Nov 30, 1984

INTENSE NEGOTIATIONS CONTINUE ON SERVICES ISSUE.

GENEVA, NOVEMBER 28 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Intense informal negotiations on the services question continued in GATT Tuesday, and were expected to continue tonight.-

The chairman of the GATT Council, Felipe Jaramillo of Colombia, reported to the Contracting Parties session this afternoon that while the results were "positive", further efforts were needed to get a result acceptable to all the Contracting Parties.-

At a news conference outside, Amb. Michael Smith of U.S., indicated that the services issue was "the lynchpin" of the consultations on the work programme and the budget.-

Smith also denied that he had ever said that if the services issue were not solved to U.S. satisfaction, the U.S. share of the GATT budget would be withheld. He also sought to deny that he was "blocking" the budget.-

But his further explanation that unless the assumptions about the content of the work programme (including services) was agreed upon, "we are not able to state our position on the budget one way or another" appeared to amount to the same thing.-

Meanwhile at the session of the CPs, Indian Amb. S. P. Shukla on behalf of the group of Third World countries reiterated the group’s position of willingness to initiate proposals for a specific round of negotiations in GATT on trade in goods, if certain prior conditions were carried out.-

Firstly, the Industrial Contracting Parties must individually act to lift any measures, inconsistent with GATT or not based on any specific GATT discipline, that restrict exports of the Third World countries to industrial markets, and refrain from introducing new ones.-

Secondly, the Industrial Contracting Parties should also agree, through multilateral actions, to engage in serious efforts on a priority basis to implement all other aspects of the GATT work programme of particular interest to the trade of the Third World.-

If these two conditions, covered by the GATT Ministerial commitments of 1982, were complied with, the Third World group would propose specific trade negotiations in GATT, confined to trade in goods only, and covering manufactured and semi-processed goods, as well as agricultural and natural resource products.-

Such negotiations should also encompass the totally of tariff and non-tariff barriers.-

In other remarks, the European Community expressed itself in favour of a new multilateral round, and suggested a meeting at senior official level, in the course of 1985, to assess the extent to which there was a consensus to start a new round, and what the object and timing of such negotiations should be.-

The Community spokesman said that in such a new round there should be a balance to take into account the interests of all participants.-

But the consensus-building process towards a new round should not be based on "an inflexible expression of positions on the contents of such negotiations at this stage", the Community spokesman said in a reference to the Third World position.-

There was need to approach the issue with an open mind and in a spirit of compromise.-

Prospects for such a new round would be enhanced by further economic recovery, and further progress internationally in improving the operation of the financial and monetary system, he added.-

Pakistan's Izharul Haque complained about the way the GATT work programme was developing. "While true solutions are considered too bold and even unrealistic, fake solutions are being indicated to shift the burden of trade liberalisation to those who are least equipped to carry them".-

While the will to liberalise the trading environment had not been displayed, and the GATT work programme was continuously running into blind alleys "emphasis is being studiously and consistently shifted into themes and suggestions of dubious economic and legal validity", the Pakistani delegate added in a reference to the U.S. push for trade in services in GATT.-

Tanzanian delegate Elangwa-Joseph Mbaga said the CPs should not be "lured into new rounds" when there was lot of unfinished work from previous rounds.-

As to the services issue, Tanzania’s well-known position was GATT was not the appropriate forum to consider issues relating to services.-

"There are other bodies in the U.N. system which have the competence and institutional framework to study services much better than GATT", Mbaga added.-

At a news conference, Amb. Michael Smith of the U.S. made clear that any new rounds while seeking to address the issues that the Third World was concerned with, must also address the issues of trade in services.-

He also insisted that at the current session of the CPs, there must be an agreement or understanding on a mechanism that would provide for formal substantive discussion of the services issue within GATT.-

Also, it must provide for a role for the GATT secretariat, in examining and discussing the question.-

Thirdly, the U.S. wanted to carry forward the third part of the 1982 declaration on services, namely, that the CPs should consider "whether multilateral action on trade in services is appropriate and desirable".-

However, since many of the national studies had come in only recently, and since others felt that they could not carry out the determination on the third point now, the U.S. would be agreeable to an understanding that this should be done at the next session.-

The U.S., he said, felt that services was now an important segment of world trade, and GATT should become involved in it.-

Smith was asked about the Third World complaint that a new round with new themes were sought to be launched, when GATT had not so far dealt with issues of importance to the Third World and still pending after the completion of the Kennedy Round of the 60’s and the Tokyo Round of the 70’s.-

Smith said the U.S. fully recognised that there were issues in GATT which had either not been fully addressed or not addressed at all in the past, and understood the concerns of the Third World on these.-

But the U.S. might differ from the Third World countries on the extent to which any particular issue had been dealt with.-

"But the U.S. cannot accept that the condition for dealing with emerging issues in the GATT would be conclusion of work on past issues".-