Jan 29, 1993



Geneva Jan 14 (Chakravarthi Raghavan) -- The conclusion of the Uruguay Round agreements could be several months away, a senior US official indicated here Thursday, putting to rest the talk of concluding an outline deal before President Bush leaves office on 20 January.

"The Uruguay Round has had many spurts of momentum and long periods of visible lack of momentum and this is not a period of spurt or great momentum," the official said.

There had been discussions this week on the changes to the Dunkel text and market access in goods, but no bilateral negotiations on initial commitments in services.

Speaking on background, the official said that as a result of the current phase of the negotiations and the scrutiny of the Dunkel draft text, when the Trade Negotiations Committee (TNC) meets next week "we will have a much better sense of the major stumbling blocks to an agreement... we will have a much clearer picture of what the universe of proposed changes will consist of."

It might be technically feasible to conclude the negotiations in time for the 1 March deadline (for the administration to notify the US Congress about the agreement for it to be dealt with under the fast-track negotiating authority), "but it will be politically difficult," the official conceded.

"There still have to be much detailed work to be done over the next several months and, more important, policy and political decisions have to be made by a number of countries to enable a package to be put together," the senior official said.

"It would be difficult to make a political judgement whether all this could be done before 1 March, given the change of administration in Washington and the French position and parliamentary elections," the official said, adding "It is technically feasible, but politically difficult."

In summing up the current state of play, the official noted that the TNC Chairman, Arthur Dunkel was due Thursday to have further discussions to see whether there could be further progress on making changes to the text, but added "we do not see significant progress towards resolving the issues of vital concern to the United States in developing a final agreement"

And although the US had been engaged in regular meetings with the EC and others on market access, it had not been possible so far to achieve an y significant breakthrough on a market access package either.

"There are quite a number of significant sticking points which remain".

The US and the Community have been striving to see whether there may be a basis by which they could have a significant and acceptable package of tariff reductions. The US-EC market access talks had not been in the traditional request and offer basis. The two had been exploring how they could fashion a package that would be mutually acceptable and sustainable. Various ideas were being explored, but no formal offers were on the table.

It was very important for the US to have a substantial reduction or elimination of tariffs in a number of sectors and the EC is seeking a substantial reduction or elimination of tariff peaks. The EC, he suggested, was very reluctant to agree on substantial reduction or elimination of tariffs in a number of sectors and products (aluminium, wood, key electronic products).

The only way the two could find an overall agreement would be to have a large package which would address the needs of the US manufacturing and export industries and this was necessary for the simple reason of getting political support.

It was vital for the US to have an agreement which would be politically sustainable an d enjoy wide support from the US manufacturing and export industries.

While the meetings and discussions would continue, at the minimum next week "we will achieve a much better sense of the major political stumbling blocks to an agreement."

While it would not be possible in the next few days for all the problems to be resolved, "we will have a full picture of where various participants are on the changes and what kind of adjustments in the Final Act would be necessary to achieve final results.

But the US would continue to insist that the final package would address some of its serious concerns.

On the textiles issues, on the tariff side, the US and EC were engaged in developing a package. The EC had sought bringing down the textile tariffs and reducing the peaks, while the US was pursuing the zero option in some sectors and substantial reduction in others. For an agreement to be reached, there would need to be some flexibility on the part of the EC.

On the text of the textiles and clothing agreement, there had been some discussions. The US had its own concerns on the proposals on this in the text. The US ability to reduce its restrictions on imports would depend on real and substantial market access in all the textile exporting countries to the US exports which in some areas were quite competitive, but faced barriers. In some developing countries there were tariffs as high as 100 percent, and in others imports were prohibited under balance-of-payments or other reasons.

As for the MTO, the US had some concerns over the current draft and had been discussing it with others. The US had no fundamental or philosophical objection to an MTO or a revamping of the existing institutional framework, but in either event it should not alter the substantive results of the negotiations in particular areas -- about non-application, waivers etc.

By next Tuesday, when the TNC meets to take stock and review the situation, everyone would be aware of what the parameters of future negotiations would be for finalising the Draft Final Act.

While this would be seen by some as "not a terribly good result", in one sense it would be good.

"We will have a clear picture of the problems and all of them will be out on the table and enable negotiators in the future to develop a package to resolve them.

"Obviously it will be up to the officials in the new administration to work with their counterparts throughout the world in advancing this package."

"They will all be on the table and we will know what are the major stumbling blocks.

On services, since the Xmas break (when the French had raised objections to the EC Commission's competence to negotiate on these matters) there had been no important bilateral negotiations on initial commitments, the senior official said.

In agriculture, not all difficulties had been resolved by the Blair House agreement. There were still many significant problems with the proposed schedules of various countries, for market access and tariffication etc.

A close examination of the EC's own schedules showed that in its current form, the imports into the EC after the Uruguay Round

A close examination of the EC's own schedules showed that in its current form, the imports into the EC after the Uruguay Round could shrink and be much less than now and this was not acceptable, he said.