Nov 25, 1982

Geneva Nov 23 (IPS/Chakravarthi Raghavan) -- In a reversal of the decade old North-South dialogue, industrialised countries, though divided among themselves, nevertheless appear to be combining forces to pressure the Third World countries to yield on vital Third World interests.

This was the picture emerging Tuesday night, on the eve of the opening of the GATT Ministerial meeting Wednesday morning, after a day of public posturing and press statements, speeches, and press conferences by some of the major trading blocs.

Within the industrialised countries, the USA, EEC, Japan, Australia and others were acutely divided on the major intra-trade problems. The EEC was unwilling to reopen what it considers issues settled only three years ago in the Tokyo round, namely, on agricultural subsidies and the general issue of subsidies.

Japan is unwilling to yield to the US-EEC assaults on it, both to persuade it to open up its own markets to their goods, by removing what US-EEC consider to be Japan's non-tariff measures.

The US itself, while wanting others to play (by) the rules of GATT, and free trade, is unwilling to give up its own agricultural protectionism under GATT waivers, or reduce its high tariffs on textiles (as the EEC asks it).

The US itself has staked its prestige on a work programme in GATT involving GATT secretariat studies on services and investment issues. The industrialised countries themselves who do not like it very much, nevertheless have agreed to 'studies' - in the hope of easing other US pressures on them - and are trying to 'persuade' the Third World countries to lift their objections to it. The Third World countries have said that the two issues are not within the competence of GATT, and if any studies are needed they must be done elsewhere.

The EEC wants to get what it could not under the Tokyo round, namely, the consent of the Third World to enable the EEC to 'safeguards' or protectionist actions against imports, but taking such actions against one or two individual countries selectively, and not against all, including its industrialised trading partners who might retaliate. The US, Japan, Switzerland and others who want to preserve their own trading rights in the USA and EEC are trying to 'accommodate' the EEC, by agreeing to what is being called 'consensual safeguards'. This would mean any 'voluntary' export restraints between two parties, restricting imports, would be legitimate under GATT, whereas now these are outside GATT rules and fall in what are called 'grey areas'.

The EEC argues this is not sufficient, but that it must have the right to take such elective actions 'unilaterally' too. The USA and others are trying to persuade the Third World to agree to 'consensual selectivity' lest the EEC apply unilateral selectivity thus leading to a breakdown of GATT.

As one Third World delegate put it privately, it is a case of whether rape is to be legalised, or, if rape is inevitable, it should be enjoyed'.

In the result, the Third World countries would appear to be in the position of not gaining anything, but in order to preserve the multilateral trading system that the powerful trading partners are threatening to break up, are asked to yield even the little gains

they have under it.

The next few days will show how the Third World countries will stand up under these pressures.