Nov 20, 1982

GATT PROGRAMME AND PRIORITIES FOR THE 80S

Geneva Nov 18 (IPS/Chakravarthi Raghavan) -- A twenty-point work programme and priorities for the 80s, will be the main outcome of the GATT ministerial meeting here next week when it adopts the draft declaration recommended to it by the GATT Council. 

The programme and priorities, while still in realm of promises, seeks to address the issues of protectionism and some of the major trading concerns of Third World countries, and set up mechanisms within GATT to deal with them. 

All these are put in the context of the current world economic crisis, the serious dangers and crisis facing the world's multilateral trading system of GATT, and the recognition that solutions to these problems would need parallel efforts in the financial and monetary fields. 

As to the response of the trading system, the declaration would have the Contracting Parties (CPs), individually and jointly, commit themselves to reduce trade frictions, overcome protectionist pressures, limit export subsidies having prejudicial effect on trade, promote liberalization and expansion of trade and through concerted action create a consensus in support of the system. 

It also involves CP's reaffirming their commitments to abide by the GATT obligations and support and improve the GATT system so that it might contribute vigorously to further liberalization and expansion of trade based on mutual commitment, mutual advantage and overall reciprocity, and the MFN clauses, preserving the operation and functioning of the GATT instruments and unity and consistency of the system, and, ensuring GATT as continuing forum for negotiations and consultations, and assuring an appropriate balance of rights and obligations for all, and fair and effective application of GATT rules and procedures on basis of agreed interpretations for the economic development and benefit of all. 

In the current climate of daily escalating protectionist measures outside the GATT, the promises and intentions of the CPs, and particularly (of) the major trading blocs, will be tested in the next few months: for,they will be committing themselves to dismantle the measures inconsistent with GATT or bring them into line, meaning seek GATT sanction for it through 'waivers' or other appropriate steps that would enable other GATT members to exercise multilateral supervision on phasing them out. 

In drawing up the work programme and priorities for the 80s, the CPs undertake, jointly and individually: 

-- to make determined efforts to ensure that trade policies and measures are consistent with GATT principles and rules, and refrain from taking any measures that protect domestic markets or adversely affect international competition which are inconsistent with or circumvent GATT obligations or nullify or impair benefits accruing to all cps under GATT. 

-- to dismantle, or bring into conformity with GATT, trade measures that are inconsistent with, or circumvent their GATT obligations or nullify or impair benefits of GATT members. 

-- in applying measures within GATT framework or in general exercise of their GATT rights, to give fullest consideration to the trading interests of others, and objectives of trade liberalization and expansion. 

-- abstain from taking restrictive trade measures of a noneconomic character, not consistent with GATT. 

-- ensure effective implementation of GATT rules and provisions, and specifically those concerning the developing countries. 

-- ensure special treatment for LDCs in the context of differential and more favorable treatment to developing countries. 

-- bring agriculture more fully into the GATT trading system by improving the effectiveness of GATT rules, provisions and disciplines through agreed interpretations: improve terms of access to markets: bring export competition under greater discipline: and, during the period of a two-year work programme to be undertaken, subject existing or new export subsidy policies, within terms of the appropriate undertakings in first three paras above. 

-- bring into effect expeditiously a comprehensive understanding on safeguards based an GATT principles. 

-- ensure increased transparency of trade measures and effective resolution of disputes by improving dispute settlement procedures and respecting the recommendations. 

-- examine ways and means and measures to be pursued to liberalize trade in textiles and clothing, including the eventual application of GATT to it after expiry of MFA-III in 1986, with strict adherence to its rules by the parties till then.

 -- and, continue consideration to changes in the trading environment to ensure GATT's responsiveness to changes.

Apart from this general declaration commitment and undertaking, the declaration also has the CPs taking decisions an a number of points: 

safeguards: 

The CPs decide to bring into effect a comprehensive understanding on safeguards that could be applied under article XIX of GATT, to be drawn up by the GATT Council, the understanding is to be adopted by the CPs not later than their 1983 session. It is on the premise that the objectives and disciplines of GATT, need an improved and more efficient safeguards system that provides greater predictability and clarity, and also greater security and equity for both importing and exporting countries, so that trade liberalization could be preserved and the proliferation of restrictive measures avoided.

The comprehensive understanding is to be based on the principles of GATT and containing as its elements -- transparency, coverage, objective criteria for action including the concept of serious injury or threat thereof, temporary nature, degressivity and structural adjustment, compensation and retaliation, and, notification, consultation, multilateral surveillance and dispute settlement.

GATT rules and activities relating to developing countries. 

In view of the special responsibility of the industrialized cps on GATT rules and activities relating to developing countries, the GATT Trade and Development Committee (TDC) should consult on a regular basis with cps, individually or collectively, to examine how individual cps have responded to the requirements of Part IV of the GATT.

All cps are urged: 

-- to implement more effectively PART IV of GATT (containing special provisions and commitments to developing countries and their trade interests), and the Nov 1979 decision (incorporating Tokyo Round MTNs into GATT) regarding 'differential and more favorable treatment, reciprocity and fuller participation of the developing countries' in GATT and MTNs.

 -- to work towards further improvement of the GSP or MFN treatment for products of particular export interest to the LDCs, and the elimination or reduction of non-tariff measures affecting such products.

 -- to strengthen the technical cooperation programme of GATT.

 -- instruct the CTD to examine prospects for increasing trade between industrialized and developing countries and possibilities in GATT for facilitating this.

 -- invite the CTD to examine other aspects of existing procedures for reviewing implementation of Part IV and dealing with the problems relating to its application 'and preparing guidelines for their improvement.

 -- review the operation of the enabling clause (on special and more favorable treatment of developing countries) as provided in its paragraph nine, with a view to more effective implementation, inter alia with respect to the objectivity and transparency of modifications to GSP schemes, and the operation of the consultative provisions relating to the differential and more favorable treatment to developing countries.

 In special provisions for the least developed. the CPs: 

-- are urged to work towards further improvement of GSP or MFN 

-- use, on request and where feasible, more flexible rules of origin requirements, 

-- facilitate participation of LDCs in MTN agreements and arrangements, 

-- strengthen the technical assistance facilities of GATT for special requirements of these countries,and strengthen their trade promotion activities in the importing countries. 

Agriculture: 

To accelerate achievement of GATT objectives, including Part IV, and recognizing need to find lasting solutions to problems of trade in agriculture, the CPs decide to accelerate preparations, including on procedures and modalities to be used, for improving market access and further liberalization of agricultural trade, to be the basis for decisions to be taken at a meeting to be held in 1984. 

Towards this end, the CPs have called for examination of a number of issues and for recommendations, through a new committee on trade in agriculture, that would report periodically to the GATT Council, and for consideration of CPs not later than their 1984 session. 

The issues of trade in agriculture are to be examined in the light of the objectives, principles and provisions of GATT, and the effects of national agricultural policies, and covering all measures affecting trade, market access, and competition and supply in agricultural products, including subsidies and other forms of assistance.

The issues to be examined include:

-- trade measures affecting market access and supplies, with a view to achieve greater liberalization of trade in agricultural products, both of tariff and non-tariff measures, on basis of overall reciprocity and mutual advantage under GATT,

 -- operation of GATT regarding subsidies, including export subsidies and other forms of export assistance, with a view to their effectiveness in light of actual experience, in promoting GATT objectives and avoiding subsidization seriously prejudicial to trade interests of cps,

 -- and, trade measures affecting agriculture, maintained under exceptions or derogations, without prejudice to rights of cps under GATT.

 As framed thus, not only can the EEC's common agricultural policy come under scrutiny (as US-Australia-New Zealand want), but policies under 'waivers' like those of USA, Switzerland, Japan etc.

 In carrying out its task, both the agricultural committee and GATT are asked to take full account of need for balance of rights and obligations, special needs of developing countries, and specific characteristics and problems of agriculture. An improved system of notifications with 'full transparency' is to be introduced to enable the study and examination.

Tropical products: 

On basis of work programme of the CTD, the CPs will carry out consultations and 'appropriate negotiations', aimed at further liberalizing trade in tropical products, including in their processed and semi-processed forms, and review progress achieved at their 1984 session.

Quantitative restrictions: 

In a special group created for this purpose, the CPs are to review existing QRs and other nontariff measures, grounds on which they are maintained, and their conformity with GATT, so as to achieve the elimination of QRs not in conformity with GATT and their being brought into conformity with it, and also achieve progress in liberalizing other QRs and nontariff measures. Adequate attention is to be given an need for action an QRs and other measures affecting products of developing countries. The group is to report its findings and conclusions to the CPs at their 1984 session.

Tariffs: 

Prompt attention is to be given to the problem of escalation of tariffs on products with increased processing, with a view to effective action for eliminating or reducing such escalation where it inhibits international trade taking into account concerns of Third World countries.

 The CPs also agree that wide acceptance of a common system of classifying products for tariff and statistical purposes would facilitate world trade, and recommended prompt action on this. The Customs Cooperation Council of GATT it was noted was already involved in this work. It was also agreed, that in introducing such a system, the general level of benefits in GATT concessions should be maintained, existing concessions should normally remain unchanged, and any negotiations needed should be instituted promptly for implementation of the system.-

MTN agreements and arrangements: Their operation are to be reviewed, taking account of reports of various committees and councils set up under them, to determine any further actions called for as decided in Nov 1979. The review is to focus on adequacy and effectiveness of these agreements and arrangements and obstacles to their acceptance by interested parties.

in other decisions, the CPs agreed that:

-- work an structural adjustment and trade policy is to be continued to focus attention on interactions between this and GATT objectives, with results to be reviewed at 1983 session of CPs.

-- GATT council is to examine issue of trade in counterfeit goods, to determine appropriateness of joint action in GATT framework and the trade aspects, and if action is appropriate, the modalities of such action. The GATT D.G. is to consult with the WIPO D.G. to clarify legal and institutional aspects of the issue.

-- Hazardous products. To maximum extent feasible cps should notify GATT of any goods produced and exported by them but banned for sale on domestic markets on grounds of human health and safety. In light of the notification procedures, the need for further action is to be examined by CPs at their 1984 session.

-- Export credits for capital goods. Since official provisions an the sales applied to developing countries, might pose problems to them for expansion of imports consistent with their trade and development needs, cps who are members of international arrangements (as in OECD), when reviewing or revising them should give special attention to relevant credit provisions including specific terms and conditions in order to facilitate expansion of Third World imports of capital goods. GATT D.G. is asked to consult with concerned CPs and report to 1983 session of cps.

-- Textiles and Clothing. A study is to be carried out on a priority basis on importance of textiles and clothing in world trade and particularly trade prospects of developing countries: the impact of economic activity and prospects of countries participating in textile trade, of existing system of restraints and restrictions on textiles and clothing principally the mfa: consequences for economic and trade prospects in these countries of the phasing out of the MFA regime or its continued maintenance, and,

-- examining expeditiously, on the basis of the study, the modalities for further trade liberalization in this sector including possibilities of bringing about full application of GATT provisions. The work is to be completed for consideration of CPs at their 1984 session.

-- exchange rate fluctuations. GATT DG is to consult with the IMF Managing Director on possibility of a study of effects of the erratic fluctuations of exchange rates on international trade, and to report to the GATT council on result of the consultations, and the results of the study so that its implications for the General Agreement might be considered.

-- forestry products and nonferrous minerals and metals.

problems, with the competence of GATT, relating to tariffs, nontariff measures and other factors affecting trade in these sectors, are to be examined for possible solutions, with the GATT Council deciding on the terms of reference, procedures and timeframe.

-- dual pricing and rules of origin. The GATT Council is to arrange for studies of this, and when results of studies are available, take whatever action might be necessary