CONSENSUS ON NEW ROUND DEPENDS ON ACTIONS OF INDUSTRIAL WORLD.

Apr 17, 1986

CONSENSUS ON NEW ROUND DEPENDS ON ACTIONS OF INDUSTRIAL WORLD.

GENEVE, APRIL 15 (IFDA/CHAKRAVARTHI RAGHAVAN) – Any efforts at building a consensus for a programme of negotiations for a new GATT round would very much depend on concrete actions, in GATT and elsewhere, on major issues of concern to the third world, the industrial countries have been cautioned.

This warning was reported to have been given Monday by several third world delegates at the meetings of the GATT Preparatory committee, when it embarked on the second phase of its work.

The preparatory Committee has been asked to determine the objectives, subject matter, modalities for and participation in the Multilateral Trade Negotiations (MTNS), and to prepare by mid-July 1986, "recommendations for the programme of negotiations" for adoption at a Ministerial Meeting to be held in September.

At several previous meetings, the Preparatory Committee has gone through a list of subjects on the GATT work programme or proposed by individual delegations, as issues that could figure on the negotiating agenda of a possible new round.

Before proceeding to negotiations and drafting on each of the issues, the committee Monday is understood to have held what was described as "an overview" – when delegates presented their own assessments of discussions or progress or lack of it.

Several third world delegations were reported to have underlined that the credibility of GATT itself, and the prospects of building any consensus within the Committee, would very much depend on the attitudes of industrial countries and their political will to reach concrete decisions on some of the major concerns of the third world in the area of trade.

These concerns included the need for trade liberalisation in the parallel negotiations over the future of the Multifibre Arrangement (MFA) governing trade in textiles and clothing, satisfactory decisions on the issues of standstill and rollback of protectionism, the question of a safeguards understanding in line with GATT principles, and the issue of differential and more favourable treatment for the third world countries in any new round.

Earlier, the U.S. would appear to have suggested that there was "some convergence" within the committee as on questions of standstill, rollback, GATT dispute settlement procedures, safeguards and improvement of the GATT system and strengthening its objectives.

Strengthening of GATT, in the U.S. view, would require not only actions in traditional areas of GATT concern, but also extension of GATT role to other areas of economic importance.

This was a reference to the U.S. moves to bring within GATT new themes like trade in services, protection of intellectual property rights, and trade-related investment issues.

The U.S. is also reported to have tried to disabuse other delegates of the view that the U.S. was only interested in new themes, and underlined the U.S. interest in agriculture.

India is reported to have made the point that the third world countries, as early as July 1985, had collectively put forward a position paper outlining their major concerns over the multilateral trading system, but had not so far been able to get any concrete responses or actions.

They were initially asked to wait the convening of the senior official group, and then were asked to be patient and wait for the preparatory committee.

But again so far nothing had happened.

On three issues – standstill, rollback and safeguards – the third world delegations had actually tabled concrete proposals and were still awaiting reactions and decisions within the preparatory Committee.

On the fourth, differential and more favourable treatment to the third world countries, a draft had been tabled in the committee Monday.

The committee must come to grips with these concrete issues and reach decisions or consensus, if there was to be progress on drafting a programme of negotiations.

It would require not only detailed discussions, but also political will to reach concrete decisions.

Progress on issues elsewhere would also be needed – such as over the question of trade in textiles and clothing, and in the agriculture sector.

In both areas, the Indian delegate reportedly complained, there had been regression recently, rather than progress.

If the negotiations in the textiles committee over the future of the MFA were not imbued with the same objectives of liberalisation, no credibility would be left in the preparatory process for a new round, the Indian delegate is reported to have warned.

According to members of the GATT Committee on Trade in Agriculture, at its last meeting early in April, the European Community had hardened its position, and had gone back on compromise proposals, evolved at earlier meetings in 1984 and 1985, over issues for negotiations in agriculture.

Argentina and Yugoslavia would also appear to have supported, at the Preparatory Committee on Monday, the need for concrete actions within the Committee, and parallel actions in the Textiles Committee.

Argentina is reported to have underscored the issue of negotiations over agriculture.

Brazil is reported to have suggested that the way the major trading partners were trying to bring new themes into GATT through collateral actions was in fact undermining the credibility of the GATT system.

If any of the Contracting Parties wanted GATT to deal with new issues, they should do this through the straightforward method of seeking amendments to the general agreement, and not collaterally.

This was seen as a reference to the U.S. efforts to bring services into GATT, and have a GATT code relating to services – providing for rights and obligations to countries joining the code both in services and n trade goods.

And any amendments to the GATT to bring in new themes, if it involved amendments to article one of GATT (the most favoured nation clause) would also have to obtain unanimous consent of the GATT CPS, Brazil is reported to have further warned.

The EEC delegate was reported to have noted that negotiations in the previous trade rounds had involved mainly the major trading partners.

The EEC had decided that the new round should involve all the trading nations, and with their free consent.

It was for this reason that the EEC sought to build a consensus over the new round, though consensus should not mean unanimity.

In the EEC view, if no new trade round were launched, the situation on the trade front would only get worse.

As regards agriculture, in the EEC view the negotiations must take note of the realities.

Argentina is reported to have retorted that the reality was that in several agricultural products like meat, the EEC through its highly protectionist policies and subsidies to exports had become a net exporter rather than a net importer.

Several of the other industrial countries, Japan and New Zealand among them, are reported to have said there had been "enough discussions" within the committee and they should move to the preparation of a draft declaration for the consideration of Ministers.

India and a couple of other third world countries were however reported to have underlined that the Committee’s task was not to draft any declaration, but agree on a programme of negotiations.