DUNKEL'S SOMBRE VIEW OF OUTLOOK ON ROUND.

May 8, 1992

DUNKEL'S SOMBRE VIEW OF OUTLOOK ON ROUND.

GENEVA, MAY 6 (CHAKRAVARTHI RAGHAVAN) -- The Uruguay Round cannot be completed without changes on agriculture and some other areas in the Draft Final Act package, and even for this third parties might have to play an arbitration role as between the United States and the European Community.

This appeared to be the thrust of GATT Director-General Arthur Dunkel's remarks to the informal group of developing countries in GATT when he spoke to them Wednesday and said that there was no political conviction among all participants that the time had come for concluding the Round.

(Later on Thursday, addressing businessmen at Lausanne, Dunkel was reported as saying that a sense of "fatigue" might overtake negotiators and put the Round in jeopardy).

The informal group has invited the EC chief delegate, Amb. Tran Van-Thinh, and the U.S. delegate, Amb. Rufus Yerxa to meet with them separately to discuss the situation in the Round.

Amb. Tran is due to meet the informal group Thursday afternoon and Yerxa sometime next week.

However, many Third World sources note that the issue is no longer in the hands of negotiators and the conclusion of the Round and its terms rests with political leaders. EC Commission officials, for example, are known to have told some of their trading partners that any resolution of the deadlock was outside their mandate and this had to be sorted out at political levels.

In this view, few see any prospect of the Round being successfully concluded before at least the U.S. elections are over.

At his meeting Wednesday, Dunkel would appear to have said at this moment there was no political conviction among all participants that the time had come for concluding the Round.

It was the firm belief of the United States, Dunkel reportedly told the group, that the European Community would not be able to accept the agricultural part of the package in the Draft Final Act (DFA) without changes and some element of external arbitration might be needed to break the deadlock.

And without agreement on agriculture and some other issues, no progress could be expected either on market access negotiations or those for initial commitments on services.

But Dunkel would appear to have ruled out his playing any part, noting that he had tried to do precisely that in filling in "gaps" in agreed positions and presenting the DFA, but which had run into problems in agriculture and elsewhere with the majors.

But besides agriculture, there were also other issues on which further work (presumably for changes in the DFA) that was needed, Dunkel noted in his remarks.

While Dunkel's views were privately known to many delegations over the last few weeks, particularly after the failure to meet the April deadline, his speech to the developing country was in a sense a formal recognition and aimed perhaps at preparing the ground.

At the same time, Dunkel would appear to have ruled out any work at this stage on his so-called fourth track (for making changes of substance in the global package he had put. forward in his Draft Final Act in December 1991).

Any such move now for work in the fourth track, Dunkel reportedly said, would unravel the whole package.

The general view that emerged was that having a formal meeting of the Trade Negotiations Committee at this stage would not help move the process forward, but something had to be done to identify what needed to be done in terms of substance and procedure.

Nevertheless the developing countries are trying to get the views of the EC and the U.S.A. in order to be able to decide on how to proceed further in the Uruguay Round process.

Some of the participants have been thinking that perhaps the Trade Negotiations Committee should meet formally and adopt a statement telling the majors that if they did not settle their differences and conclude the round, the support of the developing countries should not be taken for granted.

But Dunkel would appear to view this as having a limited value. Also, some of the participants got the impression that Dunkel was also keen that developing countries should not do anything and be blamed for the failure of the Round and the responsibility should be put at the doors of the majors.