8:24 AM Dec 1, 1993

WAITING, WITH HOPE AND CONCERN...

Geneva 30 Nov (Chakravarthi Raghavan) -- As the United States and the European Community meet in Brussels Wednesday to strike a deal in the Uruguay Round talks, negotiators in Geneva are becoming concerned that they would be faced with last-minute deals and fait accompli, creating very difficult technical problems for them in concluding the Round.

Most delegations expect little of real activity in Geneva, pending the US-EC discussions that are expected to go on till Thursday.

An EC Council of Ministers meeting is also set for Thursday, almost back-to-back of the Kantor-Brittan talks, when any US-EC deal would have to be okayed by them before it can be brought to Geneva.

The US Trade Representative Mickey Kantor has been quoted as saying that the two sides would be able to reach an outline agreement by the weekend, but that a draft text could take a few more days.

Other reports said that the US-EC market access package could be brought to Geneva over the week-end.

Key developing country delegations, while publicly expressing hope that the two majors will get their act together and put their accords on the table this week-end, or atleast advice them of it informally, are worried that the postponing things till the last possible moment could have some difficult and dangerous consequences.

Kantor has the reputation of playing cards close to his chest and cutting deals only at the very last minute.

This, some Geneva negotiators say, might be fine when it is merely a bilateral issue between the US and EC. But when others are involved, this kind of poker game could precipitate a crisis in the multilateral talks and may have some unforeseen complications with little time to resolve them.

With the Americans needing an agreement -- which they say would mean the complete DFA texts and the schedules, in agriculture, in market access in goods and initial commitments in services of nearly 30 key countries (the EC being treated as one) -- by their 15 December deadline, there might be too much of cutting the corners involved, one of the negotiators feared.

A proposed meeting of the GATT Textiles Committee, to roll over the existing MFA, expiring at the end of the year, for a year more until the Uruguay Round agreements come into force has been put off until atleast 8 December.

Meanwhile, the Trade Negotiations Committee (TNC) is meeting on Friday to undertake the mandated assessment of the results from the viewpoint of the developing countries and the assurances and guidelines on the special and preferential treatment to them set out in the Punta del Este Declaration.

The Punta del Este Declaration though mandated such an assessment before the "formal" completion of the negotiations -- not as now when almost every part of the substantive negotiations are up in the air.

But since the assessment, particularly in the market access area, will be based on the 'offers' on the table as of fourth week of November -- which admittedly has been inadequate if not meaningless insofar as the US and EC and their "offers" to developing countries are concerned -- any 'improvements' the two majors might make after their Brussels meeting could be counted by them and the GATT Chief as the positive outcome of the TNC assessment.

Reports reaching here, both out of Washington and Brussels, indicate that the two sides may be compromising on some of their differences including on agriculture and modification of the US-EC Blair House accord to the Draft Final Act text and some of the service issues.

Besides the agriculture issues as well as the market access tariff cuts, the two sides are also due to discuss a wide range of issues including those relating to the textual changes in the DFA.

Several developing country delegations have been complaining that without any response from the two majors on the sectors of concern and interest to them, it has been difficult for them to put forward their own 'offers' in a firm fashion.

The dates for filing 'offers' and 'schedules' have been constantly put back, and there is now talk of the deadline for filing market access schedules in goods being put off till 10 December.

Two major areas of interest to the developing world -- agriculture as well as textiles and clothing, with the latter accounting for nearly 30 percent of manufactured exports of the developing world -- are sectors where the US-EC differences have 'frozen' the market access bilateral negotiations involving individual developing countries and the two majors.

Reports from Brussels suggest that these are the two sectors where, because of the pressure of their domestic lobbies, the two sides might not even fully reveal their hands or disclose their accords to others until the eleventh hour.

This would complicate the problem of others whose own tariff offers and schedules would depend very much on what they would get from the majors on agriculture and textiles and clothing.

Other US-EC differences and some of the outstanding issues include those in services -- financial services, tax carve-out, maritime services, audio-visual services, antidumping rules and changes in rules in a number of other areas.

Within the last week, the United States has put forward proposals for extensive changes in the DFA texts on antidumping and canvassing support for other changes including extending the MFA phaseout from the proposed 10 years to 15, number of changes in the TRIPs accord to tighten its provisions and 'front-end' its benefits for US corporations.

On agriculture, it has been suggested that the United States would provide some compromise to 'sweeten' the deal for France -- by backloading the volume cuts in subsidised exports and the market access in some cereal substitutes. Given the latest forecasts of world's cereal production (and shortfalls), and reports that some of the EC's own stockpile mountains are getting reduced, the net result of the compromise could well be at the expense of others.

But the compromise could also mean less benefits for the developing world in textiles and clothing, and 'looser' disciplines on anti-dumping and countervailing measures and the way the US implements them.

Even if only part of the US proposals on antidumping are accepted (such as on standard of review and socalled anti-circumvention provisions), any market access benefits in the US schedules could be easily negated, while the US would easily get enforced the benefits in Third World countries in services, Trips etc.

In Trips, apart from its proposal for retroactive application of 'pipeline' protection demand, the US is also seeking to reduce the period of five years (in the draft) given to developing countries for the implementation of the accord. It is reportedly seeking amendments to provide that while awaiting changes in laws to give effect to the enhanced obligations and norms, there should be an international obligation for implementing their existing intellectual property laws.

A specific provision like this, coupled with the US view about right to raise 'non-violation' disputes in TRIPs, would enable the US -- whether on patents, trade marks etc -- to bring up complaints against developing countries who have, in response to US bilateral pressures, have actually increased the IPR norms, but where enforcement is weak.

The US reportedly has as its target some of the Asean and other NICs.