panellists function.

But few had any illusions about the immediate impact of the agreements on world trade or growth or employment and many quite sceptic about the billions of dollars of gains to world income that have been bruited about.

While finance ministers and governments might still use for a while the Uruguay Round outcome and trade growths for inaction to promote growth, the problem would catch up with them in the New Year and they would no longer be able to plead this alibi.

Meanwhile, several of the smaller trading partners were continuing their bilaterals on market access, with the negotiations due to come to an end by the time the TNC meets Wednesday evening to approve the package of accords -- 550 pages of legal texts.

While there could still be some changes and improvements till mid-February in the market access schedules, there would be no more of substantive negotiations and things would definitely come to an end one of the negotiators said.

(Note: An analysis of the package of accords will be carried in SUNS 3207)