Mar 21, 1986


GENEVE, MARCH 20 (IFDA/CHAKRAVARTHI RAGHAVAN) – The proposed new round of Trade Negotiations in GATT should address some of the issues for stabilisation of commodity prices and earnings of third world primary exporters, and take GATT-specific measures, India is reported to have urged Wednesday.

The Indian plea was reportedly made in the GATT Preparatory Committee for a new trade round, during its consideration of subjects for a new round, not figuring on the GATT work programme.

The Indian suggestion is reported to have received the wide support of other third world countries.

Earlier the U.S. is reported to have raised the issue of so-called "fair labour standards" in third world export industries, and sought this to be included on the agenda of a new GATT round.

According to some participants in the meeting, the U.S. move titled "workers rights" - virtually amounting to a GATT takes over the work of the ILO – was greeted with derisive laughter.

Some participants saw the move as another move to legitimise discriminatory protectionist measures against competing third world exports.

Others saw it as part of the U.S. tactics for the new round – raising a number of issues outside GATT jurisdiction, and then appearing to compromise by dropping them all, in return for putting "services" on the GATT agenda.

In raising the issue, the U.S. delegate is reported to have referred to the "concerns" in the U.S. congress and industry, about the "unfair" competition from exports of third world countries with "low cost wages", and the incorporation of the workers’ rights concepts already in U.S. trade policy laws. The U.S. planned to focus on the issue in the new round, not necessarily as a separate subject, but in relation to other items, wherever this was relevant.

Participants said that before others could respond, the GATT Director-General, who chairs the Preparatory Committee, closed discussion on the subject, noting that if he allowed it there would be "an avalanche" of comments.

Nevertheless, India and some other countries are reported to have reserved their rights to reply to the U.S. at later meetings of the committee.

On the issue of commodity markets, prices and earnings, the Indian delegate underscored two of the provisions of part IV of the general agreement on this issue, and their non-implementation since 1964.

Article XXXVI (4) of GATT, refers to the dependence of many third world countries on exports of a limited range of primary products, and stresses the need for more favourable and acceptable conditions of access to world markets for such products, and appropriate measures to stabilise and improve conditions of world markets in these products, including measures designed to ensure "stable, equitable and remunerative prices".

Article XXXVI (5) also calls for increased access to markets for processed and manufactured products of export interest to the third world, in order to facilitate the diversification of these economies and avoidance of excessive dependence on exports of primary products.

In the Indian view, tariff escalation practices of industrial countries on processed and semi-processed primary products of the third world, as well as their subsidisation practices in production and exports of primary products competing with third world products, had been responsible for bringing down prices of commodities exported by the third world.

To the extent trade policy measures were within GATT jurisdiction, these issues should be tackled and addressed in the new round.

Several African and Asian primary commodity exporting countries, as well as Australia and New Zealand are reported to have supported the Indian move.

New Zealand is reported to have said that while the commodity issues and problems of market access and subsidies concerned some industrial countries also, the issue within the terms of part IV of GATT should also be dealt with in the new round.

According to GATT participants, the EEC however expressed its "frustration" with such efforts "to overload the GATT agenda", arguing that commodity issues and policies were being dealt with in the UN Conference on Trade and Development, through its integrated programme for commodities, and the jurisdiction and competence of other organisations should be respected.

India is however reported to have replied that it was second to none in its loyalty to UNCTAD as an institution, or its zeal in preserving UNCTAD’s jurisdiction.

India also hoped that the EEC would carry forward its logic of respecting jurisdiction of other international organisations on issues sought to be put in the new round.

This was apparently a reference to the EEC/US efforts to bring issues relating to intellectual property, services, etc., on the GATT agenda.

The Indian delegate was also happy to hear about EEC’s support for UNCTAD’s IPC and the common fund, and hoped that this would be reflected in the EEC member-countries’ stands in UNCTAD on commodity issues, and UNCTAD efforts to negotiate agreements to stabilise prices and markets.

On issues involving one or two Contracting Parties, even when GATT jurisdiction was in doubt, there was a great deal of attention and zeal displayed to bring them on the GATT agenda and new round.

But when problems relating to the very large number of GATT CPS –, as was the case with collapse of commodity prices and earnings – there was an effort to brush the issue away, the Indian delegate is reported to have complained.

The questions of tariff escalation, market access, and subsidies on production and exports, thus affecting third world exports of these commodities, was a GATT-specific matter to be dealt with in GATT, and could not be brushed aside on ground of competence of other organisations.