6:03 AM Sep 16, 1994

ICS WANT LAXER DISCIPLINES FOR TAXES

Geneva 16 Sep (TWN) -- Taxes for environment purposes and association of non-governmental organizations in the work of the future World Trade Organization were discussed at the meeting of the Trade and Environment Subcommittee of the WTO Preparatory Committee here this week.

While not directly voicing any preference for particular taxes, some of its provisions require some disciplines to be observed in the treatment of imported and domestic products as well as in export taxes or their remits in exports.

The border taxes and charges on an import is governed by the bound schedules of a country. Once a product crosses the border and enters into the domestic market, Art III requires what GATT panels have described as 'effective national treatment' as between the imported and equivalent domestic product. Article I also requires most-favoured-nation treatment as between products from various sources.

The use of fees and charges for imports and exports are governed by Art VIII, while remission of some taxation for exported goods is governed by Art XVI.

In their presentations in the Trade and Environment Committee, United States, Nordics and some other industrial countries appear to be pushing for changes so as to give them greater leeway in imposing taxes for "environmental purposes".

In the discussions, a number of developing and smaller developed countries said that while they were not happy with the existing provisions (to ensure non-discrimination and effective national treatment) they were willing to live with it.

But if any changes were to be made for allegedly empowering countries to impose taxes for "environmental purposes", such a levy would have to be justified in terms of "necessity" and "least trade-restrictive" concept.

There could be no general ab initio change, but specific planned levies should be examined from the point of view of these two criteria, and on that basis look at the GATT disciplines.

On the issue of NGO observers at the WTO, the US appears to have put forward on Friday a paper to provide for representation of NGOs as observers, but qualifying it in a way to restrict it to those with "environment expertise".

The US would appear to have suggested that NGOs -- enviornmental, developmental or business -- but with expertise in the area, presumably environment area, should be given 'observer' status in the future WTO.

The proposal however met with opposition from a number of participants, including Egypt, Hong Kong, India, New Zealand, Sweden and Venezuela, while the European Union reserved its position since the paper had been sprung on them at the last minute and the EU time to study and consult its members.

While some initial reactions were on the basis that this would also open the way for various domestic lobbies, whether farmers or business groups, and overwhelm the WTO in terms of space and facilities, others like India said that the real issue was one of principle, namely the nature of the system -- a contract between governments, with rights and obligations and enforcement through dispute settlement -- and whether this should be altered through non-governmental participation.

The critics also made a distinction between the provisions of the WTO relating to association of 'intergovernmental organizations' -- where the language used is that the Council of the WTO "shall" provide for this -- and for non-governmental organizations where it is "may".

The responsibility for transparency of trade policy and decisions, they said, should not be placed only at the doors of the WTO. It was for each national governments to take steps within its jurisdiction to inform and associate its public with trade policy actions and instruments.

The Chair of the Sub-Committee, Amb. Felipe Lampreia of Brazil is to hold further consultations on this issue.

Privately, the US officials are trying to push for a quick decision on the ground that this would help them to get Congressional approval. But others are beginning to tired of constantly to pay another price to help the administration's battles with Congress.