Jan 29, 1993



Geneva 13 Jan (Chakravarthi Raghavan) -- The meeting of the Uruguay Round Trade Negotiations Committee (TNC) set on 18 December last for 15 January has now been put off to 19 January, the day before President Bush lays down office in Washington and President Clinton and his team move in.

An official GATT announcement about the postponement gave no reason for the postponement, merely adding that "there is no change in the purpose of the meeting which is to assess the overall progress in the Uruguay Round negotiations and to take stock".

Though no one would admit it, this puts an end to the charade of senior official negotiators engaging in hard negotiations to meet the mid-January target set by Bush-Major-Delors summit in Washington in December, and the so called last ditch market access negotiations between US and EC here since last weekend.

Privately, several of the participants, particularly those not involved in the Dunkel consultations among a small group of countries, have viewed all this high visibility exercise as nothing more than a hype intended for the media and possibly even an attempt by the senior negotiators of the US and EC not only to play games with negotiators of other countries, but also their own political masters back home.

In the process though, both the two countries, the GATT secretariat and officials from other

countries who have lent themselves to this exercise, have probably struck one more blow at the already low credibility of the GATT and the Uruguay Round negotiations.

Over the six year period, at least three officially set deadlines have come and gone, several 'windows of opportunity' have proved to be blank walls, and negotiators, GATT officials and the media that have allowed themselves to be used have run out of words to suggest progress.

Tuesday evening, the bilateral market access negotiations between the US and EC at level of their top official negotiators appear to have been broken off, with negotiators reported as seeking instructions from their political masters for resolving their differences.

This impasse, apart from other problems, appears to mean that it will not be feasible for the two to produce any outline of a deal to be presented at the (now postponed) Friday meeting of the Trade Negotiations Committee, and for President Bush to show some 'success' in the trade negotiations before laying down office on 20 January.

Meanwhile, the Dunkel consultations with a small group of negotiators from some 19 countries after another round of evening consultations also broke for a day to resume Thursday.

Since these talks are even less transparent than the normal GATT 'green room' consultations and held outside the GATT building, there was no official word even about the state of play there. But at least two or three of the participants were away in Paris for the signing of the Chemical weapons treaty.

The Dunkel consultations reportedly are going over the proposals for changes in the Dunkel text of the Draft Final Act. Most of them have been put forward by the United States, but there are also proposals for changes on Trips by Egypt and India, on Textiles and Clothing by India and Pakistan, and on agriculture by the US and EC (in terms of their bilateral Blair House accord) and also by India and a few others.

On Textiles and Clothing, India and Pakistan have repeatedly questioned the credibility of the integration process over ten years envisaged in the Dunkel text, noting that the entire process is backloaded with 49 percent of the restrictions required to be removed overnight at the end of the 10-year period. The two have asked for a front-loading of the integration process.

While the United States, whose textile industry wants an even slower integration process and is lobbying Congress, has not officially asked for extension of the period to 15 years, Jamaica has voiced such a view but has not apparently so far put forward any specific proposals.

But in the Dunkel consultations, Mexico reportedly has proposed extending the phase-out of the MFA and the phase-in of the textile trade to be done over a 15-year period -- arguing that the problem of back-loading of the integration process, complained about by India and Pakistan, should be resolved by extending the period and making the entire process more uniform.

Some developing country sources, not privy to the Dunkel consultations, saw the Mexican proposal as a proxy for the United States, noting in this connection Mexico's stakes in the North American Free Trade Agreement (NAFTA) involving the US, Canada and Mexico.

The US-EC tariff reduction differences persist over the zero-to- zero option of the United States across a wide range of sectors, the EC's insistence on a different approach and on the substantial reduction or elimination of the tariff peaks in the US tariffs.

Developing country sources, who previously thought that a US-EC tariff accord would provide a framework for liberalization of trade barriers against their own exports (in terms of the Montreal mid-term call for a 30 percent tariff cut) now see the distinct possibility of the tariffs being brought down between the US and EC in their mutual trades, but with tariff and non- tariff barriers remaining against their own exports.

Though everyone ostensibly is working towards completing the talks by the 1 March deadline (under the US fast-track authority), this increasingly looks like a mirage.

While in theory the negotiations can get going immediately Clinton takes over at the White House and can be wrapped up by 1 March, most participants privately agree that the fast track authority is no real deadline. They feel serious negotiations can begin only after the Clinton team has taken over and assessed the situation and the 'turf fight' in Brussels between Leon Brittan and Hans Van den Brock is settled.

And while no one anticipates any difficulty for Clinton to win a renewal of authority for fast-track negotiations from the Congress, unless the US moderates its position and accepts that any new agreement must necessarily involve restraints on its own trade policy unilateralisms, concluding the Round would not be easy. And if the Congress, in extending the authority adds some more riders, this may inject new issues and "negotiations would be prolonged for a few more years", one Third World source commented.

Another observer noted that the real problem was yet to be faced by the GATT officials or the majors and minors, namely that the negotiations no longer involve goods crossing the border and entering almost invisibly into the domestic trade.

In agriculture, intellectual property, services and a number of other areas, the rules and disciplines now touch on the individual lives of people and their perceptions have changed, while the leadership in all countries appear to be out of touch with the people and their changed perceptions.

This, the observer noted, has been demonstrated over Maastricht and a variety of other agreements and decisions taken by leaders at the top, the so called G7 and other macro-economic coordinations and reassuring statements of economic recovery that is passing everyone by.

The Uruguay Round and its fate is just part of this wider malaise of political rather than economic and technical issues that can be settled in secret negotiations without wide public debate and acceptance.