5:19 AM Jul 26, 1993

MUCH ACTIVITY, BUT LITTLE MOVEMENT EXPECTED

Geneva July 25 (Chakravarthi Raghavan) -- A number of bilateral meetings on market access issues, involving the major trading entities in the Quad (Canada, EC, Japan and the USA) and their trading partners have been set for this week, but with little movement expected by many of the participants.

Last Thursday, the Quad countries put in a paper spelling out their Tokyo accords on market access in industrial goods and these have raised more questions than answers, a Third World participant said.

The many bilateral and plurilateral meetings this week will at best help to clarify the points, leaving serious negotiations when the GATT and Uruguay Round resumes for substantive work on 13 September, the source said.

Meanwhile last week, Japan's vice-minister for agriculture (an official), Shiwaku Jiro called on the GATT Director-General Peter Sutherland to make the point that in the post-election political uncertainties, it would be difficult for any government in Japan to yield on the rice issue in agriculture.

The Dunkel text on agriculture, and the US-EC Blair House accord on the changes, call for full tariffication and some minimum imports.

Shiwaku is reported to have told Sutherland that all the parties in the election had campaigned and pledged themselves not to allow rice imports.

In the post-election situation, where it is clear that a coalition government has to emerge, it would be difficult for any government in Tokyo to change their stance.

Even making allowance for the fact that this was only an official from the agriculture ministry, and not the more powerful MITI (ministry of international trade and industry), it showed the problems facing any efforts to find compromise to resolve the differences.

Sutherland, for his part, reportedly told Shiwaku that his main task and responsibility was to complete the Round before the end of the year, and it was for those seeking changes in the Dunkel text to establish a consensus for the change.

The renewed strains on the EC Exchange Rate Mechanism (ERM) and the speculators' attack on the french france is another development that will have some imponderable effects on the GATT and the Uruguay Round.

For the moment, both Paris and Bonn are trying to hold on to their common position, and both are attempting to beat back the speculative assaults on the franc.

Last week, after the Kohl-Mitterand meeting, both reaffirmed their united front and the French Prime Minister Balladur too has insisted that there would be no French devaluation (which on economic basics is not warranted either) or French giving up the ERM, with Balladur reported in some French media as saying in effect that change would require a new government.

However, French media reports show that there is growing volume of opinion and disquiet on this inside France, with increasing number of voices calling for more attention to unemployment. French leader Chirac, expected to make a bid next year for the Presidency is reported as being less insistent on the ERM and more insistent on the government tackling the unemployment.

The French continuance in the ERM is as important politically for France as for Germany itself, and this reduces the leverage Bonn might have in pushing France over the trade issues.

However, the markets clearly see limitations of French and German central bank interventions and at the moment it is difficult to see a solution except if the German Bundesbank cuts its interest rates by atleast one percentage point -- a development difficult to envisage given the German domestic indicators and inflation situation.

On Monday, top levels of the French government are due to confer in London with the British government -- battered and weakened over the Maastricht ratification.

In this situation, many negotiators, including from countries that have a major interest in agriculture and want to ensure that the market access negotiations cover these too, find it difficult to envisage any serious negotiations now, or easy results even on resumption in September.