Jan 24, 1987

GATT STILL HOPES TO GET MTNS GOING FROM FEBRUARY.

GENEVA, JANUARY 22 (IFDA/CHAKRAVARTHI RAGHAVAN) – The Group of Negotiations on Goods (GNG) of the Uruguay round, at a brief meeting Thursday, heard a progress report on informal consultations to resolve differences that would permit Uruguay round Multilateral Trade Negotiations (MTNS) in goods to begin.

Though the round was formally launched on September 20, 1986, through the Ministerial declaration at Punta del Este, commencement of actual negotiations have got bogged down because of differences on a number of key issues between the U.S. on the one side and leading industrial and third world nations on the other.

Unable to resolve these differences, the GNG has already missed the December 19, 1986, deadline for approval of detailed negotiating plans, set in the Punta del Este declaration, raising serious questions whether the new round would at all be able to get going.

In an effort to put an optimistic gloss over the situation, the GATT spokesman suggested Thursday that negotiations in the MTNS had already begun, with the "launching" of the round at Punta del Este, and the current discussions were all about the next phase.

The spokesman quoted Dunkel as being confident that the differences on various issues would be resolved, to enable start of various negotiations early in February.

But other participants in the GNG said that the differences on key issues between the U.S. and some others were still large, and some of the efforts at once again papering over them, as in the Japan-Swedish paper, may have further complicated the problems.

When the GNG adjourned on December 20, it had before it a number of formal and informal papers, including some secretariat drafts, on a number of key issues that need to be resolved.

These relate to the surveillance mechanism for implementation of the standstill and rollback commitments, negotiating plans for each of the 14 subjects included in the MTNS on goods, establishment of negotiating structures and naming of chairmen for them.

Since then there have been further consultations, both within and outside GATT, and a new more informal papers have been put forward, including one jointly by Japan and Sweden.

At a meeting Wednesday of the informal third world group, several of the compromise ideas put forward by Japan and Sweden are reported to have come in for strong criticism and opposition. Virtually everyone who spoke is reported to have viewed the paper as yielding to the U.S. in watering down several of the key decisions in the Punta del Este declaration, and hence unacceptable.

The discussions resulted in a consensus among third world countries on a number of elements including the need for an effective surveillance mechanism and a central role for the GNG over the MTNS and its negotiating groups. The group asked its chairman, Amb. Srirang P. Shukla of India to convey these views on its behalf to the GNG.

Meeting Thursday for the first time after its pre-Xmas adjournment on December 20, the GNG heard from Dunkel a report on the various consultations over the last week or so, and the views of the informal third world group, presented by Shukla.

After hearing brief remarks from Canada and the EEC, the GNG agreed to suspend its meeting and remain on call, pending further consultations to find solutions to the package of issues.

Canada’s Amb. Alan Beesley expressed concern over the delay and stressed the need to complete the work by January 28. The spokesman for EEC, Tran Van-Thinh said for this to be achieved everyone had to contribute to a compromise.

Dunkel identified the package of issues needing agreement as relating to the nature and powers of the surveillance mechanism to monitor and oversee the implementation of standstill and rollback commitments, approval of negotiating plans and structures for each of the 14 subjects already listed for negotiations, and agreeing on a calendar of meetings.

A core question in all these areas is the role of the GNG, and how it would carry out its overall function of supervision and coordination of the various negotiations.

The GNG would also have to agree on and name chairmen for the various negotiating groups. The chairman of the contracting parties, Amb. Mansur Ahmad of Pakistan is reported to be holding consultations on the chairmanship of various groups as well as of the surveillance body.

The GATT spokesman said that the secretariat’s informal paper on surveillance mechanism commanded a wide measure of support, but was yet to be approved.

The secretariat had also prepared detailed negotiating plans, essentially on the first phase of negotiations, and these had much less areas of divergence than before.

On the negotiating structures, he said, the differences centered over the question whether there should be a group for textiles and clothing right from the beginning.

In his statement at the GNG on behalf of the third world group, Shukla said that discussion within the group had resulted in a convergent approach among the third world contracting parties on a number of key issues, and he had been authorised to indicate them.

On the surveillance mechanisms, Shukla said, third world countries felt that it should be set up, if not prior to, at least simultaneously with the commencement of negotiations in various areas of trade in goods.

The procedures for surveillance should be based on principles of transparency and multilateralism, and these should also govern the procedures for rollback of protectionist measures.

The surveillance body to be established should reach conclusions in its deliberations and be in a position to make recommendations to the GNG and the Trade Negotiations Committee (TNC) the overall body to conduct the Uruguay round.

The U.S. is opposed to the Surveillance Body reaching any conclusions or making recommendations. The U.S. does not also want any role for the GNG in this area.

An informal paper presented by Dunkel to the GNG on December 20, before its adjournment, called for the surveillance body merely to retransmit a record of its proceedings on complaints before it.

At an informal third world group meeting Wednesday, a number of third world countries were critical of this, and argued strongly in favour of the Surveillance body being enabled to reach conclusions and make recommendations.

Shukla also told the GNG Thursday that in the implementation of standstill and rollback, as provided in the Ministerial declaration, particular care should be taken to avoid disruptive effects on the trade of third world countries.

On the role of the GNG, Shukla said the third world group believed that the GNG should have "an important and central role" in carrying out the programme of negotiations.

In particular, the GNG should be able to exercise "effective control" on the calendar of meetings of negotiating groups.

Apart from the initial elaboration of detailed negotiating plans, the GNG’s mandate also involved approval of any subsequent changes, amplification or revision in such plans. While these could be initiated by any of the negotiating groups, final approval should lie with the GNG.

Each of the negotiating groups should report on the progress of its work to the GNG, which should meet as frequently as necessary to discharge its function of supervision and coordination.

As regards the structure of negotiations, the third world group believed that a separate negotiating group should be established for each of the 14 subjects, and "there should be no discrimination in treatment of any of the subjects of negotiations, including textiles and clothing", Shukla said.

The U.S. has been trying to reverse an earlier GNG decision on this, and prevent the establishment of a separate group on textiles and clothing.

Various suggestions to meet the U.S. view, including postponing the naming of a separate group on textiles to a future date or combining its chairmanship with that of some other group or groups, have been mooted, but all these have been rejected by the third world countries.

The statement by Shukla also underscored the need to establish techniques and modalities for appropriate practical application of the principle of "more favourable and differential treatment in favour of developing countries in all areas of trade negotiations", as agreed to in the Ministerial declaration.