7:23 AM Jun 18, 1993


Geneva 18 June (TWN) -- The European Community's pattern of protection, starting with import 'surveillance' and automatic licensing and ending with product and country-specific variable levies came for some sharp criticisms Thursday at the GATT Council.

Also raised at the Council is the growing US habit of starting 'investigations' whose mere announcement in its official trade register has a chilling effect on importers and imports, and given its normal costly and protracted processes and times inhibits further imports, even if at the end of the day no action is taken.

The spotlight on the EC actions came under 'any other business', used by delegations to raise issues of concern, as an early warning to others to alert them to trade frictions and problems, but without invoking the formal procedures of consultations and invoking dispute settlement procedures.

Argentina used the opportunity to raise the EC's introduction of 'import surveillance' and 'automatic licensing' for imports of garlic from Argentina.

As Argentina noted, a pattern was developing in the EC's use of these instruments. Brussels first introduces automatic licensing and import surveillance, telling complaints that it was just keeping a watch and enabling it to form a correct statistical picture.

At the next stage comes unofficial or other hints about the price at which imports were coming in and affecting domestic producers, and when not heeded via minimum import price, variable levies are slapped to bring the price of the import in line with the domestic price. The final stage is to slap quantitative restrictions.

Earlier, through a formal agenda item, Chile had referred to the same patterns having culminated in a levy on the imports of apples from Chile during the high production/export season for such fruits and vegetables from the Southern hemisphere, with the EC explaining or trying to explain away the issue by noting that the levy had been only on Chilean apples which was 'low-priced' and not on others.

Backing the Argentine complaint over garlic, Australia stressed that there was a pattern of behaviour in the EC actions -- starting with surveillance and ending with trade restrictions.

Argentina also raised a complaint over the US beginning investigations under S.22 of the US Agriculture law providing for support, which has a GATT waiver, over imports of peanuts and peanut butter from Argentina. The US investigation of a product under domestic supply management and support could lead to import restrictions.

The US made the usual response in such matters by arguing that it was only an 'investigation' and the administration had taken no actions, and may not take action, and thus not a matter for GATT complaints.

But Canada and Argentina did not see it that way, noting that US investigations invariably seemed to lead to actions against imports.

Japan raised the US anti-dumping levies on steel, noting a common complaint against US use of the instrument, namely using its socalled best-information-available, the information provided by domestic complainants, to arrive at a finding against the country or enterprise from which the imports came.

Another complaint that came up was over Canadian use of Art XIX safeguard provisions, in combination with Art XXIV (free trade agreement with the US) to slap discriminatory quantitative restrictions on imports of boneless beef. This use of Art XIX (which requires non-discriminatory safeguard actions) in combination with Art XXIV to discriminate against outsiders in safeguard actions was criticised by a number of others.

Finally, the Council was advised by the Chairman of the GATT CPs that in terms of the understanding reached in the informal consultations with CPs on the choice of Peter Sutherland as the GATT Director-General, Sutherland had agreed to begin consultations on the appointment of his three deputies, even before assuming office on 1 July and that all nominations should be addressed to him.

In terms of a GATT Contracting Parties decision, the appointments are to be made by the Director-General in consultation with the CPs and such consultations are to begin three months before.

However, given the way in which the Sutherland election came about, and with all three posts vacant, the DG-designate has been asked to start the process immediately and make the appointments as soon as possible, without the 3-month specific period.

Of the two existing posts, one (held till his retirement by India's Madan Mathur) has been vacant for quite some time and the second, held by Charles Carlyle of the US is becoming vacant on 1 July. A third post has been created by the CPs along with the choice of Sutherland.

It has been widely reported that part of the US-EC deal over the choice of Sutherland has been that Carlyle's post will be filled by Warren Lavorel, the chief official (career diplomat) negotiator under the Bush administration. For the third post, expected to go to a Latin American, about six or seven names are being mentioned or have been nominated by governments including Mexico's Amb. Seade, Venezuela's trade official Miguel Rodriguez, Chile's Amb. Tironi, Colombia's Felippe Jaramillo (who was former Colombian representative before GATT) and (latest) Brazil's Nogueira Batista who was formerly his country's ambassador to GATT and the UN in Geneva until 1988 and then was Permanent Representative in New York. There are also reportedly three or four more candidates from the region. India is expected to nominate a candidate and there will perhaps be one or two more from the region, sources said.