3:58 AM Oct 1, 1993

UNRESOLVED ISSUES REMAIN, AND PILING UP

Geneva 30 Sep (Chakravarthi Raghavan) -- Except for a general mood of seriousness on the part of everyone to complete the negotiations by 15 December, there is still little ground for any optimism and the plethora of unresolved issues, and some new ones remain, several negotiators said Thursday after the stock-taking exercise of the Trade Negotiations Committee (TNC).

Even the Quad countries have not been able to agree among themselves so far as to what exactly they agreed at the Tokyo summit on market access package and without that the question of extending or expanding that package to others, and meeting the concerns of other trading partners and particularly the developing countries, would be difficult one of the Quad delegates who did not want to be identified agreed.

On Tuesday, the EC Trade Commissioner, Sir Leon Brittan had tried to shift the onus on to others, by pointing the finger at the Japan, Asean and others and insisting that they should now negotiate and show some initiative in market access, rather than hiding behind the US-EC discords over agriculture and subsidised farm export.

Last week, senior EC officials, after a round of bilateral meetings with other trading partners, agreed that the Quad package did not cover the export areas of interest to the developing world, but suggested that the same formula approach (zero tariffs in some sectors, harmonisation in a few others, and reduction in yet others where there were peak tariffs) should be adopted by everyone and they should put their revised offers on the table.

But As Argentina's Archibald Lanus had pointed out in the UNCTAD Trade and Board debate, the zero and harmonisation at low levels had been agreed by the Quad only in areas where the major trade was among themselves and they were suppliers in other markets.

One of the participants at the TNC said that in the bilaterals, developing countries were frustrated when they found that the Quad countries were neither interested in extending 'zero-to-zero' formula to sectors where developing countries were exporters and principal suppliers, nor in harmonising or lowering the peak tariffs in other areas of interest to them.

One EC source said that the complaint of some of the developing countries was perhaps true in that the Quad countries so far had been unable to agree on the details of their Tokyo decisions even in regard to industrial goods and without that Europe, for example, found it difficult to be more forthcoming to the developing country partners.

In other areas, some of the participants said, the progress in the services area was much less than Sutherland's summing up suggested.

The audio-visual issue has been coming up in a big way, and so are the questions relating to pricing (of basic telecommunications) or taxation issues in the services, one source explained.

Even if the current text is somewhat weak, and has sought to deal with them on a best endeavour basis, there was some serious opposition, since several developing countries viewed it as an attempt at keeping a foot inside the door.

Once the issue is on the GATS text, even as a best endeavour effort, issues that really belonged for example to International Telecommunication Union or to bilateral tax treaties among sovereign countries based on reciprocity, would be brought into the GATS and taken up at future negotiating rounds to extract more from the developing world to augment the profits of the TNCs, one Third World negotiator explained.

Many issues of public policy, going far beyond 'trade', would be involved, including the issues of relative priorities of development and economic policies inside countries, and the use of tax instruments for equity and burden-sharing, which cannot be addressed or permitted to be addressed in the narrow trade focus, he explained.

Sutherland at his press conference said that 'sensitive discussions' were still going on between the US and EC and among EC member countries over the Blair House accord on agriculture and its text and refused to comment on the continuing French stand against the text or about whether he would make the Blair House text as the 'multilateral negotiating text' in the agriculture area in the DFA.

This suggestion by an American correspondent implied though that the Blair House would be put in as a 'consensus' draft, and the onus put on others to get any changes made.

However, several agricultural exporting countries who do not any tampering with the Blair House, noted that there were also reportedly some side agreements between US and EC which had not been made public.

Also, only when the Blair House was brought up for multilateral considerations, they could seek some clarification, and if necessary, get the language changed, in regard to such matters as the "peace clause" sought by the EC.

Under this, questions relating to subsidies -- whether on domestic production, market access or exports -- could not be dealt with excepting in terms of the provisions of the agricultural text.

Given the likely varying interpretations, it could really leave some countries helpless when the US or EC, for example, dump their milk products in their countries, or cereals and meat in third markets, or in the process of exports and trade violate the other rules.

"We could be faced with the same tangle as between the US and EC over civil aircraft, namely, what should be looked at from the subsidies code and what from the agreement on civil aircrafts," one diplomat noted.

Everyone wants to finish up, time is running out, and no issue has been resolved and new ones are creeping up, one delegate said.

In such a situation, two scenarios are likely: the US and EC might spring some last minute compromise package as a surprise and, with Sutherland's help and new processes of 'individual' consultations, try to pressure and outflank others to take it or face the political consequences of being pointed at as being responsible for the failure.

The GATT secretariat and with its manipulation of the western media, with many showing such little understanding of the technicalities, would be in full play -- just as now when the entire problem has been sought to be reduced to French stance on agriculture.

If this thing happens, one Asian negotiator said, the developing countries would be asked to pay an even higher price than now and pointed in this connection to the clear US-EC attempts to make others provide market openings, rather than their providing the market openings to the Third World in return for what the Third World has already conceded in Trips, Services etc.

But such a scenario that was feasible in 1989 over the Tokyo Round could be more difficult with so many participants, even if most of them merely turn up at the TNC or go along with the majors and even undercut the developing countries. However, a few might just dig their heels in and it would be a case of whose nerve will break first.