Nov 8, 1984

CONCERN OVER DRAFT TO BILATERALISM.

GENEVA, NOVEMBER 6 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Concern over what was seen as a draft towards bilateralism in international trade was expressed by most delegates attending a Council Meeting of the General Agreements on Tariffs and Trade (GATT) here Tuesday.-

The Council was conducting its half-yearly review of developments in the international trade policy area.-

The Council had before it a GATT secretariat report which said that while a few liberalising actions had been taken from April 1 to September 30, 1984, "these are outweighed, however, by the continuing introduction or intensification of non-tariff restrictions, particularly in the form of bilateral restraint arrangements".-

"The trend to bilateralism", the secretariat said, "is also evident in continuing discussion and conclusion of a growing number of bilateral agreements and in the increasing attention given to country-trade".-

The secretariat had however tried to brighten this gloomy picture by references to statements at the highest political level to resist protectionism and to pursue multilateral cooperation, notably in completing the GATT work programme and in studying possibilities for new negotiations.-

The protectionist actions were also presented in the report in the context of the overall economic outlook - recovery in the U.S.A. but with a high value for the dollar and increasing trade deficits, and uneven recovery elsewhere in the world.-

The secretariat also spoke of "no significant relaxation of protectionist pressures" in the industrialised countries, but balanced it by referring to what it called "an encouraging development of increasing counter-pressures against protectionist action", as in U.S. refusal to restrict copper imports and the new U.S. trade law.-

In the various speeches of the delegations, the Australian view, presented by its delegate to GATT Peter Field, was forthright and minced no words in questioning the view, as he put it, "that there is not much evidence of increased protectionist pressure, that the system has held together and that on the whole we are living by the commitments" made at the 1982 GATT Ministerial meeting.-

Field cited in this connection the various restraint measures, voluntary or otherwise, taken by major trading blocs in sector after sector of industrial goods, and their failure to conform to GATT rulings or to observe their GATT and OECD commitments to rollback.-

He also referred to the agricultural sector, where he said two years of efforts to liberalise trade now verged on "total failure", while the two major agricultural export blocs decided to what extent they were prepared to discuss any possible limitation of subsidisation of exports leave aside the liberalisation of imports.-

The supposed pluses of counter-pressures such as in the new U.S. trade law cited by the secretariat, field said, were "just de-escalations of adverse impact from horrifyingly bad to very bad".-

The analysis, he said, showed how badly the major trading powers had been discharging their responsibilities for reinforcing the principle of undistorted competition.-

"Instead we have institutional paralysis. We have fallen into a morass of words with double meanings which substitute for progress towards reinforcement and liberalisation of the system".-

It was no wonder that the smaller countries, both Industrial and Third World, had lost confidence in the ability of GATT to produce genuine improvements, and were sceptical and unresponsive to calls to embrace new areas of examination within GATT or for a new round of multilateral trade negotiations.-

Most of the speakers that followed endorsed the Australian viewpoint.-

But the EEC took a more favourable view of the secretariat document, as reflecting the actual economic situation. The Community spokesman, Tran Van-Thin, cautioned against an assessment that new trade measures were proliferating and jeopardising the system, and thought the system had held together remarkably well.-

But this was challenged by several others.-

Brazil said the system may have survived, but if current trends were not reversed, the multilateral system would fade away.-

India stressed the need to pay better attention to the problems of the Third World, and supported the Australian view that the overall tendency was for limiting multilateralism.-

There was need for concrete measures of liberalisation, rather than search for new ways and measures to deal with new problems, the Indian delegate S. P. Shukla said, in a reference to the efforts to launch new round of negotiations and bring issues like services into GATT.-

Hungary focussed on the double standards in GATT contrasting the attitudes when small countries took measures violating GATT, and the inaction when measures were taken by the major trading blocs.-

Pakistan’s Mohammad Bajwa had earlier raised in the Council the Third World complaints over U.S. restrictions on textiles and clothing imports, and the U.S. failure to rescind them despite the call from the Textiles Committee and rulings of the Textile Surveillance Body.-

He cited recent U.S. statistics to show that from January to September of 1984, while total imports of textiles and clothing into the U.S. had increased 41.4 percent over the corresponding period in 1983, imports from developed sources other than Japan rose by 88 percent during the same period.-

"This clearly underlines the discriminatory aspect of the U.S. restraint actions", Bajwa said.-

Bajwa underlined the need for Industrial countries to carry out their commitments under the GATT Ministerial declaration and work programme, including in the area of liberalisation trade in textiles and clothing.-

"Unless and until the work programme on textiles and all other aspects are successfully completed, any initiatives such as a new round of negotiations in GATT would be lacking in credibility particularly for developing countries", Bajwa said.-

Norway announced what it said would be unilateral measures to liberalise its trade restrictions in favour of the Third World.-

The Norwegian delegate, Martin Huslid said that the Norwegian authorities were in the process of reviewing import regulations including coverage under the Generalised System of Preferences, with particular references to products of importance to the Third World.-

This review, he said, would result in additional liberalisation measures.-

The Norwegian government was also taking necessary constitutional procedures to advance the remaining tariff cuts under the Tokyo Round so that those cuts to be effective in Janm Npapand 1987 would be advanced to 1985.-