Dec 1, 1984

THIRD WORLD FIRM ON SUBSTANCE OF SERVICES ISSUE.

GENEVA, NOVEMBER 27 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Third World countries insisted Thursday on priority attention in GATT to long-standing problems of trade in goods, rather than be inveigled new areas of little relevance to them.-

A range of Third World countries spoke at the annual session of the Contracting Parties to present their positions.-

Though by then a consensus text on the handling of the services issue had been evolved, the remarks of several of the Third World countries showed that whatever the procedural compromises to which they had agreed, they were not going to yield on the substance, namely that trade in services could not be regulated on the basis of GATT framework and its principles and rules of most-favoured-nation treatment to countries or equal treatment for national and imported products.-

The Third World position on prior attention to long-standing problems got support from Australia, which took a critical view of the failures of the major trading nations to live up to their GATT obligations.-

Japan reiterated its call for a new round of negotiations, and for initiating the preparations.-

Brazil's Amb. Paulo Nigeria Batista, a key negotiator on the services and other issues, said that while Brazil would follow a consensus on the agreed conclusions on services, in Brazil’s view this was an issue that still remained at the stage of exchange of information on national studies and had not reached "any degree of matury required before decisions can be taken".-

"We doubt that our perception of this matter will reach the maturity required for the adoption of an international decision on services for many years to come".-

The Third world group' statement at the CPs meeting, Batista said, was "a contribution of significance". If the preconditions set there were met, the Third World would initiate a discussion of ground rules for a negotiating process that would address the needs of the Third World and be of benefit to all Contracting Parties.-

"Inversely", Batista said, "we will be reluctant to lend our support to initiatives which do not subscribe themselves in the context of the full implementation of the work programme, or which either focus disproportionately on themes of doubtful relevance to the GATT system or are alien to the specific interests of a group of Contracting Parties".-

While Brazil deplored that all aspects of the work programme had not progressed in a uniform fashion, it could not be ignored that certain issues interested a larger number of CPs and were more vital to the multilateral trading system than others.-

Australia's Colin Teese said in the statement on behalf of the Third World group the "frustrations demonstrated by the lack of progress came through with stark reality".-

It was difficult to detect in the work programme "more than a hint of progress, outside the merely procedural".-

"A heavy burden for the lack of progress rested on the major trading countries, and GATT could not gain influence and status while major CPs "cannot themselves resist the temptation to renounce the fundamental GATT principle of non-discrimination in their specific trade actions".-

The real question was not whether the work programme should first be completed before a new round or whether a new round would enable negotiating in substances on the components of the work programme, but whether "we are all prepared to negotiate real and meaningful solutions on the matters which are the subject of a work programme".-

Australia was in favour of a new round, provided priority was given to the solution of long-standing unresolved issues, including, those of interest to Australia.-

Any negotiations on the work programme or a new round could succeed only if the issues to which various participants attached importance were addressed in "an even-handed way".-

It was understandable that major trading nations wanted to address issues that they consider important.-

"But these cannot be allowed to push other issues, especially long-standing issues impeding trade growth, off the negotiating stage. For this would exclude from the negotiations all but the largest trading powers, and leave the impression that negotiations had little relevance for medium and smaller nations".-

Negotiations should be on pressing trading problems currently debilitating world trade - tariff escalation, non-tariff barriers, safeguards, policies adversely affecting trade in agriculture, tropical products, and textiles and clothing.-

These should have priority in any approach to trade liberalisation, without excluding consideration of other issues as services or counterfeit trade.-

Indonesia’s Sutiswawinate, supported the Indian statement on behalf of the Third World group, and Pakistan’s statement on behalf of the Third World members of the Multifibre Arrangements.-

On tropical products he reiterated the plea of the ASEAN countries that Industrial countries should align their duties on such products to the lowest level of duty prevailing in any one of their countries on a product.-

While Indonesia had taken measures to deal with problems of worldwide recession and declining oil revenues the "dark clouds of protectionism, particularly on non-oil commodity export's such as textiles and clothing, and the potential dangers of high interest rates continue to loom before us".-

South Korea’s Sang Yon Park said the Third World, despite the recovery in the north, still faced the same critical situation of sharp decrease in commodity prices, restricted access to export markets, high cost of borrowing and severe problems of external debt servicing.-

There had been an intensification of restrictions against exports of the Third World, and the protectionist trend was snowballing "in an ever more sophisticated fashion".-

About 44 percent of South Korea’s total exports were now subject to import restrictions in 19 Industrial countries, he complained.-

Malaysia’s Ahmad Faiz Hamid said in any new round of trade negotiations, Malaysia would not wish to be drawn into new areas at the expense of areas of work, which they had all agreed should be implemented.-

Already the Third World was feeling that whatever it had achieved in the trade in manufactures, it was being slowly deprived, since their competitive products were subject to all kinds of restrictions.-

"We are not allowed to reap the full benefits of industrialisation achieved at great expense. Now we are being asked to consider new areas, which are rather grey as regards the competence of GATT and in which many of us are still deficient and handicapped".-

"All these lead only to one conclusion: developing countries are being made to constantly chase rainbows. We are just within grasp of one objective when we are made to run further yet for another".-

Finland, speaking also for Iceland, Norway and Sweden, said that recovery remained highly differentiated and the prospects beyond 1985 did not look very encouraging.-

While some indebted countries had been able to substantially increase their exports, the debt situation remained a serious threat to the stability of the international economic system.-

Industrial countries had committed themselves to rollback protectionism, but there was no real evidence of "a rollback on a worldwide scale" or a real dismantling of trade restrictions.-

For the credibility of the GATT system, concrete actions beyond the political commitments for standstill and rollback were needed. Big trading nations should recognise their special responsibilities, bearing in mind that "no product is as easily exportable as protectionism".-

Kazimir Vidas of Yugoslavia said that two years after the Ministerial declaration "we are witnessing the worsening of the trade environment, further erosion of the multilateral trading system and the strengthening of bilateralism".-

The economic recovery in the major Industrial countries had not resulted in a wider and more stable world recovery, and specially, in the majority of the Third World nations.-

The share of the Third World in world trade had deteriorated, there was continuous fall in terms of trade, and paradoxically "a negative trafer of financial resources from developing to developed countries".-