Mar 25, 1986

NEED FOR TRANSPARENCY IN NEW ROUND STRESSED.

GENEVE, MARCH 12 (IFDA/CHAKRAVARTHI RAGHAVAN) Major third world trading nations continued to show scepticism about the proposed new trade round in GATT and its contribution to ending discriminatory protectionism against them, as the Preparatory Committee ended the first phase of its work this week.

The committee is due to resume on April 14, when it is expected to attempt an overview of its work so far, before trying to agree on draft recommendations that could be made to the Ministerial Meeting set for September 15.

The venue of the meeting has so far not been decided, but the GATT Director-General Arthur Dunkel is reported to have informed the Preparatory Committee that he was still continuing his consultations, and hoped the committee would be able to take a consensus decision at its next meeting.

Punta del Este (Uruguay), Montreal (Canada), and Brussels (EEC) are the three major contenders for hosting the meeting.

Dunkel has sought to promote a compromise of holding the meeting in Montreal with the Uruguayan Foreign Minister, Enrique Iglesias as the chairman of the meeting.

Normally, in such cases the chairman is from the host country.

But the EEC has countered with an offer that a Brussels venue could be combined with Iglesias or any other third world representative chairman.

On Thursday, the Preparatory Committee considered the issues of modalities for and participation in a new round, as well as the objectives of such a new MTN.

On the modalities, Pakistan is reported to have raised the issue of transparency, and pointed to the unhappy experience of most participants, industrial and third world alike, in the Tokyo round when two or three countries negotiated among themselves, and simply presented these agreements to others as something that "could not be further changed".

This was a reference to the U.S., EEC and Japan, negotiating among themselves on a number of non-tariff issues and codes, and presenting them at the eleventh hour, and forcing others to accept it on a "take-it-or-leave-it" basis.

On the issue of participation, some members felt that it would not be possible to decide on participation without knowing the nature of the negotiations, while others felt the negotiations should involve as wide a group of countries as possible, both Contracting Parties to GATT and others.

However, some members of the committee felt it would be "unreasonable" to allow non-CPS to be involved in discussions and negotiations relating to changes in GATT rules and provisions.

As to the conduct of the negotiations, many participants favoured the setting up of a trade negotiations committee to conduct and supervise the MTNS, and to ensure that the MTNS were completed within a short time frame of three to four years.

The unhappy experience of the Tokyo round which began in 1973 and lasted till 1979 should not be repeated, many felt.

The Swiss put forward a "three-basket" approach to negotiations, dealing with issues in each basket separately, while others like the European Communities favoured a package approach, where there should be parallel or simultaneous progress on all issues.

The Swiss proposals involved, separate negotiations on each basket of issues, with:

--A first basket of issues relating to the multilateral trade system improvements, strengthening and extension of GATT rules,

--A second basket of issues relating to market access, and involving exchange of concessions in the traditional GATT way, and

---A third basket of issues linked with external institutions, and international economic relations.

On the question of objectives, several participants are reported to have argued that the objectives of GATT were good enough.

The U.S. is reported to have strung together, selectively, the remarks of various delegations so far, to suggest that all these varying aims and objectives would be achieved by the new round.

Brazil is reported posed the question whether "an all-encompassing" new MTN would indeed be to the advantage of the third world Contracting Parties, who despite growth and recovery in industrial countries, were still at the receiving end of discriminatory protectionist trade restrictions.

Without a clear indication that these discriminatory practices against their exports, whether through mechanisms not foreseen by GATT or by misuse of GATT, would be ended, third world CPS would have to wonder whether any new MTN would be deserving of their attention.

Without credible commitments on standstill and rollback of protectionism, and of a safeguard agreement, would the promises of liberalisation of a new round be any more credible than those of the past?

Previous liberalisation efforts in GATT MTNS had not benefited the third world countries, because of the use of discriminatory restrictions against them.

The expansion and liberalisation of world trade, and preserving and improving the GATT system, should be the objective of the new round, in the view of Pakistan.

The new round should make the GATT system more responsive and equitable to the third world countries, whom now accounted for two-thirds of the membership, and foster their rapid development.

Nigeria is reported to have stressed that a major objective should be the end of discrimination against third world in GATT, and removal of all derogations from GATT. Only the areas within GATT competence, and assuring widest consensus among the CPS, should be included in the new round.

India, in effect, is reported to have cautioned against taking the third world and its participation for granted.

The climate of confidence for participation should be created by implementing commitments on standstill and rollback, and evolving a comprehensive safeguard agreement.

It was not enough to pull together some good and laudable objectives. The GATT itself mentioned very good objectives, and so did the 1982 Ministerial Declaration, but this did not result in implementation of the undertakings in the declaration or progress in the work programme.

The question to be asked, before drafting objectives or framing an agenda, was whether there was the necessary political will to carry out the objectives, end the asymmetry of the system between the industrial and third world countries, end the discriminatory protectionist measures against third world countries, and create a truly multilateral system based on agreed rules and principles, and not on arbitrary will or unilateral decisions of some.