7:04 AM Apr 28, 1993


Geneva Apr 28 (Chakravarthi Raghavan) -- UNCTAD Secretary-General Kenneth Dadzie warned Tuesday that the alternative to early and successful conclusion of the Uruguay Round would not be a return to 'status quo ante' and industrialized countries would not be able to insulate themselves from the negative consequences to the global economy and that of the developing world and the resulting deterioration in their political and economic situation.

Dadzie who was speaking at a one-day meeting of the Executive Session of the Trade and Development Board to discuss 'developments in the Uruguay Round'.

At its March session, the Board had sent a message to all participants calling for an early and successful conclusion of the negotiations and in a balanced way.

While the developing countries in the Group of 77, collectively and individually, asked why the necessary steps are not being taken to bring the Round to an early and successful conclusion and sought answers from the major entities who were engaged in bilateral talks, the industrialized countries not only gave no answers but even questioned the need for a debate in UNCTAD when there had been no recent developments.

All, or almost all, repeated the familiar refrain about the Dunkel Draft Text of the Final Act providing a basis for concluding the negotiations, with a few raising some concerns about the changes being sought by the majors in the text that would tilt the balance against the developing world even more.

In a declaration at the Executive session on behalf of the Group of 77, Ambassador Mrs. Lilia Bautista of the Philippines repeated the call for the finalisation of the Draft Final Act (DFA) "in an equitable manner to achieve an early, balanced and successful conclusion" and asked why when the text had before governments for 16 months, necessary steps were not being taken for successful conclusion of negotiations.

Criticising the retreat from multilateralism, Dadzie had earlier underscored that since the DFA was put on the table, more progress seemed to have been made "in fine turning instruments of managed trade than in bringing to a conclusion the five years of work that had gone into rebuilding a rule-based system",

The UNCTAD head noted that tangible progress towards completion of the negotiations continued to be elusive and increasingly issues previously considered settled were being reopened, while fully-fledged market access negotiations in goods had yet to begin.

"Several, albeit low profile, discussions," Dadzie continued, "are being conducted on a restrictive basis, putting into question the supposedly transparent and multilateral nature of the negotiations.

"Trade policy developments outside the realm of the Round similarly suggest a retreat from the multilateral approach, with frequent announcements of measures and arrangements that appear contrary to the spirit, and even the letter, of the DFA. Indeed, since the DFA was first put on the table, more progress seems to have been made in fine-tuning instruments of managed trade than in bringing to a conclusion the five years of work that have already gone into rebuilding a rule-based trading system."

As the world's largest traders, Dadzie said, the developed countries stood to suffer most in absolute terms from a retreat from the multilaterally agreed rules and principles of international trade which had contributed so substantially to their growth over the last forty years.

But in relative terms, weaker countries, particularly the developing countries, were likely to be the most adversely affected by the weakening of the rules. They needed improved access to world markets to stimulate their economic growth, particularly when they themselves were increasingly opening up their domestic markets to world trade.

While no useful purpose would be served by apportioning blame, it would be wrong to assume that an alternative to early and successful conclusion would be resumption of status quo ante.

"On the contrary, in the present context of recession and slow recovery marked by increased protectionist pressures, a vicious circle could ensue in which heightened protectionism serves to impede rapid recovery from recession, with negative consequences for the global economy and that of developing countries. Given the fragile world economic situation, only the naive will believe that industrial countries can be insulated from the resulting deterioration in the political and economic situation in the developing world."

Compromise on all sides and mutual accommodation would be required, "but not compromise based on the hypothesis that any deal is better than no deal at all", Dadzi stressed.

There were many areas of the DFA where there was a large measure of agreement. An acute awareness had also emerged of the dangers inherent in any form of trade war, as had been manifested in some of the trade policy compromises of the past year or so.

Governments must build on this pragmatism to achieve the results required, but that result must be "nothing less than a major step towards the goal enunciated at UNCTAD-VIII: an open, equitable, secure, non-discriminatory and predictable international trading system".

Bautista, for the Group of 77, expressed the group's concern over the persistence of the world economic recession which was stifling their own efforts at trade liberalization and export-led growth, and frustrating the effectiveness of their economic reforms and structural adjustment programmes.

The recession has been manifested in protectionist pressures in the developed countries, aggravating existing restrictions and creating new barriers to market access.

The DFA which had been before governments for 16 months should be finalized in an equitable manner to achieve an early, balanced and successful conclusion of the Round, in particular to fulfil the objectives of the Punta del Este Declaration on the needs of the developing countries and the least developed.

Meaningful and comprehensive market access offers of export interest to developing countries, the G77 complained, was yet to be circulated by a large number of particulars including the major trading partners. Some of them seemed preoccupied with mutual trade tensions some of which could be more effectively addressed within the framework of the results of the Round.

The major entities appeared to be attempting to resolve among themselves key issues of interest to all participants and had been introducing trade-restrictive measures which violated the standstill and rollback commitments and which cast doubt upon their commitment to the principles governing the negotiations.

The sense of frustration among the developing countries, Mrs Bautista added, was exacerbated by "the absence of transparency in the negotiating process" -- a situation which engendered concern in developing countries that they risk being presented with a fait accompli which would be unacceptable.

Developing countries, she said, continued to strive for a balanced outcome consistent with their development, financial and trade needs. They were convinced this could be achieved with the necessary "political will" on the part of developed countries, not only to resolve their outstanding differences, "but, most importantly, to accommodate the concerns of developing countries (who) should be informed of actions envisaged by developed countries to overcome this impasse effectively."

The G77 spokesman also referred to the Punta del Este mandate for conducting an evaluation of the results and said the modalities for evaluation should be "both serious and meaningful, in the sense that necessary measures could be taken" (to ensure that specific steps to reflect the principle of differential and more favourable treatment to developing countries in specific decisions).

Also, the concerns of LDCs should be adequately reflected in the final outcome. A high-level group should be organized to examine thoroughly the provisions of the DFA as they related to the LDCs and propose concrete measures for inclusion in the DFA, she added.

Underscoring the Cartegena Commitment (at UNCTAD-VIII) and the mandate for the negotiations, Bautista said the results of the Round should faithfully reflect the principles and objectives of the Punta del Este Declaration. Participants should refrain from introducing new subjects in the final stages of the Round.

However, she added, issues for future multilateral negotiations could be initiated in UNCTAD with the objective of ensuring that priority interests of developing countries are fully taken into account. The results of the Uruguay Round should also be supported by multilateral actions in monetary and financial field.

In other interventions, a number of individual Latin American countries took the floor to support the G77 declaration and to stress the importance of concluding the Round and establishing an open, secure non-discriminatory multilateral trading system to support the continued efforts of developing countries to reform their economy and liberalize their trade regimes.

Hugo Cubillos of Chile warned in this regard that failure to conclude the Round could well force countries like his, which had taken unilateral measures of trade liberalization and opened up their markets, to reconsider their policies and measures.

Eduardo Mestre of Colombia said a solution to the problems in the Uruguay Round required "greater political realism that would take into account the political and doctrinaire changes that had taken place in the world, and particularly the renewed interest in the school of thought of Keynes as testified by actions taken recently in developed countries". This change, Mestere added, should lead to "a redefinition and reorientation of the international economic system.

Gonzalo Gutierrez of Peru said that in addition to an evaluation of the results of the Round, UNCTAD should prepare a global study before the next quadrennial conference on all trade-related aspects of interest to developing countries.

Syed Jamaluddin of Bangladesh reiterated the key proposals of the LDCs in various areas of the negotiations and supported the idea of a high-level group in UNCTAD to look into the needs of LDCs and propose concrete measures for inclusion in the DFA.

China's Wang Tiance supported the G77 declaration and cautioned against a reopening of the package contained in the Dunkel text.

Switzerland questioned the usefulness of the discussions at the Board since there had been no new developments. This view was repeated later by the European Community which also said that while UNCTAD could analyze what happened in GATT, it could neither substitute itself for the GATT nor "play the role of negotiator for the developing or least developed countries."

Joyce Rabens for the United States (which in the negotiations wants the DFA text to be changed in several particulars to suit its interests) felt that the many concerns of the developing countries were covered in the draft Final Act and all participants, developing and developing, had to make commitments corresponding to their level of development to ensure successful conclusion of the Round. She also opposed creation of any additional group in UNCTAD to deal with the concerns of the LDCs since, in her view, this would duplicate the work being done in the GATT negotiations.