ARGENTINA FAVOURS PRE-MINISTERIAL OFFICIALS MEETING.

Aug 11, 1986

ARGENTINA FAVOURS PRE-MINISTERIAL OFFICIALS MEETING.

GENEVA AUGUST 4 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Argentina came out Monday in support of the idea of a high-level meeting of the GATT Contracting Parties (CPS), before the September 15 Ministerial Meeting, in order to narrow down differences and promote a consensus over the new round.

The Argentine Ambassador, Leopoldo Tettamanti, said Monday that such a meeting could be held at Geneva or organised by the host country at Punta del Este (Uruguay), prior to the Ministerial Meeting.

Though Uruguay’s delegate had been associated with the preparation of the Swiss-Colombian paper, Tettamanti was confident that the Uruguayan Foreign Minister, with his equilibrium and objectivity, in his capacity as chair of the Conference could try to bridge the differences and create a consensus.

Since the end of the GATT PREPCOM on Thursday, with no recommendations and mere remittal of three alternative texts before it, there has been talk of a high officials meeting, on the ground that otherwise the ministers would be unable to make any progress in the face of three texts.

The preparatory process for a new round, Tettamanti told a news conference, had ended "in acrimony and confrontation", and without at any stage discussing in detail any of the drafts before it.

A major share of the blame for this lay with the major industrial countries, specially the U.S.A., EEC and Japan, Tettamanti declared.

These countries had been talking of a new trade round to "organise the world trade of the 21^st. Century", and of strengthening the trading system, "but without ever presenting a comprehensive picture or paper of how and what they proposed to do".

Each had bits of papers about "services", "investments", "intellectual property rights", "workers ‘ rights" and so on, but there was never a comprehensive paper before the PREPCOM, or any ideas how the credibility of the GATT could be restored.

Explaining the reasons which had led Argentina it to present a separate paper in the form of amendments to the Swiss-Colombian text, Tettamanti made clear that Argentina continued to be associated with the group of ten, but had put forward its proposals to serve as a political bridge between the two other papers.

Many CPS, he noted, had refused to discuss the G-10 document on the ground that it did not include new issues, but it was curious that at no stage had they presented any amendments.

"They refused to discuss it, not because of absence of new themes in the text, but because of the way we dealt with the traditional issues", the Argentine delegate stressed.

The Swiss-Colombian text too, was never considered in the PREPCOM, and all the time there was only "a battle to decide which will be the basis for discussion".

At an informal meeting, Argentina had agreed to take the Swiss-Colombian paper as basis for discussion, and had presented amendments to the text to demonstrate it would be possible to work on the basis of that document.

But it was one thing to have a paper as the basis for discussion and quite another to disregard the other (the G-10 paper). The democratic way would have been to take one paper, for methodological reason, as the basis for discussion, and see whether consensus could be reached.

But a second revision of the Swiss-Colombian text had been presented just a few hours before the final PREPCOM meeting, and "we never discussed either this paper, or that of the G-10 or the Argentine amendments, but ended more or less in a state of confrontation, and this did not help the work of our Ministers at Punta del Este".

Currently, GATT had no credibility. There were now some 120 arrangements (voluntary export restraints and other non-tariff barriers against particular countries), negotiated outside and inconsistent with GATT rules.

The first step to be taken, if the major CPS really wanted to organise the trade of the next century, would be to restore the credibility of GATT, and correct things done in the past without taking account of GATT rules, and then adapt GATT to the next century, by perhaps discussing the new issues.

But it was very clear that the new areas were not in GATT.

"If the ills of GATT are to be cured, and new issues are to be brought in, it would have to be by a decision of the CPS, and not through a new GATT round", Tettamanti said.

Even the PREPCOM had not been presented with any such picture.

GATT, Tettamanti underlined, was not a universal organisation "but a western organisation, with some other countries from the rest of the world".

"If there is one organisation where the leadership of important western countries can be presented clearly, it is in GATT. But they never did so and were always on the defensive or worked behind others and the normal processes of discussion", Tettamanti complained.

Papers were prepared outside GATT, but not within the institution itself, which showed that there was something wrong with GATT, and there was a lack of leadership’, not only in the realm of ideas but even in the conduct of day-to-day work.

The differences between the Swiss-Colombian approach, and that of the group of ten or of Argentina in its amendments, was not so much over the new themes, but on the normal GATT issues, the Argentine delegate underlined.

Within the PREPCOM, Tettamanti noted, there had been long discussions whether the Punta del Este meeting should be a meeting of GATT CPS at Ministerial level where GATT provisions would be observed or an ad hoc meeting, as in the case of the Tokyo round where some 20-30 countries met and decided to launch a new round.

At the end everyone had accepted that it should be a Ministerial meeting of GATT CPS.

Yet the Swiss-Colombian paper talked of launching a new round, not in accordance with the provisions of GATT as in the G-10 paper, but "within the framework and under the aegis of GATT", implying they would apply GATT where it suited them and act on an ad hoc basis where it suited them.

The proposal on services in the Swiss-Colombian text also said that after the framework of rules had been established, the CPS would take a decision regarding "its incorporation into the GATT system".

The "GATT system", as different from the general agreement, was intended to include the provisions of the GATT, the codes of conduct, the waivers, and bilateral arrangements in violation of GATT.

"If we want to organise a new trade round, we should begin with the rectification of the present system – by applying GATT disciplines to the codes, agriculture and the MFA".

In the case of the safeguards, the Swiss-Colombian text had differed from the G-10, by talking of a safeguards agreement based on the "basic principles" of the GATT, but no its most important clause for MFN treatment.

On MTN agreement and arrangements, the G-10 wanted them to be integrated into GATT, while the Swiss-Colombian paper talked only of improving, clarifying or expanding them, "thus in effect continuing the present ad hoc system".

On agriculture, Argentina has repeatedly stressed that the main thing was not the wording "but the political will to negotiate".

In its discussions, and in the amendments presented, Argentina had said that while recognising the right to implement national policies, the CPS would "agree upon an action to redirect them and all their instruments, so as to correct market imbalances and reduce substantially their negative effects on international trade".

But this was not acceptable to the major trading partners.

But in the Swiss-Colombian text, backed by them, they had sought negotiations to enhance surveillance in GATT and monitoring of national trade policies.

"They want to control and monitor our national trade policies, but they do not want to submit the negative influences of their own domestic policies in agriculture to negotiations".

The community was unwilling to discuss the substance of its policy of subsidised exports in agriculture, and even as the new round was being sought to be advanced through the PREPCOM, the U.S. was extending its system of subsidised exports.

Asked about what the G-10 or Argentina envisaged on services at Punta del Este, Tettamanti noted that on services there was the separate exercise in the "Jaramillo group".

But that group had not reported, and even a meeting to prepare a report was now scheduled only for august 29.

Everyone knew that this group was unable to reach any conclusions, since the issues were not ready for multilateral action.

No one knew the difference between "trade" and "transactions" or whether they wanted to negotiate on transport, insurance, banking, tourism, public health or anything else.

Only the U.S. was arguing for negotiations on services and for national treatment.

"The U.S. does not want its own national policies in agriculture to be discussed, but wants to discuss our national policies in services, and when some of us are yet to study and formulate our policies".

In the context of the Jaramillo Group and its report, all that the CPS could do at Punta del Este would be to continue that exercise, and decide in the future whether to negotiate or not.

Even if there was agreement to negotiate on services, it need not necessarily mean only in GATT, since there were many services being dealt with by other international organisations.

Asked about what would happen in Punta del Este in this situation, Tettamanti stressed the view that the six weeks ahead should be used to hold direct consultations among governments, and perhaps at the level of high officials, to work for a consensus.

Otherwise, there could be a new climate of confrontation at Punta del Este, and what would emerge would be "a weaker and less credible GATT, without correction of many of its ills".

GATT could not be made stronger, and its ills could not be cured, if the basic issues or agriculture were not tackled.

"If this is not done, and if the contradictions are increased by pushing new issues instead of solving old issues, the confrontation will be very big".