Nov 27, 1985

NEED FOR CLEAR AND COHERENT SIGNAL FROM GATT.

GENEVA, NOVEMBER 25 (IFDA) -- It is necessary to provide "a clear and coherent signal" that the GATT is capable of dealing effectively with the serious problems threatening the trading system, and that common interests of GATT members outweigh their differences, Felipe Jaramillo chairman of the GATT Contracting Parties declared Monday afternoon.-

Jaramillo was opening the 41st session of the Contracting Parties.-

Referring to the latest GATT estimates of the slowing down of trade, Jaramillo noted that the slowing down of economic growth in the U.S.A., Japan and parts of Southeast Asia has not been compensated by improvements elsewhere.-

Since 1973, and particularly over the last five years, there has been a definite movement away from the steady liberalisation of trade policy that had done so much to promote growth between 1950 and 1973.-

"The present trend is towards protectionism, subsidy and managed trade ... our role here in the GATT is to ensure that this tendency is reversed, and reversed quickly".-

The recent reports of the GATT secretariat had clearly brought out the "unmistakable evidence" of continuing emphasis on managed trade, with some 94 export restraint agreements in place, negotiated outside GATT, and covering among others steel, machine tools, automobiles, consumer electronics, footwear, textiles and clothing, and agricultural products.-

"If they were left to run their course, present economic and political trends would be likely to have disastrous consequences", Jaramillo warned.-

Referring to the danger of trade policy being made a scapegoat for failure to solve major problems in other areas - macro-economic management, monetary and financial policy and the debt crisis - Jaramillo gave a somewhat upbeat view of recent effort, to tackle these problems.-

He referred in this connection to the decision of the group of five industrial countries to intervene in foreign exchange markets, to the determination shown at the October Fund/Bank meetings in Seoul, to bring relief to the debt problem, and the emphasis on need for growth in indebted countries.-

While presenting thus a more favourable view of the Seoul decisions and the Baker plan than taken by the indebted countries generally, Jaramillo suggested that it would de more difficult now to argue that cooperative action in trade field is impossible due to disarray in related areas of economic policy.-

"Today it may de the inertia of trade policy makers in the face of an impending crisis which gives the greater cause for concern", he said.-

Referring to the work on the 1982 GATT Ministerial work programme, and the efforts of the senior officials group on a new trade round, Jaramillo said "we now have to move the process a stage further - to the point at which political commitment to renewed liberalisation and to effective disciplines will inspire confidence in those whose investments will provide employment for the future ... the business world will be waiting for the outcome of this session with more attention and concern than for many years past".-