6:50 AM Oct 27, 1993
TNC MEET SET FOR 1 NOVEMBER
Geneva 26 Oct (Chakravarthi Raghavan) -- The Uruguay Round Trade Negotiations Committee (TNC) has been summoned to meet on 1 November for an assessment of the state of play in the negotiations. The Round, the benefits of its conclusion and mortal blows that the GATT multilateral trading system might receive by a failure, and the need to conclude the negotiations, has been occupying much media attention. It has also been figuring at various gatherings of political leaders outside -- the latest being last week's Commonwealth Heads of Governments meet which has named a delegation to go to important capitals and impress on them need for early conclusion. With just 51 days for the US-set 15 December deadline -- a deadline set by the fast-track authority given by the US Congress to the Bill Clinton administration, and which has been tacitly accepted by most of the other participants -- Third World sources say in Geneva itself there has been no progress in the talks. There is a stalemate on market access and no serious negotiations, nor any negotiations or discussions on any of the other issues and details that need to be settled, Third World sources said. At the meeting of the informal group of developing countries Tuesday at the GATT these worries were voiced, with most delegations complaining about lack of transparency in the negotiations. But one Third World participant said that transparency seemed many things to many. While some of the developing countries have interests across various issues, for most of the Third World participants, the delegate said, they had either a single issue of interest to them in the round, and did not pay much attention to others or were not active participants in any. To these latter, meetings of the TNC where they would be told what is going on is 'transparency' and don't bother too much about the major players (US, EC and Japan) negotiating among themselves outside. Though all these demand 'transparency', one of the major Third World participant noted, few of them turn up at meetings open to all where there is some negotiations are involved and they could participate. He cited in this connection the open-ended informal consultations chaired by Julio Lacarte-Muro of Uruguay which is considering institutional questions and the integrated dispute settlement system, where the small and the weak have as much at stake as the majors. But few attend these meetings, and fewer still participate and express views and opinions which they voice at developing country meetings. To the former category of major developing countries, the current process in which the US and EC are publicly brawling and threatening, while holding talks away from Geneva, and the prospect that at the last moment they would come and present a mutual agreement and use the GATT chief, Peter Sutherland to push it through others, has become worrying. Some of them have had a informal dinner meeting with the majors and Sutherland and made clear that they want a plurilateral negotiation-cum-consultation process, and not a bilateral one where they are in a sense negotiating with Sutherland. While Sutherland has said that he would consult and set a process, according to all indications, he is trying to keep all the other issues to the end, and trying to focus and tie up the market-access negotiations in goods and services. He has been leaning on the Quad to do more on market access, both on their own bilateral deals, but even more on concessions to the developing countries and responding to their offers. But while they have been making promises to him, this has not been reflected in the actual negotiations here, according to several of the Third World delegations. In the goods area, developing country delegates every day troop to the GATT headquarters for 'bilaterals' with the other major trading partners, and particularly the US and EC, where they are merely going through the same ground of the past few weeks and months without any attempt on the part of the majors to 'negotiate' mutual concessions or even indicate what is being done between the two. The US-EC bilaterals too do not seem to have moved very far, and many believe they will not make progress, atleast until after the NAFTA vote in the US Congress. Apart from the other issues and questions relating to that vote, the time and preoccupation of decision-makers in the USTR are tied down at the moment to winning the NAFTA votes. In Services, there has been some bilaterals going on involving the US, EC, Japan and some of the major Third World countries. While the US and EC have considerable differences among themselves in the services bilaterals too, both are joining hands to press the major Third World countries (Asean, India, Korea, Brazil etc) to liberalise their financial services sectors and provide access for banking, insurance and pension funds etc. There are also talks going on over some of the framework issues in the draft General Agreement on Trade in Services (GATS). The United States, which has refused to open up maritime services, because of the Jones Act (which predates the 1947 GATT and is saved by it), has offered to put on the table ports and other ancillary maritime services and wants developing countries to do so. As one developing country expert put it, this is really a demand for 'liberalising' our ports and other ancillary services, while maritime services themselves will be kept protected by the US. In financial services, the US is now seeking to provide on an mfn basis only existing access in its markets, leaving future access or liberalisation in terms of US domestic laws, subject to reciprocal liberalisation arrangements. On these last, the US (and presumably the EC too) would enter some across-the-board general reservations over MFN treatment to any bilateral agreements for liberalisation that might be reached. This in effect would bring back a original US Treasury proposal for the services agreement, namely have a separate annex on financial services that will be part of the GATS only in name, but would have completely self-contained provisions applicable only to those who agree to full liberalisation. The developing countries and others had rejected this and the existing GATS text and annex was a compromise. But the US is now going back. The US is also wanting changes in the GATS text on taxation issues relating to how foreign service providers, who supply a service through commercial presence (or investments). The GATS requires most-favoured-nation treatment among participants, and 'national treatment' between domestic and foreign suppliers in sectors inscribed on a country schedule and subject to any qualifications. The General Exception in GATS Art XIV enables exception to national treatment in taxation matters, enabling differing treatments between resident and non-residents where the measures are aimed at ensuring equitable or effective imposition or collection of taxes on income of service suppliers of other members. The General Exception also enables departures from the MFN requirement, where the difference in treatment between two Parties is the result of an international agreement relating to avoidance of double taxation. The United States is trying to get this changed to enable it to discriminate in treatment of foreign service suppliers on taxation matters based on any reciprocal arrangements it would have with a country. Some of the developing countries are objecting to this. Another area in the framework accord, and one where the developed and developing countries are ranged against each other, is over the question of the service charges that a country might levy for basic telecommunication services. Most developing country basic telecom services, whether publicly or privately owned, are regulated to provide access to rural areas and other needs and commonly cross-subsidise it by charging higher fees for access to their basic telecommunication networks from abroad. The industrialized countries started with the proposition that the charges should be related to the cost, and agreed for the present to a compromise of a cost-oriented fee, and as a 'best endeavour' obligation. Their intention was that at some point in the future -- under the commitment for continuance of the negotiations on telecommunication services after the GATS and Uruguay Round are concluded -- the best endeavour could be converted into an obligation. Third World countries are opposed to any provisions relating to pricing, insisting that this cannot be part of any trade agreement.