LITTLE EVIDENCE OF IMPLEMENTATION OF UNDERTAKINGS.

May 17, 1984

LITTLE EVIDENCE OF IMPLEMENTATION OF UNDERTAKINGS.

GENEVA, MAY 16 (IFDA/CHAKRAVARTHI RAGHAVAN)— Though world trade has at last been picking up "trade policy remains in difficulty", the director-general of the General Agreement on Tariffs and Trade was quoted Tuesday as telling the GATT Council.

The special session of the GATT Council was reviewing developments in the trading system and a secretariat note on developments.

A GATT spokesman described the report as indicating a number of negative trends like tendency towards short-term protectionist measures and ad hoc sectoral arrangements outside GATT.

On the positive side there were few new restrictive measures in the agricultural sector and "encouraging evidence" that some Third World countries were pursuing very positive trade liberalisation programmes.

Also, while there were positive proposals for accelerated tariff cuts (agreed to under the Tokyo Round), "there has been little evidence of other substantive actions by the industrial countries in line with their specific undertakings at the 1982 GATT Ministerial declaration, the spokesman said.

The GATT spokesman's characterisation of the secretariat note appeared to be attempts to meet criticism at the special session of several Third World countries on what they saw as deficiencies, in both the assembling of facts and lack of explanations or analysis of their impact, resulting in, perhaps "unintended", bias against the Third World.

The document itself Third World delegates later said, while pointing to trade liberalisation by Japan and some other industrial countries (in tariff areas), but not the trade liberalisation measures of Third World countries, under very difficult external conditions due to BOP difficulties and debt servicing problems. Only Turkey's action in this area have been mentioned.

Also, the report lists on the same basis the illegal trade restrictions imposed by the industrial countries, and often outside the GATT, and the legal restrictions imposed by the Third World and justified to GATT committees.

The report claims itself to be based on both official notifications by GATT Contracting Parties, and other information gathered by the secretariat including from the "economic press".

In several cases of third world countries while raising of tariffs and quotas on particular items were mentioned in the report, the liberalisation done by them in respect of others found no mention.

This is perhaps because of over-reliance on western press reports which whit their "news values" report the negative restrictions of the Third World that affect the industrial countries, but do not list the positive liberalisation measures.

Again, the new U.S. textile restrictions are merely summarised with the U.S. claims that these were only for "internal purposes of monitoring", but without explaining or bringing out the fact that they were really restrictions on textile imports from the Third World, not even sanctioned by the Multifibre Arrangement.

In fact under the new "internal procedures", and despite U.S. assurances it would fully abide by its MFA obligations, the U.S. administration, since beginning of l984, has issued 84 "calls" on Third World exporting countries for "consultations" that would lead to reduction of quotas and voluntary restraints.

Third World spokesmen were also reported to have complained at the special session that even some "factually accurate" statements, in the report and its annexes, were quite misleading.

For example, they noted, that the report merely records "no notifications" under the heading "Article XXXII: 2 (A) – non-fulfilment of Article XXXVII: 1).

Under this article, in part IV of GATT, the industrial countries undertook to reduce or eliminate barriers to exports from the Third World, refrain from increasing customs duties or non-tariff import barriers on goods of export interest to the Third World, and refrain from new fiscal measures that would hamper growth of consumption of primary products, raw or processed, from Third World.

They were further required to notify GATT about not giving effect to the provisions.

These provisions of GATT, from its incorporation in 1965, have remained unimplemented - no barriers have been brought down nor notifications made by the industrial countries.

In 1983, the GATT Trade and Development Committee, which reviewed this situation, reminded the industrial Contracting Parties of their obligations and need to notify. The 1982 Ministerial declaration too contains references to it.

Third World sources noted that the GATT document's statement about "no notifications" would give the impression that the industrial countries were either implementing or erecting no new barriers. The contrary was really the case.

Third World delegates at. The special session said that in future reports, the secretariat should make an interpretation and analysis of the information to bring about in clear focus the trends, whether they were trade restrictions or liberalisation.

Earlier, in what the GATT spokesman described as the "only substantive" comments, the EEC said that despite the protectionist pressures, governments had stood up to the pressures and the GATT trading system, with occasional exceptions, had done remarkably well.

Japan stressed needs for international cooperation to put in motion the process of rolling back of trade restrictions. The prospects for the Third World countries were not very bright in the trading context. Japan itself had taken some measures to liberalise its imports from these countries.