Nov 30, 1982
GATT SHEDS ITS FIG LEAF
Geneva Nov 29 (IPS/Chakravarthi Raghavan) -- The ministerial part of the 38th session of the GATT Contracting Parties ended just before dawn Monday, with a declaration adopted by consensus, but devalued by the numerous reservations and interpretations by individual countries.
The major thrust of the meeting, more than a year in preparation, was supposed to have been firm commitments by members to abide by GATT, to resist and rollback protectionism, and decide on other steps that would send signals to the market - the public and investors around the world.
The meeting ended with a declaration by Ministers, a 'political declaration', whose effect shorn of its verbiage was that of changing GATT from a system based on a contract involving obligations into one based on 'best endeavour efforts'.
If gatt previously was, as EEC's Sir Roy Denman put it, 'a system without a badge, sherif or a prison', it was now well set on way to becoming a trading 'non-system' operating an the political principle that illegalities that cannot be ended should be made legal.
The session was to have ended by Saturday noon, and the regular meeting of the CPs by Saturday evening. The latter may now be set for Tuesday. The ministerial session was extended almost from hour to hour throughout the weekend, while more and more ministers left Geneva in disgust to do more serious work at home.
A few negotiators battled each other other in the proverbial smoke-filled caucus rooms, away from the conference center itself, to draw up a document to be adopted. When finally the session began at about 0200 GMT of Monday, the paper put forward by chairman Allan Maceachen was adopted by consensus.
No one liked it, almost everyone had serious problems about one part or another, and yet no one wanted to even record them before it was put and declared adopted by consensus. It was both because the document could not be taken seriously, and even more because no one wanted to be blamed for a breakdown, and everyone was afraid of the consequences they were being daily warned about, namely a trade war.
No one knows whether there was such a danger (apart from implying trade peace now), and no one can predict that a trade war will not come with the document either.
The Declaration finally adopted changed in some areas drastically the draft recommnded by the GATT Council. This was in the provisions relating to protectionism - standstill and rallback agriculture, leaving out the issue of subsidies (both generally and in agriculture). It set out an elaborate procedure for dispute settlement that however merely reaffirmed the present procedures including the consensus requirement that blocks adoption of panel reports against powerful trading blocs. On all these, the US and others yielded ground to the EEC, who nevertheless ended up dissatisfied with their own 'declaration' interpreting the provisions of the documents adopted. There was also addition of a provision on services.
During the tense hours of Sunday evening, preceding the final plenary, EEC Chief Representative to GATT, Tran Van-Thinh made the usual remarks about need for outcome without 'winners and losers, but everyone winning'.
There was perhaps one 'winner' - Japan that maintained a low profile, managed to escpe any US-EEC pressures on it over its effective non-tariff trade barriers (even if they be based on Japanese oligopoly and or culture, rather than government regulations), and the destabilising effects of its continuing accumulation of overseas payment surpluses.
The US lost almost everywhere - judged by the aims with which it came to Geneva. It came determined to battle the Third World and the EEC, and concentrated its fire on the EEC, with a daily barrage in the media by its spokesman and a plethora of Senators and Congressmen. Ultimately the US had to give way on the 'protectionism' issue, on agriculture, on a 'consensual safeguards', and give up three of its major goals too: a new 'North-South round' to graduate the Third World out of GSP tariffs and preferences, for freedom for its TNCs to invest and operate anywhere in the world, without any national restrictions anywhere, and GATT work and negotiations on 'high technology and services'.
It got a decision of sorts on services that however did not seem to carry its objective very much, and time might even show that the US might have landed itself into some troubles on the issue.
(for) The GATT secretariat and its Director-General Arthur Dunkel, who mooted the idea of the ministerial meeting, the fact that the system has not formally collapsed was a gain. But it was a setback for the Director-General and his officials, and the oft-repeated claims about GATT.
During the weary long hours over th weekend, as diplomats and newsmen would arrive for a meeting, wait around, complain and disperse after an announcement about rescheduling, one GATT official cited the case of the Nairobi UNCTAD that had faced similar uncertainties at the end.
'Join the club', a diplomat accredited both to GATT and UNCTAD remarked. A West European in a more serious vein contrasted the paralysis in GATT at a time of world economic crisis, crisis for the trading system, and growing numbers of the millions unemployed, and said "UNCTAD is becoming technical these days, while GATT is becoming political. How can people take us seriously?"