7:21 AM Sep 24, 1993

MIXED PICTURE ON URUGUAY ROUND

Geneva 24 Sep (Chakravarthi Raghavan) -- A mixed picture of positive and negative developments, from the perspective of the developing countries, in regard to developments in the Uruguay Round of particular interest to developing countries has been provided by the UNCTAD secretariat in a conference room paper for the current session of the Board.

On the current state of the Uruguay Round negotiations, the note points out that while participants in the Uruguay round have welcomed the substantive contribution to the negotiating process, from the 'Quad Agreement' at the Tokyo G7 summit, many of them, including developing countries, had viewed the Quad accord as largely leaving out products and product sectors of export interest to them -- particularly agricultural and natural resource based products, tropical products, consumer electronics and some other manufactures.

In recent months, UNCTAD said, there have been positive signals from the major trading entities about their increased political will to address some of the key outstanding issues in the Round.

However, these have been largely deployed outside the multilateral process in Geneva and the developing countries and smaller trading partners have been disturbed by these developments which marginalized their own interests.

The developing countries have also repeatedly warned that a fait accompli would be inacceptable to them. In this connection, the re-engagement of the multilateral process in Geneva was viewed as a significant and positive development.

However, there had also been negative developments such as the considerably intensification of potential trade conflicts, attempts to seek solutions outside the multilateral trade rules and disciplines, and increasing emphasis on bilateral and regional approaches, growing tendency for unilateralism in trade relations and threats of retaliations, and arguments for trade-balancing as a solution to existing tensions.

These trends, UNCTAD said, had exerted a negative influence on the Round and leading to a situation where countries are being tempted to reopen issues previously considered as settled, particularly in the rule-making areas.

Referring to the work programme established by the TNC for completing the substantive negotiations by 15 December and looking beyond that to the Ministerial meeting in April, UNCTAD said that the developing countries were likely to face complex problems during the concluding phase of the Round.

These would involve the magnitude of the benefits to be derived from successful negotiations, especially in terms of commitments, rules and disciplines resulting in meaningful improvements in market access for their export products as well as the increased obligations that developing countries would have to assume within the international trading system and with impact on their development prospects.

In this context, the paper said, it was important that the provisions of the Punta del Este declaration should be fully applied and implemented in the negotiations, particularly the firm recognition of the principle of differential and more favourable treatment to the developments, especially for the least developed among them.

There should also be an early and comprehensive evaluation as foreseen in Part I of the declaration. This should be carried before the conclusion of the negotiations, since such evaluation was intended to provide a basis for any corrective actions to protect the interests of the developing countries.

While the hierarchy of criteria by which countries would assess the balance would vary from country to country, these should include in particular: meaningful market access for export products in terms of coverage and tariff/non-tariff measures that are eliminated or reduced; erosion of preferential margins affecting exports; balance between market access concessions on industrial gods and similar concesssions on agricultural products; the degree of fullest liberalization of trade in tropical and natural resource-based products; and meaningful reduction of tariff peaks.

Also important would be security of market access in terms of strengthened multilateral rules and disciplines, and "unambiguous acceptance" of the latter by other trading partners.

In this regard, there should be:

* full respect for principles of non-discrimination and unconditional MFN treatment;

* phasing out and prohibition of all market sharing and managed trade arrangements;

* preclusion of unilateral actions outside the multilateral legal framework; and

* functioning of a strengthened and effective dispute settlement system, including capacities in protecting the interests of trade partners who lack credible retaliatory powers.

Other important criteria for evaluation and judgement would include; the impact of higher prices for imports and exports of agricultural products; the cost of a strengthened intellectual property protection, including the impact on royalty payments and conditions affecting access to, and transfer of technology; reduction of flexibility in use of various trade policy options; burden of increased procedural obligations like notification procedures; net increase of obligations in individual agreements and in general acceptance of the results of the Round; and specific positive measures to facilitate expansion of trading opportunities for the LDCs

A successful conclusion of the Uruguay Round faces some potential impediments and a decisive factor for overcoming them would be the determination of participating governments to resist pressures from narrow interest groups, according to the UNCTAD secretariat.

Such a stance, the secretariat says in a note to the current session of the Trade and Development Board, would enable them to agree to make concessions not originally anticipated and refrain from pursuing requests that are politically unacceptable to other negotiating parties for reasons of sovereignty, culture or social welfare.

Such a determination would also be required to enable them to refrain from reopening issues covered by the Draft Final Act so as to preclude its unravelling.

Such a realistic approach should recognize that it is not credible to seek the weakening of disciplines in one area, while seeking to impose stringency in others.