Mar 6, 1985
THIRD WORLD COUNTRIES EXPECTS MORE U.S. PRESSURES.
GENEVA, MARCH 5 (IFDA/CHAKRAVARTHI RAGHAVAN) – Third World countries expect considerable bilateral pressures on them over the next few weeks over U.S. efforts to launch a new round of trade negotiations in GATT, including "trade in services". This assessment came after last week’s meeting in Geneva of the GATT’s Consultative Committee of 18 (CG-18), and the weekend meeting at Ludwigsburg, near Stuttgart in West Germany, of what is described as "a high level gathering" chaired by the West German Economic Minister, Martin Bangemann. The Ludwigsburg meeting was attended by Ministers from key OECD countries and some Third World countries, and some academics. Though there was no agreed conclusions because of sharply differing viewpoints, Bangemann has been quoted as having told the press that there had been "unanimous agreement" on beginning a new round next year, and that one could be convened if present GATT signatories did not raise new protectionist barriers in the meanwhile. Bangemann also has been quoted as saying that Third World countries present had "some reservations", and that industrial countries should hold "bilateral talks with weaker nations". However, Third World sources at GATT, who have been briefed by third world participants at the Ludwigsburg meeting, give a different assessment. They say that as at the CG-18, at Ludwigsburg there was no consensus or agreement either on the launching of a new round of trade negotiations, covering trade in goods and services, or on its timing. There were some who supported the U.S., and others from the industrial and third world who see the need to find some way of helping the U.S. administration beat off domestic protectionist lobbies and pressures in the Congress. But there were others, both in the industrial and Third World countries, who see the disarray in the international monetary and financial system as a major contributor to the crisis in the trading system, and see the emphasis on need for GATT actions to liberalise trade as misplaced. They feel that the problem of the GATT trading system now are deep-rooted, and any undue focus on "events" would simply distract attention from basic reforms and solutions to the ills of the trading and money and finance systems. Also, to the Third World countries, any new round would lack credibility when past assurances, including the 1982 commitments on standstill and rollback remain unimplemented, and there is a continuing discriminatory protectionism on the rise in industrial country markets against third world exports. Third World countries say that given the proliferation of new trade barriers against them, after the solemn commitments in the 192 Ministerial (...) the talk of launching a new round "if no (...) raised", as Bangemann had said, was meaningless. And while the U.S. has been insisting that any new round must include "trade in services", the major Third World countries who are the targets of the U.S. drive for "liberalising" service imports, continue to be opposed. Third World countries in GATT however expect over the next few weeks, bilateral pressures in their capitals, particularly in countries who need U.S. political and economic support to meet growing domestic problems. They note that in the months of preparations leading to the 1982 GATT Ministerial meeting too, similar pressures were mounted, and at the Ministerial meeting itself, a few of the Third World countries gave oblique support to the U.S. But others stood firm, with the result that the U.S. could not get endorsement that services is an area within GATT ambit. Within the GATT framework so far, the group of Third World countries have shown a remarkable amount of unity. They have taken the common position that the first priority is implementation by the industrial countries of past commitments, including para 7 (1) of the 1982 Ministerial Declaration, which called for lifting of protectionist measures maintained by industrial countries either in violation of GATT or not strictly sanctioned by GATT. Secondly, the Third World countries have said there should be implementation of the GATT work programme, particularly those parts of special concern to the Third World. Thirdly, if these were done, the Third World countries themselves would initiate proposals for "specific trade negotiations" in GATT, but to be confined to "trade in goods only". In an effort to "persuade" Third World countries to soften their stance, the Reagan administration has been pointing to moves in the U.S. Congress such as the talk of an import surcharge to counter the high value of the dollar. U.S. officials have been telling Third World countries that unless they had an agreement in 1985 to launch a new round of negotiations in GATT, and unless this included the services and investment issues, it would be difficult to counter the protectionist lobbies inside the U.S. Despite all its talk about "free trade", the Reagan administration has in fact imposed more import controls than any of its predecessors since the 1920’s, according to Fred Bergstein of the Washington Institute for International Economics. Before the 1982 GATT Ministerial meeting, the U.S. had sought to bring both services and investment issues into the GATT framework, and principally application of the most-favoured-nation principle in article one and equal treatment for domestic production and imports in article three of the general agreement. Even before the actual Ministerial meeting, the U.S. was forced to give up "investment", since even other OECD countries questioned GATT competence, and could only get other Contracting Parties in GATT to agree to national studies and exchange of information on the issues in the services sector. The issue of whether any international action was called for on services and, if so, in what framework, was left wide open. But recently the U.S. has again revived the issue of "investments", and the U.S. representative at the CG-18 had said that the U.S. would have no interest in any GATT negotiations, unless both services and investment issues were included. But many Third World countries see the raising of the "investment" issue as a ploy to raise the ante and then compromise on having "trade in services" only in GATT, while apparently giving up the investment issues. In the same vein, the U.S. has been portraying its efforts at multilateral solutions to "services" issue in GATT, as being in the interest of the weaker Third World nations, since the U.S. in any event could get its way through bilateral treaties and pressures on the Third World countries concerned. While hinting at reprisals and restrictions against those holding out, the U.S. has also been taking of launching a new round, including trade in services, but with different time-frames for the various issues to be covered in the new round, and priority being given to third world issues. Third World countries say they had been fooled in the past too with similar assurances. In the declaration launching the Tokyo Round too there was talk of priority to third world concerns and issues, but in fact nothing happened and third world priority issues were ignored, and a virtual two-tier GATT system has now been created. If they allowed services to be brought into GATT now, there would be a three-tier system, negating the fundamental GATT principles of most-favoured-nation treatment and non-discrimination.