Nov 27, 1982

Geneva Nov 26 (IPS/Chakravarthi Raghavan) -- Third world countries held firm Thursday in the GATT Ministerial meeting, and refused to consider any compromises that would inject 'selectivity' in any form - by agreement, unilateral or any other - in regard to 'safeguards' actions against imports.

The group, which held an evening meeting at level of ministers, heard a report on some of the consultations being held at the level of a small group of 'friends of the president' by the

president of the Contracting Parties, Canadian Foreign Minister Mceachen.

The group also stood firm in refusing to accept any studies or work programme in GATT on the 'services' issue. The utmost that some of them seemed willing to accept, in order to save American 'face' was to agree that it was 'an important area', and that countries should study their problems within their national context. While some seem also willing to consider exchanging this information through GATT, and for contracting parties at future point to consider whether anything need be done, and if so outside or inside GATT framework, others refuse to do this - both because it may be the proverbial story of the camel and the tent, and because they see no reason why the US face should be saved given the US turning its face away from rest of world for the last three years.

Third World countries have so far been totally unimpressed by the 'threats' bandied about by the US Congressional groups or by the US officials of what the Congress would do, nor are they impressed by the argument that there may be no document at all out of the meeting. The Third World countries say they would deeply regret it, but any failure would be entirely the responsibility of the USA and the Industrialised Countries, since the Third World had shown its bona fides in the extent to which it has gone inside the GATT council in compromising on the draft declaration now before the ministers.

There were major unresolved differences as of Thursday night, between the USA and the EEC on agriculture, between the EEC and others on the EEC efforts to weaken language of the declaration relating to standstill on new protectionism and rollback of the old.

The conference, with only two days to go before adjourning Saturday evening, was an Thursday in a state of confusion and uncertainty, due both to genuine and some deliberate misinformation, even among delegates.

While this is all characteristic these days of international conferences, and specially at this stage at any conference, part of the misinformation, spread deliberately by some of the friends of the US in the corridors, are aimed at splitting the Third World group, who amorphous inside GATT, and not even the G-77 as in other forums, has stood together remarkably well and have been coordinating their positions and negotiating with purpose.

The consultation process of President Mceachen of Canada has also added to the confusion perhaps.

While there is within GATT, a small informal negotiating group of countries - known by the name of 'seven plus seven' after the original group of seven industrialised countries and seven of the rest - Mceachen has been involved in consulting 'friends of the president'. According to some European sources, the process sometimes has been so mysterious that not even Arthur Dunkel the Director-General has been present.

All this gave rise to the joke Thursday in the corridors, that "apart from the outsiders at the conference, there were three groups of participants: the 'friends of the president', the 'enemies of the president', and the 'friendless who are trying to be friendly'

In the first fell those whom - Mceachen was consulting, in the second those who are suspicious of Canadian role as one of pushing US interests, and in the third those who want to get into seven plus seven group, both for their own personal prestige and for pushing US interests that they are unable to do inside the Third World group as such.-

The way Mceachen sought to promote Thursday evening the US move -for an annexe to the declaration for an agreement of 'consensual safeguards' - lent some credence to these complaints.

This has been unresolved problem of the Tokyo Round, and three years of work in the safeguards committee chaired by Arthur Dunkel. In that committee Dunkel had tried to promote the consensual safeguards and selectivity approach, but was spurned by the Third World which refused to allow the entire GATT system to become a MFA. The EEC is insisting on unilateral 'selectivity', as in the Tokyo Round, knows it cannot now get it from the Third World, and is willing to go an 'negotiating' while continuing its unilateral 'grey area actions'. The US has been trying to promote 'consensual' approach,arguing 'it is better to legitimise grey area action than ignore it'. Third World countries view it as being on a par with argument that if crime cannot be curbed it should be legitimised through registration without punishments.

The US attempts to promote the consensual approach again -- (but) only Philippines and Chile seem ready to support it - and the EEC trying to argue with Third World to accept some studies on services, lest the conference be broken up by the USA, is seen by most Third World countries as a red herring at this stage.

Some Third World countries felt that these moves were being made now, and Mceachen was floating them, primarily to distract attention and concentrate energies of Third World on these, while the USA and EEC work out in private some modus vivendi that would be sprung on the conference at the last minute as the best possible one that had to be accepted or rejected, and those doing so must bear responsibility for the consequences.

It was from this assessment that many Third World countries at their meeting last night, opposed any move to reopen the draft declaration recommended by the GATT council, even for improving some Third World points.

From this standpoint they also oppose any accommodation on services issue, on which the USA and even more Brock has staked his prestige for domestic political ambitions.

Meanwhile, the French Trade minister, Mr Michael

Jobert, appeared to have told some Third World delegations in bilateral talks that the (EC) Commission's support to services issue was beyond its mandate. He had also apparently told some French Newsmen, who had asked his reaction to UNCTAD Secretary-General remarks on on-going unctad studies in this area that Corea's remarks was a good idea.

In his speech Wednesday, English text of which was put out by the delegation, Jobert was pretty sarcastic. He said 'whereas the traditional elements relevant to international trade are radically different now from those of the 1960s, it is nevertheless being proposed we should negotiate new liberalisation in sectors to which GATT has not hitherto given attention - services, investment, flows of high technology. These latter proposals, like the paradoxical side of some analyses that have been made of the recession, fill me with perplexity and cause me to doubt as to the topical, operational, and realistic character of.our discussions on the recession, freedom of trade, the role of GATT".

At the plenary meeting Thursday morning - there was none in the afternoon - some more Third World countries spoke up against the US moves an 'services', and supported by some of the industrialised countries. These included Tanzania and Uruguay. Tanzania considered introductions of new issues in GATT, while not adequately addressing present problems besetting multilateral trading system, as irrelevant and diversionary.

The Tanzanian minister said that his country was totally opposed to the proposal to drag the 'trade in services' into GATT's work programme as "we feel this would give legitimacy to the service multinationals to spread out to the Third World without any control".

Malaysia, differed with fellow Asean Philippines, and came out against any 'safeguards' not based on GATT's MFN principles, but was prepared to be flexible and pragmatic on proposals for comprehensive framework governing safeguards. It also was cool to the North-South trade round (supported by the Philippines) and said unless its relationship to the committments in GATT's Part IV, and ultimate long-term objectives and intentions of such a round were made clear "we do not feel motivated to be involved in this exercise". On services too, it was willing to consider any studies provided it did not dilute GATT work programme in priority areas, provided there was a consensus, and there was no duplication of work going an in other international institutions.