GATT SECRETARIAT AND THIRD WORLD DIFFER.

Jun 8, 1985

GATT SECRETARIAT AND THIRD WORLD DIFFER.

GENEVA, JUNE 6 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The GATT secretariat and Third World countries appeared to differ sharply Thursday on their assessments of the discussions in the GATT Council on a new round and the further steps.

The issue of a new round, and the convening of a meeting of the GATT Contracting Parties (CPs) at senior officials level to agree on the preparations for a new round - being pushed by the U.S.A., and supported with varying degrees of enthusiasm by other OECD countries – has never been formally on the agenda of the GATT Council, though the U.S. and other OECD countries have been repeatedly bringing up the issue.

At the current meeting of the GATT Council, discussions have been on a broadly worded agenda item "recent developments in international trading system and the consequences for GATT and implementation of the 1982 GATT work programme".

Wednesday evening India on behalf of a group of leading Third World trading countries had presented a joint position paper on how they see the current world trading environment, and what needed to be done to liberalise world trade, lend credibility to the GATT system and strengthen it.

It was presented by Shrirang P. Shukla of India on behalf of Argentina, Bangladesh, Brazil, Burma, Colombia, Cuba, Cyprus, Egypt, Ghana, India, Jamaica, Nicaragua, Nigeria, Pakistan, Peru, Romania, Ivory Coast, Sri Lanka, Tanzania, Uruguay, Yugoslavia and Zaire.

Shukla said Thursday that though the ASEAN countries and South Korea had not joined, and had made separate statements, there was no contradiction, and on the question of priorities they had supported the paper of the 22.

Many countries had not so far got instructions, and the list of adherents was growing, he explained.

The U.S.A., European Community and a number of other industrial countries also have spoken in the Council, both providing their preliminary reactions, and in support of the U.S. push for a new GATT round and convening a high level preparatory meeting of the Contracting Parties to agree on modalities for launching the new round.

A GATT spokesman summed up the outcome of the discussions Thursday noon in these words: "There is no longer any question of whether there is need for a new round. The trade round has already started, and in these exchanges we are having the first part of it. Delegations are putting their requirements in a new round formally on the table, and we are now talking on substance".

"There is a broad consensus on the need for a new round, and even the developing countries are supporting it. It is now a question of agreeing on an informal mechanism for discussions on how to go forward".

At a separate briefing by the Third World group, India, Brazil, Egypt and several others seemed to sharply disagree with this assessment.

They were asked about the GATT spokesman’s assessment, and his view that there was now a growing consensus in favour of the EEC proposal for "an informal process of negotiations, under the direction of the GATT Director-General", between now and the next meeting of the Council in mid-July.

Paulo Nogueira Batista of Brazil said, "we need trade liberalisation and strengthening of the trading system. This is important for us, and we have spelt out how this should be done. Some of it will need negotiations".

"But there is no consensus of any sort on mechanisms leading to preparations of any sort for a new round or for negotiations on it until these questions we have raised are fully understood and accepted".

Amb. Julio Lacarte Muro of Uruguay put even more picturesquely the difference in the approaches of U.S. and some other OECD countries, and those of the Third World.

"Some are proposing a marriage, and want to have an engagement leading to it. We are saying let us first discuss what this marriage is all about, and what it should mean as an institution".

Lacarte noted that the Third World countries had an "unsuccessful experience" of the Kennedy and Tokyo rounds. One had only to see the declarations launching them, what was achieved, and what the joint assessment of Third World countries were at the end of each of those rounds.

This was why the Third World countries were looking at the calls for a new round form a different perspective. They were the only group of countries who had formally spelt out their views and proposals on paper. Others were only talking about it elsewhere.

Asked why the group had now come forward with a new paper, and whether it was a pre-condition platform for negotiations, Shukla said it should not be considered so narrowly. It reflected a basic position, and had spelt out in details some of the points covered generally in their previous paper of November 1984 to the meeting of the CPs.

It was an appreciation of the present trends, and its analysis, diagnosis and prescriptions.

The joint paper really spoke for itself, and was very specific and clear.

Some preliminary reactions had come, but they were awaiting detailed and considered reactions of industrial countries.

While others had been trying to focus on events and procedures, the Third World countries were addressing the substance of the issues and problems facing the GATT system and the world trading environment, and want these issues of substance to be addressed.

Argentina’s Lopez Noguerol said they had felt that a lot was being said about the problems of the trading environment everywhere, but not in the institution dealing with it. They had therefore considered it was time everyone had a clear appreciation of what the Third World felt about the situation, and what should be done about it.

Batista said it would be unfair, as the European Community has sought to characterise it that the new round had started or the Third World countries were supporting it.

The Third World group of countries had clearly set out what needed to be done to improve the world trading situation, and the measures that would have to be taken first for negotiations to be considered.

There were a number of measures, including individual actions for trade liberalisation, that would have to be carried out and did not even need negotiations.

But in respect of issues like rollback, there had to be a prior commitment, backed by legislative sanctions – since their past unhappy experience had been that political commitments and declarations was one thing, and actual legislation was another.

But the period of time for rollback of restrictions, etc., might need negotiations.

Shukla said that on some issues they had said there should be prior commitments and agreements, and the details would need negotiations. But on some like the issue of special and preferential treatment of the Third World, this was a part of the general agreement, and there was no question of negotiating it.

On the multifibre arrangement, while the negotiations about its future, after July 1986, was due to start this July, and the third world paper had called for a commitment by the industrial countries that the trade in this sector should be returned to full GATT rules and principles, the MFA issue could not be made a part of any new trade negotiations.

Mahmoud Abdel-Bari Hamsa of Egypt said that the Third World countries had developed their own ideas on substance and had put them forward, and were not merely reacting to other peoples ideas on procedure.

They wanted a discussion on substance.

Asked about the U.S. demand for a high-level meeting, Shukla noted that this proposal had been formally put before GATT only now, and would need to be considered in the capitals.

"But we are concerned with substance and not events. Whether this issue can be considered and decided at the next Council meeting in July would depend on reactions to our proposals and the kind of discussions on it. These discussions had just started and we see no need for any mechanisms for this purpose".