Jul 25, 1986


GENEVA, JULY 24 (IFDA-CHAKRAVARTHI RAGHAVAN) – Efforts of a group of industrial and third world countries, and the three major trading blocks, to agree on a common draft declaration for the GATT Preparatory Committee on a new round is running into trouble, the U.S. delegate to GATT, Michael Samules, indicated Thursday.

The GATT Preparatory Committee, already past its "mid-July" deadline has been deadlocked over the draft recommendations to be submitted to the Ministerial Meeting due to begin at Punta del Este, Uruguay, on September 15.

The PREPCOM has before it a formal draft confined to trade in goods only, submitted by a group of ten third world countries, and another by Colombia and Switzerland, which includes both the traditional and new themes, with some 40 brackets on language of negotiation issues on which there are disagreements.

The Colombian-Swiss draft itself was the result of talks and consultations involving the three major trading blocks (U.S., EEC, and Japan), the group of nine industrial nations, and a group of 20 third world countries led by Colombia and Uruguay (the host country for the Punta del Este Meeting).

In this effort, the groups of ten have been excluded, and there has been talk of "isolating" them.

After a informal luncheon meeting last week of western newsmen with the GATT Director-General, Arthur Dunkel, there were more or less similar reports in western media about India, Brazil, and the others in the group of ten being now "isolated", and the rest of the countries involved, both of the industrial and third world, moving forward on a common draft, leaving only a few issues needing political decisions at the Ministerial Meeting, in brackets.

A small working group of these countries have been at work for the last several days trying to work towards this end, and in effect present it to the PREPCOM on a take-it-or-leave-it basis for the group of ten.

Samules indicated also Thursday that the intention had been for some 40 or 45 countries, both of the industrial and third world, to put their signatures to a document, and either get it approved by the PREPCOM or for two alternative drafts, one of the 45 and the other of the ten, to be sent on to the Ministers.

It is this effort, he suggested, that might now get unstuck over the EEC stand.

Inside the PREPCOM itself, efforts at negotiating a draft text, have been brought to a standstill, with the three major trading blocs, and Colombia, Uruguay, Switzerland and others involving in the exercise outside wanting time to be able to finish their effort first, and in effect presenting a fait accompli.

At a press conference Thursday morning, Samuels charged that the EEC’s attitude on the negotiating issues on agriculture, and refusal to agree to the possibility of early conclusion of negotiations on some issues, including agriculture, was threatening to wreck the process of reaching a compromise within this group.

Though Samuels focussed the problem as entirely due to the EEC position, and relating mainly to the issue of agriculture, his replies to questions suggested that there were also other areas in the Colombia-Swiss paper where the removal of brackets was creating some problems.

From Samuels’ remarks it would appear that apart from the agriculture issue, and the early conclusion of negotiations on priority issues including agriculture, the efforts so far have not resolved some of the issues relating to the nature of the standstill and rollback commitments, the issue whether safeguards agreement should be negotiated only on an unconditional MFN basis or otherwise, the question of future of the trade in textiles and clothing.

Samules indicated that the next 24 to 48 hours would be crucial, and unless the EEC gave way on agriculture and agreed to early conclusion of negotiations on some issues, a number of third world countries associated with the effort would not put their signatures to the document.

The EEC, according to the U.S., was refusing to agree to any negotiations in agriculture on the basis of the 1984 conclusions of the Agriculture Committee which had been accepted by the Contracting Parties, nor agree to negotiate on export subsidies and such basic issues in agriculture.

Though the community itself has never made a secret of its position on this, or on its insistence that the entire negotiations in the new round should be treated as "one package", to be negotiated and implemented together, the U.S. delegate said the community’s stand had been a surprise, and the U.S. had thought the EEC position earlier had been only "a tactical one".

Samules suggested that the U.S. itself had adopted a position of "compromise" but would not spell it out.

He also made clear that the U.S. would not accept any two-track approach in the negotiations – one to deal with traditional GATT themes, and the other with the new themes and issues like services, investment and intellectual property rights – a compromise envisaged by several of the third world countries in the group of 20 who have reservations on the new themes.

The U.S. was agreeable to an early conclusion of negotiations on a package of issues – dispute settlement, safeguards, tropical products, counterfeit and agriculture – but the EEC would not accept it, Samules said.

Samules also indicated that there had been no compromise so far on the issue that any safeguards agreement should be on the fundamental GATT article one, unconditional most-favoured-nation treatment to all GATT Contracting Parties.

In the Colombia-Swiss paper this is in square brackets, clearly indicating that negotiations could also be on the basis of "selectivity".

On the issue of standstill and rollback, there were also differences whether the commitment should apply only to measures illegal under GATT, or also those not specifically sanctioned by GATT or based on GATT provisions.

The U.S. and EEC want to exclude from an automatic standstill and rollback, some of the "grey area" measures.