POLICY ISSUES AND WORK PROGRAMME TO BE REVIEWED BY GATT CONTRACTING PARTIES-

Nov 24, 1984

POLICY ISSUES AND WORK PROGRAMME TO BE REVIEWED BY GATT CONTRACTING PARTIES-

GENEVA, NOVEMBER 23 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Trade policy issues and progress in the GATT work programme are to be reviewed next week at the annual meeting of the Contracting Parties to the General Agreement on Tariffs and Trade.-

The meeting scheduled to be held from November 26-29, will be chaired by Amb. Hans Ewerlof of Sweden.-

The annual meeting provides an opportunity for the CPs to address overall trade policy issues against the background of what GATT Director-General Arthur Dunkel has called "a situation where trade is improving but trade policies are not".-

"If the stalemate over efforts to improve the functioning of the multilateral trading system is not broken soon, it is very difficult to see how the current recovery of world trade can be sustained", Dunkel told the World Bank's Development Committee in September.-

In the two years since the work programme for the 1980’s was set by the GATT Ministers, there has been no movement of "substance" on the individual items of the work programme, though on some there have been some procedural movements, resulting in what a GATT spokesman has described as "overall frustration among all CPs".-

After the GATT Council itself ended its overall review in the second week of November, key delegations have been consulting informally, and this is expected to continue through this weekend, in efforts to find compromises that would enable the CPs to agree on further actions on the different parts of the work programme.-

While setting out the work programme for the 1980’s in the declaration adopted by them, the GATT Ministers had set 1984 as a time for review and stocktaking by the CPs on the individual points the work programme.-

In drawing up the work programme, the Ministers had committed themselves to standstill and rollback of protectionism.-

Subsequently, at Belgrade UNCTAD-VI in 1983, the Industrial countries renewed this commitment, adopting more forthright and specific language than in the GATT declaration.-

However, by and large, these commitments have remained paper commitments, and trade restrictions, particularly against Third World countries, have proliferated.-

While adopting such restrictions, the Industrial countries, and specially the U.S. have been pushing for a new round of trade negotiations, including trade in services.-

The U.S. has been privately telling Third World countries that none of their old grievances or the new ones would be addressed excepting in the context of the Third World agreement to a new round, and opening up third world markets for investments and exports of services from the Industrial countries.-

The next week meeting of the CPs is taking place in this context.-

Of the individual items on the GATT work programme there are several issues on which there has been agreement on how further progress is to be made.-

But some of the Industrial countries, specially the U.S. have made these conditional on the emergence of satisfactory agreements that would open the door for work in GATT on other issues like the "trade in services" and counterfeit trade, where GATT’s jurisdiction is challenged by several Third World countries.-

The areas where there has been no movement, and on which various informal consultations are being focussed, are-

-- Counterfeit goods, where the U.S. and EEC want to set up a working party for GATT measures to stop such trade, while the Third World insists these should be tackled in the world intellectual property organisation which has competence on this.-

-- Fluctuations in exchange rates, where an IMF report supporting the U.S. viewpoint that short-term fluctuations have no direct impact on trade policies, has been challenged by the EEC.-

-- Trade in services, where the U.S. wants a working party to be set up but which is resisted by the Third World.-

-- Dual pricing policies and rules of origin, an issue that has come more to the fore since 1982, because of the U.S. changes, introduced in 1984, in its rules of origin over textile imports.-

-- High technology goods, a U.S. sponsored issue which was not included in the work programme but remitted to the GATT Council, and where there has been no progress with many countries, Third World and Industrial, being even puzzled as to what the U.S. really wants.-

On all these issues prospects for a substantial movement are rated low, though some procedural moves to keep the issues alive might be possible.-

In a number of areas, various Committees and working groups, have evolved some agreements, but for the moment their endorsement by the annual CPs appears to be tied up with progress on other issues.-

In agriculture, a general framework for negotiations and the objectives to be achieved have been agreed upon, and further work on these lines could resume year.-

On Quantitative Restrictions (QRs) and other non-tariff measures, countries maintaining them have been asked to give specific proposals about how they would bring these QRs under GATT discipline and rules and/or the liberalisation of the QRs.-

While this represents some substantive movement too, in this area in 1985 GATT would be considering proposals for actions that are mandatory under the agreement (which eschews QRs generally) and which the Industrial countries said they would phase out by 1965.-

On liberalisation of trade in tropical products, another issue of non-implementation of the commitments since 1965, the Committee on Trade and Development has carried out lengthy consultations and identified the problems remaining. But the Committee has been unable to determine how best to move from consultations to "appropriate negotiations" called for by the Ministerial declaration.-

On the operation of the Tokyo Round multilateral trade negotiation agreements and codes, very few Third World countries have acceded to these codes. Individual Committees overseeing these codes are to undertake next year a review, and the GATT Council itself is to make a general assessment in 1985.-

On textiles and clothing trade, the working party studying the issue has asked for an extension of its mandate. While this has evoked support generally, the U.S. has linked it to progress on its issues.-

On the issue of a comprehensive understanding on safeguards, an issue pending since 1970 when the Tokyo Round was launched, there has been no progress again, and at best a procedural decision to keep trying is likely.-