Nov 2, 1985

THIRD WORLD WON'T PAY PRICE FOR MFA LIBERALISATION.

GENEVA, OCTOBER 31 (IFDA/CHAKRAVARTHI RAGHAVAN)— Third World countries should not be expected to pay a price or reciprocate with concessions in other areas as a price for liberalisation of trade in textiles and clothing.-

This point is reported to have been made by several Third World countries at the meeting of the senior officials group considering the subject matter and modalities of a new round of GATT negotiations.-

While the future of the Multifibre Arrangement (MFA) is the subject matter of separate negotiations in the Textiles Committee of the General Agreement, the issue of liberalisation of trade in textiles and clothing and the possible application of GATT principles to this sector of trade is also an item on the GATT work programme.-

Without going into details about the future of the MFA, a large number of Third World countries would appear to have stressed their objective of seeing liberalisation in the MFA and an eventual return of this trade to the rules and principles of the General Agreement.-

Several of them underlined the need to couple this with a comprehensive safeguards agreement.-

There would be no purpose in liberalising the MFA if the safeguard rules are not sufficiently defined and well-disciplined, the Third World delegates would appear to have pointed out.-

A number of delegates also made the point that they were not prepared to "reciprocate" in any new round with concessions in return for liberalisation of the trade in textiles.-

The MFA, these delegates pointed out, was a derogation from GATT principles.-

No one had given the Third World countries, against whom the MFA was applied in a discriminatory way, any compensation when the trade was brought under MFA and in violation of GATT rules.-

"There is hence no question of our paying any compensation now for the removal of the MFA and its return to GATT principles" these delegates argued.-

Industrial countries would appear to have said that they would indicate their intentions about liberalisation in MFA in the actual negotiations in the Textiles Committee.-The U.S. itself would appear to have underlined pressures in the Congress for protection, including via the Jenkins bill, and said the U.S. would need to see progress on other areas in the context of a new round, if the U.S. president was to continue to withstand congressional pressures for protection.-

The Community would appear to have said that if was not seeking any reciprocity for liberalisation of MFA, but would spell out its views in the negotiations.-

The EEC saw the renewal of the MFA (due to expire in July 1986) as a transitional arrangement, and not a final solution.-Earlier on the issue of export of domestically prohibited goods, several Third World countries complained that though on an item on the GATT work programme, there has been little action so far.-Sri Lanka, Egypt, Zaire, Chile, Singapore and India were among the countries that raised the issue.-

They underlined that it was "outrageous" that goods could be banned for sale in the country of production but could be allowed, to be exported for sale in foreign markets, despite known health risks.-

In a reference to the U.S. and EEC efforts to bring trade in counterfeit goods into GATT on the ground it was necessary to maintain "purity" and "safety" in international trades India said that the issue of export of domestically prohibited hazardous goods was certainly more important.-

The industrial countries who want to bring services and other issues into GATT, despite these subjects being handled in other international forums, however argued that the question of export domestically prohibited goods were being considered in institutions like the who and hence need not be considered in GATT.-