Aug 1, 1985
NEW PUSH ON GSTP EXPECTED FROM NEW DELHI MEET.
BY CHAKRAVARTHI RAGHAVAN, GENEVA, JULY 31 (IFDA) – An important outcome of the New Delhi Ministerial meeting on the Global System of Trade Preferences (GSTP) is that Trade Ministers and officials from capitals of the participating countries have become aware of and involved in this.-This political impetus will give a push to the technical and other discussions and negotiations and ongoing work in the UN Conference on Trade and development.- In giving this assessment, participants at the New Delhi meeting said that there is now a clearer perception of GSTP as a major concrete project in south-south cooperation and not merely in terms of south-south relations, or as leverage to extract concessions form the north.- The importance of such south-south inter-regional links appears now to be better appreciated also in Latin America, as seen by the strong commitment of brazil now to the GSTP negotiations, and its announced offer to host the next Ministerial meeting on this in April 1986 to kick off the actual first round of GSTP negotiations.- The participants at New Delhi represent the bulk of the Third World's trading nations - both in respect of south-north and south-south trade.- Half of the Third World exports to the north, as to the south, are accounted for by petroleum.- In the past the OPEC, and Gulf countries specially, tended to see petroleum as something different, and viewed other south-south cooperation in an academic framework, or something where they will "give" and others "take".- But now their perspectives have changed, and they see GSTP as an instrument to diversify and expand their petroleum and non-petroleum exports.- At New Delhi Saudi Arabia voiced its interest for example in use of GSTP for petroleum and petrochemical trade.- Apart from petroleum, the other half of the south-south trade is both in manufactures and commodities and raw materials.- A major challenges that the GSTP negotiations Committee, and the major Third World nations among them, is how to make this relevant to the African, specially sub-Saharan African countries. The GSTP concept itself looks beyond tariff and non-tariff preferences promote trade, and envisaged joint ventures and long-term contracts for positive promotion of south-south trade links.- And given the current crisis in sub-Saharan Africa, while the first round of GSTP negotiations may not even directly have a positive impact on these African countries, the challenge is to agree on a framework that would bring some benefits and at least enable positive steps of cooperation on a medium to long-term basis, that would expand production and trade of these countries.- Another issue, raised by the UNCTAD Deputy Secretary-General and Officer-in-charge, Alistair McIntyre, related to the issue of trade finance.- In a situation as now, of adjustment and enforced austerity (by the IMF), expansion of trade though beneficial all around, cannot take place without the lubrication of trade finance.- McIntyre suggested an immediate expert level study, and while the Ministers took no decision, it is expected to be pursued.- According to participants, while the GSTP negotiating Committee meet formally at New Delhi, the Ministerial meeting took no "decisions", but has provided the political thrust and direction for the future work of the GSTP negotiating Committee.- So far, they noted, over the last three to four years, the preparations for the negotiations have all been handled at the level of diplomats in Geneva.- The GSTP idea was mentioned as one of the concepts in economic cooperation among developing countries (ECDC) at the Mexico City Conference in 1976, and was further conceptualised at the fourth Ministerial meeting of the Group of 77 in Arusha in 1979.- Three more years of work at the level of Geneva diplomats ultimately resulted in the 1982 declaration of Foreign Ministers in New York launching the negotiations, providing the broad guidelines for the GSTP, and constituting a GSTP negotiating Committee open to all G77 countries notifying their desire to participate.- Thereafter there was further technical work at the level of Geneva diplomats for another two years, resulting in the approval of the mechanisms for bilateral/plurilateral/multilateral negotiations, including a time-table.- Approval of other ground rules were put off.- These included: rules of origin, rules of safeguards, special treatment for Least Developed Countries (LDCs), procedures for negotiation of long-term contracts among interested participants in the GSTP, rules for extension of negotiated concessions, new entrants, and modification or withdrawal of concessions.- Drawn up by a group of experts (but mostly Geneva diplomats), and agreed to ad referendum and subject to okay the capitals, all these contain one or two points of difference where, on basis of definitive views from capitals, the rules have to be finalised.- Though these drafts were prepared and agreed to ad referendum in October 1984, there has been no further progress towards approval.- "Till now", one participant pointed out, "these issues were being dealt with a leisurely pace and at the level of Geneva diplomats, and, based on their advises, their capitals. "But now after the New Delhi meeting, the Trade Ministry officials and Ministers have become directly involved, and we can now expect things to be taken more seriously, and perhaps move forward".- Even in respect of the approved mechanism, participating countries were to have provided the UNCTAD secretariat by March 31, 1985 a tentative list of export products for which they envisaged seeking concessions from others under the GSTP.- However, by March 31, only about half a dozen countries had provided any indicative list.- Only after preparation for the New Delhi meeting began here in earnest, more and more countries felt prodded to put in their tentative lists.- By the time New Delhi meeting began, 17 countries had submitted their lists to UNCTAD.- The New Delhi meeting was informed that four ASEAN countries had also now put in their lists, and five others (Libya, Mexico, Tanzania, Venezuela and Zaire) announced their intention to do so in the near future.- This would make a total of 26 countries.- When the New Delhi meeting was organised, there were some Latin American countries like Brazil that wanted to push ahead and ensure decisions being taken at New Delhi to move on to negotiations and complete the first stage of the GSTP quickly.- On the other hand there were some within the ASEAN who were hesitant, partly because within the ASEAN itself they enjoyed some advantages and were worried about the possible effects of outside competition within their subregion.- There was also the added factor that when India organised the New Delhi meeting, the U.S. saw it as counter to its own moves in GATT to launch a new trade round and to organise preparations through a senior officials meeting.- And the U.S. is known to have brought pressures in some capitals against the New Delhi meeting.- Whether due to these pressures, or other reasons, the ASEAN countries insisted that the New Delhi meeting should not take any "decisions", which should be done only in Geneva through the GSTP negotiating Committee, and that Ministers should only make "recommendations" to the negotiating committee, and provide the political thrust for it.- It was not as if all the six ASEAN countries viewed the New Delhi meeting from the same perspective.- Thailand, which is known to be keen to put life into the Bangkok arrangements (within the Asian region), and in expanding trade and other links with countries like India, from the beginning viewed GSTP as different from any GATT issues, and at one stage had decided to attend the New Delhi meeting at the level of the vice-Minister in charge of trade.- However, some other ASEAN states were worried that a Ministerial level participation on their part could jeopardise their relations with the U.S., and ultimately the ASEAN countries appear to have decided not to participate at Ministerial level.- This had raised some questions in the minds of India and other participants about the ASEAN views and interests in the GSTP.- However, participants said, no discordant voices were raised, and the announcement by four of the ASEAN countries that they had submitted their indicative request lists, cleared the air.- The New Delhi meeting has now drawn up quite a tight time for the further work.- The legal framework, incorporating the various grounds rules (like rules of origin, safeguards, etc.), is to be elaborated, in the form of a framework agreement, by October 31, 1985.- The GSTP negotiating Committee itself has been asked to elaborate the techniques and modalities for the first round of negotiations by December 31, 1985 and draw up a negotiating plan by February 28, 1986.- Approval by governments of the framework agreement, and the techniques, modalities and negotiating plan, would complete the preparatory phase for the first round of the GSTP negotiations.- The Ministers in New Delhi have set may 1, 1986 as the date for commencing the first round of negotiations.- While approval of the framework agreement by governments would be essential for start of negotiations, the framework agreement itself would become effective when it is accepted by states which shall have exchanged concessions in the first round of negotiations in accordance with the provisions of the framework agreement.- Brazil has offered to host another Ministerial meeting in April 1986 to launch the first round of the negotiations.- Thus, though the New Delhi Ministerial meeting has merely put forward "recommendations", the fact that capitals are now involved, and could be expected to involve themselves actively in the further work of the GSTP negotiating Committee in Geneva, and that there would be another Ministerial meeting in 1986, would help speed things up, some participants suggested.- Some of the outstanding issues in the ground rules are important and need decisions from capitals.- But in the light of the discussions in New Delhi, the capitals should now be in a position to make up their own minds, and enable the GSTP Committee to take decisions.- The New Delhi meeting has also suggested that in addition to the traditional product-by-product approach, the first round of negotiations should consider an across-the-board tariff reduction to provide a preference margin for GSTP participants of ten percentage points in the tariffs.- Secondly, it has been suggested that there should be no new non-tariff barriers or intensification of existing ones, in respect of products where tariff concessions have been negotiated.- Thirdly, some priority sectors have been identified for special attention, processed tropical products, non-textile handicrafts, textiles, and agricultural products.- Looking at promotion of trade in a positive way, the Ministers have also suggested organisation of "product consultations" to promote greater processing, distribution and marketing among Third World countries. This is aimed at improving the cooperation among the Third World countries in commodity trade, and use for this purpose of long-term contracts, joint ventures, joint initiatives in marketing, etc.- While some work is being done in these areas in international organisations and commodity agreements in the north-south context, the use of the GSTP framework for south-south cooperation is an important element.- Apart from the "traditional" commodities, the Gulf countries would appear to be now interested in using this framework to promote south-south cooperation in energy products – petroleum refined products, petrochemicals, etc.-