Oct 22, 1991


GENEVA, OCTOBER 21 (CHAKRAVARTHI RAGHAVAN) - Uruguay Round negotiations, while going through what is described as an intense phase of negotiations to wrap up agreements before end of the year, appear to be marking time and showing little flexibility in any area, while awaiting signals from the European Community about its willingness to compromise in agriculture.

Last week, there were intense consultations among others on agriculture, textiles, trade-related intellectual property rights and dispute settlement.

This week consultations are set in services and rules and continuance of consultations on TRIPs and Textiles.

However, participants said the consultations and discussions in small informal groups have not shown any sign of flexibility on the part of any of the negotiations, and even some hardening of positions and demands, though perhaps for tactical reasons.

Most negotiators, as also the GATT secretariat itself, appear to be awaiting meetings of the EC Council of Agriculture Ministers in Brussels this week, and any signs from there of a possible forward movement and readiness to compromise on the part of the EC.

The EC Council of Agriculture Ministers are due to end their meeting tuesday evening.

The consultations on agriculture last week in the GATT apparently got nowhere, and are now due to resume on October 28.

The EC Agriculture Ministers are to discuss the issues of reforms of the common agricultural policy and changes in it for moving away from production-based subsidies to so-called decoupled direct payments to foreigners.

Another and equally contentious issue before them is over change in the EC's oil-seeds regime, subsidising domestic production of Soya and other oil-seeds and subsidising EC oil-processors for use of domestic inputs - a regime that GATT has held to be illegal and which the EC Ministers have committed themselves to change by October 31.

Signals from the EC so far have been confusing for outsiders and many of the agricultural exporting nations have privately said they would judge things by what is put on the table in the Uruguay Round negotiations by the EC rather than the statements issuing out of Brussels and some European capitals.

Earlier reports from Germany about a change of position on agriculture and isolation of France and Ireland within the Community, are now seen by some of the Cairns Group members as less than originally made out.

After weekend inter-Ministerial meetings in Paris, there w ere reports that France may now be willing to accept the EC Commission's proposals for reform of the CAP. But whether this would be sufficient to unblocked the deadlocked agriculture negotiations in the Uruguay Round remains to be seen.

In a somewhat confusing signal, on Friday the French government sources were reported from Paris as tying up the issue of agreement within the EC for a common foreign and security policy, with moves to resolve key economic issues including the Uruguay Round negotiation and EC concessions on agriculture.

On the foreign and security policy, on the face of it France and Germany are pitted against the UK which refuses to accept anything except the principle of unanimity in Community decisions on these matters, and any compromise or resolution could only emerge at the EC summit Maastricht in the Netherlands in December.

One Paris report quoted French sources as saying that France would need to see substantial progress on political union so that it could make concessions on agricultural prices, farm exports and monetary disciplines acceptable to French public opinion and that without success in Maastricht, it would be harder for Paris to make concessions in the GATT.

In this situation, which might be lucid and logical for the EC member-states and their way of bargaining, others are clearly unwilling to make any moves showing flexibility in any other area of negotiations in the Uruguay Round and in none of the consultations have there been any progress, some participants said.

In the consultations on TRIPs, which saw informal consultations through sunday at the GATT, there was not only no movement but even hardening of positions on all sides, though this could be tactical, these sources said.

Issues relating to "trade secrets" and their protection as intellectual property, as well as the U.S. demands for so-called "pipeline protection" (extending any likely agreements for enhanced protection in the Round to existing intellectual property rights) were reportedly considered at the Sunday consultations.

Some delegates said they found to difficult to believe that with such large areas of differences and disagreements embracing almost every major area of negotiations, GATT Director-General Arthur Dunkel or any of the Chairmen of the negotiating groups being able to put forward by November 15 their own proposals for a take-it-or-leave-it draft of agreements across the board.

Such a course could be attempted, even though there is always the risk of one or the other side choosing to leave it rather than take it, on one or two issues, particularly where the differences are small however important.

But for this to be attempted in a number of areas would be such a high-risk strategy that even Dunkel and others would hesitate, since such an approach would not only involve Dunkel and others putting their heads on the chopping bloc, but perhaps irretrievably damaging the GATT itself, some sources note.