U.S. LOOKS FOR DECISIONS ON NEW ROUND AT CPS MEETING.

Jul 23, 1985

U.S. LOOKS FOR DECISIONS ON NEW ROUND AT CPS MEETING.

GENEVA, JULY 19 (IFDA/CHAKRAVARTHI RAGHAVAN)— The U.S. was pressing ahead Friday for a special session of the Contracting Parties (CPs) to GATT to consider issues and modalities for a new round of Multilateral Trade Negotiations (MTNs).-

The U.S. move, supported by EEC, Canada, Japan, among others, came after they had failed to secure from the GATT Council Friday an endorsement for their move for a senior officials level meeting of the CPs early in September to consider the issues and modalities for a new MTN, including new themes like trade in services.-

The U.S. and others wished to discuss both trade in goods and on services and other issues, at a high-level meeting, and in a process that would result in launching a new MTN on both goods and services.-

The informal Third World group of 24 countries wanted the two issues to be delinked, and the services issue discussed, if at all, in a way that would not prejudge or prejudice their contention that the present general agreement did not cover "services" but only "goods".-

The GATT Council session was "suspended" in the early hours of Friday morning, while the U.S. announced before suspension that it would be seeking the convening of a special session of the GATT Contracting Parties to consider all these issues.-

Under the rules, the first item on the agenda of such a session would be approval of the agenda, and this could well result in a replay of the discussions and impasse in GATT Council, some GATT delegates feared.-

It would have been much better, these delegates added, for everyone to have continued the discussions in the GATT Council, reconvening it in a week or ten days, and strive to find a compromise that both sides could live with and that would attract consensus.-

At a news conference Friday noon, the tired and weary U.S. delegate to GATT, Peter Murphy, said the U.S. has confident of securing the 46 votes for the special session, where these issues could be addressed at a higher level than in the GATT Council.-

Industrial countries suggested that Contracting Parties would be represented by trade policy officials from capitals normally, and they would thus secure a senior officials meeting to discuss the new MTN issues in September.-

However, Jaramillo had told newsmen early Friday morning, after the break-up of the Council meeting, that there was no way to require the CPs to be represented at the level of senior officials, or even force anyone to participate in any negotiations.-

GATT is a multilateral forum, and best results are obtained through a search for consensus, he underlined.-

Murphy at his news conference said that the need for a new trade round had been supported by the UN and other international organisations, but found it difficult to understand the resistance to it in the body most concerned with world trade and the slowing down of the world economy.-

Some GATT delegates said that the U.S. and other Industrial countries too must share the blame for the present impasse.-

They noted that instead of first raising and discussing this issue in the GATT, the U.S. and others try to drum up support in other bodies (like IMF and World Bank or the OECD), and then took decisions in OECD and the Bonn summit about the launch of a new round and a high level preparatory meeting, and then brought the issue before the GATT.-

And through their tactics and pressures, they also ensured the GATT secretariat getting identified with the interests of the industrial major trading nations, with the result that the normal mediatory role of the Director-General has become even more difficult.-

And even before the Council could discuss the substance, there had been high pressure tactics to get the high level meeting scheduled.-

Murphy said at his news conference that the U.S. recognised that there were basic differences on the issues of a new round, and that was why it was seeking a meeting at senior official level, where all the issues - whether there should be a new round, what should be included, etc. - could be discussed and decided.-

While the U.S. did not want any "pre-conditions" the Third World countries, he complained were setting conditions for discussions on services.-

Services were already in GATT, within the terms of the 1982 Ministerial declaration and work programme and the 1984 agreed conclusions of the CPs on that work programme, and the U.S. was not going beyond that, he claimed.-

The objections of Third World countries like India, Brazil and a few others, to the Swedish compromise move was not "understandable" to him.-

Third World delegates explained that while Brazil, supported by India and others, had sought two separate meetings, one on trade in goods and the other on services, the Swedish compromise, like an earlier EEC proposal, would merely convene a senior officials meeting within the framework of GATT, "to undertake discussions on the subject matter and modalities of a new round of Multilateral Trade Negotiations".-

When the Swedish compromise was brought before the Council early Friday morning, Pakistan’s Mohd Bajwa had pointed out that a compromise must incorporate the views of both sides, where as the Swedish compromise merely reflected the views of one side.-

Some Third World delegates privately explained, after the end of the Council session, that a separate meeting on services would not have prejudiced U.S. efforts for a multilateral framework, though it might require unanimous consent of the present GATT CPs to put such a framework within GATT.-

But a single preparatory and negotiating process would prejudice the position of those who questioned GATT competence, and would also hold up any progress on trade in goods within GATT competence, they added.-

Murphy said that discussions in the GATT Council had reached an impasse, and that was why the U.S. was seeking a special session of the CPs which could take decisions in September.-

Asked whether the special session of the CPs would not be faced with the same problems as the GATT Council, on the issues of services and GATT competence, etc., Murphy said: "we certainly recognise that we are a long way from agreement".-

"But the way we are dealing with issues now is not helping confidence-building, and could encourage others to take to the bilateral road".-

The U.S., Murphy stressed, took in about 60 percent of manufactured exports of the Third World, and if the Third World did not recognise this it was their business.-

But the U.S. believed that there were a number of countries which had a larger dependence on foreign trade in its contribution to GNP than India or Brazil, and they were interested in the new round and were ready to move ahead with the U.S.-

Murphy’s remarks on this, as well as others about the differences in the Indian and Brazilian positions, appeared to be part of the pressure tactics, evidenced too in western press reportage, to drive a wedge between India and Brazil, and between them and their other Third World supporters.-

Murphy said there was "growing disillusionment" in the U.S., in the Congress and in industry and trade, over GATT and multilateral system, and not taking any actions now would be a "prescription for disaster".-

The U.S. Congress, he said, would never agree to any new MTNs without "services".-

If as a result of discussions at the special session, it was clear that GATT CPs were not ready for multilateral negotiations with the U.S., there were a number of countries including from the Third World who were willing for bilateral or plurilateral negotiations with U.S., and the U.S. would go ahead with them.-