8:35 AM Oct 19, 1993

SUTHERLAND CALLS FOR QUAD MINISTERIAL

Geneva 19 Oct (Chakravarthi Raghavan) -- GATT Director-General Peter Sutherland tried Monday to put new steam behind the drive to spur the market access negotiations and get the Uruguay Round negotiations concluded by 15 December by asking the US and EC to demonstrate leadership and for an urgent Quad ministerial meeting to thrash a deal.

In a strongly worded statement addressed essentially to the US and EC, Sutherland accused them of "prevarication and evasion" and called for evidence now of the leadership promised at Tokyo in July.

But Sutherland's call for a Quad meeting, echoing the views of the EC Commission and its trade Commissioner, Sir Leon Brittan, has already been turned down by the US Trade Representative, Mickey Kantor who has said that there was little use of such a meeting unless the EC is ready to engage in serious bargaining on market access.

Some GATT participants have suggested that with NAFTA vote in Congress (reportedly due in third week of November), it might be difficult for Kantor to go to a Quad meeting and reach compromises, and hence realistically the 15 November deadline for market access mentioned by the GATT chief may not be met.

"We will see more of the same present, and a last-minute effort by the two majors to wrap up a compromise and force it on others," one of the negotiators said.

The European Community was due to table its revised "offers", which was described as more of an example of what the EC would do in line with its understanding of the July Quad accord rather than an "offer".

Other participants continue to be frustrated by the US-EC standoffs which, though focused in media as an agricultural problem, and French opposition to the Blair House texts, clearly also went beyond it.

It covers a range of questions including market access in industrial products, the parallel steel negotiations, the questions relating to audio-visual sector in services (though here a solution might be much nearer) and the overall institutional issues in the post-Uruguay Round multilateral system.

A communique issued Monday afternoon by the Cairns group, after a ministerial meeting, without endorsing the Blair House (US-EC agreement) on the changes to the DFA agricultural text, expressed the group's "alarm" at the "further efforts to weaken the DFA disciplines on agriculture".

However, the group collectively did not specifically rule out any changes, though Australian Trade Minister Peter Cook, who chairs the Cairns group, told a news conference: "We don't accept the Blair House accord, and we don't endorse it. But if its weakened the chances of its acceptance are zero".

The Cairns group also endorsed 15 December as the "real deadline" for the negotiations, insisting it could not be extended -- a point which Sutherland reportedly made to them, and sought their endorsement for it, when he met the group over lunch on Monday.

According to Cairns group sources, its Latin American members pressed for a stronger wording against any modifications of the Blair House text, but failed to get it.

The compromise wording of the communique was arrived at over lunch at the level of the Ministers or representatives leading the delegation.

One of the non-Latin members of the group explained it by saying "we have to be realistic". But it was not clear whether this meant that at some point if the US and EC decided to compromise and find some mutual accommodation, the Cairns group would go along (even though it might be a further erosion of what the group is looking for) which (unlike the US) is more in terms of disciplines on EC on export subsidies.

The statements of Cook and other Cairns group members at the press conference suggested a more flexible attitude over compromises needed to get support of Japan and South Korea (over tariffication and rice imports) and of Canada over its insistence on maintaining quotas as part of domestic supply management on dairy products (reflected in a footnote).

Cook and the Thai Deputy Prime Minister, Dr. Supachi Panitchpakdi, spoke of the emotive issues involved in Japan over rice and the need for political understanding and said that, while not favouring any 'exception' to the tariffication formula, they might be agreeable to a "flexible interpretation" of it.

Though Japan and the US have both denied any 'deal' had been struck between them on rice imports, there have been reports that the 'offer' being discussed is for Japan to accept full tariffication, ensure current access and expand it, while getting a six-year moratorium on the tariffication and annual reduction.

Some Cairns group members have been saying that if the compromise is merely reflected in any schedules that Japan has to file (in agriculture), they might not object to it. They explain the difference in their stand over possible compromises to accommodate Japan or South Korea and ridicule and opposition to what the French see as their own domestic political problem as due in the former case to temporary protection against imports and in the latter continued use of subsidies in exports and thus 'unfair' trading.

In other moves, Sutherland also reportedly got together Monday night with a small plurilateral group of key countries, to discuss ways of unblocking the deadlocks and moving the process forward. Since he took office he is reported to have been avoiding such plurilateral meetings.

However his and US attempts to get US concerns on substantive questions relating to 'institutional questions' -- the proposed Multilateral Trade Organization (MTO) and the integrated dispute settlement mechanism -- to be addressed and resolved, independent of other questions relating to changes in the Draft Final Act text, would appear not to have met with much success.

The MTO and its integrated dispute settlement mechanism are being discussed in an informal open-ended group (though attended only by a handful of countries), chaired by Uruguay's Julio Lacarte-Muro. However the attempts of US and Lacarte to get negotiations going in the group on the substantive changes sought by the US has been opposed by several of the participants including Brazil, India and Egypt.

The EC is also opposed to the changes in the MTO text sought by the US, but is reported in the Lacarte group itself to be playing it in low key and not objecting to consideration of substantive questions.

Sutherland's meeting is also reported to have produced no breakthrough, with the US continuing to be reluctant over a Quad ministerial meeting, the EC unable to spell out what it could or would do on agriculture and non-agricultural market access questions, and others pressing for an overall plurilateral negotiating process to settle all outstanding questions, and not the current fragmented bilateral consultation processes favoured by the GATT head.

Sutherland's press statement, relayed via the GATT press office, expressed his concern and disappointment that last week's efforts of the US and EC, bilaterally and in the Quad, to make progress together on the market access package announced at the Tokyo summit, had come to "very little".

"The simple fact is that we need a breakthrough now, and the market access package envisaged in Tokyo must be fully developed and expanded," Sutherland said. "If we do not have that breakthrough in the coming days, it will become virtually impossible to conclude the process multilaterally by the deadline for the Market access discussions of 15 November."

"While political leaders may be preoccupied by other issues in the Round, it is specific progress on Market Access which must now provide the foundation of a deal among all participants. We await new and urgent moves by the United States and the European Community to demonstrate leadership on Market Access. If their negotiators cannot reach rapid and substantial progress, Ministers of the Quad countries should meet urgently to thrash out a deal before it is too late.

"There is no further time for prevarication and evasion. The leadership we were promised in Tokyo is needed now to give us a final chance of concluding the Round."