SOVIET APPLICATION TO GATT AIMED AT EVENTUAL ACCESSION.

Sep 11, 1986

SOVIET APPLICATION TO GATT AIMED AT EVENTUAL ACCESSION.

GENEVA SEP. 9 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The Soviet approaches to the general agreement for observer status, and its formal application now to participate in the proposed new round of multilateral trade negotiations could lead ultimately to the Soviet Union's "accession to the general agreement on agreed conditions", a top soviet official stressed Tuesday.

Mikhail S. Pankine, head of the Department of International Economic Organisations at the USSR Ministry of Foreign Trade, was answering questions at a press conference to explain the soviet application.

"It goes without saying that the USSR will be prepared to observe strictly the existing GATT rules and traditions in the event that it is granted observer status as well as in the event of its possible accession to the GATT as a full member, and also in the event of its participation in the MTNS", Pankine added.

The Senior Soviet Official, who met with the GATT Director-General on this issue last week, said the soviet application in mid-august had been addressed to the contracting parties to GATT, and "the ball is now in their court".

"We hare too far away form GATT to know how this will be handled, and whether this would be formally placed before the session of the GATT CPS at Punta del Este, whether they will decide by consensus or take a vote, is all up to the GATT CPS".

"But we have shown the link, as we see it, between intention to participate in GATT activities as an "observer", our wish to participate in the new round, and our ultimately joining GATT", Pankine added in response to questions.

On the US argument that the Soviet entry into GATT would "politicise" GATT, Pankine suggested that any objective assessment of the international trade situation would show that GATT was "politicised" already.

However, "as far as we are concerned, if we join GATT, it is with awareness that GATT is a contract, and different for example from the UN Second Committee or even UNCTAD", Pankine declared.

The Soviet Union has been making informal approaches to various GATT CPS since 1982, sounding them out about reactions to any possible approach by the USSR, and followed this up in august with a formal letter, circulated by the GATT Director-General among the CPS, expressing its desire to participate in the new round, and in GATT activities as an observer.

The GATT Director-General himself has indicated that with the circulation of the letter, he had nothing more to do and it was up to the GATT CPS.

The US has come out openly against the soviet application, while the European Community has publicly taken a somewhat neutral stance.

But at the recent quadrilateral meeting (of US, EEC, Canada and Japan) at Cintra in Lisbon, all of them would appear to have agreed against the soviet move, and also on need to make sure that it was not brought formally on the GATT Agenda at Punta del Este, but perhaps disposed off at the informal session of the Heads of Delegations, on the basis of lack of consensus.

But the EEC, which has been pressing on the US for compromises and consensus over the new round (including finding ways and means to accommodate viewpoints of countries like India and Brazil over the new themes), is reported to have privately warned the US that if it adopted a "rambo-style" approach to the new round issues, and forced a vote rather than compromise for a consensus, it would have other serious consequences.

If decision-making by vote became a precedent, other issues too would easily be brought to a vote like the soviet application or moves for sanctions ai iixlafrica, and on all of these the industrial world would be easily outvoted.

While GATT Officials and Western Delegates have been stressing that none of these are formally on GATT Agenda, some other GATT sources noted that the issue of soviet participation in the new round, or the exclusion of South Africa from a new round, could easily come up as issues in the consideration of any declaration to e adopted by Ministers to launch any new round.

The EEC's purported warning about a vote on services ETC having repercussions on others, were of relevance in this regard, some of these sources suggested.

Pankine himself steered clear at his press conference of these controversies, stressing that it was up to the GATT CPS, who were masters of their own procedures, to decide these matters.

As to soviet views on new themes, Pankine said that the Soviet Union had taken note that these were "controversial" issues within GATT, and "as outsiders we would not comment on it in any way".

"But in our internal work we have taken note of all eventualities".

Pankine also related the soviet moves to decisions at the last parti Congress, now being implemented, in regard to the fundamental restructuring of the external economic management system, and the new autonomy being provided to individual enterprises and conglomerates on their external relations.

Among the traditional sectors of goods trade likely to be on the Agenda of a new round, the Soviet Union was interested in negotiations on fisheries and products, non-ferrous metals, forestry and other natural resource products.

"At present", he noted, "only two major world trading nations were outside GATT - the Soviet Union and the German Democratic Republic".

The Soviet Union was among the first ten world trading nations, and its foreign trade accounted for four to five percent of world trade, and its participation in the new round would ensure the real universality of the MTNS.

In 1985 twenty-seven percent of soviet foreign trade with the OECD countries, 20 percent with the third world, and 53 percent with other socialist countries.

The Tokyo round, he recalled, had enabled the participation of not only GATT Members but other countries too, including those with different modalities of foreign trade organisations, and this had not caused "any significant problems or create obstacles, either for the negotiating process or its conclusion".

In the Soviet view, the new round of MTNS could continue the process initiated at Tokyo round of strengthening the international trading system, making it more universal and open, and consolidating and developing its legal principles and rules.

The Soviet Union considered itself an active player in the international trading system, and "we are sincere proponents of a strong and stable international trading system based on such generally observed principles as mutual advance, mutual commitment, non-discrimination and the most-favoured-nation clause", Pankine added.

While the soviet approach for participation in the MTNS was part of a general policy of "approachment with GATT", the soviet application to GATT for observer status and for participation in the new round were not necessarily linked.

"We will continue our dialogue with CPS concerning our formal participation in the general agreement", Pankine declared, making clear that this would be irrespective of whether any decision is taken at Punta del Este or not.

It was "simply not true" that the majority of GATT CPS has reservations about soviet participation, Pankine declared.

Their own contacts with the GATT CPS showed that the majority of them react positively to Soviet participation in the MTNS and the Soviet approaching GATT in general.

The approach to GATT "originated in our Department, and we did not connect it with the Soviet Union joining any other international organisation".

"But in our talks with CPS, some of them have drawn attention to the fact that the links between GATT and the IMF is becoming stronger", Pankine added.