Feb 14, 1986


GENEVA, FEBRUARY 12 (IFDA/CHAKRAVARTHI RAGHAVAN)-- The GATT Council decided Wednesday to set up a working party, open to all contracting parties, to consider the application of Mexico for accession to the General Agreement on Tariffs and Trade.

The working party will be chaired by Amb. Georg Reisch of Austria, and is expected to finish its work by June 1786, in order to enable Mexico to avail itself quickly of the status of a contracting party.

Contracting parties will have four week's time to submit questions to Mexico, in the light of a memorandum circulated by Mexico on its current trade policy, and Mexico will have a further 30 days to respond to the questions, before the working party can take up these issues.

In 1979, Mexico had actually negotiated its entry into GATT and a draft protocol was drawn up, but ultimately Mexico decided not to go ahead with it.

The working party is yet to decide whether the 1979 draft would be taken as a basis for the new discussions, or things should start de novo.

Another issue that came up before the Council, and that gave rise to concerns over the tendency of industrial countries to "differentiate" among third world countries in trade concessions, was a Canadian request for waiver to enable it to extend duty free preferences to 11 Caribbean commonwealth countries.

Canadian imports from these countries averaged over 1982-84 to about 265 million Canadian dollars, and the Canadian preference would cover 99.8 percent of these imports, the Canadian request to GATT stated.

Canadian imports from these countries amount to 0.03 percent of Canada’s total imports.

A number of countries, both third world and industrial, spoke critically of the tendency of industrial countries to differentiate and discriminate amongst the third world countries.

Colombia and Singapore were among the third world countries who spoke on this.

Singapore noted that it was open to Canada to provide duty free GSP treatment, in a non-discriminatory and non-reciprocal way, open to all third world countries.

Japan, among the industrial countries, also expressed concern over the tendency to discriminate.

A GATT working party is expected to go into the matter and report to the Council.

The GATT Council is also agreed to the article XXIV consultations to look into issues arising out of the enlargement of the European Communities by the accession of Spain and Portugal.

The accession took effect from January 1, but the common EEC tariff and trade measures come into effect from March-4, 1986.

Both multilateral and bilateral negotiations relating to the rights and obligations of other contracting parties affected by the Spanish and Portuguese accession to the EEC and the consequent changes in their external tariffs and trade measures, will be taken up in the GATT consultations under article XXIV, and "some of these may well be subsumed in a new round", a GATT spokesman said Wednesday.

The U.S. and several other countries expressed concern that the new measures that could affect the rights and obligations of other parties, would be brought into effect without prior consultations and negotiations with affected contracting parties in GATT.

Colombia complained that with the accession of Spain and Portugal, and the EEC’s preferential arrangements with the Mediterranean countries, Colombia would be the only supplier of cut flowers to the communities that would be discriminated against.

On other matters, Nicaragua complained about the delay in agreeing on the terms of reference, and setting up of a panel, to hear Nicaragua’s complaints against the U.S. over its trade embargo.

Nicaragua had raised the issue in GATT in may 1985, and after initial U.S. objections, the Council had agreed to refer the issue to a GATT panel, and the chairman of the GATT Council was asked to consult with the parties for agreement on the terms of reference and for naming a chairman of the panel, acceptable to both sides.

U.S. objections on both these have reportedly held up the naming of the panel.

Nicaragua reserved its right to raise the issue again in the Council if there was no progress in the setting up of the panel.

Earlier the Council put off till its next session the request of the gulf cooperation Council for observer status in GATT.

While the request received the support of a large number of countries, the U.S. and the EEC wanted more time to consider the issue.

Some of the industrial countries have been trying to restrict observer status in GATT to those cases, where observer status would further their acceding to GATT.

Of the six members of the GCC, Kuwait is already a member of GATT, while Saudi Arabia has sought and been granted observer status.

Some of the other GCC members (Bahrain, Oman, Qatar and the United Arab Emirates), already apply the GATT provisions on a de facto basis.

The application of the world intellectual property organisation to participate in GATT meetings as an observer was agreed to earlier, without any objections.