5:30 AM Feb 16, 1996

FOCUS ON IMPLEMENTATION PROBLEMS, SAYS MALAYSIA

Geneva 16 Feb (TWN/Martin Khor) -- A review of the difficulties faced by developing countries in implementing the Uruguay Round agreements should be the focus of the WTO Ministerial Meeting in December, according to a senior developing country diplomat.

In the review process, reasons may also be found on the need to adjust the existing WTO rules to help developing countries face up to the new trading order, added Amb. Haron Siraj, Malaysia's Permanent Representative to the WTO and the outgoing chairman of the WTO's Trade and Development Committee.

In an interview with TWN, Haron said the time is not ripe for a diversion of attention to new issues, such as a multilateral investment agreement, when developing countries are already facing a wide range of difficulties in implementing the Uruguay Round results, and in subsequent negotiations.

"We owe it to our Ministers taking part in the Singapore meeting that our main task is to review fully the implementation of the Uruguay Round results in their totality," he said.

Haron added that the experience of developing countries in the past two years since the Uruguay Round's conclusion has been difficult.

"This is especially in relation to the GATS agreement (both in the implementation of the Round's results and in the subsequent sectoral negotiations) and in the implementation of the TRIMS agreement," said Haron.

"In the services negotiations on sectors such as maritime, telecommunications, financial services and movement of natural persons, developing countries have had to grapple with difficult problems, including deciding on how and what to liberalise, how the economy should adjust to this, and facing up to the potential impact of liberalisation on the local sector.

"It would be thus be well justified that the Ministerial Meeting focus attention on the problems of implementation, and discuss if it is necessary to make adjustments to the rules and time-frames for implementation agreed to in the Uruguay Round, in order to accommodate the difficulties of developing countries."

The manner in which the Uruguay Round results are being implemented and the problems encountered are matters of immediate interest to developing countries, and these should occupy the centre stage in the Singapore meeting, he emphasised.

"We should review whether provisions that are of benefit to developing countries, such as special and differential treatment as well as progressive liberalisation (in the GATS agreement), are being adequately recognised by the industrialised countries," said Haron.

"After the Uruguay Round's conclusion, and during the actual negotiations in the GATS services agreement, there does not appear to have been full recognition by industrial countries of these provisions.

"The framework agreement recognises the principle of progressive liberalisation, in which developing countries are given time to adjust. But now itself, in the first round of negotiations since the Uruguay Round, the developing countries have come under pressure to liberalise fully."

Haron said some of the WTO Agreements contain specified time frames before implementation and for a review to be made. Moreover, even after that period and the review process is completed, countries facing difficulties in adjustment could ask for further delays in implementation.

"In the review process, we may well find there is justification or grounds to adjust the existing rules, to take into account the difficulties of implementation," he added.

"Developing countries are well justified, two years after the Uruguay Round's conclusion, to ask whether they have benefitted from the Round in terms of market access, especially in comparison to the new obligations and responsibilities which they now have to shoulder as a result of the Round."

This question, he said, has become even more pertinent since the developed countries appear to be "more enthusiastic" in making use of new instruments such as 'anti-circumvention' against some developing countries.

Referring to moves by some industrial countries to introduce the issue of an investment regime in the Singapore meeting, Haron said that under the item of reviewing the Uruguay Round's implementation, the investment elements in existing agreements such as TRIMS, GATS and subsidies could be discussed.

He added that, indeed, a discussion reviewing these agreements would bring up the difficulties already being faced in implementing the investment elements, and the possible need to make adjustments to the rules.

"In these agreements, the various elements of investment in them exist insofar as they are directly trade-related and trade-distortive, and not as investment rights per se.

"Even then, a review of implementation is likely to show many difficulties already faced by developing countries in meeting the obligations relating to trade-related investment elements.

"It would therefore not be timely to start a discussion on new obligations regarding investment per se, when even the existing trade-related provisions are causing difficulties in implementation."

Referring to the arguments put forward by some industrialised countries that since investment was covered in some of the WTO agreements, it was not a new issue and thus can be taken up at the Singapore meeting, Haron said: "The investment elements in these agreements are confined to trade-related aspects.

"This should not be construed to mean that the agreements include the issue of an investment regime as such or in totality.

"The experience of developing countries in the post-Uruguay Round negotiations on services sectors under the GATS agreement has shown the trickiness of dealing with various elements of investment, in particular the issues of national treatment and commercial presence.

"When it was agreed to have these elements in the services agreement, this was accepted only on the basis that they could be offered on a positive list - with the country schedules listing the limitations.

"This means there has been no blanket acceptance of the right of entry or establishment, nor of the principle of national treatment. There is thus no justification to put forward the argument that an investment regime in totality should be brought into the WTO, simply because some elements of investment already exist."