Dec 6, 1989

THIRD WORLD CONCERNS AT UNEVEN PROGRESS IN TRADE ROUND.

GENEVA, DECEMBER 4 (BY CHAKRAVARTHI RAGHAVAN)ó The general debate Monday morning at the 45th session of the GATT contracting parties brought to the fore the dissatisfaction and concern of third world countries at the lack of progress so far in the Uruguay Round on market access and other issues of concern to them.

The CPs put aside the general debate in the afternoon to take up various disputes and pending matters in the report of the GATT Council.

India, Indonesia on behalf of the Asian countries, South Korea, and Japan, Switzerland and the European Community and Canada made comments on both the state of the GATT trading system and the Uruguay Round.

While third world countries were concerned over the uneven progress, Japan expressed satisfaction.

India more specifically and naming the united states, and Japan and the EEC without naming the U.S., also made references to the U.S. unilateralism and use or threats of use of trade retaliation under section 301 of U.S. trade law.

In briefing the press, the GATT spokesman called the Japanese speech positive and the Indian negative, but when asked to clarify the basis for this description of "negative" referred newsmen to the text.

Indian delegate, Amb. Balkrishan Zutshi said the most "disturbing development" of the past year of unilateralism, whose most striking manifestation had been the U.S. actions identifying certain practices in certain countries as "unfair and detrimental" to U.S. trading interests, and seeking elimination of the practices through bilateral negotiations.

These were the very issues of substantive negotiations in the round, and India (one of the countries named) had assumed no international obligations in the areas.

The attempt to establish possible linkages between investment, services, and protection of intellectual property rights with trade flows covered by GATT was "totally unjustified and obviously unacceptable to U.S.", Zutshi declared.

This was an attempt by one CP to influence the negotiating processes in ways wholly inconsistent with multilateral negotiations and a clear violation of the standstill commitment. This was also the view of the other GATT CPs at the special GATT Council meeting in June this year, Zutshi recalled.

India, Zutshi said, would once again urge the U.S. to refrain from this approach of ccontention and confrontation" in order to help the Uruguay Round reach a fruitful and successful conclusion.

In his comments, Japanís Amb. Yoshio Hatano, saw "sure progress" on the Uruguay Round but underscored the importance of everyone abiding by GATT obligations.

Without naming the U.S., he criticised what he called "unilateralism of a party resorting to trade-restrictive measures on its own unilateral judgement". In a reference to the EEC, Hatano was also critical of the "closed regionalism" in which trade barriers are effectively being raised against outsiders and implementation of protective measures through "clever misuse" of GATT rules such as on anti-dumping, and tendencies to seek "reciprocity" in results.

The EECís Roderick Abbott viewed the tendencies towards unilateralism and bilateralism as a danger to the multilateral trading system.

"The existence of legislation which will permit this kind of action is unacceptable, and it is not a good enough reason to maintain such a legislation simply on the basis that GATT as it stands has no rules with reference to services, investments", Abbott was reported by the GATT spokesman as having commented.

The Community, Abbott added, would look for a change with respect to this legislation in combination with the end of the Uruguay Round.

On the Uruguay Round negotiations in goods, Zutshi said that after the mid-term accord and the summer breaks, the pace of work had gained considerable momentum but "only selectively".

"In areas of interest to U.S. in the developing world", he complained, "progress has been poor, and, in some cases, it is nil. In areas of market access, prospects for actual negotiations to begin are not quite clear and even the modalities for negotiations, coverage and participation are far from settled".

At the April meeting of the Trade Negotiations Committee there was a commitment to phase out the MFA, an area of market access of great relevance and interest to India.

But there had been no progress in this area, and "the truth is we are practically where we were at the end of the April decision".

India could not "contemplate" a successful Uruguay Round without a definite and irrevocable plan for phasing out the MFA within a reasonable and foreseeable timeframe and a credible guarantee for its implementation, Zutshi warned.

While work in the area of rule-making had picked up speed, there were attempts "to fundamentally alter the balance of rights and obligations inherent in GATT". This was clear from several proposals on the issues of safeguards, subsidies, anti-dumping and GATT articles.

On TRIPs and TRIMs the pace of work had been "brisk and business-like", but there had been a "measure of reluctance" on the part of some participants to come to grips with the development and public policy dimensions of the issues involved.

There was a need for the developmental, technological and public policy objectives of concern to third world countries being woven into the fabric of the negotiating results.

The shortcomings in the negotiating process would have to be addressed on a "priority basis" if the results of the round have to be balanced and meaningful to all participants.

Indonesiaís Amb. Hassan Kartadjoemena, speaking for the Asian countries also expressed concern over the evolution of negotiations.

Notwithstanding the commitments, standstill and rollback violations continued. together with unilateral and sectoral arrangements by the industrialised countries, which contravened GATT principles and disciplines, the violations clearly undermined the effective operation of the multilateral trading system and militated against exports of third world countries, the Asian spokesman said.

The Asian countries were also disappointed with the slow rate of progress in areas of particular interest to the third world countries.

They were also concerned that commitments in the Punta del Este declaration had not been adequately transformed into tangible actions by major participants. An example of this was the negotiations on tropical products.

Another issue of concern was the attempt by some major industrialised countries to place participation by third world countries on the same footing as ICS, even though the Punta del Este declaration, in the principles of negotiations, had clearly laid down the principle that ICS did not expect reciprocity from third world countries.

South Koreaís Amb. Sang Ock Lee, also complained of the "uneven progress" in different negotiating areas.

Work in all negotiating groups, and particularly on traditional issues of market access and rule making, should be brought to a successful conclusion to achieve the objectives of reversing protectionism and strengthening the multilateral trading systems.

Though the traditional areas had received less focus compared to other areas, it could not be denied that results in these areas would be the essential parts of an overall package.

In this regard, Sang Ock Lee declared, multilateral control over safeguard measures based on most-favoured-nation principles and integration of the textile trade into the GATT system were very important.

No less important was the need for establishing strict disciplines and more objective criteria for anti-dumping measures in order to prevent arbitrary recourse to these measures and deter their use as a trade policy option.

As for the new issues, it should not be forgotten that for the first time they were attempting to establish multilateral rules for trade in services, intellectual property rights and investments.

"We have reasons to be ambitious. But we should bear in mind that results of the negotiations should be acceptable and applicable to as many participants as possible. Otherwise, a large number of contracting parties would simply stay away from the new rules to be established".

As for agriculture, the interests of both importing and exporting countries had to be equitably reflected in the final outcome of the negotiations. Agriculture was the "most sensitive" subject for Korea, with many special characteristiques, and closely related to food security, land exploitation and environmental protection.

Agricultural trade should be liberalised gradually, and with due consideration to socio-political impacts in countries concerned, and taking full account of legitimate interests of food importing countries, and their economic and non-economic concerns.