9:10 AM Jul 15, 1993

MARKET ACCESS CAN'T BE SETTLED WITHOUT DFA ISSUES

Geneva 14 July (Chakravarthi Raghavan) -- The hype and euphoric effusion with which the Tokyo Quad agreement on a market access package, in terms of its impact in reviving and concluding complex Uruguay Round of multilateral trade negotiations appears to be coming up against the realities of the process.

At the first meeting Wednesday afternoon of the "market access" or the track one group -- chaired by Germain Denis of Canada, and set up in February 1992 to deal with market access negotiations in goods -- a number of non-Quad countries, including Australia, India and New Zealand, made clear that they not only needed more details and clarifications of the Quad accords at Tokyo, but that it was not possible to negotiate market access in various areas, without negotiating on the related areas of the Draft Final Act text, such as on agriculture and textiles and clothing.

A number of developing countries also made clear that the guiding principle in the Round for market access negotiations remained that of the Punta del Este declaration and the Montreal objectives, namely, that the contributions from the developing countries were subject to their "trade, finance and development needs" and not either "appropriate" or "matching" contributions as the Quad communique or the G7 summit declaration would have it.

While the European Community, at least pro forma, acknowledged this at the TNC, the other Quad members, and particularly the US have not.

In his summing up, Denis acknowledged this and made clear that the market access group, in its bilateral and plurilateral negotiations was governed by the Punta mandate and the Montreal mid-term objectives and accord, and that the Quad accords needed clarifications and explanations.

The Group was meeting again Thursday morning to enable the Quad members to provide this.

(While at the GATT, the Third World delegations were cautious and reserved in their public comments on the Quad accord or its impact on the Uruguay Round, at the ECOSOC, currently meeting in Geneva, the Group of 77 and China said that the big partners had brought the process back to Geneva without resolving the difficult subjects of negotiations of interest to G77 and China. And while the Tokyo accords were in the right direction, they only tried to resolve trade issues of developed countries, and did not take into account those of developing countries, and no one could believe that in these circumstances the negotiations could conclude by year's end).

As several of the Third World delegates commented privately Wednesday (after the meetings of the TNC and the market access Group), the market access negotiations were faced with the same situation as in July 1992, when the US and EC hijacked the multilateral process to undertake bilateral negotiations and strike a deal.

It was not at their instance or with their consent that the multilateral process and negotiations had been hijacked out of Geneva and into a bilateral and quadrilateral context. And while the return of the negotiations to the multilateral process in Geneva, through the Tokyo accord, was welcome, it was not sufficient to move the stalled negotiations forward substantially, nor could it be dictated by the agenda of the two or the four.

And while the multilateral process has been restarted, it could gather real momentum only when the majors are ready to acknowledge some of the hard and difficult issues and agree to negotiate on these in Geneva, in parallel with the market access, in a multilateral context. If they believe that like the Quad limited market access accord, they could also settle the other issues and come to Geneva and through the GATT head force it down the others, the GATT leadership and the Quad would be in for some surprises.

Even in market access, most of the other trading partners were neither principal or major or even minor suppliers in the sectors where the four had agreed to eliminate tariffs, and this was not an "offer" they could or need reciprocate or even agree to join and do the same.

As one of the Latin American agricultural exporters reportedly told EC Commissioner Leon Brittan, if the EC wanted reciprocal concessions and offers, they should be willing to find agricultural sectors where there could be elimination of tariffs and subsidies -- a suggestion which understandable got no response from the EC (or the other Quad members either).

Following up on the "briefings" by the representatives of Quad members (Canada, EC, Japan and the US) at the Japanese mission on Monday, and the highly publicised visits and talks of the EC GATT Commissioner, Sir Leon Brittan, the 112-member Trade Negotiation Committee overseeing the Round got some pep talk and exhortations -- and 'commandments' as the Indian delegate put it at the meeting -- from GATT Director-General Peter Sutherland.

This was followed up by him with a press conference where he took the EC line that negotiators should first concentrate and produce a "big market access package" and then tackle the other issues relating to the Draft Final Act Text in the autumn.

In a public exhortation to the other participants to put forward their revised or best offers, Sutherland also said that as GATT D.G. he would be a strict task-master and "if we discover that negotiators have been marking time and enjoying the good life in Geneva, it may become necessary to point fingers at the poor performers"

He also promised to keep the major trading countries "fully engaged" in the negotiating process, and announced that he would be going on Monday to Washington to meet the US Trade Representative Mickey Kantor, but that the agenda for his talks were "still germinating in my mind, and no doubt in his own". The new GATT head did not indicate how in his scheme the other trading nations fit in.

While Sutherland's language and content in the TNC (in a draft text that was provided to delegations, but not to the media) was more cautious, both in exhortations and the way he thought he could run the TNC and the GATT, his press conference remarks left an impression of some cockiness on several of the newsmen and delegates who learnt from newsmen about what he said.

Some of them suggested that Sutherland would soon realise that he was not an EC Commissioner (where the Commission had some statutory powers under the Rome treaty), nor the head of a private enterprise where he could lay down the law to the staff and customers, but a contracted party of the contracting parties who are sovereign governments defending their country interests.

Others said that Sutherland was yet in the learning process in the GATT, and should not be judged too quickly, and being an intelligent person would learn quickly. However, they conceded that there was not much time left.

Several participants later noted that either in convening the TNC or in setting the programme for it, Sutherland had not held the kind of 'consultations' with key groups of countries.

While it might not have been very essential for the relaunching of the multilateral process, Sutherland in the final analysis is only a "contracted party" and the contracting parties, even the medium and smaller trading partners, are sovereign governments negotiating on their countries' vital economic concerns and "finger-pointing" could work both ways, and would not make agreements easier.

As several of them put it privately, the disappearance of multilateral negotiations from Geneva in 1992 was not due to them and their being brought back to the GATT was a "positive development", but that alone or even the Quad agreement in areas of competitive advantage to them was not sufficient to move the negotiations forward to a successful conclusion.

Unless the major trading partners are proceeding on the assumption, and that is shared by Sutherland, that they can get market access negotiations with the developing world and other trading partners going without putting on the table "best offers" in areas of interest to the others, the negotiations would continue to be stalemated and people coming from capitals, even from the developing world, are not so enamoured of the Geneva life and its good time to be "marking time" out of cussedness, some of the negotiators said.

Leon Brittan had told a press conference Monday that he had convinced the US Trade Representative Micky Kantor to accept this strategy and now that the Quad had done their work, others should reciprocate and put forward their offers.

While not going as far as Brittan or Kantor or their bosses about the major breakthrough for the talks through the Quad accord, Sutherland viewed it as a "good package" and a positive step in making "concrete progress" and provided a basis for renewal of the multilateral process.

Sutherland told his press conference that the majors had negotiated an initial substantial market access package and had made some substantial "offers" and that others should now put their "best offers" on the table and do so "in the coming weeks" and that this applied to the Quad too. He however conceded, in response to questions, that the Quad's package related to their own trade and did not deal with the areas of concern to the other trading partners and that he expected in the Geneva process the Quad countries too to make their contributions in the bilateral talks.

At the TNC itself he said that the Quad had negotiated a concrete market access package and had provided "new momentum" to the Round, that there were sufficient elements in this "first instalment" (words that Brittan had used at his press conference Monday) to enable them to get down to work on a bilateral, plurilateral and multilateral basis and that in this process, it would be incumbent on all including the Quad to contribute further.

In the market access group, where the Quad accord was on the table and the quad members briefly explained it and called on others to make their offers, a number of participants said they could not make any meaningful assessment of the Quad accord or react with their own offers without knowing clearly, at the plurilateral/multilateral level or atleast in bilateral talks, the nature of the "exceptions" of individual countries and whether it has been accepted by all the Quad members, as also at the six-digit tariff line level the concessions exchange or proposed.

India, supported by Argentina, Brazil, Tanzania, Colombia, Venezuela and several other developing countries, referred to the Tokyo accords and the call there on other countries making "appropriate" contributions and the G7 call for "comparable" offers, and said that as far as the developing countries were concerned the only requirements were set out in the Punta del Este mandate and the Montreal accords.

The Punta declaration and the Montreal mid-term accord on tariff and non-tariff issues, have reiterated that the "contributions" by the developing countries would be subject to their trade, finance and development needs -- the code language for special and differential treatment.