THIRD WORLD COUNTRIES STUDYING NEW U.S. TRADE LAW RESTRICTIONS.

Nov 3, 1984

THIRD WORLD COUNTRIES STUDYING NEW U.S. TRADE LAW RESTRICTIONS.

GENEVA, NOVEMBER 1 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Third World countries in GATT and UNCTAD are carefully studying the provisions in the new U.S. trade bill, adopted by the Congress in October and signed into law by President Reagan this week.-

Though the initial reports viewed the provisions as "liberal" and beating back of protectionist measures, on a preliminary reading of the amendments, Third World sources say there are quite a few worrisome provisions, even if less protectionist than what some congressional, industry and labour lobbies had sought.-

Among other things, the new law has extended benefits to Third World countries under the Generalised System of Preferences (GSP) till July 4, 1993.-

But there are some important new provisions that in effect convert the GSP, as a trade instrument to promote Third World exports on a non-discriminatory and non-reciprocal basis, into a discriminatory instrument to extract "concessions" from the Third World in return for GSP benefits on the U.S. markets.-

In the qualifications for inclusion of a country in the list of beneficiaries for GSP treatment, there are some new factors listed.-

The criteria specified are mandatory, unless the president decides it was not in U.S. national interests to comply with them.-

There is now a new so-called social clause.-

Before including a country in the list of beneficiaries, the administration should determine "whether or not such country has taken or is taking steps to afford workers in that country (including in the free-trade-zones) internationally recognised worker rights".-

The term "internationally recognised worker rights" has been defined to include: right of association, right to organise and bargain collectively, prohibition on use of any form of forced or compulsory labour, a minimum age for employment of children, and "acceptable conditions of work" with respect to minimum wages, hours of work, and occupational safety and health.-

While the first four are covered by ILO conventions (with its own sanctions for non-observance), the fifth about "acceptable conditions of work" would appear to be a little vague, and amenable to "subjective" decisions of the administration.-

Third World countries have always opposed inclusion in GATT and other trade policy instruments the concept of "labour standards" for fair trade.-

Though the labour clauses would appear to have been put in at the instance of several U.S. NGO groups critical of anti-labour actions in several "U.S. client states", Third World sources note that it could became a powerful protectionist tool in the hands of U.S. industry and labour to mount pressures on the administration against specific Third World countries and their products.-

Other areas sought to be covered through this provision about "beneficiary countries" include extent to which the Third World country takes measures to protect rights of foreigners in the areas of patents and trade marks, and the "export performance requirements" that countries impose on U.S. foreign investments.-

These could be used by the administration to bilaterally pressure Third World countries to change their policies on investments and services issues.-