May 11, 1984

NO NEW ROUND WITHOUT SUPPORT OF THIRD WORLD – EFTA.

GENEVA, MAY 9 (IFDA/CHAKRAVARTHI RAGHAVAN)— There could be no new round of multilateral trade negotiations in GATT without the support of the Third World countries, the secretary-general of the European free trade association (EFTA) said Wednesday.

EFTA groups together Austria, Iceland, Norway, Portugal, Sweden, and Switzerland. Finland is an associate member of EFTA.

The EFTA secretary-general, Per Kleppe of Norway, was answering questions, at a press luncheon hosted by him, on the U.S.-Japanese moves for a new round of negotiations in the General Agreement on Tariffs and Trade and the Third World's collective "no" to it, in their joint paper presented to the GATT Council meeting for next week.

"We (in EFTA) are not interested in a new round, but we will go along if the big countries can convince us about its content", Kleppe said.

"But it is necessary to prepare this very well and take the time needed for it. But we cannot go along without the support of the developing countries. If they have objections, these have to be discussed with all the main partners in the GATT system".

The first priority in GATT should be to complete the work programme of the GATT, laid down in the 1982 Ministerial declaration. But not very much progress has been made in implementing this, Kleppe noted.

He mentioned in this connection the issue of a comprehensive understanding on "safeguards" and what he termed as "resistance" of some Third World countries themselves to "some of the suggestions" in this area.

The EFTA official was apparently referring to the objection of the Third World countries to any "understanding" through the so-called "consensual" approach to safeguards, namely safeguards actions through bilateral agreements, or for mere notification and surveillance of "grey-area" or protectionist measures taken outside GATT authorisation.

Third World countries have opposed any such arrangements to bring "grey area" measures within GATT, through notification and surveillance, that would legitimise or sanction the discriminatory or selective actions being taken against imports from Third World, rather than all imports on a most-favoured-nation basis.

They also oppose "consensual safeguards" since in effect it would enable powerful trading partners to enforce their will on their weaker partners.

All countries, Kleppe said, must make an effort to get an agreement to bring into the GATT system all safeguard measures.

"A disturbing element in the present situation is the extent to which important countries are using safeguard-type measures outside GATT. It is difficult to maintain the authority of GATT, without getting all such measures within agreed GATT rules", he added. In the last few years protectionism had been increasing.

A very bad development was the "new protectionist" measures against the exports of the Third World to the industrialised countries.

"We give priority to the dismantling of the protectionist measures against the exports of the poorer countries", the EFTA official said.

He noted that the U.S.A. and Canada, where there was a vigorous recovery, far from dismantling barriers had put up new ones. This showed that free trade did not automatically come with economic growth, but needed political will.

The EFTA secretary-general welcomed the recent rise in prices of primary products. The prices had been far too low, both for financing imports from industrial countries and to sustain growth in the Third World.

Raw materials, in the traditional sense and in its newer substitutes, were exported by both the third and industrial world. "But what is especially disturbing is the number of obstacles being erected against the manufactured exports from the Third World".

"The protectionist barriers thus being erected, to favour the old manufacturing sectors in the industrial countries, thwart Third World exports, and hinder the necessary structural changes, both in the industrial and developing countries".