8:01 AM Aug 29, 1993

NO SERIOUS NEGOTIATIONS...

Trade: No serious negotiations before 20 September

Geneva 25 Aug (Chakravarthi Raghavan) -- After a month-long summer recess, Uruguay Round market access negotiations are set to resume at the GATT from August 30, with capital-based negotiators engaging in bilateral negotiations on agricultural market access.

The Uruguay Round Trade Negotiations Committee (TNC) is also due to meet on August 31 by which time GATT Director-General and Chairman of the TNC might indicate how he proposes to proceed on the issue of changes in the texts of the Draft Final Act sought in various areas by one or another of the participants.

However, several delegates privately expect no serious negotiations until the week of September 20, with many believing that even thereafter there will be no progress or concessions by anyone until perhaps the very end.

Without knowing the fate of proposals for changes in the rules area or in the agriculture trade rules, developing countries would be unable to make any serious "offers", lest they be asked to pay a "price" repeatedly, one negotiator said.

Geneva-based Third World diplomats say that though European Commission sources in Geneva say their negotiators from Brussels would be on hand from August 30, many note that the EC's "112 committee" -- the committee of ambassadors of member-countries -- is set to meet only on 13 September, while the EC's "Grand Conseil" (the jumbo meeting of the EC Council with participation of foreign, agriculture and trade Ministers) to consider the US- EC Blair House accord of November 1992 on agriculture has been set for 20 September.

Until this process is over, even if Brussels negotiators are around and go through the motions, the EC Commission would be unable to reveal its hand or engage in serious negotiations, several sources say.

Before the summer recess, Sutherland had indicated that he plans to give priority to tackling the textual questions on the institutional issues (the proposals for a Multilateral Trade Organization pushed by the EC and the US demands for a 'looser' arrangement in a GATT-II) and the related integrated dispute settlement, and also how to consult on the changes sought in the DFA text on agriculture, as well as in other areas where informal proposals for changes have been put forward in December 1992 in respect of anti-dumping, Trips, agriculture, subsidies etc.

Sutherland has been so far discouraging attempts to make changes in the DFA. According to some GATT sources, he is hoping to persuade the US to give up its attempts to change the anti- dumping rules and use it to dissuade others from seeking changes elsewhere, but accept the Dunkel texts of December 1991.

But reports from Washington, and the stand taken by the leading business groups there, including the US Chamber of Commerce, suggest that the US would insist on changes in the anti-dumping texts.

Many delegations have stated both at the TNC, and in bilateral and plurilateral consultations that any offers or improvements to be made by them could only be after the agriculture accord is clear as also the situation in the rules area, such as on anti- dumping where the US wants changes to ensure that its domestic procedures and decisions are not challenged in the GATT.

Others like India have been insisting that it would not be possible for them to make any offers without knowing about the changes sought by them in the textiles and clothing accord, with some "front-loading" of the integration process to make the accord credible.

Sutherland meanwhile has reportedly addressed personal communications to trade ministers pressing them to put forward "conditional offers", namely putting forward their best offers to expand the market access package, without waiting for accords to be nailed down in other areas including on the texts of the Draft Final Act in areas like agriculture and rules.

The GATT secretariat also put out in mid-August what was described as a "short report" on the cost to consumers of protection and the potential benefits the Uruguay Round will bring.

The report though appeared to be a hastily put together document, presenting some old figures of costs to the consumer and the "price" tag on jobs saved through protection.

But it is unlikely to win any new converts.

Trade theories, based on the Ricardian concepts of immobility of factors of production, and welfare advantage to all through free trade postulated on comparative advantage, no longer have the same force in the face of mobility for transnational capital, technology monopoly privileges impeding domestic production, and restrictions only on movement of labour.

Neither the GATT economists nor others have been able to come up with answers to the questions posed by opponents, particularly when its view of 'free trade' appears merely to be create an international regime that would hobble national efforts to tackle domestic economic problems, and create a global laissez faire state.

The US and EC have been privately telling several developing countries that in the current state of their domestic economies and pressures on them over unemployment it would not be possible for them to provide any major market access openings and that in fact the developing countries should open their markets more by cutting tariffs in order to enable the US and EC to "sell" the package to their constituents and conclude the Round.

As one developing country negotiator put it, the Uruguay Round was launched on the assumption that developing countries would pay a price through their agreeing to provide market access in services and providing global monopoly privileges to the Northern enterprises through uniform international protection for patents, trade-marks etc.

Having secured these, the majors are asking the developing countries to pay an additional price in market openings, but without any reciprocal actions on their part.

Meanwhile many of the developing countries, under pressure from the IMF and the World Bank, also undertook unilaterally 'trade liberalization' and were promised 'credits' if they bound their tariffs.

Now, they are being asked to do more to maximise the size of the market access package that the Quad were able to agree upon in Tokyo at the G7 summit.

A recent commentary in the Basler Zeitung noted that the import markets of industrialized countries like Switzerland were in fact shrinking, thus reducing the value of their tariff cuts and concessions, while the markets of the developing countries are growing, making even a very small concession by them of much greater value.

But with developing country capitals, under pressure from the IMF and World Bank, most negotiators seem unwilling to challenge or resist the pressures on them but conclude the Round.