Nov 24, 1982



Geneva Nov 22 (IPS/by Chakravarthi Raghavan) -- In what appeared to be a preview of US tactics at this week's GATT Ministerial, the deputy secretary of the US Treasury, Mr Tin McNamar, blamed Monday the EEC and Japan for their protectionism, but sought to explain away US own actions as 'pragmatic' response to domestic political pressures.


The second ranking US treasury official, at a press conference, underlined the strong linkages between trade and Third World debts, and viewing the present world economic situation as paralleling that of the 1930s viewed the ministerial meeting as posing a major challenge to the industrialised countries.


Mcnamar underlined too the impossibility these days of making any distinctions between domestic and international economic policies and the fact that the United States no longer was in the dominant position it had in the immediate postwar years. The US too was dependent on the rest of the world, including the Third World countries, he said.


The collective response at the GATT Ministerial this week, he said, would determine whether the trading system would move forward and the economy of the world would expand, or it would regress. It would also determine whether the Third World would able to service its debts.


The US, he claimed, was particularly concerned that the Third World countries should be able to continue to impart its capital equipment and goods and services for development. This could be done only if the Third World was able to export and sell its goods to the EEC, Japan, the USA, and other industrialised countries.


In this context he was very critical of the protectionism of the EEC and Japan, and their 'turning their backs' on the Third World. As examples, he cited the recent French actions against imports of video-recorders through new customs clearance procedures, and the EEC's actions in cutting back on the imports of 'Brazilian oranges and soya beans'.


Earlier McNamar expressed concern over the problems of the Third World due to the fall in commodity prices and earnings from their exports.


McNamar explained away US protectionism, as in the use of multi-fibre arrangements to reduce Third World textile and clothing exports, as a pragmatic reaction to domestic political pressures.


When asked about the steep fall in commodity prices, resulting in a loss of some 18 billion dollars in earnings in 18 months by the Third World countries, brought about as a result of US domestic policies to fight inflation in disregard of international consequences, McNamar defended the US policies as essential to put 'our own house in order by fighting inflation'.


He pointed to the present fall in inflation rates, and the prospect of continued fall in interest rates, to argue that this would help economic growth and thus help Third World commodity exports as the world economy began to grow again.


When McNamar was critical of the EEC's agricultural protectionist policies and was asked whether the USA would now give up its permanent waiver in GATT over agriculture, the Treasury official said they were not considering it. He felt that the rest of the world did not appreciate the political pressures inside the United States to its current agricultural situation as reflected in the Congressional elections. But he was clearly on the defensive when asked to explain how US policies were "pragmatic" and (that of) others "protectionist".


He however suggested that the EEC's sugar export subsidy policies and US agricultural policies differed in that the former had its impact on exchange rates of currencies. But he viewed the 'strong US dollar as merely a reflection of market forces, and made clear the Treasury would not intervene in this as it had not when the dollar was weak.


Asked whether it made any difference to the Third World countries between EEC's sugar subsidy policies that brought down world sugar prices and reduced their earnings and the US quota policies on sugar and other commodities under its GATT waiver, McNamar argued that the agricultural policies of US under the waiver was 'one that we have inherited'.


On the issue of US GSP schemes, for preferential duties on Third World imports, McNamar said it would come up before Congress for review next year. While the administration was not in favour of ending it, there were Congressional pressures, and the outlook in Congress was bleaker now than five years ago. At the same time the US administration favoured phasing cut of the GSP benefits for the newly industrialising countries who had the obligation to assume additional responsibilities.


The Treasury official also sought to put an optimistic view on the US priority areas for the ministerial - the services and investment issues - and thought much of the opposition had come from the way it had been handled, making countries think the US wanted now to launch negotiations. The US objective, he said, was only to have a GATT work programme on it, for study and identification of the problems in a year or so for consideration in GATT. He also sought to suggest that the opposition (from the Third World countries who question GATT jurisdiction and competence even for a study) was now much less because of the bilateral discussions.


The US Congress, and the protectionist pressures there, he however warned could be combated only if the US was able to get something out of GATT on the issues of services, investment, safeguards and dispute settlement.


Though he sought to blame the EEC alone for lack of progress on safeguards, in the current negotiations, the US position favouring what it calls 'consensual selective safeguards' to legitimise voluntary export restraints (like its agreements with EEC over steel) are equally unacceptable to the Third World, which insists on non-discriminatory MFN approach.


On disputes settlements too he blamed the EEC, though he would not commit the US and its Congress about accepting GATT rulings that went against the USA.


The extent of the technical underpinning of the Reagan administration officials was illustrated an a last question at the press conference. A French correspondent asked McNamar, in the light of his strong defence of GATT, whether the US had ever 'ratified' the General Agreement.


Mr Mcnamar said he did not know, and the conference ended on that note with other newsmen pointing out that GATT was never ratified and remained only a 'provisional agreement'.



Trade: GATT Contracting Parties begin meetings


Geneva Nov 22 (IPS/by Chakravarthi Raghavan) -- The Contracting Parties of GATT began Monday afternoon their annual meeting, with Canada's D.S.McPhail in the chair.


The main item before the CPs were the reports of the GATT Council, the GATT Committee on Trade and Development and the various committees administering the various codes and arrangements under the Tokyo Round MTN agreements.


The CPs went through the GATT Council report, and its various points, and approved them.


The Argentine issue of trade sanctions for non-economic purposes and the Argentine move for guidelines on notification and other procedures and understandings on the scope of the application of the security provisions of GATT was put off till Tuesday afternoon when the CPs are to consider it.


On the Polish complaint against the United States over withdrawal of the MFN treatment, the CPs heard a reiteration of the Polish and US positions but took no further action, though it could be brought up again by any contracting party at a future meeting. The item itself is on the GATT Council's agenda, and its consideration is to be resumed by the Council at its next meeting after the meeting of the CPs.


According to a GATT spokesman there was no 'substantial discussion or decision' by the CPs on any of the over 30 odd items listed in the Council's report beyond the CPs taking note of them.


Meanwhile consultations at the level of the CPs were going on (over) the 'outstanding' issues, unresolved in the draft declaration forwarded to the CPs by the GATT Council. There were reportedly some 'agreed texts' on the issues of fisheries and high technology goods. The fisheries issues, will be part of the GATT study programme, like those relating to forestry products and non-ferrous minerals and metals.


GATT is also now to study the issue of 'trade in high technology goods', a US sponsored item. But the study will be confined to 'high technology goods' and not the 'associated services' as the US had sought.