Jun 24, 1986


GENEVA, JUNE 20 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The basic objective of industrial countries in proposed new round are markets of the third world, providing the third world with "greater negotiating power" that should be used jointly to further third world interests and goals, the Latin American Economic System (SELA) has recommended.

This is one of the conclusions and recommendations (MTNS) of the high-level coordination meeting on multilateral trade negotiations of the SELA held at Montevideo last month, and now circulated by the delegation of Uruguay amongst informal group of third world countries in GATT.

The SELA meeting said the approach of the industrial countries to the new round made clear that one of their basic objectives is to expand their access to markets of the third world, "markets with the greatest growth potential".

"This will allow our countries greater negotiating power which should be used jointly, in coordination and in a spirit of solidarity. It is necessary to make use of this negotiating power in order to further the interests and goals pursued by the developing countries", the meeting declared.

The countries of the region should use their negotiating power to ensure that the proposed negotiations "reverse the existing asymmetry in the international division of labour which hinder them from sharing equitably in the expansion of international trade".

"In reality, a new round of negotiations would only be viable with the full participation of developing countries. For that to occur, a broad consensus fully reflecting region's interests is required", the SELA document said.

Placing the proposed round in the context of the critical situation in the region's economy - the crisis in the commodity, trade and financial areas, including external indebtedness and net financial outflows from the region - the Montevideo meeting said: "A new round of trade negotiations must run parallel to negotiations aimed at restructuring the international monetary and financial system in order to make it supportive of growth and development".

Referring to the collapse of commodity prices and earnings, and the fundamental importance of commodity trade to the region, the meeting suggested that efforts must be made in multilateral fora like UNCTAD, to implement measures to overcome difficulties in the area of commodities.

Commodity trade problems should also be included in the deliberations concerning the proposed MTNS.

There should be full implementation in the MTNS of the principle of differential and more favourable treatment to third world countries, and negotiating modalities should be developed to permit quantification of this principle.

Industrial countries, the SELA meeting underlined, had not fulfilled their 1982 GATT Ministerial Commitments on standstill on protectionism, and such protectionism measures, incompatible with GATT, had proliferated.

The proposed MTNS should hence be preceded by adoption of "firm and credible commitments" regarding standstill, and on rollback of measures "which are not in conformity with GATT and which are not negotiable", to be implemented within a specific time-frame.

The standstill and rollback commitments must include all products and measures, and particularly those affecting trade in agricultural goods and textiles, and should be subjected to effective surveillance mechanism.

"No trade negotiations could be held in the absence of prior agreements on these matters", the meeting said.

There should also be maximum priority to conclude a legally binding agreement on safeguards, based on the GATT principles of non-discrimination.

For the Latin American and Caribbean countries, it was of vital importance and high priority that all elements restricting access or distorting international markets for agricultural products "should be treated in full from the start of the proposed MTNS, and that they be effectively included in the strengthened disciplines of GATT".

"Otherwise, the participation of the countries in the region in those negotiations would not be justified".

The priority objectives in negotiations on agriculture should include substantial improvement in conditions of access to markets of industrial countries for exports of the region, through liberalisation and expansion of trade in all its forms and on a "secure and stable basis" to enable the full exploitation of the undoubted comparative advantage of the countries of the region in these products.

Export subsidies and other practices distorting trade and displacing exports (of agricultural products) of the region from their traditional markets, should be gradually rollbacked according to an agreed programme and time-table.

As regards the Multifibre Arrangement (MFA), the restrictive and discriminatory regime should be phased out.

"There is a close link between the negotiations (on the future of the MFA) and the proposed MTN, as the developing countries exporters of textiles could not be expected to participate in a new round of MTN if a restrictive and discriminatory regime is maintained against their exports of textiles", the meeting warned.

In the area of tariffs, the negotiations should be geared to reducing tariff escalation.

Negotiations on tropic products must ensure comprehensive treatment of all restrictive measures inhibiting access to markets of industrial countries on a non-reciprocal basis.

Comprehensive negotiations should also be promoted on problems affecting trade and products obtained from exploitation of natural resources.

Non-tariff barriers restricting third world exports, even if compatible with the general agreement, should be eliminated in the proposed new round.

The SELA meeting complained of the use by industrial countries of the Tokyo round codes to adopt protectionist and discriminatory measures, and imposition of counter-vailing or anti-dumping duties and grant of export subsidies, through unilateral interpretations of the codes.

The problem of these codes and their implementation, and the full application of the differential and more favourable treatment principle to third world countries to facilitate their accession to these codes, should be tackled within the framework of the proposed MTNS.

Efforts at improving the GATT dispute settlement mechanism, the meeting urged, must take into account the existing asymmetries among the GATT CPS, so that recommendations for settlement of disputes are fully implemented.

Procedural changes alone would not be enough to protect the interests of the third world countries, since their powers of retaliation are limited.

The improvements in the dispute settlement mechanism should redress this imbalance in capacity of third world countries in having their GATT rights respected.

Modalities and procedures in the proposed MTNS should be so defined as to avoid a repetition of negative experiences of the past.

The meeting also urged that results in areas of interest to the region should be implemented, without awaiting the end of the MTNS, and specially in issues pending from previous rounds such tropical products and tariff reductions on products of export interest to third world countries negotiated in the new round.

The meeting said that if a new round is launched, third world countries not members of GATT should be enabled to participate in them.

Similarly, interests of other countries should also be taken into account to ensure "as universal a participation as possible within the framework of the competence of GATT".