Feb 26, 1985
LIBERALISATION OF TRADE DISCUSSED.GENEVA, FEBRUARY 22 (IFDA/CHAKRAVARTHI RAGHAVAN) – Elaboration of an approach to liberalisation of trade in agriculture, and developing possible policy options, was discussed this week at the meeting of the GATT Committee on Agriculture.Some 50 countries were represented at the meeting, but mostly at level of Junior Technical Officials or from their Geneva Missions. The 2-1/2 day meeting of the Committee, which ended Thursday, is expected to be the first of a series of meetings to elaborate the basic approach agreed upon at the November 1984 annual meeting of the Contracting Parties to the General Agreement on Tariffs and Trade. The next meeting of the Committee is expected to take place in late March. It was agreed at the annual session of the CPs, that the committee should undertake elaboration of approaches in specific areas, as a basis for possible future negotiations to liberalise trade in agriculture. Firstly, all Quantitative Restrictions (QRs) and other related measures affecting imports and exports are to be brought within the purview of strengthened and operationally more effective GATT rules and disciplines. All restrictions, including those maintained under waivers, such as those of the USA and Switzerland, and other derogations or exceptions from GATT, and export and import activities of state trading organisations and other related enterprises are to be covered. Also to be elaborated under this approach would be appropriate rules and disciplines relating to Voluntary Export Restraints (VERs), variable levies and charges (such as those of the EEC), tariffs not bound by GATT agreements, and minimum import price arrangements. When tariffs are "bound", that is when their levels are negotiated and set and notified to GATT, they cannot be varied or raised without fresh negotiations with other GATT members. Where they are unbound, they could be varied or raised by the importing country to protect domestic producers, and this is often done seasonally. Most agricultural tariffs are not bound. The second area to be covered relates to subsidies affecting trade in agriculture, whether export subsidies or other forms of export assistance including export credits or domestic support measures affecting trade, so as to bring them under strengthened and more operationally effective GATT rules and disciplines. Also to be covered are improvement of procedures relating to sanitary and phytosanitary regulations and other technical barriers to trade. In most industrial countries these are often used to protect domestic markets against imports from the Third World. In the elaboration of these approaches, full account is to be taken of the need for a balance of rights and obligations under GATT, of the special needs of Third World countries and their GATT rights for differential and more favourable treatment, and the special characteristics and problems in agriculture. At this week’s meetings, all these issues were covered in what was described as "an exchange of initial views". The ultimate aim of the Committee is to prepare the basis for Ministers and Governments to make policy choices on the various options, and decide whether the progress made was sufficient to engage in negotiations. All the issues in agriculture are inter-twined, and it has been agreed that progress on any one would be dependant on simultaneous progress on the others. Most of the views, and initial suggestions from participants, a GATT spokesman said were often "personal or exploratory" and did not represent any position of the Governments concerned. The main discussions at this week’s meeting related to the whole issue of QRs on agricultural products. While a GATT spokesman declined to elaborate on the various viewpoints expressed at the meeting, according to some participants, the U.S. Representative would appear to have put forward the view that all agricultural tariffs should be "bound", and that all QRs should be removed. However, most other delegations were reported to have felt that this was "impractical", and a more practical approach would be to identify the restrictions, and remove them bit-by-bit. Also in this area, one of the ideas put forward was that there should be some kind of minimum access available on each market to exporters. Since both in the market economy and centrally planned economy countries, a lot of trade in agriculture is through state-trading or such quasi organisations, their role in applying or liberalising restrictions was also discussed. Also considered were various ideas to deal with minimum import price arrangements, use of variable levies and charges, and VERs. In regard to subsidies, the committee has been asked to consider either of two approaches – a general prohibition of subsidies and other export assistance measures, but subject to carefully defined exceptions, or improvements in the existing framework of GATT rules and disciplines, which would not per se rule out subsidies but set limits and conditions. This is the most difficult area in GATT, and one for which no solution had been found in past multilateral negotiations. At this week’s meeting, a number of ideas were "put on the table", and the GATT secretariat is to produce a new working paper for the committee in time for the next meeting of the Committee. Domestic support mechanisms of countries that have an impact on trade in agriculture, were also discussed in this area. Anwarul Karim Chowdhury of Bangladesh was among the vociferous critics, charging that the proposal would virtually double the number of countries qualifying without a corresponding increase in available resources. But Brown denied that, saying that the number qualifying would only increase from 63 to 66 countries without any loss of benefits. Many countries supported the proposal that factors other than GNP and population – such as external indebtedness, development efforts, and special circumstances such as frontline states or landlocked states – should be given additional weight. But the Indian delegate, Mahdu Sudan Mukherjee, asked whether his country "should be penalised because of its large size and population". In response, Brown said that continued use of the current weighting would "mean that about 40 countries would have to compensate two or three". With respect to distribution of resources, India also led the argument that too much was being allocated for special programmes, special industrial services and UNDP support costs, and that these savings should be made in direct grants to individual countries. The consensus Friday was that the negotiations ahead will be arduous, but the majority of developing countries said they wanted to retain the character of UNDP, as it was the only technical assistance programme with no strings attached. But as Brazil’s delegate, Marco Cesar Naslanksy, said: "The idea of UNDP is to promote economic development in developing countries in accordance with their own plans, priorities and national goals". "Formulas that impose cut-off points, graduation and other discriminatory practices should be opposed".