5:39 AM Dec 8, 1993

US-EC TO DISCLOSE SOME DETAILS IN BILATERALS

Geneva 8 Dec (Chakravarthi Raghavan) -- The United States and the European Community appear to have outlined, at a meeting Wednesday morning of the Market Access Group (chaired by Germain Denis), in broad terms their bilateral accords at Brussels on market access package, but appear to have disclosed few of the actual details.

Both sides appear to have indicated they would do so in their bilateral negotiations this week with a range of their trading partners.

But the outline of what has been presented left many with the impression that while the two have resolved their problems and increased their mutual concessions, these have been either at expense of the others (as in the case of agriculture) or in effect reducing the expectations that some might have had.

"Paris leads the jostle for crumbs" said a headline in the Financial Times Wednesday in an assessment of the US-EC negotiations, and the internal fights and jostling among the European Union members -- the French and a few others seeking monetary or other compensation for their 'structural adjustment' of agriculture at expense of Germany (which pushes for free trade in industrial goods, but has a highly inefficient and protective agriculture sector, with problems accentuated by the problems of east German integration), the Portuguese for compensation for their textile industry etc.

But if the French (and the Irish, Spanish, Portuguese etc) are fighting for crumbs from the EC table, the developing world are like sparrows waiting to pick up a particle or two out of the discarded parts of the crumbs strewn on the ground, but after the magpies have done with them, one Third World diplomat sarcastically commented.

The US-EC deals appear to include zero-tariffs on wood and paper (but not on tropical woods and products) which will benefit US, substantial tariff cuts in electronics, zero tariffs on steel (without a Multilateral Steel Agreement and an unclear situation whether the US would still hit imports on grounds of subsidy or dumping), zero on some non-ferrous metals (but excluding aluminium), big tariff cuts by US on glass and ceramics and some textiles (mainly in products traded between the two, and perhaps some woollens which would benefit Uruguay).

The US side also appears to have won some concessions in exports of their poultry, pork and turkey products as well as fruits and vegetables and juices, but on a seasonal basis -- which could mean that Latin American exporters would not benefit.

In services, the US has moved forward in indicating some conditional liberalisation of maritime transport.

Brittan Tuesday night said that this gave an opening but it required a critical mass of offers from others to produce results.

Besscho said Tuesday evening that from what they had heard the accord was 'discouraging news' in some sectors -- being a downward revision of the Tokyo package and involving a longer time for reaching the reductions in areas not mentioned before, perhaps ten years instead of the five (agreed at Tokyo and agreed multilaterally so far in the mid-term review and market access group).

Japan, he said, had sought full zero-to-zero in the electronics sector, scientific instruments and equipment, paper, pulp and toys. But the response on all these had been much less and that on paper, pulp and toys while there would be an eventual zero tariffs, it would take a much longer period.

Asked to comment on Brittan's suggestion that others should respond to the US and create a critical mass in maritime services, Tsuruoka said that Japan had put forward a large offer on maritime services at the very beginning, and there was nothing further needed from it but from others. He however agreed that some others, developing countries like India or Pakistan, could legitimately refuse to respond on the ground they had got nothing on textiles or other areas of interest to them out of the Round. Coming at this late stage, he said, the US offer would need much clarification, and he was not sure whether there was time enough to negotiate with others and get them to come on board.

In the market access group meeting, in some preliminary comments Japan on industrial products and the Latin American delegations on agriculture expressed some disappointment.

However, the US and EC would appear to have privately assured some Third World delegations that they would find some concessions from them in particular areas in bilaterals.

Australia too, as one participant put it, made some "murmurs" in the market access group about the modification to the Blair House, but was virtually laughed out by others, including several in the Cairns group, who are aggrieved that the US in all these matters has been acting to safeguard Australian interests (in return for Australia's role in the Uruguay Round and in moves like the APEC).

European sources would appear to have left the impression with other delegations whom they briefed that while the US still maintained its two-tier approach in financial services (reflected in the offers in tabled Tuesday evening), they expected the issue to be resolved by Clinton intervening in this matter in the dispute between the USTR and Treasury on treatment of banking and securities services.

US treasury officials and their legal experts were in town Tuesday in an attempt to persuade several of the Third World delegations about the correctness and consistency of the US treasury stand and asking them to maintain their financial liberalisation offers, arguing that without it they could not even maintain their two-tier approach, guaranteeing current access to those already having commercial presence in the United States, but take a total reservation on this sector.

Third World delegations however were not convinced and several of them said that if the US made a total reservation -- which was its initial negotiating position in 1989 -- the entire GATS would fall through.