May 18, 1984

BROAD SUPPORT TO THIRD WORLD POSITION PAPER

GENEVA, MAY 16 (IFDA/CHAKRAVARTHI RAGHAVAN)— The reaction to the joint position paper of the Third World countries on need for implementation of past commitments and completion of the current GATT work programme was "sympathetic and constructive" from the industrial countries, a spokesman of the General Agreement on Tariffs and Trade said Wednesday.

The GATT Council held a lengthy discussion this morning on the joint paper, tabled by Uruguay on behalf of the "informal group of developing countries" on may 4. (See Suns No. 1005 of May 9).

Third World sources said that at the meeting the U.S., which has been trying to push the idea of a new round, was "moderate" and underlined the need for faster progress on the work programme.

The European Community, these sources said, laid down some "prior conditions" for any new round, but was more on the side of the Third World position, while the Japanese suggested that the new round and completion of the GATT working would be "reinforcing" each other.

The Japanese also admitted that their own bilateral discussions in Third World capitals showed their reactions to be similar to that in the joint paper before the GATT. When the Council took up this issue this morning, Uruguay as spokesman of the Third World group, said the paper represented "our serious concerns about the future of the world trade", and the group wanted to elicit the reactions of the industrialised Contracting Parties (CPs).

Most of the speeches in the Council were by the representatives of the industrial countries, but a few Third World countries also spoke. Among them, India made clear that the work programme or a new round could not embrace "new themes alien to GATT, and beyond its purview and jurisdiction". Jamaica said the present work programme could not be "rolled into a new round". Issues like service and high technology could be discussed, "if the issue is relevant".

The EEC expressing sympathy and support for the Third World paper noted that everyone knew what lay behind it, namely, "the concept of a new round in the offing".

Clarifying the Community's own position, the EEC spokesman said they did mot view the work programme as something for a limited time-period but one designed for the 80's. The work programme, agreed to at the 1982 Ministerial meeting, represented an overall equilibrium and should be completed in an orderly and balanced fashion.

In the EEC view, the work programme represented a continuous process of on going negotiations in GATT, and should not be used to achieved ends, which were not warranted. The EEC had a vital interest in world trade in goods and services, and hence could not but support measures for liberalisation.

The EEC spokesman said the first priority was on resistance to protectionism and dismantling of trade restrictions and implementation of the present GATT work programme. "This is the only way by which the credibility of GATT can be restored. Any failure to implement the work programme will make a consideration of the new round impossible".

The pre-conditions for any new round, the EEC spokesmen was reported as further saying, was firstly that the economic upturn and recovery must be confirmed, "and not be based on frivolous indicators"

Secondly, there must be improvement in the international monetary and financial system.

Thirdly, there should be preliminary consultations to arrive at a "broad-based consensus" on any new round and " everyone must be on board", with agreement on a time-frame.

The Third World countries, the EEC suggested, need not have presented their paper "in a defensive manner", as this was not a mere north-south problem but one involving all the CPs.

The United States agreed that there had not been much progress in implementing the work programme.

In what was seen as a reference to the "trade in services" issue, the U.S. said in some areas progress had been "excruciatingly slow". Some of the background studies were not even ready and on some items "many CPs have lost interest". Switzerland suggested that there was increasing protectionism both in the north and south.

In what was seen as a reference to the U.S. Caribbean Basin Initiative (CBI), the Swiss delegate said it was important not to introduce new differential provisions among the Third World countries.

The Swiss delegate also emphasised the need to strengthen the most-favoured-nation (MFN) principle in the GATT system. He suggested that while the Third World was right in asking for elimination of protectionism against them, they could not "close their own markets" the Third World should also create a more favourable climate for investment.

In a sense, in the Swiss view, the new round had already begun in GATT in the work programme, and these must be completed and a rational basis found for any new round.

Sweden, on behalf of the Nordic countries, assured Nordic "sensitivity" to the concerns of the developing countries. Canada underlined the need for completing the present work programme.

Australia said the Third World paper in some ways expressed "the alienation among countries over the growing. compartmentalisation of world trade". There could be no liberalisation in world trade without the participation and commitment of the major trading countries. The work programme should be accelerated and completed.

And before any new round was launched it should be demonstrated that it would be in the interest of all the trading partners.

Australia also fully subscribed to the Swiss concerns over the MFN. Third World sources said this was a reference to the U.S. CBI. Austria agreed that while it was not opposed to a new round, it agreed that the present work programme should first be completed. Poland expressed full support to the Third World paper, as also Czechoslovakia, which however was not opposed to a new round as such. Jamaica underlined the need for progress in the fight against protectionism and completing the unfinished work of previous negotiating rounds, such as in agriculture, safeguards and structural adjustment.

Any new round must reflect consensus and balance in the trading system, and the Third World could not be treated as "mere appendix or asterisks".

In a long intervention, Nicaragua was highly critical of us actions, its stance in excluding Nicaragua from the CBI and U.S. hostile actions like the mining of Nicaraguan harbours and thus interfering with its trade.

India underlined that the GATT work programme was no more than "a modest elaboration" of the unfinished business of previous negotiating rounds. The completion of the work programme did not require any new round, as there was an existing mandate.

But if any new political initiatives were needed to speed up the work programmes India would view it in a constructive spirit.

"The strengthening and credibility of GATT required the completion f the work programme, keeping out new themes which are alien both to the spirit and letter of GATT and outside its purview and jurisdiction".

This was seen as a reference to the "trade in services" and "investment" issues on which India and several Third World countries had entered specific or general reservations at the 1982 GATT Ministerial.

South Korea, in clarifying its position, said "the work programme should be completed and implemented before we discuss any new round".