Nov 19, 1992
MINISTERS AND THEIR PROMISES
Geneva Nov (IPS) by Chakravarthi Raghavan -- "Declarations and commitments by ministers in GATT are very different from those in other organisations, that need not be named", GATT spokesman John Croome told newsmen on Tuesday answering why the proposed ministerial declaration was a 'political declaration and commitment'.
The sniggering remarks an 'other organisations' was understood by most newsmen to refer to UNCTAD.
When GATT ministers meet next week, talk and disperse after adopting their 'declaration', 'undertakings', 'commitments' and 'decisions' - they will at best remain promises for future.
Lewis Carrol (1832-1898) said it all: "The rule is jam tomorrow, jam yesterday, but never jam today".
For most Third World countries, and for the poor in all of them, it is "not even bread today".
And Carrol's "tomorrow" predated by more than three generations, the European ethnic jokes about the Latin American "manana" or the more serious western development economists' tomes on inherent obstacles to "development" in Africa and Asia as seen from the lack of separate words in many of their languages for "tomorrow" and "yesterday".
Despite the GATT spokesman's PR job for his organisation, judged In terms of its being a contract and an agreement, the track record either of contractual agreements or past ministerial declarations and promises give little credence to the view that ministerial statements in GATT have a superior status.
When the Third World countries arrived on the international scene, entered GATT and began claiming rights, the first 'cotton yarn and textile agreement' was concluded on Feb 9, 1962, and came into force from Oct 1, 1962 for five years, replacing the previous twelve-month 'short-term agreement of July 1961.
It enabled 'restrictions' on cotton textile imports, but stipulated that the restrictions are "to be progressively eliminated", that restrictions inconsistent with GATT will be "progressively relaxed" each year with a view to their elimination as soon as possible and that in "normal circumstances" no new restrictions would be introduced.
The temporary five-year arrangement was then extended by protocols, first upto Oct 1970, then Sep 30, 1973, and again to Dec 1973.
It was then replaced by the Multifibre Arrangement (MFA) for four years from Jan 1, 1974.
Far from removing and eliminating restrictions, under the MFA regime, besides cotton, textile products of wool and man-made fibres were brought under a restrictive regime in an 'authorised departure' from GATT. The textile products covered were defined as "tops, yarns, piece-goods, made-up articles, garments, and other textile manufactured products (being products which derive their chief characteristics from their textile components) of cotton, wool, man-made fibres, or blends thereof, in which any or all of these fibres in combination represent either the chief value of the fibres or 50 percent or more by weight (or 17 percent or more by weight of wool) of the product; 'artificial and synthetic staple fibre, tow waste simple mono and multifilaments' were not to be covered but could be brought in under conditions of 'market disruption'.
MFAs have been extended twice, with the current MFA-III due to run until July 1986.
Each of the GATT ministerial declarations and decisions of CPs over this period, continued to talk of 'liberalizations' and other GATT 'principles', and each of the renewals and new textiles agreements cite them dutifully. But each has been progressively more restrictive.
The present declaration too promises 'trade liberalisation' in textiles and clothing, and 'possibilities' of full application of GATT provisions when MFA-III ends.
GATT officials and OECD countries explain away in private that this has been a 'regrettable' derogation and persistent lapse from GATT principles but an understandable one in view of wide social factors.
But other track records are none better.
GATT Article XI, in place from the inception outlawed all quantitative restrictions (QRs) on imports, excepting in some specific cases. But QRs, in one form or another, specially against imports from Third World continue and proliferate.
The ministerial meeting of 1963 adopted 'conclusions and resolutions' an measures to expand trade of the Third World in order to further their economic development. The programme of action put forward then by 21 members of the group, was agreed to by the ministers of all the industrialised countries, with the exception of the EEC, subject to some 'understandings'.
The programme called for standstill on tariff and non-tariff barriers, elimination by Dec 31, 1965 of QRs, reduction or elimination of tariff barriers to semi-processed and processed products of atleast 50 percent over 1963-66, progressive reduction of internal fiscal charges and revenue duties, duty free entry for tropical products and elimination of tariffs on primary products, reporting procedures on continued barriers, and adoption of other 'appropriate measures' to enable diversification of Third World economies.
The EEC, not a party to this, endorsed 'in principle' the general objectives but complained that these were only removal of barriers that would not suffice, and that what was needed was 'positive measures' for rapid increase in export earnings of the Third World, including measures to increase exports at 'remunerative, equitable and stable prices'.
The understanding of 1963 involved reservations by the USA about its congressional requirements that tariff reductions should be phased out over a five-year period, and Austrian and Japanese reservations of inability to meet Dec 1965 deadline on QRs 'on a few products'. There was also talk by all of some of the problems being addressed in the GATT Kennedy round of MTNs.
Nothing was done on most of the promises, except for some reduction or elimination of duties on raw materials that only helped strengthen uneconomic processing sectors and protect them. The last objective of the EEC, of 'remunerative, equitable and stable prices' for Third World exports of commodities, was put into UNCTAD's unanimously adopted Integrated Programme for Commodities, but many of same EEC members inside UNCTAD on individual commodity negotiations object to efforts that they complain would 'interfere with market forces'.
Dissatisfied with the outcome of the 1963 declaration, Third World countries pushed ahead and created UNCTAD, while continuing pressures inside GATT.
Thereafter the General Agreement was amended to incorporate from 1965, Part IV of GATT on 'Trade and Development' containing special provisions for Third World countries.
Though the industrialised countries look upon them as 'enabling' provisions for 'autonomous actions' by them, the GATT article XXXVII in that part has some legally binding 'commitments' as part of the General Agreement.
These are specific commitments on reduction and elimination of discriminatory barriers. standstill on customs duties or nontariff barriers, refraining from new fiscal measures that hamper growth of consumption of primary products, and high priority to their adjustment and reduction in revision of fiscal measures.
Also, going beyond the commitments to end illegal trade measures, are commitments of the industrialised countries that even for measures permitted by GATT, they would explore 'all possibilities of constructive remedies' if these affect the Third World Countries.
These were the GATT's golden years of postwar economic growth and prosperity of the OECD, and not only were the promises not kept, but even specific notification and consultation procedures envisaged were never obeyed.
Then came the Tokyo Ministerial meeting and its declaration. Through the MTNs launched, the Third World was promised 'additional benefits' for their international trade, 'improved access to markets' and maintaining and improving the GSP, substantial increases in their export earnings, diversification of their exports and acceleration of their rates of growth, and a multilateral safeguards system.
That was in Sep 1973. by then the Bretton Woods system had broken down, and the Ministers called for parallel efforts to shield the world economy from the shocks and imbalances and the need for 'orderly conditions' and establishment of 'durable and equitable monetary system'. Despite the Jamaica Agreement, nothing was really done, and the IMF is trying to preside over a 'non-system' even now.
The Tokyo Round ended in 1979. With some tariff benefits to the Third World because of the MFNn provision and the tariff cuts negotiated by the US-EEC-Japan among themselves. But its effects were undercut by the increasing 'voluntary restraints' and other nontariff protectionism; and all the other promises of the Tokyo declaration remained promises.
They were put high on GATT agenda and work programme, but with not much results, and next week there will be a new declaration. And if we all survive, in the next decade more declarations that the media has to report.