May 12, 1989


GENEVA, MAY 10 (BY CHAKRAVARTHI RAGHAVAN) – Chile sought Wednesday the establishment in the GATT of what it called "mechanism for crisis management" to safeguard interests of exporting countries when faced with serious threats to their trade, like Chile a few months ago when imports of its grapes and fruits were banned for suspected toxic contamination.

The Chilean request elicited very wide support in the GATT Council, with some 30 countries speaking in favour.

The Council asked its chairman to organise informal consultations to consider the matter further and report to the Council.

The Chilean draft decision before the Council had sought a similar result, but its motion had some preambular paragraphs which the U.S. and EEC thought would prejudge matters.

The bans on Chilean imports came first in the U.S., after two or three grapes in a bunch had been found contaminated by cyanide.

The Chile had charged that this was due to sabotage to harm its trading interests.

The U.S. action was quickly followed by similar bans by Europe and Japan, causing hundreds of millions of dollars of losses, according to Chile.

Chile said it was necessary to create mechanisms in GATT to deal urgently with such matters to safeguard trading interests of CPS and their secure access to markets, while clearly enabling governments to take actions to safeguard public health of their citizens.

On other items on the agenda, the Council put off actions on three new panel reports that came up before it for the first time.

In the first, on the Canadian complaint against Japan over timber tariffs the panel had rejected the Canadian complaint that it had been discriminated against.

In the second, the U.S. complaint against Norway over imports of apples and pears, the panel had ruled for the U.S.

In the third case, the Chilean complaint against the European Community on imports of dessert apples, the ruling was in favour of Chile.

The restrictions ended last year, but Chile had sought compensation for its trade losses. The panel had given no recommendation on this. It agreed that the EEC import restrictions were illegal and violated Chile’s GATT rights, but said Chile and EEC should consult with each other and reach agreements on the compensation issue.

On the EEC complaint against U.S. over the U.S. retaliatory tariff sanctions against imports from the EEC over the hormone meat imports dispute, it was noted that a joint task force had reached some interim solutions and that this could result in abatement of U.S. sanctions.

However, the EEC reserved its rights to maintain the issue on the agenda and bring it up again if it desired.

On the U.S. failure to implement panel ruling against it over the super-fund levy, Canada announced it was considering a list of imports from the U.S. on which it would withdraw concessions.

The community as well as other members spoke in strong criticism of U.S. failure to implement the report. The U.S. delegate regretted the delay, and said the administration was seeking congressional action this year. If it failed, the U.S. would consider compensation.

On the issue of U.S. customs user feeds, where another panel had ruled against the U.S., but without remedial actions so far by the U.S., the Administration seemed more confident of congressional actions before the end of this year.