May 11, 1985

SPECIAL SESSION OF GATT COUNCIL SET FOR MAY 29.

GENEVA, MAY 9 (IFDA/CHAKRAVARTHI RAGHAVAN)— The special session of the Council of Representatives of the General Agreement on Tariff and Trade (GATT) is to meet on May 29, to consider the Nicaraguan an complaint on the trade embargo and economic sanctions, imposed by the United States.-

President Reagan had announced in Bonn a total embargo on trade with Nicaragua, and other economic sanctions against Nicaragua, and these took effect on May 7.-

Nicaragua complained to the general agreement on May 7, and sought a special session of the GATT Council to consider the issue.-

According to a GATT spokesman, after consultations with members, the session has now seen set for May 29 morning.-

While the Nicaraguan complaint has not been made public, its details have become known from GATT delegations.-

In its communication, Nicaragua is reported to have called for a special session of the GATT Council of Representatives to enable the Contracting Parties (CPs) to examine the unilateral economic sanctions imposed by the U.S. government and "take the measures which the gravity of the matter requires".-

The total trade embargo and other economic sanctions decreed by the U.S. administration, the Nicaraguan complaint said, was "a flagrant violation" of the objectives and provisions of the general agreement.-

In particular, it violated articles one, three, five, eleven and thirteen, and part four, of the general agreement.-

Article one is the fundamental provision of the general agreement for most-favoured-nation (MFN) treatment by a GATT CP to all other CPs.-

It applies to tariffs or charges of any kind on imports and exports, international payments transfers for imports or exports, and rules and formalities for imports and exports.-

Article three requires national treatment to imports in respect of internal taxation and regulations.-

Article five enjoins CPs to provide "freedom of transit" through their territories for goods, to and from other CPs, and for vessels and other means of transport, carrying such goods, without distinctions based on the flags of the vessels.-

Such transit facilities should be on MFN basis, and would cover air transit of goods (but not to operation of aircraft in transit).-

Article XI enjoins a general elimination of all Quantitative Restrictions (QRs) - whether through quotas, import or export licences or other measures - on imports from other CPs.-

The exceptions to this prohibition are also listed in the article.-

And where the QRs are sanctioned by the general agreement, article XIII enjoins the application of the QRs on a non-discriminatory basis.-

Part IV of GATT incorporates special, preferential and to extend differential provisions that the industrial CPs are to extend to the Third World CPs.-

These include industrial CPs taking special measures for a rapid and sustained expansion of export earnings of the Third World CPs, positive measures to ensure shares for Third World countries in international trade, commensurate with their development needs, and for diversification of their international trade.-

Industrial CPs have also undertaken through these provisions specific commitments in this regard.-

The U.S. actions had created an emergency situation "for a developing CP", and a special session of the GATT Council should be convened to consider the issue, Nicaragua said in its complaint.-

The economic sanctions announced by the U.S. Executive, the Nicaraguan complaint further said, constituted "a measure of political coercion", and thus was in breach of the provisions of the Ministerial declaration of November 1982.-

It also infringed the UN Security Council resolution 530, and the UN general assembly resolution on assistance to Nicaragua and the situation in Central America.-