Mar 15, 1984

GATT COUNCIL DEFERS ACTIONS ON PANEL REPORTS.

GENEVA, MARCH 13 (IFDA) – The GATT Council agreed Tuesday to defer actions on two panel reports, one ruling against Japan over its leather import regime, and the second against the U.S.A. over the "manufacturing clause" in its copyright law.-

Japan sought more time to deal with the substance of the report on leather, where the panel had ruled that the Quantitative Restrictions and licensing regime of Japan was contrary to article XI of the General Agreement.-

While acceding to Japan request for more time, number of countries (Australia, Canada, Chile, Argentina, India, Pakistan, New Zealand, and Hong Kong) however spoke on the substance.-

While commending the panel for its conclusion that the Japanese restrictions were violative of GATT, these countries too issue with the panel’s special plea about the social conditions in Japan that had brought about the restrictions, and that this should be borne in mind by the Council in giving time to Japan to eliminate the restrictions.-

These countries said the mere existence of social and historical problems (like that of the Doha people in Japan) could not result in toleration for illegal Quantitative Restrictions. The clear worry of these countries was that using the special plea, Japan would maintain the restrictions over the next 20 years.-

The chairman of the panel, Martin Huslid of Norway, however explained that "too much" should not be read into the particular para than had been intended by the panel. All that the panel had said was that the Council might wish to take this into account in giving Japan "a reasonable period of time" to comply with the ruling.-

In the case against the U.S.A., the panel had held that the extension till 1986 of the provision in U.S. copyright law, prohibiting imports of copyrighted works of preponderantly non-dramatic literary material in English by authors domiciled in the U.S., unless these works had been "manufactures" in the U.S. or Canada, was contrary to U.S. obligations under article XI of the agreement.-

In this case too, the U.S. sought further time, and this was agreed to by the Council.-

Both the reports will now come up at the next meeting, expected to be held in May.-

In other actions, the Council agreed to set up a working party to consider various GATT studies on the problems of trade in non-ferrous metals. The same working party will also go into two other products - forestry and fisheries.-

The November 1982 GATT Ministerial meeting had agreed that problems relating to trade in these "natural resource products", including in their semi-processed and processed forms, should be studied to find possible solutions.-

The problems, falling within the GATT competence, would relate to tariff and non-tariff measures and other factors affecting trade in these products.-

A somewhat strange EEC complaint against Japan, that the latter was "distorting" the market for copper ore concentrates by paying higher prices than Europeans was also put off.-

The EEC had asked for a working party, though it was not clear to other members of the Council even what the EEC complaint was about and how Japan’s actions violated any GATT provisions.-

The EEC had said that Japan applied a three percent tariff on unworked copper, and as a result Japanese industry was able to assure itself of copper concentrates by "systematically offering prices higher than European industry".-

It was not clear whether the EEC was contending that Industrial countries should join in offering a common lower price to producers of copper and copper ores.-

Japan itself disputed EEC complaints, and made clear that whatever was happening was not due to any Japanese government actions, but that of Japanese private sector.-

According to a GATT spokesman, in the heated discussions in the Council, most delegations seemed to agree with the Japanese position, and felt "insufficient information" had been provided by the EEC.-

However, Third World sources later explained that what the EEC was really complaining about was in respect of Japanese Restrictive Business Practices (RBPs), supported by the tariff imposed by the government, that enabled Japan to maintain domestic prices of copper concentrates in Japan higher than world price, and thus enabled the exploitation of its own mines and full use of its domestic smelters to produce fully refined copper.-

These sources said that the EEC had not spelt out how this violated GATT (which from the beginning had frowned on government restrictions but had shut its eyes to private sector RBPs). May be, the EEC should really take it to UNCTAD where RBPs are dealt with, and get support against Japanese RBPs with government connivance against which others too have grievances, the sources said.-