Nov 7, 1985

GATT LIKE PROCEDURES ADVOCATED AGAINST RBPS.

GENEVA, NOVEMBER 5 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The procedures and machinery available in GATT for control of governmental protectionist measures need to be matched now by similar measures against, Restrictive Business Practices (RBPs), a senior UNCTAD official urged Tuesday.-

The director of the Manufactures Division of the UN Conference on Trade and Development, B. L. Das, was initiating the general debate at the UN review Conference on RBPs, and explaining some of the secretariat proposals.-

The UN Conference is reviewing the implementation of the set of multilaterally agreed equitable principles and rules for the control of RBPs (or the set), adopted in 1980 by the UN General Assembly as a non-binding voluntary instrument.-

The review Conference, attended by over 60 states, is also mandated to formulate proposals for better implementation and improvement of the set.-

Das underlined that five years after the adoption of the set, though a number of countries had enforced or amended their domestic laws, and had widely disseminated copies of the set to their industry, trade and academic circles, in fact "very little action has in fact been taken in respect of RBPs which affect international trade transactions".-

To UNCTAD’s knowledge, the notification and consultation provisions in the set had never so far been applied, nor had the provisions for technical assistance, advisory and training programmes been implemented.-

In view of the growing use of RBPs as a protectionist device in international trade, and the links of RBPs with the international trading system, the review conference could agree on a declaration, to be adopted by the UN General Assembly, Das suggested.-

The declaration should urge all states to avoid entering into arrangements in restraint of trade through use of RBPs in place of government measures.-

Apart from the declaration, the review Conference could also adopt some of the technical proposals in the secretariat study.-

These would improve the transparency in use of RBPs in international trade, set up a notification and consultation procedure, strengthen the institutional machinery for monitoring the application of the set, and implement the technical assistance, advisory and training programmes on RBPs.-

GATT rules, Das pointed out, provide for a degree of transparency on governmental measures through notification, and for consultation and dispute settlement for resolving disputes among the trading partners.-

"But there is no such relief available against RBPs", he noted. -

The secretariat’s proposals before the Conference would establish a similar procedure, to be monitored by the appropriate institutional machinery to be created within UNCTAD, in respect of RBPs.-

The secretariat proposals, Das noted, also called for establishment or improvement by states at national and regional levels, of their notification procedures applied to enterprises on the use of RBPs in their import and export transactions.-

Some countries already collected this information on export cartels, but most did not, and even the available information was usually kept secret.-

To improve transparency in the use of trade barriers, there should be a public registry of export and import cartels in force in ail countries, and such information could be centralised in UNCTAD and serve as a basis for negotiations to "a general ‘disarmament’ of such protectionist measures".-

As part of the notification procedures, when a state adversely affected by an RBP of an enterprise located abroad or outside its jurisdiction, it could promptly notify the state concerned in order to identify the practice and take necessary action to control it.-

Also, when a state decided to undertake an investigation of an RBP, originating in another state, it should be able to promptly notify such a state of the intended investigation and enter into consultations with that state prior to initiating any action.-

Such consultations could be undertaken directly between the states, or within the intergovernmental framework.-

On the idea of setting up a special Committee in UNCTAD as an institutional follow-up measure, Das assured the Conference, that this would have no adverse financial or budgetary implications, since the special committee would be replacing the present intergovernmental group of experts.-

Australia’s Merv Keehn, speaking for the OECD countries, said it was unrealistic to expect that all aspects of the set could have been fully put into effect in the five years since its adoption.-

While the secretariat study, in trying to provide a global assessment of the implementation had provided some valuable information, some of the assumptions were not supported by factual analysis, the Australian delegate said.-

The secretariat had not distinguished sufficiently between RBPs of enterprises and actions by governments in implementing trade policy measures.-

The secretariat paper also took "an unduly pessimistic view" of the extent to which the set had seen put into effect.-

Speaking for the Socialist Group of countries, Gennadi Kuzmin of the Soviet Union, said the adoption of the set five years ago was a turning point in the history of the international efforts to overcome the RBPs in international trade.-

The set had stood the test of time, and was still topical, and could be the instrument of a long-term programme of action at the international level.-

The topicality of the set had become even more important in view of the symbiosis between governmental protectionism and use of RBPs, with adverse impact on international trade and economic cooperation among countries.-

The protectionism of RBPs, practised with the support or approval of governments, was even more pernicious because it was selective, discriminatory and used against a particular country or group of countries.-

As the disputes on steel and textiles showed, this protectionism also had its impact on political relations and led to a situation of confrontation.-

At a time when some economists in the U.S. were seriously putting forward the thesis justifying protectionism in economic terms, it was very necessary to deal with the practice of RBPs and ensure the better implementation of the set, the Soviet delegate added.-

China’s Liu Xiaming said that while there had been some encouraging developments during the last five years, an overall re-view showed that the set had not been implemented "earnestly and effectively".-

Largely due to the lack of the set having no legally binding force, it had failed to be implemented in a "genuine, effective, and comprehensive manner".-

The proposal of the Group of 77 to make the set a legally binding document was hence "a positive one", and there should be joint efforts at the Conference to achieve this.-