Jan 29, 1993



Geneva Jan 19 (Chakravarthi Raghavan) -- Uruguay Round negotiators in effect took a recess Tuesday, waiting for a clear signal and message from the Clinton administration that it wants to and would take the political decisions to conclude the negotiations, without unravelling the package of accords.

As GATT Director-General and Chairman of the Trade Negotiations Committee, Arthur Dunkel put it at a press conference: "The message of the participants to President Clinton is 'we are ready to conclude in the near future. are you ready?'."

The US was represented by its number two, Andy Stohler, a very able and experienced trade diplomat, but still a second or third ranking career official. The US Ambassador to GATT, Rufus Yerxa and the official chief negotiator, Warren Lavorel, who had been here and participated in the intense informal consultations here in January, had left Geneva for Washington before the TNC met, to brief the new administration and the new USTR, Micky Kantor.

The TNC which supervises the six-year negotiations, and has now become virtually the negotiating body, met Tuesday evening to take stock of the state of play.

After a three-hour debate, it agreed, technically, to remain on call and meet at short notice to complete negotiations and conclude the Round quickly.

While several participants inside the TNC and outside officially took the position that the pause could be very short, and the negotiations resumed and concluded within the 1 March fast-track deadline, several key participants in private comments thought the Round could either be completed over the next 3-6 months or become a new round with a new mandate and go on for a few years.

One key negotiator, who was clearly sceptic about the concluding it by 1 March, said the new administration in Washington by its actions would have to show it was serious.

The new administration had first to get its act together and agree on what it wants to do in the negotiations, including any inter-departmental consultations and decisions involving Commerce, Agriculture, Treasury and Trade Secretaries.

Some of the statements before Congress of the Clinton team gave some contrary signals (such as the new USTR Micky Kantor's talk of a new Super 301 etc), this could be viewed as the opening gambit and public posturing.

What was needed was the view they would be able to convey to their negotiating partners in Geneva and in key capitals.

President Clinton would have to decide and seek a new fast-track authority for a short period, say till the end of the year, which really would mean the negotiations have to be concluded and the package sent to the Congress by 1 September.

The administration, the negotiator said, would not be taken seriously if it came back here to the negotiations claiming that the 1 March deadline could be met, since it would imply it expected everyone to accept whatever it demanded.

The administration had also to get its negotiators and team in place, keeping in mind that hereafter the negotiations can only be at the level of chief negotiators and Geneva ambassadors and/or ministers, and the negotiators, particularly if they or some of them are new, establish personal rapport and understanding with the other negotiators and counter-parts.

Though it had been the intention of Dunkel and the European Community to orchestrate at the TNC and send to Washington a near-unanimous view and message on the quick resumption of negotiations and its conclusion, this did not come through quite so clearly.

Some participants said that in Monday's green room consultations, it had been thought that at the TNC there would only be Dunkel's stock-taking assessment and, excepting for the Latin American banana producers who would voice their objections to the EC's new banana regime, there would not be much of substantive comments or differing views from others.

But the EC's chief negotiator, Hugo Paemen, while talking of no useful purpose being served by finger-pointing, in effect appeared to blame the US and others for having kept under the table till now their demands for changes and brought them up now and thus delayed the negotiations.

But whether this provoked the comments from 27 speakers (representing some half of the 112 participants) or it was something else, the outcome was what Dunkel described as a "lively debate" -- a normal diplomatic euphemism to hide some serious differences and their frank expression.

Departing somewhat from the script that had been written at the "green room" consultations, a succession of countries took the floor after Paemen to stress, with varying nuances, that while it was technically feasible to quickly restart the negotiations and conclude it, this can only be done if there was no attempt to upset the balance and unravel the package, either with new issues or basic changes in the rules.

And while everyone, or almost everyone who spoke, endorsed the call from the TNC Chairman and GATT Director-General, Arthur Dunkel on the need for immediate political decisions for concluding the Round, each also laid out their own concerns and the need for "flexibility" and changes in the Dunkel text.

Also, several of the speakers expressed dissatisfaction with the 'non-transparent' negotiating process.

No new targets or deadlines were set or hinted at the TNC and it was clear that no one was even willing to bet that this could now be kept or achieved.

After six years of negotiations, and several 'last sprints' and failures to keep three year-end deadlines and missing several 'windows of opportunity', GATT's word-spinners had clearly had run out of words to capture public attention or that of the world trading community -- and would need a new thesaurus.

But Dunkel, as an international civil servant forced to be optimistic, still attempted it by speaking (in his assessment and stocktaking to the TNC) of the Uruguay Round being "poised for conclusion", the need for a 'result-oriented' approach and 'flexible' procedures if quick success was wanted.

Even though his own consultation process since the resumption of negotiations after the US-EC Blair House accord on agriculture had become so non-transparent that many negotiators refer to the German meaning of dunkel (dark to sinister depending on context), Dunkel spoke of not forgetting "the central principles of transparency and multilateralism", that there would be no "fait accompli for any participant" and nothing could be accepted until everything was agreed.

Assessing the outcome, Dunkel told the TNC "We are critically short of time. To succeed we must conclude now or run the risk of drifting into the sands".

At his press conference, Dunkel warned of the high risk of negotiating fatigue and unravelling of the package if the negotiations were prolonged unduly.

He made clear that the TNC, while on call, had not even set a date for its next meeting and had not set another deadline and that he himself could not say whether the negotiations would be concluded by 1 March, but suggested that it could be met, though it would not be easy.

Dunkel also told the TNC that he had held intensive bilateral, plurilateral and multilateral consultations (with some 20 countries) with a view to forming a clearer picture of the political status of the Draft Final Act with governments participating in the negotiations.

The process had not been one of "negotiations or trade-offs", but making national positions "more precise and better understood" and the consultations could not be regarded as replacing or substituting the 'track four process' (for making changes in the draft text) and that changes could be made only by consensus.

"My process is nothing more and nothing less than a series of soundings with a view to complete a comprehensive political reading and review the draft final act and in this sense it has proved immensely useful," Dunkel told the TNC.

He made clear at his press conference that he would neither put together and consolidate the substantive changes in the text that had been put forward by various participants in his consultations, lest it freeze positions, nor put forward a new revision of his own 1991 December text of the Draft Final Act.

Dunkel saw continued overwhelming commitment to the Round and a "strong desire to conclude it now", growing fears that a long delay would cause "a dangerous loss of momentum, a negotiating vacuum in which even the existing multilateral trading system could be put at risk" -- a mood shared by developed and developing countries.

Coupled to this was the growing frustration that "the largest trading entities which have benefited most from the system have not so far, for various reasons, provided the leadership for the end game."

From now on "globality and parallelism" were vital for success and all the remaining issues in all areas "now require political decision-making" and the differences between negotiations market access, initial commitments on services and track 4 (changes in the DFA) had become blurred "to the point of merger (and) all fronts must move together".

Important political decisions remained to be taken by each and every participant, and the work done in January had enabled negotiators to clearly identify the handful of key issues that needed to be resolved, and enable them to separate issues which could "possibly be accommodated"within the overall existing balance of rights and obligations of the DFA and those which would be of "such substantive departures as to lead to counter- proposals and therefore to the Draft Final Act's unravelling".

The vast majority of the participants, he said, in spite of the "pain" it would cause them in specific areas seemed willing to live with the DFA and it remained the only available basis for a quick and balanced conclusion of the Uruguay Round.

"The Uruguay Round can, and must be concluded quickly. The negotiating structures are in place, and on call...Things will move rapidly in Geneva once the immediately needed political decisions have been taken on the few remaining issues. Conversely, without these decisions, or if there is an uncontrolled unravelling of the DFA documents, a quick and balanced conclusion of these negotiations will be difficult, if not impossible. The choice has never been clearer for governments and negotiators."

EC's Hugo Paemen said "substantial progress" had been made "if only because we have abandoned the one-track approach (on agriculture) which had kept us in break of our common commitment to globality" and they had begun to discuss issues other than agriculture. This had confirmed the EC's suspicion that "more difficulties had been technically kept under the table, which had not only unbalanced the previous discussions but probably made us lose a substantial amount of time".

Successive processes of informal negotiations since January had demonstrated that each one of the participants had his particular difficulties with the DFA. The EC had a severe problem on tariffication without exception in the banana sector, but had confronted the problem and others could not avoid taking similar difficult decisions.

However it was still necessary to break the logjam in market access, important questions relating to coverage in services negotiations and in certain key matters of the DFA itself, particularly the institutional questions (of the MTO and the organizational approach of the EC and several others and the US's contractual approach).

The EC was committed to the successful ending of the Round "as rapidly as possible and within its present parameters" and hoped it was the common desire of all.

"I would also hope," Paemen said, "that a signal could go out along these lines to the new US Administration. I think it is the best service we can render to the world economy as a whole and to the welfare of each of our countries individually."

Paemen suggested to Dunkel that without wishing "to set new deadlines", he should envisage a process of periodic informal meetings of the TNC.

Amb. Ernesto Tironi of Chile, on behalf of the Latin American and Caribbean group of countries, agreed that a conclusion of the negotiations was possible even within the 1 March fast track limits and for his group of countries the DFA was acceptable with minimal changes.

Tironi was however concerned that one or two of the participants had put forward substantial amendments and this had been followed by a whole of other amendments as a reaction and all this posed the danger of unravelling. He also warned against the danger of going back to issues previously agreed or attempts to add on new issues, and said: "if we have to go back and seek new mandate to add new issues, it will be a delusion to think the round can be quickly concluded."

Colombia, Costa Rica and a number of other Latin American countries took the floor to voice their own concerns, with Colombia, Costa Rica and Guatemala announcing that they would "object" to the conclusion of the Round if the EC did not honour the commitments agreed to on banana imports.

The new banana regime agreed to by the EC Council of Ministers to enter into force in July 1993, they said, "is a violation of the principles agreed upon at Punta del Este, particularly the Standstill and Rollback, a violation of the Montreal agreements on Tropical Products, and constituted a unilateral, unique and absurd interpretation of the liberalization modalities conceived in the Draft Final Act, evolving into a serious precedent for implementation of agreements ... and will generate unpredictable consequences which will serious endanger the successful conclusion of the Round".

The three Latin American banana exporting countries expressed what a press release by them described "emphatic rejection" to the early and opportunistic use of the proposals in the DFA for protectionist and restrictive ends and said they "will oppose the consensus" on any Uruguay Round results if those on market access were not consistent with the Punta del Este commitments and the mid-term review accords.

Jamaica, speaking for the ACP countries, presented the opposite view on the EC banana regime, but hoped that a mutually satisfactory solution could be found. The Jamaican delegate underlined the exclusive reliance of several of the ACP countries on their banana exports and the EC's commitments under Lome accords.

Norway, for the Nordics, noted that some progress had been made but further distance had to be covered to conclude the Round. The Nordics hoped that the changes to the DFA would be kept to the minimum and the present balance maintained, and new issues would not be brought in. There were other issues to be pursued in the GATT "but not now". The Uruguay Round was not the end of trade negotiations.

Malaysia's Amb. Haroon, speaking for the Asean, called upon all participants to exercise restraint in proposing changes. The ingredients for conclusion of the Round were there but needed political impetus and maximum efforts, particularly from the major participants.

Tanzania's Amb. Amir Jamal underlined the need for recognition to the rationale for substantially increased aid needed in the context of net food importing countries and their needs due to net price increases due to the trade liberalisation among the food producers in the industrial countries. He also questioned the rationale in putting restrictions on textiles and clothing exports should be imposed on Tanzania by staggering the transition for market access over a decade or more. Jamal also voiced the concerns of countries like Tanzania vis-à-vis the Trims and Trips agreements. Countries like his over the last two decades had slipped back so much, "almost to the bare bones" that to ask them to make initial commitments in the Round was not fair and amounted to "placing the cart before the horse."

Egypt, Pakistan, Senegal were among others who voiced concern over the lack of transparency and multilateralism in the current process of consultations and negotiations.

Japan was concerned that the "window of opportunity for closing the Round had become narrower" but thought if everyone maintained momentum the negotiations could be closed.

Mexico warned that either the negotiations should be concluded quickly or face the danger of disintegration.

Korea's Amb Soo Gil Park said the DFA provided the only basis for concluding the Round and changes should be kept to the minimum. But Korea had difficulties over agriculture.

India's Balkrishna Zutshi shared Dunkel's assessment and agreed the Round could be concluded on the basis of globality. Zutshi also underlined that the conclusion of the Round had to be on the basis of Punta del Este Declaration and the mid-term review accords. India favoured an early conclusion of the Round, but on the basis of a balance that would strain credibility. That balance did not exist now and could not be achieved merely through market access negotiations and concessions. The interests of all parties had to be taken into account.

Amb. Celso Amorim of Brazil said the balance in the DFA was now currently tilted against the developing countries. Brazil sought a quick conclusion of the Round but not through proposals that would further upset the imbalance. "We cannot also trade rules for market access concessions," he added.

Andy Stohler for the US agreed with the Dunkel approach and noted that the EC and many participants wished to conclude the Round. The US, he said, hoped that a substantial market access package would create a good atmosphere for concluding the Round. While the DFA remained the basis for the conclusion, "the text is not chiselled i stone and changes would be necessary," he said.