WILL US, EC GAME PLAN SUCCEED?

5:58 AM Jul 13, 1993

WILL US, EC GAME PLAN SUCCEED?
Geneva 13 July (Chakravarthi Raghavan) -- The United States and the European Community appear to have agreed on a common strategy of trying to extract maximum "market access" concessions from the other trading partners in goods as well as in services over the next four to six weeks, and then seek further concessions for changes in the draft texts of the Uruguay Round accord.

This is the assessment of several trade negotiators after a series of bilateral and plurilateral informal consultations with the Quad members and their briefings of the last week's accord at Tokyo on a market access package among the four and the kind of work programme for the resumed Uruguay Round negotiations that the GATT Director-General Peter Sutherland is trying to put through the Trade Negotiations Committee meeting Wednesday.

The meeting of the Trade Negotiations Committee (TNC) at official level, and those of the Group of Negotiations on Services (GNS) whose meetings have been convened by the TNC Chairman and new GATT Director-General Peter Sutherland for Wednesday, are expected to agree on a work programme for bilateral and plurilateral negotiations for market access in goods and services, with the market access group under Germain Denis of Canada meeting from time to time to make assessments and push the negotiations.

While in theory, these negotiations and work are to go on through August, this last will be more "cosmetic" than real, and aimed merely at making people believe that the momentum is not being lost.

Trade negotiators from key countries Monday had briefings first at the Japanese mission, where some of the other Quad officials who were at Tokyo were also present. This was followed by a meeting of negotiators from the 19 countries involved in the Rossin process (who met last December and this January under the chairmanship of Arthur Dunkel and considered the changes in the Draft Final Act text by various participants) at a lunch.

The European Community's Commissioner for GATT negotiations, Sir Leon Brittan had a series of bilateral meetings with key delegations and groups of them. The US chief official negotiator for the Uruguay Round, John Schmidt, who was also in Geneva (from Tokyo) also appears to have met some delegations.

At these meetings, the Quad members attempted to project a picture of the four having done their own part by agreeing on a "big package" of market access concessions on goods and services, and now expect others to "cooperate" and come forward with their own concessions to make a "bigger package".

However, the attempts of trading partners to get a better picture of the Quad accords, than has been available to them from the public communique and statements from out of Tokyo, does not appear to have met with any success nor their efforts to explore the links between such market access concessions and the changes in the Dunkel texts of the Draft Final Act that has been sought by the US, the EC and a few others.

At the luncheon meeting, a number of trading partners sought clarifications and assurances on the texts and the changes sought in the 'rules' area -- such as in the texts on anti-dumping by the United States, the EC-US Blair House accord on agriculture and the consequent changes to the agriculture text, the whole issue of dispute settlement and how far the GATT or its successor's process would prevail over domestic procedures of countries etc.

However, there were no satisfactory answers, but every indication from the US and EC that these questions of the DFA texts should be taken up after the market access package is settled in bilateral and plurilateral discussions.

At his press conference Monday, Brittan suggested that trading partners could put forward their "revised offers" -- of tariff cuts and initial services commitments -- with the stipulation that this would be on the basis of the DFA draft texts on the table and that the "offers" would be subject to revisions if the texts were changed, on the basis that nothing would be final until everything would be finalised.

Brittan boasted of his having persuaded US Trade Representative Mickey Kantor, and before that his predecessor, Carla Hills, to concentrate on the market access package first and that this strategy had now been accepted by the Quad and was now at work.

"This attempt to concentrate on market access package, but subject to the texts and its problems being resolved, sounds nice in theory, but in practice will work to the complete disadvantage of the other trading partners, particularly those from the developing world," one of the negotiators commented Monday evening.

It is an invitation to the others to "buy a pig in the poke".

At the series of Monday meetings, several of the negotiators would appear to have underlined that without knowing the details of the "offers" or market access package that the quad had negotiated or tentatively agreed upon, it was difficult for the others to "improve" their own offers.

In any event, since the US "offers" (under the modalities agreed upon within the market access group) in industrial products had not been completed and placed on the table, and the EC offers on agriculture is clearly subject to the changes in the agriculture text, and the Japanese "offers" in agriculture is similarly flawed (in terms of tariffication and minimum access on rice), it would be difficult for others to engage in meaningful bilateral negotiations.

Participants at the Monday lunch said that Brittan had been extremely reluctant to put any "revised offers" on the table, though he did not rule it out. However Schmidt for the United States would appear to have bluntly turned it down, and said that the US would only "disclose" in bilaterals what it would offer -- whether in terms of the 'zero tariff' with exceptions in some sectors or the harmonising and cutting down of 'peaks' in others.

At Tokyo itself, the US officials had explained that they could not yield or be seen as yielding in cutting the peak tariffs on textiles and clothing, given the sensitivity of several Southern Senators on whom the administration depended to get its budget and tax bills through.

As one of the negotiators here put it, this could be understood by others in a limited way, in terms of tabling "revised offers". But unless the US clearly indicates the extent of cuts in peak tariffs it would make, as also the issue of the changes in the textiles and clothing agreement it would accept or contemplate, it would be impossible for the others to negotiate.

"We might be going through the same process as in July 1992, when a big pitch on a market access package was made, and soon reached a stalemate," one of the negotiators said.

Before the Tokyo summit, at the first TNC under Sutherland, the latter was advised by the EC representative "not to shake the coconut trees, but merely harvest the coconuts".

This was taken by others to be an advice to Sutherland not to put pressure on the G7 and engage in what Sutherland had promised to do before taking up the job, namely say things bluntly as he sees it, and 'shake the trees' in Geneva and conclude the Round.

Coconut harvesting is a labour-intensive and employment-promotion (but not capital accumulation) sector, where the tapper has to climb a coconut tree and cut the ripe fruit and throw it down.

In South-East Asia, in some parts of Thailand for example, man has trained monkeys (tied to a long chain and thus to its master) to clamber up the tree and throw down the nuts.

Perhaps Sutherland would get some technical assistance from that part of the world to "harvest" the Uruguay Round coconuts without shaking the trees or be persuaded by the EC that shaking the tree (of the G7) might be disastrous but not the trees of the smaller countries.

But in bilateral or plurilateral tariff negotiations there is little that either Sutherland or anyone could do to put pressure on parties to reach or accord or suggest compromises between two sides.

With no certainty over the texts and the rules governing those concessions -- whether on anti-dumping or the textiles and clothing, or the subsidies or even the steel sector and the multilateral steel accord sought by the US -- everyone will go through the motions.

But none, particularly among the smaller, and weaker, trading partners could be forthcoming, and make market access commitments and then finding the rules changed, he explained.