Mar 1, 1986


GENEVE, FEBRUARY 28 (IFDA/CHAKRAVARTHI RAGHAVAN) – The GATT Preparatory Committee for a new round of Multilateral Trade Negotiations (MTNS) appears to have completed a "preliminary exchange of views" on the various items on the GATT work programme and their possible inclusion as subjects for negotiations in a new round.

At its next meeting, on March 17 to 20, the committee is to exchange views on various new items and issues not on the GATT work programme, suggested by delegations at the meetings of the senior officials group in October 1985.

These include the question of review of some of the articles and provisions of the general agreement, and the way they have been interpreted and implemented to the detriment of the unity of the GATT framework, and its fundamental requirement of Most-Favoured-Nation treatment for all Contracting Parties.

At issue has been the way the provisions for "customs unions and free trade associations have been used to create preferential regional trading blocs, and their special trading arrangements with other blocs or countries.

The EEC’s arrangements with EFTA, as well as other countries, the U.S. Caribbean basin arrangements (and the proposed move of Canada in the same direction), as well as U.S. proposals for "free trade" arrangements with Israel, Canada and others are seen as discriminating against other countries.

Also expected to come up at the march meeting of the Preparatory Committee are U.S. demands for inclusion of high technology and investment issues, questions relating to developments in the monetary and financial areas, including the third world debt issues, and their impacts on the trading system and a new round (raised by Brazil), commodity trade issues, and the asymmetric way in which the third world has to justify trade restrictions before GATT, while industrial nations go scot free.

When the Preparatory Committee considered this week the subject of structural adjustment and trade policy, discussions brought out the sharply differing viewpoints on this as between the industrial and third world countries.

Third world countries argued strongly that during any new trade round negotiations, this issue should be an item for negotiations, and should result in specific undertakings and agreements on targets by the industrial countries in relation to structural adjustment policies and measures they would promote for redeployment of non-competitive industries.

The industrial countries on the other hand suggested that the subject should be a kind of background for a new trade round, but should not be a negotiating point.

On the issue of trade in counterfeit goods, a GATT expert group that looked into it has agreed that there is a problem in this area, but could not reach a consensus on the nature and scope of international action on this.

Specifically, the differences centre on the forum or international body that should be responsible for dealing with this problem, and how any remedial actions could be taken.

The U.S. pressed for action on this issue in the new trade round and specifically for international agreements to deal with counterfeit trade, while avoiding barriers to legitimate trade.

While the U.S. view found support of the EEC, several third world countries argued that GATT was not the appropriate forum and the matter should be pursued in the World Intellectual Property Organisation (WIPO) where it was already being considered.

Several third world countries also argued that GATT had a number of trade problems to be dealt with as a priority, and this issue of counterfeit trade was not such a priority item.

On the question of "other aspects of intellectual property rights", raised by the U.S. and aimed at "persuading" other countries to provide more patent and trade mark protection (in areas where the WIPO convention itself gave lot of autonomy to the signatories of the Paris Convention), the U.S. found little support for GATT involvement, even from other industrial countries, according to a GATT spokesman.

On the subject of exports of domestically prohibited goods, an item on the GATT work programme, the spokesman conceded that this had been an item "almost ignored" since 1982, when it was put on the GATT work programme.

Only recently, he said, there had been some response from countries for information in this area, and there was agreement that this work should be continued, to enable the preparatory committee to revert to this at a later stage.

While some of the industrial countries pointed to the work going on in this area in other organisations like FAO, WHO, etc., a number of third world countries underlined the complementary role of GATT, specially to secure "transparency" in this trade, and trade policies of governments.

Several delegates noted that many pharmaceutical products prohibited for domestic use were often exported to the third world countries, which often were unaware of the prohibitions or its causes to be able to take a decision on their own.

There were also cases of a product under on trade name being prohibited in the country of origin, and being exported and sold to other countries under other trade names.

On the question of export credits for capital goods, the third world countries had raised the issue in the context of OECD moves (at the instance of U.S.A.) for agreement on interest rates and terms of credits for export of capital goods to the third world.

A major focus of third world concern was on the impact of any such OECD arrangements in raising the cost of import of capital goods, and also the discriminatory provisions envisaged as between different groups of countries.

While viewing this as in the OECD domain (and not for GATT), some of the industrial countries like Canada and the EEC, have sought to use the subject to suggest that subsidies provided by third world exporters of capital goods should be brought under the same OECD disciplines via GATT.

Several of the third world countries rejected these views, and said that the question of "subsidisation" could be considered and tackled only in the context of the current GATT agreements and codes on subsidies.

The Preparatory Committee also discussed the question of trade in natural resource products.

A GATT working party has identified three main areas for further work and negotiations – in non-ferrous metals and minerals, in forestry products, and in fisheries products.

Some of the problems of tariff and non-tariff barriers include the problem of tariff peaks, absence of bound tariffs and escalation of tariffs with stages of processing, market access and issues of subsidies.

Many of the major exporters of these goods sought specific sectoral negotiations in any new round and with some priority for them in the negotiations.

Some of the importing countries argued against sectoral negotiations on the ground of possible "further fragmentation" of the GATT.

Some of the sectoral negotiations, it was felt by some, could be subsumed in any general negotiations on trade in agriculture.

The European Communities sought to use the issue to put on the GATT agenda the question of "access to natural resources" that GATT did not create any obligations on countries "to export", but only laid down the rules and principles of access in the event of exports.

The GATT could not be used to obtain "access" to raw materials or natural resources or even their products of a country, unless the country wished to export them.