READING TEA-LEAVES AND ARGUING ABOUT PROCESS

6:26 AM Nov 2, 1993

READING TEA-LEAVES AND ARGUING ABOUT PROCESS
Geneva 1 Nov (Chakravarthi Raghavan) -- For those who wanted to look into the future (45 days ahead) and foretell what would happen in the Uruguay Round, there were plenty of "tea-leaves" and "sheep's entrails" around at the GATT headquarters on Monday.

To start with, the Uruguay Round Trade Negotiations Committee (TNC) met on 'All Souls Day' -- a Roman Catholic holy day (but observed as a holiday) for prayers to all the dead.

Whether there were collective prayers at the TNC led by its Chair, GATT Director-General Peter Sutherland (from catholic Ireland), was not disclosed by the GATT press office.

But GATT being about 'trade' and the 'market' -- which from time of Francis Hutcheson and Adam Smith through 19th century economic 'radicals' like Ricardo, to our days, benefits society through the individual's pursuit of self-interest and profits, egged on by greed -- and GATT membership extending beyond Catholics and Christians, the prayers to the old gods who frown on greed, perhaps were never invoked.

A scheduled social event at the GATT headquarters, immediately after the TNC was due to end, was a reception for exhibition and sale of water-colour paintings (which had replaced the previous week's paintings of nude women, which had not raised any sexist complaints, probably because the artist was a woman) of which the first was of an Irish castle in ruins.

And the GATT headquarters itself was preparing for its concluding the Round (with its $213 billion promised bonanza ten years later) by erecting 'barricades' to retreat behind -- everyone had to get and wear special badges (with only accredited correspondents allowed to use their UN identification) to be able to go to the front reception desk.

But after the TNC meeting Monday, and the subsequent plurilateral consultations, the 'soothsayers' among the trade officials and negotiators, hedged their bets -- like the Delphic oracle which foretold "the Greeks the Romans shall conquer", which as any student of English (the real official language of the GATT) knows, with a couple of commas, could be read either way.

The negotiators and the observers -- either because they really believed it or because as clever diplomats managed to put across to the media what they had agreed to do, by osmosis, inside the meeting -- exuded a feeling of confidence that at long last, after the seven-year itch that seized them at Punta del Este, they were going to conclude the Uruguay Round of MTNs and do so by 15 December.

Each one of them though added a few caveats or conditions, even as tacitly all of them agreed that over the next fortnight (until after the 17 November NAFTA vote in the US House of Representatives), there would be no real negotiations or progress and all of them would be reading tea-leaves when they were not twiddling thumbs in bilaterals.

Officially, the TNC agreed Monday to some new tentative deadlines for the ongoing negotiations in market access, the services framework and institutional questions -- all of which implicitly recognized there would be no real negotiations until after President Clinton jumps the NAFTA hurdle in the US House of Representatives on 17 November.

Even the US official comments to the media that it was ready to deal seemed more pro forma than real. Even the US Uruguay Round coordinator, John Schmidt was not around in Geneva, but away in Washington.

The market access group under Germain Denis, the Services framework group under David Hawes and the informal working group on institutional issues have all been given a 15 November date to complete their work, though even this was set in wording to suggest that it could and would extend itself.

The TNC is to meet again early next week to agree on a "process" for considering all the outstanding issues relating to the textual changes, with the TNC Chair, Peter Sutherland due to hold consultations on what kind of a process should be set.

There was a general agreement that the failure of the quad to agree among themselves on market access, or individual quad members visavis the other trading partners, was holding up the negotiations.

Also, the United States (which has either gone back on its old positions or raised new demands and issues) emerged as the 'villain' and 'spoiler' -- taking the heat away from France.

The US raising demands and the ante could have been mere tactics, staking out positions to be given up at the last moment to secure real objectives. But in the kind of debates at the GATT, and its being carefully monitored in Washington, as in other capitals, the tactics looked to many as risky and scary.

The plurilateral consultations conducted by Sutherland Monday evening, after the TNC adjourned, did not appear to have resulted in an agreement on the further process: it did not resolve the differences in approach, how and who should conduct lead the process, and how to reconcile the needs of transparency and desire of participants to take part if they chose, how to prevent 'fragmentation' of negotiations and issues at this stage, how to ensure serious negotiations among those who have to make the deals, and put in place a process by which the 'deals' would be made inside the GATT, rather than outside.

With no trade-deals or trade-offs of substance to be cut, given the US immobility due to the Washington's preoccupations over Nafta, and the new proposals and demands from the US in several areas, some tactical but others reflecting new strains inside the US, that threaten to wreck the whole negotiations, GATT negotiators have become embroiled in 'process'.

There appears to be an emerging general view that the GATT head, Peter Sutherland, unlike his two predecessors, should not be engaged in the nitty-gritty of negotiations (through a revival of some 'green room' process or open-ended informal working groups), but keep himself in reserve to act at a political level on one or two key issues at the end.

Some attributed the general view not to involve Sutherland at this stage on the detailed negotiations on the need for Sutherland to keep himself in reserve to be useful at political level at a crucial juncture. There is a fear though among some that time is running out, and whether it be ordinary reserves or army generals, those being kept back for the last fight may never find a fight to fight or influence.

Others attributed it to Sutherland's lack of technical knowledge, without which political-level decision-making won't succeed. Yet others explained as due to his alleged "short-fuse" at a time when steel nerves and ice-cold heads would be needed, and a wrong move or word could just blow everything up.

But the outcome, being pushed particularly by those not too familiar with past GATT failures and successes, seemed to be to create some kind of an open-ended working group to deal with all the issues 'globally', but with problems being hived off to smaller groups and coordinators.

But there was no agreement even on this, including who should lead these efforts -- senior GATT official aides of Sutherland or some eminent 'outsiders' like Julio Lacarte (who is looking at institutional questions without any progress over the last month or so) or some other combination.

However, the idea floated by some that at some stage towards the end of the 15 December deadline, Sutherland should call some kind of key countries at ministerial level to resolve problems appears to have been shot down Monday. Neither the key majors nor minors favoured it.

As one of the participants put it, to get Ministers on hand they would need atleast a week's notice, and after the negotiations had been finely honed to seek their views/decisions on no more than two or three points on the Round as a whole.

But the moment it is clear that ministers are to meet, everyone will retreat behind their fortifications, not willing to make any deals or compromises that would foreclose their own ministers' options.

But behind this all has been the GATT experience on ministerial decision-making with a wide-open agenda and issues: the 1982 GATT Ministerial, the 1988 Montreal mid-term Review and the 1990 GATT Ministerial at Brussels.

In all these cases, the ministers failed to agree, and officials had to laboriously pick the pieces to set the process going again, with some negotiators feeling that the ministerial interventions only managed to complicate their problems.