Sep 19, 1989


GENEVA, SEPTEMBER 18 (BY CHAKRAVARTHI RAGHAVAN)— The resumption of negotiations, after the summer vacations, on the Uruguay round at the GATT has brought out the polarisation of views between third world countries and their development objectives and the U.S. and other industrial countries looking to enhancement of global "space" for transnational corporations.

Participants who gave this assessment said this was evident at the meetings in mid-September, of the negotiating groups on "trade-related intellectual property rights" (TRIPS) and "trade-related investment measures" (TRIMS), two of the three new themes on the Uruguay round agenda.

The U.S. and other industrialised countries including Japan and the EEC, despite their own mutual differences in these areas, are trying to use the negotiations on these two new themes as well as the parallel negotiations on "trade in services" to write new rules for international economic relations, going beyond normal meaning of "trade", and encompassing production and distribution, and global relations amongst the factors of production.

The group of negotiations on services (GNS) was meeting Monday to continue its "testing" exercise - to test various concepts and principles, considered "relevant" for a framework to govern "trade in services", in terms of their applicability and effects on individual sectors.

It was due to consider financial, banking, and professional services at its meeting this week.

In all the new areas, the ICS are trying to discourage in-depth consideration of their concept’s and proposals vis-à-vis the issues of third world trade and development, but are advising third world countries to "liberalise" and "open the door" to transnational investments which, in their view, would take care of development.

In the negotiating group that met on "safeguards", a systemic issue where GATT negotiators have been discussing concepts and negotiating (without success) for nearly two decades, the industrial countries want to continue endless discussions on "concepts" rather than move to serious negotiations, taking as a basis the informal paper put forward by the chairman, as mandated by the mid-term accords.

However, under pressure from the third world participants they have agreed to discuss the chairman’s informal text, section by section, and address "concepts" under each.

In the TRIPS group in mid-September, the negotiators applicability of basic principles of GATT and international instruments for protection of IPRS to the TRIPS negotiations, enforcement of IPRS, and trade in counterfeit goods. On the last while the industrial countries did not find the Indian paper as going far enough, a number of third world countries reportedly felt it went too far.

In the TRIMS group, India presented a comprehensive paper on Indian views about investment measures and scope of negotiations in TRIMS.

Several of the points made in the paper have been made in the TRIMS group, over the last two years of discussions, as comments by several third world participants on papers presented by the U.S., Japan and others.

But the Indian paper has brought together in a structured way and in one place all the issues and concerns of India and other third world countries in this area, and would have to be taken note of by the other side and the chairman of the negotiating group in future work, one third world participant commented.

The TRIMS and TRIPS groups are due to hold their next meetings in October.

Apart from objecting to disciplines on investment measures per se, third world countries would appear to have argued that even if any new disciplines are called for to tackle adverse trade "effects" of investment measures, in the case of the third world the development considerations should outweigh trade effects and third world countries should have flexibility.

Till now in the group, the industrial nations have suggested that rules relating to investment should first be drawn up and then consideration should be given as to how to deal with the problems of third world countries and development.

The U.S., Japan, Switzerland and the EEC have in effect suggested that at best third world countries should have a limited but longer transition period to get their domestic laws and policies in line with the proposed new rules.

India and other third world countries have rejected this approach, insisting on development considerations being an integral and central part of the TRIMS group’s exercise.

One third world participant said that "longer transition period" to the third world would make sense only if third world countries could have as much time as the present industrial countries took to complete their industrialisation and "develop" - a century and half.

In the TRIMS group, the U.S., Japan and the EEC argued that the best way for third world countries to develop would be to allow unrestricted flows of foreign direct investment, and this in time would bring in technology, expand exports and promote development.

All of them opposed the insistence of third world countries that adverse trade effects resulting from TNC investment and business measures would have to be addressed if effects of government mandated investment measures are to be disciplined.

Sweden, speaking for the Nordics, reportedly showed some understanding for the third world view, but in effect appeared to be arguing that this could be done through national competition laws. However the issues of extra-territorial application would need to be addressed.

India however rejected the view that the TRIMS negotiations could not deal with private practices and measures.

"As long as the negotiations do not address the issue of anti-competition policies and RBPS of TNCS, and as long as the effort is only to deal with the interests of one group (the ICS) and the TNCS, there will be no progress on TRIPS, TRIMS or services", the Indian chief negotiator, A. V. Ganesan reportedly told the group.

"Any multilateral rules or framework could not be one-sided in protecting the interests of one side, without tackling the concerns of the other. It could not be argued that ‘private transactions should be left to private people’ and governments alone should be disciplined".

The Indian paper and position reportedly was supported by third world countries who intervened including Brazil, Egypt and Nigeria. But despite the importance of these questions to the future of development, very few delegations were present or intervened, another participant said.

But other participants, who privately welcomed and praised the Indian paper on TRIMS, said the paper had just been received and they were awaiting instructions from their capitals.