Dec 6, 1988

CAIRNS GROUP COULD PLAY CENTRAL ROLE AS MIDDLE MAN.

WASHINGTON, DECEMBER 2 (IPS) The mid-term review of the Uruguay round of negotiations, within the GATT system, starts this coming Monday in Montreal under the threat of agricultural disputes.

While a forum like the General Agreement on Tariffs and Trade (GATT) is the natural outlet for the needs of the less developed, and consequently, less powerful nations, in Montreal, Canada, centre stage will be occupied mainly by a dispute among developed nations.

The positions taken by the two opposing sides --the United States and the European Community-- are so far apart that a group of less powerful nations with strong interest in the issue, the Cairns group, could act as a negotiator, trying to accommodate the dispute into an acceptable middle ground.

Economist Stuart Tucker, a fellow at the overseas development council, says a failure to effectively address the agricultural dispute -- the United States is asking for the abolition of all subsidies on agriculture -- would be "disastrous."

"But," he warns, "the best possible result for this stage of the negotiations would be a determination to continue the negotiations." as this is a mid-term meeting where the issues should be reassessed and the "enthusiasm reinvigorated," the worst outcome, for tucker, would be "any declaration by any participant that any one problem is irresolvable."

For other experts, however, the importance of the agricultural disputes extends beyond the specific issues at hand.

The dispute between the United States and the European Community about agricultural subsidies could become a measurement to gauge the efficiency of the GATT system itself.

According to this reasoning, it would be in the interest of the less developed countries to see that such a dispute comes to a reasonable and equitable solution.

"If the mid-term review fails in (dealing with the) agriculture issue," says Ernest Preeg, a senior fellow at the Centre for Strategic and International Studies, "questions would be raised about how efficient GATT is, and this could in turn put more pressure for bilateral (solutions)."

"This should worry the less developed countries", says Preeg, who directs a project an the U.S. interest in the GATT system.

The recent United States-Canada free trade agreement was seen as a major victory for the "bilateralists". While the less developed nations, and, for example, organisations like the World Bank, are strong defendants of a multilateral approach for international trade, the United States has maintained a discreet rejection of such position.

Officially, the United States sees bilateral agreements as a first step in the direction of multilateral negotiations. But for many observers, the reality is that the United States is not really committed to a multilateral approach in the international trade system.

Thus, if it does not get its way in an international forum, like GATT, the United States is likely to continue its bilateral behaviour, weakening the power of any multilateral initiative.

Clayton Yeutter, the U.S. trade representative, has not been mincing words lately. In public event after public event in the last few days, Ambassador Yeutter has been using strong language to define the U.S. position and its "minimal requirements" for any move forward at Montreal.

Interviewed on TV Friday morning, Ambassador Yeutter referred to it same intransigence by some of our trading partners.

"In some cases", he explained, "it's lesser-developed countries who are looking for some special privileges from U.S. and others. In other cases, it's the European Community on agriculture, not really wanting to reform. And so we're going to have to push hard, and what we're really saying is that, if they're looking for an easy kind of settlement from the United States on these tough issues, that isn't going to happen".

Some observers discount such statements as the expected tough talk that precedes any important negotiation. Others, however, see in it signs of an intransigent position by a major player that could play havoc with the negotiations.