Nov 10, 1984

EVERYONE FRUSTRATED" ON LACK OF PROGRESS.

GENEVA, NOVEMBER 8 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Informal consultations are to continue in the Council of the General Agreement on Tariffs and Trade, over the next two weeks, in efforts to provide recommendations for the annual session of the Contracting Parties (CPs) on individual subjects on the GATT work programme.-

The Council, which has been meeting since Tuesday, is expected to adjourn later Thursday night, but meet again on November 19. The session of the CPs is set for November 26-29.-

Over the last three days, the GATT Council chaired by Amb. Felipe Jaramillo of Colombia, has been reviewing the overall progress in the GATT work programme of the 80’s, set out in the GATT Ministerial declaration of 1982, as well as the individual items on it.-

A GATT spokesman summed up the discussion in the Council as showing "considerable degree of dissatisfaction" among a number of delegations - with each country or group of countries having its own "favourite" subjects - and "with everyone frustrated".-

The work programme itself, he underlined, was for the 80’s and would not come to an end in 1984. But the current efforts, with varying degrees of success, he said was to define an approach to future negotiations, to put forward to the annual session of the CPs.-

While no one expected spectacular results, the consultations were aimed at injecting a sense of "urgency and negotiating flexibility" into the further work that would re-start in 1985.-

With political changes taking place or in the offing in many of the major countries, many were facing difficulties in making "major political concessions" at this stage, the spokesman explained.-

According to Third World sources, with the U.S. efforts to push forward with priority actions on issues like "trade in services" and "high technology goods" blocked by one or other group of countries, the United States was trying to insist on "a package" of future work that would include the trade in services.-

The GATT spokesman said there were a group of subjects, like issue of Quantitative Restrictions (QRs) and other non-tariff measures, where studies through working parties were more or less finished and further work through appropriate negotiations could take place.-

There were some others, like the safeguards issue, where further formal and informal negotiations were needed in the coming month.-

There was also a third group of subjects, on which the mandate was much less "specific and ambitious", and where there had been some "tentative informal consultations", but formal work was yet to begin. These included the problems of trade in services and counterfeit goods, where some Contracting Parties were challenging the jurisdiction of GATT itself.-

Apart from the specific items of the work programme on the Council's agenda, on the issues of particular concern to the Third World, there had been only general discussion on the Multilateral Trade Negotiation (MTN) agreements and problems that countries (specially the Third World) faced in acceding to them, he added.-

Third World sources said that the United States had sought to push the Third World countries to agree to GATT formal consideration, leading to negotiations, on "trade in services", stressing the U.S. domestic political imperatives for this.-

The thrust of the U.S. argument was that with the U.S. facing a trade deficit in goods of about 140 billion dollars, and with its manufacturing sector losing competitivity, unless there was movement on trade in services, trade liberalisation lobbies in the U.S.A. were facing difficulties in resisting protection in the manufacturing sector. The U.S. could not hence understand the objections to the services issue in GATT.-

The U.S. stand on the services issue, and its call for the setting up of a formal working party, was reportedly supported by Canada, Japan, and Sweden on behalf of the Nordics.-

The European Community while not "formally" opposing the idea of a working party, would appear not to have formally supported it either. The Community however thought it would not be "wise" to go. Before the meeting of the CPs "with nothing on services".-

Third World sources said that the EEC was apparently trying to "satisfy" the U.S.A. by suggesting a mandate for the GATT secretariat to undertake its own studies and consultations, rather than the current "neutral" position, mandated by the Ministers, of merely helping the circulation of national studies.-

Third World countries, questioning GATT jurisdiction have blocked any work by the GATT secretariat itself.-

All the Third World countries, who participated in the discussion, are reported to have opposed the U.S. moves in varying degrees.-

India is understood to have reiterated its position that the GATT jurisdiction did not include "services trade". Also, of the agreed points in the Ministerial declaration on this, even national studies were far from complete, with only some nine countries out of the 91 in GATT, having prepared studies, some of which had come in only in October. The question of a working party could be considered only in the light of agreements on the issue of jurisdiction.-

Argentina stressed the need "to proceed slowly" and as not being comfortable with the idea of a working party.-

The Argentine position was echoed among others by Yugoslavia, Egypt, Brazil, Cuba and Pakistan.-

In the result, the Council could not agree on the U.S. request for a working party, and the issue is expected to be brought up at the meeting of the CPs, with informal consultations continuing in the meanwhile.-

On the issue of trade in counterfeit goods, discussed by the Council earlier, there was a "replay" of the services debate, with Third World countries arguing that any action should be addressed in the World Intellectual Property Organisation (WIPO) within the context of remedies available in the Paris Union on patents and trade marks, the spokesman said.-

The U.S., supported by Canada, the EEC, and Japan would appear to have strongly favoured action in GATT through a working party.-

India on behalf of the group of Third World countries however said that despite the informal consultations and compilation of views of countries by the secretariat, the fundamental issues about legal and institutional aspects and competence of GATT vs. WIPO, that had confronted the Ministers, were "far from clear".-

While the Third World was "extremely keen" that the "trade disruptive and inhibiting" effects of commercial counterfeiting should be curbed, they felt that the Paris Convention enabled this to be done "both at the border and at the point of production".-

The Paris Convention enabled seizure of such goods "on importation", and had provisions against direct or indirect use of false indications of origin or identity of the producer, manufacturer or merchant.-

The Indian delegate added: "there is no possibility of GATT settling the essential question of what is counterfeit and what is not. This can only be settled in the domain of industrial property. The Paris Convention contains all basic rules to deal with the problem from the trade and production angle, and thus a more effective instrument than GATT".-

Any need for national laws and actions should be taken up in WIPO, which administered the Paris Convention and whose basic rules did not even need any changes or revisions for this.-

While the Third World group did not rule out examination of the problem in GATT, that stage had not yet been reached, and might be rendered unnecessary by the consideration of the issue in GATT.-

Protagonists of action in GATT, and field out the prospects of "unilateral action" otherwise.-

But in a riposte Brazil cautioned them, reminding the protagonists of their GATT obligations.-

On QRs and non-tariff measures, the Council took note of the report of the working group on this, and forwarded it to the CPs.-

A GATT spokesman said this was one "substantial issue" on which "surprisingly" there had been "a positive outcome" envisaging possible movement towards liberalisation.-

The report of the group showed that Contracting Parties are to make written proposals by the end of April 1985, as to how they would achieve progress in eliminating restrictions not in conformity with the General Agreement or to bring them into conformity, and otherwise achieve a general liberalisation of QRs and other non-tariff measures.-

The report of the working group has also asked all Contracting Parties to continue to notify GATT on the restrictions maintained or imposed, giving precise information on the nature of the measures, the products affected, the effects of the measure, and the relevant GATT provisions under which they were imposed.-

The GATT secretariat was asked to prepare a comprehensive data base on these, with an analysis of non-tariff measures other than QRs, including those affecting products of particular interest the Third World countries.-

The group has also called for future periodic multilateral reviews, both of the accuracy and adequacy of the documentation and the grounds on which the measures were being maintained and their conformity with GATT, with priority attention to products of particular export interest to the Third World countries.-

Third World sources while welcoming this step, said much would depend on the actual proposals that the Industrial countries would make and any negotiations on them.-

The sources noted in this connection that this was an issue on which Industrial countries had promised to eliminate QRs by December 31, 1965, but had not done so and in fact increased discriminatory QRs against Third World countries.-

"We hope Industrial countries are now more serious about their GATT obligations, and this is not just another promise", one Third World delegate commented.-