May 31, 1985

NICARAGUA: NO DECISION IN GATT COUNCIL OVER U.S. TRADE EMBARGO.

GENEVA, MAY 29 (IFDA/CHAKRAVARTHI RAGHAVAN) – The Council of the General Agreement found itself unable Wednesday to take any decision or action over the Nicaraguan complaint against the U.S. trade embargo and economic sanctions, and left it to the chairman of the Council to hold further consultations.

The Council, in two sessions, heard a large number of countries in support of Nicaragua, but found itself blocked from taking any actions in view of the U.S. stand opposing any council decision or action.

The GATT Council acts by consensus.

At the meeting of the Council Wednesday afternoon, Nicaragua offered a draft decision, for adoption by the Council.

The draft decision would have the council disapprove of the trade embargo and other economic measures adopted by the U.S. unilaterally against Nicaragua and which would endanger the multilateral trading system.

It would also have the Council urge the U.S. and Nicaragua to initiate the dispute settlement procedures and rapidly arrive at a satisfactory solution of the matter.

The Nicaraguan Vice-Minister, Orlando Solorzano, said that the discussions in the Council had shown that there was general agreement on the need to separate political and economic issues, and that GATT was competent to deal with the economic and trade aspects of the issue.

None of the speakers, he noted, had "congratulated or cheered" the U.S.A. on its measures, and there had been general disapproval.

Also a number of delegations had noted problems with the use of Article XXI of the agreement, and underlined that there should be a balance between a security situation and the measures taken.

In Solorzano’s view, there was also general agreement in the Council that the measures taken by the U.S. were arbitrary and potentially damaging to the international trading system, and that the two countries should negotiate and reach a settlement.

It was in the light of this that Nicaragua would table the draft decision, the Vice-Minister said.

The U.S. Representative, peter Murphy, made clear his opposition to any Council decision or action in this matter, and noted that a number of countries had spoken recognising the right of any Contracting Party to take actions for safeguarding its national security.

As far as the U.S. was concerned, it would be "futile" to invoke the GATT dispute settlement procedures, and the only course open would be for the Council merely to record the discussions.

After a recess for consultations, the European community spokesman, Tran Van-Thin, repeated the earlier position of the community on the issue, and said that the proposed draft decision for disapproval was not appropriate and not in accord with the Council practice.

Such a decision, he added, would not facilitate a solution of the problem.

The chairman of the council, Kazuo Chiba of Japan, then read out an agreed summing up.

This said that the Council had taken note of the views expressed in the debate and the proposal made by Nicaragua, and the statements in connection with the proposal.

The Council had also noted that the chairman of the Council would consult with delegations, and "determine how this matter could be dealt with at a subsequent Council meeting".