Nov 5, 1985
CREDIBLE COMMITMENTS ON STANDSTILL SOUGHT.
GENEVA, NOVEMBER 1 (IFDA/CHAKRAVARTHI RAGHAVAN)— Third World countries again pressed for credible and monitorable commitments by industrial countries on standstill and rollback, ahead of any new round of negotiations, but failed to get a favourable response from the major trading nations.-The call for such guarantees was put forth at the meeting of the senior officials group, considering the subject matter and modalities of a new round of multilateral trade negotiations, which concluded its discussions Friday evening.- The group is to have one more meeting on November 11-l2, to agree on the report of its work.- At the end of the meeting Friday, some of t he leading Third World trading nations appeared to have given the group a negative assessment of the outcome of the discussions, and said this had made them even less enthusiastic about a new round or preparations for it.- Earlier, the U.S. would appear to have spoken in terms of the CPs session setting up a Preparatory Committee for the new round in November, and of a Ministerial meeting to launch the new round in April 1986.- While not going thus far, several of the industrial countries would appear to have spoken of the growing consensus for a new round and the setting up of a reparatory Committee.- India, Brazil, Egypt, Argentina among others, on the other hand, questioned such an assessment.- They argued that the discussions in the group had shown that there had been no response from industrial countries to even minimal demands of the Third World.- With such a negative balance sheet it was difficult to expect the Third World to be prepared for negotiations or expedite the process.- Among the issues discussed Friday under modalities, were credible standstill and rollback guarantees, priority for a safeguards understanding, and the issue of special and differential treatment for the Third World countries in any new round.- Brazil advanced some detailed proposals on standstill and rollback commitments.- On standstill, these called for credible commitments, from all Contracting Parties, individually, and "at the highest level" to be provided to GATT before the setting up of a Preparatory Committee for the proposed new round.- The Brazilian proposals also called for similar highest level commitments in respect of rollback, from all industrial countries in favour of Third World countries, and to be provided before the launch of a new round of negotiations.- India, Egypt, Argentina and Yugoslavia made similar proposals, while a number of other Third World countries stressed the need for coherent and reliable commitments but without going into details of how and when this should be done.- A number of these countries said they could have no confidence in a new round of negotiations, if the industrial countries would not commitments against any illegal restrictions while negotiations continued, and if there was no assured process of rollback of existing illegal restrictions.- Among the industrial countries, Australia, New Zealand and Switzerland also supported the call for firm and credible commitments.- While supporting the need for commitments on standstill and rollback, both the European Community and the U.S. appeared to shy away from specifics.- The Community spokesman talked of the need for "realism", and said the Community had always been willing to make such commitments as part of "a continuing process for contractual negotiations for further liberalisation".- The U.S. saw such commitments only as a part of the negotiations in the Preparatory Committee, and in the new round itself.- Several Third World countries also called for priority for negotiations for a comprehensive safeguards understanding in the new round.- Without agreement on safeguards, they stressed, there could be no real confidence in further concessions and agreements on trade liberalisations.- Brazil argued that, before a Preparatory Committee was set up, there should be firm and credible collective commitment by all CPs to negotiate and conclude a comprehensive agreement in the first stage of the new round on emergency safeguard actions on imports of particular products.- Such a comprehensive safeguards agreement should be based on the MFN principles of GATT.- Such a collective commitment to conclude a comprehensive agreement on safeguards, and individual commitments on standstill be mutually reinforcing undertakings crucial to the preservation and strengthening of the GATT system, the Brazilian delegate, Amb. Paulo Nogueira Batista argued.- The industrial countries, and particularly the EEC (which wants the right to impose safeguards selectively and in a discriminatory way), seemed cool to the call on safeguards.- A number of them noted that an agreement on this issue had been eluding GATT CPs for so long that it would be unrealistic to expect quick agreements in the new round.- Earlier, in putting forward the Brazilian proposals on standstill and rollback, Batista had said that these questions were key elements in the preservation of the GATT system, and creation of conditions for strengthening the multilateral trading system through a new round of Multilateral Trade Negotiations (MTNs).- In the Brazilian view therefore, "strong and precise" agreements should be reached on these two issues during the preparatory process itself.- The Brazilian proposals envisaged a two-step approach - for individual commitments by all CPs on "standstill" before any decision on the establishment of a Preparatory Committee, and commitments from all industrial CPs on rollback of protectionist measures against Third World countries before the proposed new round is actually launched.- The Brazilian proposals clearly indicated a lack of any credibility in declarations by the CPs or even their Ministers at GATT meetings or other fora.- The 1982 GATT Ministerial declaration had called for standstill and rollback.- In 1983, at UNCTAD-VI, this was carried further, and the standstill and rollback commitments were more specific and firm.- Nevertheless, there has been neither standstill nor rollback, but a piling up of protectionist measures, often in a discriminatory way against the Third World countries.- The Brazilian proposals appeared to be reflecting the views of a large number of Third World countries that there would be nothing for them in any new GATT round, without firm commitments and observance of standstill and rollback. Many of these countries fear that the powerful trading blocs would put in place governmental and so-called voluntary grey-area measures, and then bargain to reduce or remove them in return for concessions from the Third World countries on legal restraints they have in place.- Brazil’s proposals would require both the standstill and rollback commitments to be provided at the highest political level, and by an executive order or presidential decree or equivalent legal instrument, and for such commitments to be monitored by the GATT.- While the standstill commitment would have to be provided by all CPs, the rollback commitments would be required from all industrial CPs in favour of Third World CPs, with the latter backed by legislative authority.- Such a commitment to standstill, as Brazil put it, would .be an undertaking not to introduce any new restrictive import measures, tariff or non-tariff, in all sectors of trade.- It would also be a commitment not to agree with any such measure if proposed by the legislative branch of the government, unless the new measures were in strict conformity with the general agreement, and specially its articles VI, XII, XVIII and XIX.- These articles deal respectively with anti-dumping and countervailing duties, import restrictions to safeguard balance-of-payments, government assistance to economic development, and "safeguard" actions or emergency import restrictions to protect domestic producers.- The Brazilian scheme outlined Friday, would require the individual commitments to standstill being notified to GATT, before any decision by the GATT Contracting Parties on the setting up of the Preparatory Committee.- These individual standstill commitments should be monitored by GATT through an appropriate machinery established by the GATT Council.- The standstill commitments would also have to be supported by legislative sanctions, enacted and notified to GATT, before any new round of MTNs are launched.- Also, before a new round of MTNs are launched, "firm and credible" individual commitments to "roll-back" protectionist measures in favour of the Third World CPs, should be required from each individual industrial CP.- While the rollback would thus have a preferential character, the standstill would apply to all.- The commitment to rollback should be undertaken by a decision at the highest level - executive order, presidential decree, or equivalent legal instrument, backed and supported by legislative sanctions where required by the national constitutional provisions.- The individual commitments for rollback could be notified to GATT later than those on standstill, but before the CPs could take a decision on the launching of the new round.- The GATT Council should set up appropriate machinery for the monitoring of the rollback commitments.- The rollback commitments, Brazil explained, ought to constitute an undertaking to "phase-out" in a time-bound programme not exceeding three years, of all existing restrictive measures (tariff or non-tariff), in all sectors of trade, applied on imports from Third World CPs, which are inconsistent with GATT or based on waivers from GATT obligations granted under article XXV.- On the question of special and differential and more favourable treatment for Third World countries in a new round, Brazil said that before any new round was launched there should be agreement on specific measures of such treatment and quantifying the degree of reciprocity that would be required from them in the new round.- This determination of the level of reciprocity should not be left to be determined by each individual Third World country in bilateral dealings with industrial countries.- There should be agreement on some precise formulae that would automatically ensure, in concrete situations, the effective application of this principle of special and differential treatment.- Differentiation could be establishment in terms of trade coverage, type of concessions or extent of reduction of trade barriers.- An area offering the greatest prospect for differentiated treatment would be in the timing of implementation of concessions exchanged.- The industrial countries could put into effect the concessions exchanged immediately, while the Third World country concerned could do so after a timelag or in a staggered way.-