Jul 11, 1985

NO PROGRESS ON HIGH LEVEL MEETING.

GENEVA, JULY 9 (IFDA/CHAKRAVARTHI RAGHAVAN)— Two days of meetings of GATT’s Top Policy Making Body, the Consultative Group of 18 (cg-18), ended Tuesday without any consensus on a new round of trade negotiations or the convening of a high level meeting of GATT Contracting Parties for this.-

According to participants at the meeting, while there had been an open and frank exchange of views, the Third World and Industrial countries are still far apart, and so far there it no understanding or agreement over the convening of a high level meeting of senior officials of the Contracting Parties to the general agreement.-

The Industrial countries who want to launch a new round of trade negotiations, and include new issues like "trade in services" within it, have been seeking the agreement of the Third World to set up a high level meeting in September that could agree upon and prepare for the launch of the new round.-

"The whole issue is wide open, and will be considered by the GATT Council, but without any 'guidance' from the CG-18", one participant said after the meeting.-

A major stumbling block to the launch of the negotiations, and the convening of a high level preparatory meeting, is the insistence of the U.S. and other Industrial countries on the inclusion of "services" issue in the round, and within the GATT.-

The U.S., EEC, Canada, Japan and the Nordic countries have now put in their "submissions" to the GATT Council on the new round, and these will be considered, along with the earlier joint stand of the Third World countries, at the next meeting of the GATT Council on July 17-18.-

The U.S. paper reportedly makes clear that the U.S. would insist on the trade in services to be considered within GATT, even if there were to be "parallel" negotiations and writing of new rules and principles guiding the trade in services.-

In a joint memorandum in June to the GATT Council, some 24 Third World countries made clear their opposition to any link between trade in goods and trade in services, or for services to be considered within the GATT framework.-

The submissions and clarifications offered at the CG-18, one participant said, show that the industrial countries want to be "very cautious" in the traditional areas of GATT concern the trade in agricultural products and manufactured goods.-

But at the same time, they are "inviting" the Third World countries to join them "in an adventure in new areas".-

"Caution on goods and adventurism in services is the new watchword", the participant commented wryly.-

He noted that the European Community has made clear that there could be no radical changes, but only small reforms, in its common agricultural policy, which protects the Community's domestic agriculture from any foreign competition and enables the subsidised export and dumping of surplus commodities.-

The Japanese and the Nordics too speak of the "specificity" of agriculture in relation to trade.-

Also, in the trade in goods, unlike in the Tokyo Round where the Industrial countries spoke of "securing additional benefits" for the trade of the Third World, the current emphasis of Industrial countries is on "graduating" the Third World out of any special treatment, and differentiating among them on any benefits.-

But on the services, an area where even not enough is known about trade or its relationships to other sectors of production and development, the Industrial countries want the third World, "to join in a new adventure" (as the EEC has reportedly put it) to write international rules and open up Third World economies to foreign competition.-

After an informal meeting of Trade Ministers of some Industrial and Third World countries at Stockholm in June, western sources and media had spoken of a rift in the Third World ranks, and of a purported "Brazilian concession" on the services issue.-

However denying such interpretations, the Brazilian Foreign Office in Brasilia issued a communication where it made clear that there should be total delinking of negotiations in good and services, or even the preparations, and that no trade-offs should be sought between each of the negotiations.-

Some Industrial country sources said that so far a large number of Third World countries seem to be united in their opposition to bringing the services issue into GATT, and appear unwilling to agree even to parallel meetings on goods and services, if the latter was to be held in the GATT framework or even a GATT secretariat involvement that would imply GATT jurisdiction.-

One Industrial country source said that it was inevitable that there would be a senior officials meeting in GATT, but the only question was when and under what guidelines.-

GATT sources said the major thing was that all the parties are now talking openly and frankly, and everyone is aware of the dangers facing the entire GATT trading system.-