May 14, 1987
TROPICAL PRODUCTS GROUP STILL DIVIDED ON SCOPE OF NEGOTIATION.
GENEVA, MAY 12 (IFDA/CHAKRAVARTHI RAGHAVAN) – The negotiating groups in tropical products still appears to be divided on the scope of its negotiations – whether it should focus on liberalisation in industrial economies or also in third world countries – participants in the groups reported. The group, chaired by Malaysia’s Paul Leong Khee Seong, held its second meeting monday when it reportedly agreed to the updating by the secretariat of the background document. The group also reportedly agreed to the participation of the food and agricultural organisation (FAO) in the work of its group, but was unable to decide on other organisations. The U.S. was reported to be insisting on a "package", and providing observer status in the group to the World Bank and the IMF along with UNCTAD and UN secretariats. Others however disagreed with this "package approach", arguing that only those who could provide technical expertise for the negotiations should be allowed to participate, and the only organisation with some technical expertise in the area, apart from the FAO, was the secretariat of UNCTAD. This question, and other issues including the so-called "extended coverage" (meaning covering both industrial and third world countries) in compiling background material for negotiations, are to be further pursued in consultations and considered at the next to be further pursued in consultations and considered at the next meeting of the group to be held in July on dates yet to be fixed. The tentative dates proposed for the next meeting, July 13-14, were found by third world countries to be clashing with UNCTAD-VII session, and hence no precise dates were set. Participants said that the secretariat had prepared background information on tropical beverages, but delegates reserved their comments until they studied it. The secretariat, it was suggested, should compile similar information for other product groups. While this received the support of all, the EEC reportedly raised the issue of "extended coverage", noting that the information provided covered only eleven (industrialised) country-markets. Other markets, including third world markets, should also be covered and consumption patterns studied. The U.S. reportedly supported this view, but a number of third world countries were opposed to this, seeing the move both as an attempt to delay negotiations on long-pending unfinished issues on the GATT agenda in this sector. The issue of liberalisation of trade in tropical products, and reduction or elimination of tariff and non-tariff barriers in the OECD countries, as well as elimination of domestic taxes inhibiting consumption, have been on the agenda of GATT since the late 1950’s, figuring in successive GATT rounds without any progress. Norway reportedly suggested that studies about conditions in other markets could also be done, but without losing sight of the main focus and without delaying progress in the negotiations. The extra information (on other markets) should not affect the basis for negotiations, and the two types of information should not be treated on the same basis, the Norwegian delegate reportedly suggested. While this reportedly received the support of several third world countries there was no consensus within the group, and the question is to be pursued further in informal consultations. The group is also reported to have discussed issues relating to submission of initial proposals by participants (aimed at achieving the agreed objectives), as well techniques and modalities for the negotiations. The Asian groups of countries have put forward a proposal for harmonising tariffs, and bringing tariffs on individual items down to the lowest tariff levels. A number of other third world participants however reportedly felt that this only addressed problems of tariffs, but not the other major obstacles- non-tariff barriers, internal taxes inhibiting consumption, and tariff escalation at each stage of processing. The Asian however reportedly clarified that the proposal was only one of the modalities, and they were open to other ideas. The industrialised countries reportedly took no position on the modalities issue, but indicated they favoured a product by product approach. The EEC reportedly favoured such an approach, but without its being considered the exclusive approach to the negotiations. The EEC also emphasised the issue of reciprocity, and reportedly disagreed with a Pakistani contention that the Punta del Este declaration did not call for any reciprocity. The EEC reportedly quoted from the declaration to make its point that while third world CPS were not expected to make reciprocal "commitments", they were expected to make contributions according to their capacity. In the EEC view, a sine qua non for negotiations was full participation buy all, and "offers" should be tabled by all (both industrial and third world participants), and negotiations conducted thereafter on a multilateral basis. Third world participants later said this seemed to be part of an U.S.-EEC effort to focus these and other negotiations in traditional GATT areas on liberalisation by third world CPS. Several third world CPS appear to be opposed to this, viewing any negotiations for mutual third world expansion of trade to be a matter within the focus of their efforts elsewhere to establish the global system of trade preferences (GSTP), where reduction or elimination of tariff and non-tariff barriers could be tied to other sectoral measures to expand mutual trade and domestic production and diversification efforts.