6:41 AM Nov 26, 1993

DFA TEXTS TO BE CLOSED ON 13 DECEMBER

Geneva 26 Nov (Chakravarthi Raghavan) -- GATT Director-General and Uruguay Round Trade Negotiations Committee chair, Peter Sutherland, told the TNC Friday that the negotiations on Draft Final Act texts would have to be "effectively closed on 13 December at the latest" to give time for reproduction of consolidated texts and for capitals to be advised of any final amendments.

A final meeting of the TNC to approve the results would be held on 15 December, he added.

A GATT spokesman however later clarified that there was no change in the 15 December deadline, that the 13 December date was only for concluding the negotiations on the texts to enable their translation and reproduction, and that market access negotiations would continue till 15 December.

The spokesman also said that while the TNC would approve the results on 15 December, there was no intention of any initialling of documents or the final texts at that time.

Sutherland told the TNC that revised final texts of agreements in the Round would begin to be tabled from 30 November, and that the period from now (till conclusion of the Round) would be devoted to completing negotiations on the short list of remaining issues.

The GATT head again pressed on both the US and the European Union (EU), the new name for the European Community, to bring their 'decisive contributions' to the table and not make 'the dangerous mistake of leaving everything till the last minute'.

"They must remember there are other participants who must also be engaged in our multilateral process, which is being hindered by their delay...They must next week at their meeting in Brussels reach a substantive result and place a decisive contribution on the table here in Geneva...Time is now becoming as big a factor as the remaining issues of substance...we cannot afford further delay without jeopardising the Round."

In a number of interventions in the TNC, delegates expressed their concern at the large number of last minute proposals for changes in the Draft Final Act texts that were being tabled or proposed.

Particular concern was expressed in this regard over the US moves for a number of changes in the texts on anti-dumping and counter-vailing duties, as well as others being mentioned but not specified so far.

Amb. Tran Van-Thinh for the EU said despite the internal difficulties of the Community in decision-making, it would make every effort to ensure the process was concluded in time.

For the US, John Schmidt, Uruguay Round coordinator, said that the US would be putting forward specific proposals on the anti-dumping texts and circulated to delegations and the US hoped to have discussions on these with other participants. The US, he claimed, was approaching the issue in a spirit of restraint, but it was a matter of enormous importance to the United States.

Schmidt later told newsmen outside that his country's chief textile negotiator, Ms. Jennifer Hillman was coming to Geneva next week to discuss with other delegations the US concerns over the text on the textiles and clothing.

The US President, in 'buying' votes in the House of Representatives for getting NAFTA approved has committed himself to exploring the possibilities of extending the transition/implementation period for phasing out of the MFA from the current 10-years proposed in the DFA to 15 years.

Also, pending in the GATT is the question of a further extension of the Multi-fibre Agreement (which has been rolled over twice pending the conclusion of the Round) for a further one-year period. The US is demanding that the extension should include provisions against circumvention and other questions where again Clinton has committed himself to the domestic textile lobby.

In other comments at the TNC, Malaysia's Amb. Haroon Siraj, speaking for the informal group of developing countries, said they were looking forward to substantial developments from next week's Kantor-Brittan meetings in Brussels. He called for 'leadership' from the majors in restraining themselves in bringing up new elements for changes to the table. The developing countries were in no position to cope with such new substantial issues, he said.

Siraj expressed particular concern over the 'whiff of news' that one country (US) was bringing forward proposals for a number of changes to the anti-dumping texts which would negate other gains in the Round for the developing countries. He asked participants to be very careful and not upset the balance within the antidumping text or the package as a whole.

Siraj also expressed concerns over the services issues -- a reference to the US moves on financial services and for tax carveout.,

Japan announced it would be tabling its revised services offers next week as also its list of MFN exemptions in services -- mainly relating to maritime services in relation to cabotage and freight forwarding. Japan also expressed strong concerns over the US position on financial services and for the tax carve-out and the proposals for new amendments in the rules area.

Korea repeated its position against tariffication of import restrictions in the area of basic foodstuffs. Korea also drew attention and expressed concerns over the proposals for changing the antidumping text which had been a text arrived at after painstaking negotiations and reflected a delicate balance which might not be fully satisfactory to anyone. If this text was sought to be reopened then other aspects of the Uruguay Round package would also need to be reopened. Korea also shared concerns of others over the (US) two-tier approach to financial services and for the tax carve-out.

Argentina was disappointed that there had been no response to its offer for zero tariffs on oilseeds.

Sharing concerns of others over changes being proposed in the rules area, the Argentine ambassador, Archibald Lanus stressed the need for majority support for changes in the rules and such changes should not be sought to be pushed through at the last moment.

Australia asked the US and EC to get their act together on their market access package and noted that there was very little time left.

New Zealand said there were many proposals coming forward for technical amendments and substantial changes, some to recently negotiated texts, but much less on market access questions.

Egypt spoke of need for serious consideration to the problems of net food importing countries.

Costa Rica complained of lack of any progress with respect to the European Community's offer on bananas.

According to Latin American sources, the European Community has now proposed a tariff of 850 ECUs per tonne of bananas which was equivalent to a 220 percent duty, with a 2-million tonne tariff quota at 100 ECUs or an equivalent of 24 percent.

The single market regime introduced on 1 July has provided for a 2-million tonne tariff quota regime for banana imports from Latin American sources at a 17 percent tariff.

This means that instead of improved market access in the Round, the tariffs on our banana exports would increase even within the tariff quota, a Latin American exporting country privately explained.

The Latin American sources said the EC was now attempting to split the Latin American countries on this.

Earlier, In his opening remarks to the TNC, Sutherland felt encouraged by the increasing focus being given by virtually all participants to resolution of the outstanding issues, but stressed the need for "greater urgency" on the part of the EU and the US to bring a further decisive contribution to the table.

While it was good to know that last week's meeting in Washington was "constructive" and had made progress, "constructive meetings are no substitute for concrete results", he said.

The EU and the US "should not make the dangerous mistake of leaving everything until the last minute; they must remember too that there are other participants who must also be engaged in our multilateral process, which is being hindered by their delay."

The two must next week at their meeting in Brussels reach a substantive result and place a "decisive contribution on the table here in Geneva", Sutherland said, adding: "So many offers and schedules from other participants depend on that contribution. Time is now becoming as big a factor as the remaining issues of substance....we cannot afford further delay without jeopardising the Round."

In assessing the state of play, Sutherland said in the market access, Germain Denis who is coordinating this area was "aiming" to complete consultations by end of next week to be able to table revised texts on market-access related issues in the DFA.

In services area, the outstanding problems to be resolved related to maritime transport, audio-visual services and the Financial Services question. Further delay would make solutions harder, not easier, since all solutions have to be multilateral.

While 26 November had been fixed earlier as the deadline for submission of draft final schedules and final lists of MFN exemptions, and almost every day revised schedules and exemptions were being put forward, many of them were "heavily conditional" and there were sheer logistical problems of circulating schedules and having them examined in the capital.

Sutherland also announced that he was combining the evaluation by the Group of Negotiations on Goods (GNG) of the results, from the viewpoint of the developing countries, in the negotiations on goods, as mandated by the Punta del Este Declaration with an overall evaluation to take place at the TNC on 3 December.

In outlining further work, Sutherland said that he was asking 'Friends of the Chair' to take on hand work relating to all the agreements and to produce revised draft texts in consultation as necessary with delegations, and circulate the revised texts as and when ready to the Heads of Delegations meeting.

This process would begin from 30 November, Sutherland said, and the ensuing period would be devoted to completing negotiations on the short list of remaining issues, effectively closing the substantive negotiations on texts on 13 December at the latest, and holding a TNC meeting on 15 December to approve the results of the Round.

In other developments, at consultations Thursday chaired by Amb. Julio Lacarte, the issue of application of the dispute settlement understanding and the non-application clause to the TRIPs agreement was brought up by India.

Under the GATT, disputes can arise, under Art. XXIII, for nullification and impairment of benefits as a result of (a) failure to carry out an obligation, (b) application of a measure by a contracting party, whether or not it conflicts with the provisions of the General Agreement, or (c) any other situation.

Art XXIII (b), the application of a measure by a cp whether or not in conflict with GATT provisions, is generally described as the 'non-violation" clause in GATT parlance. It has been used to raise disputes where the other party's laws or trade measures are not themselves GATT-illegal, and yet they have affected the trade benefits that a complainant had reasonable hopes of getting.

The US-EC oilseeds dispute was an example of one such case:

The European Community had negotiated and agreed with US on zero-tariff for oilseed imports and bound it. While it did not increase the tariffs (and thus did not violate this obligation), it subsequently provided subsidies for domestic oilseeds production. In raising the dispute and winning its case, the US said that its reasonable expectations of trade benefits in EC's zero-tariff had been impaired by the EC's subsidy (for domestic oilseeds production) even though such subsidies by themselves are not per se illegal in GATT.

In the Lacarte consultations, India, supported by Canada, Egypt, Pakistan, Brazil and Mexico, in a slightly muted fashion, said that this 'non-violation' clause could not and should not be allowed to be invoked in a TRIPs agreement which only provided for increased norms and standards in intellectual property.

The United States, Switzerland, Nordics, Australia and New Zealand wanted such a provision to apply, while the EC took a middle position.

Consultations on this are expected to continue.

At the Heads of Delegations meeting in the evening, the issues relating to services, and particularly financial services (and the US positions for a two-tier approach and tax carve-out) was brought up and criticised by almost every delegation who spoke.

The US indicated that its Under Secretary for international economic relations at the Treasury, Lawrence Summers would be here next week to consult with delegations the US position on financial services.