Jul 20, 1985
U.S. SEEKS SPECIAL SESSION OF GATT CPS ON NEW ROUND.
GENEVA, JULY 19 (IFDA/CHAKRAVARTHI RAGHAVAN)— The GATT Council members found themselves unable to reach any consensus on the issue of holding a high level meeting of the GATT Contracting Parties to consider the issues of a possible new round of Multilateral Trade Negotiations (MTNs).-The Council which met throughout Thursday, and actually broke up at about 0300 GMT of Friday, was unable to resolve the issue of a possible role of GATT in the services and the proposed new MTN, and holding preparatory high level meeting to discuss and decide these questions.- The Council session itself remains "suspended", to be convened after consultations, perhaps at the end of July or early in august, after Third World delegates return from the New Delhi meeting next week of Third World trade Ministers.- Though south-south trade is the principal focus of the New Delhi meeting, and some of the U.S. supporters in the Third World have been insisting that the issues of a new round should not be discussed in New Delhi, the latest developments might well make them try to bring the issues before the New Delhi meeting itself.- In any event, even outside the meeting, the 24 or so Third World GATT members who have taken a firm position so far on the services and new MTN issues, are expected to have informal exchanges among themselves at the Ministerial level.- In the meanwhile, before the Council was "suspended" Friday morning, the U.S. announced its intention to seek a special session of the Contracting Parties in September.- The Council had earlier "deferred" a decision on fixing the dates for the regular annual session of the Contracting Parties.- The U.S. move found support from the EEC, Canada, Japan, Spain and Portugal.- Under the procedures, the formal request would have to be the subject of a postal ballot, and the meeting of the Contracting Parties could be summoned if a majority or 46 GATT Contracting Parties, agree to the U.S. request.- Normally, a postal ballot in GATT takes between 30 to 60 days, and with all the bending of rules that a U.S. move could depend upon, it would require at least 30 days.- And when 46 positive vote in favour are received, the session could be summoned with 21 days notice.- A GATT spokesman said that in practical terms, if a special session is agreed to, it could not meet before the last week of September.- In announcing its intention to summon a special session of the CPs, the U.S. delegate, Peter Murphy stressed that the issues dividing the Council were "substantial", and could not be solved by further discussions, and should be solved through a meeting at a higher level of the CPs.- However, many GATT delegates from the Third World noted, that there was no way to insist that the governments should be represented at "senior official level" at the special session of the CPs, and that the very first problem that the special session would be faced with in trying to adopt an agenda for the meeting, would be the very same divisive issues as now.- It would have been far better to have "suspended" the Council as now, or set a new date early in August, to continue the discussions, they said.- However, they noted, the U.S. and EEC having taken a particular stand, had "to show results", but this could be counter-productive in so far as the ultimate objectives were concerned.- They noted in this connection that while originally the services issue was strongly agitated by a few like India and brazil, gradually the other Third World countries have begun to see the stakes for them in ensuring no GATT involvement or no linkage between trade in goods and services.- Previously very few African countries seemed interested in the issues, but since recently several of them have been attending these meetings and consultations, and generally voicing themselves.- The major division between the Industrial and Third World countries relates to the issue of "trade in services" in GATT, and whether these should be linked or delinked with trade in goods, the traditional area of GATT competence.- The U.S., EEC and other Industrial countries want to link the two issues, both at the high-level meetings to prepare for the new round, and the actual negotiations themselves.- Several of the Third World countries have been opposing this on several grounds.- Firstly, they argue, GATT jurisdiction does not extend to services and investment and other new themes.- Secondly, preparations on these issues, and negotiations that could lead to a new multilateral framework would take years, and perhaps more than a decade, and immediate issues of trade in goods in GATT should not be held up or delayed under the guise of seeking a multilateral framework in services and other new themes via GATT.- On Wednesday, Brazil had tabled two draft decisions, one for a high level meeting confined to trade in goods issues, and a second draft for a separate high level meeting in October to deal with some of the service issues, but within the framework of already agreed GATT decisions of 1982 and 1984.- The EEC, which has been given the lead role on the new round (after the recent quadrilateral meeting of U.S., EEC, Japan, and Canada in Canada), countered with a call for a single high level meeting in September, and with the senior officials free to discuss all the submissions before GATT for a new round, which would have meant submissions of the Industrial countries for a new round focussing both on goods and on new themes like services.- Discussions in the Council, and informal consultations in a more restricted group, which ran till midnight of Thursday, failed to bridge this basic gap of delinked or linked discussion of goods and services issues.- When the Council met again at midnight, after more procedural sparring, the chairman made clear that he would take decisions only by consensus.- Earlier, there had been reports that the western countries were planning to force issues to a vote, in the belief that they could isolate India, Brazil and a few other countries.- However, the precedent of council decisions by vote and its future implications for the Industrial countries themselves, seemed to have deterred this move.- With the Brazilian drafts having been tabled first, the chairman was forced to put the Brazilian drafts first, and its adoption by consensus was blocked by the U.S. and EEC.- Thereupon, consensus on the EEC’s draft was blocked by India and Brazil.- Third World participants underlined that once a decision had to be taken by consensus, it was not necessary on either side for everyone to object.- The fact that there were one or two objections to the Brazilian or EEC proposals did not mean that the consensus was blocked only by one or two countries, they said.- The situation was that the Industrial country view for a single high level meeting with a wide open agenda to ensure linkage between goods and services, had the support of all the Industrial countries and of ASEAN, South Korea, Chile, and one or two other Latin American and Caribbean countries, who were willing to go along with the proposal for a single high level meeting with an open agenda.- The viewpoint of some of these few countries a apparently is that since the U.S. and EEC have staked their prestige on a high level meeting, nothing would be lost by agreeing to it, and transferring the entire dispute on services to them, even if it was clear in advance that no solution was possible.- The rest of the Third World countries of Asia, Africa and Latin America, remained opposed to GATT consideration of services or any linkage between discussions and negotiations on goods and services, whether at a high level meeting or in any future trade round of MTNs.- Similarly, all the Industrial countries remained opposed to any delinkage of goods and service discussions.- A so-called "Swedish compromise" which also was unable to get a consensus, Third World participants said, did not really try to incorporate or accommodate the views of both sides, but in its operative decision was only the Community view for a single high level meeting, though in its preambular paragraphs there were references to the 1982 and 1984 decisions on the services issue.- After further consultations, a Colombian proposal, which was more or less similar to the Swedish text, but with a few changes in the preambles, but sticking to a single high level meeting with an open agenda, did not also get any consensus.- A GATT spokesman Friday morning claimed that "there were relatively few countries not prepared to go along with the text that left open the question whether services could be discussed. Nevertheless there was no consensus".- However, Third World participants questioned this, and said the basic line-up on the issue remained, however small the number who might formally voice their objections to a consensus.- Several Third World countries expressed themselves as unhappy with the outcome, and the efforts to force decisions by the western countries.- They felt that the division was substantial, and the only way to bring about a consensus was for continuing discussions at one or more meetings of the GATT Council to search for solutions.- "Efforts of the U.S. and EEC to bulldoze their way, will only further complicate matters, since an open agenda would merely mean that the divisions at level of GATT representatives to the Council would be transferred to the level of the Contracting Parties" session or of senior officials".- And senior officials from the Third World, coming from long distances, cannot spend their time to settle these matters either, they added.- "All in all", one Third World delegate commented, "efforts to hijack the north-south dialogue from the UN into the World Bank Development Committee and the GATT could only end in polarisation and failure".- The delegate noted that many of the issues now being sought to be brought into the GATT agenda or decided in the IMF Interim Committee and the IBRD Development Committee, were part of the wider agenda of north-south dialogue that had been blocked for more than a decade.-