May 11, 1992


GENEVA, MAY 7 (CHAKRAVARTHI RAGHAVAN) -- The Europeans Commission's chief GATT delegate, Amb. Tran Van-Thinh, reportedly told developing countries Thursday that while the EC needed changes in the agricultural part of the Dunkel package in the Uruguay Round, moves to use this to get other parts of the text changed would unravel the whole package.

Amb. Tran met, at their request, the informal Third World group to discuss with them the current state of the Uruguay Round and possible scenarios for its conclusion.

U.S. delegate, Rufus Yerxa is similarly expected to meet the group next week. On Wednesday, Dunkel had met the group.

Third World sources said that it was clear from Tran's comments and remarks that the Uruguay Round could be concluded only after the U.S. elections, but that both the U.S. and EC would want to keep things ready to conclude the package of accords soon after the elections in order to present it to the U.S. Congress for action under the "fast track authority".

While the EC has made clear that politically the DFA could not be accepted by its member-states without some changes in agriculture, and the principal protagonists including the U.S. and leading Cairns Group members as well as others seem reconciled to it (though till disputing on the details of the modification), some of the "players" want to make use of any such "reopening" of the Dunkel text to get changes in other areas.

Dunkel on Wednesday had warned against such a possibility and had said that there should be no general recourse to his "track four process" (making substantive changes in the DFA on the basis of a consensus) but it should be limited and attempted only at the end when all other outstanding details have been settled.

In his remarks to the informal Third World group in the GATT, Tran would appear to have said that the technical inputs for concluding the Round were there but there was no political will.

Tran reportedly was asked about the question of the changes in the agricultural package and the published differences between the U.S. and EC on this issue, namely the question of access to the EC's internal market and volume limitations and reductions on EC subsidised cereal exports (where the U.S. is reportedly seeking a reduction of 3-4 million tonnes and the EC is only ready for one million tonnes).

Tran reportedly remarked what was involved really was an issue of political decision-making and not the figures.

On the issue of the DFA and the view that others would be demanding changes in other parts of the text if the EC sought changes in the agriculture text, Tran reportedly said that the EC had problems with other parts of the texts, but was willing to accept them if changes were made in agriculture, and without which it could not be accepted by EC member-states.

Except for agriculture, all other parts of the package must remain closed, was the EC view as understood by some of the participants. One of them said that this was mainly perhaps intended to oppose any changes in the services text.

Tran reportedly told the informal group that work on the DFA should continue unabated and the entire technical work could be completed so that as soon as there was a "political breakthrough", the negotiations could be concluded and the package readied by end October or early November for presentation to the U.S. Congress sometime in January or February.

The U.S. deadline for fast-track authority action by Congress is I March 1993.

While Tran suggested that work in the "legal drafting group" and in negotiations on market access in goods and initial commitments in services should be continued and concluded, he could not explain how this was possible so long as the agriculture issue remained open.

One of the participants noted that so long as the agriculture issue remained open, it was not possible for others to conduct bilateral negotiations with the EC on market access in agricultural products and conclude them.

The Tran plea for continued work in other areas, as of the United States, appears to be aimed at preserving a public image of negotiations continuing in all other matters and making progress.

Otherwise the appearance of deadlock or failure or call for suspension of talks until the two sides were ready to make a political deal and bring it before others for acceptance could be damaging to both: for President Bush in his re-election and for the EC Commission and its member-States in the weeks and months ahead.

In April, both Washington and Brussels pressed Dunkel not to "suspend" the talks or take a "pause" test this create some public pressures on the two.

Meanwhile, GATT sources said that work on the legal drafting exercise, and efforts to reconcile the draft for the Multilateral Trade Organisation and the individual agreements that would come under it were continuing.

However, some Third World sources noted that under the guise of this exercise, some substantive changes were being proposed that could alter the shape of the final package.