Jul 26, 1986


GENEVA, JULY 25 (IFDA-CHAKRAVARTHI RAGHAVAN) - Attempts at informal negotiations within the GATT Preparatory Committee on a draft Ministerial Declaration to be stalled, but further efforts are to be made next week, third world sources said Friday.

The PREPCOM had been mandated to prepare "by mid-July 1986" recommendations for the programme of negotiations for adoption at a Ministerial Meeting to be held in September 1986.

Short of a miracle, it appears virtually impossible now for the PREPCOM even to meet a July-end deadline and some GATT diplomats are already envisaging the possibility of having to work during the traditional August vacation season in Europe.

"The only deadline we really have is August 25, by which date notices have to go out if the Punta del Este Meeting of September 15 is to be a meeting of GATT CPS at Ministerial level", one GATT source said.

Though the U.S., EEC and some other industrial nations are still trying to keep their options open for an "ad hoc meeting" at Punta del Este, third world countries have now agreed that it should be a CPS Meeting, in order to keep control of the process and avoid problems.

One of the hot issues that would come up at Punta del Este if it were an ad hoc meeting would be the issue of South Africa’s presence.

It could come up, even if it is a formal meeting, given the current political preoccupations of the African countries, and the pressures in the U.S. on President Reagan, and on U.K. within the Commonwealth, for sanctions against South Africa.

But while the issue could perhaps be avoided with some understanding on all sides, if the Punta del Este Meeting is a formal CPS Meeting, it would be impossible to duck it at an ad hoc meeting, some industrial country sources now concede.

Though various proposals, formal and informal, for a draft Ministerial Declaration and Programme of Negotiations have been placed before the PREPCOM, chaired by GATT Director-General, Arthur Dunkel, the Committee so far has been unable to get down to the process of negotiating a text.

Third world sources said that at a meeting of "friends of the chairman", where there are about 20 participants, efforts to start discussion and formulation of texts, either on the basis of a formal paper of the group of ten third world nations, or on the basis of a Colombian-Swiss text which has a number of formulations in brackets became impossible.

At a similar effort of the group on Monday, Colombia, Switzerland and Uruguay among others had sought 48-hours for the efforts to "clean up" their text in informal consultations.

These consultations, being held outside GATT, on the premises of the Secretariat of the European Free Trade Association (EFTA) is reported to involve representatives of a third world group led by Colombia and Uruguay, a group of industrial nations led by Switzerland, and the three major trading blocs, U.S.A., EEC and Japan.

The PREPCOM itself has been blocked for over three weeks now from getting to the stage of negotiating a text, either formally or informally, or in any small grouping, as the U.S., EEC and Japan, continued this attempt to put together a draft with which 40-45 industrial and third world nations could associate, and thus "isolate" a group of ten third world countries.

This group has taken a strong stand on standstill and rollback of protectionism, safeguards and other traditional issues of trade in goods as well as on efforts to bring new themes, now outside GATT jurisdiction, into the agenda for the new round.

But even before this U.S.-EEC-led effort could succeed, the talk of India, Brazil and others in the group of ten being "isolated" got currency and media coverage, after an informal briefing last week by the GATT Director-General to a selected group of western correspondents over lunch.

However, the press conferences Thursday of the U.S. delegate to GATT, Michael Samuels, and the EEC chief negotiation, Tran Van Thinh, suggested that the efforts to "isolate" India, Brazil and others, appears to have become now an effort to isolate the EEC, and within it France.

And while the difficulties within PREPCOM were being blamed on the "hard-line" positions of India, Brazil and others over new themes, the efforts to isolate these "hard-liners" appears to be running into difficulty, in the face of fundamental differences in the traditional areas of "trade in goods" among the participants in this exercise – U.S., EEC, Japan, a group of nine industrial nations, Colombia, Uruguay, Jamaica, Asian and a couple of others.

The third world countries in this group are doing so in the name of a group of 20 third world countries, but not all of the 20 appear to be involved or even fully aware of the efforts, and with some of them privately expressing serious reservations.

Third world sources said that apart from the public exchanges, through press conference, between the U.S. and EEC Thursday, these divisions came out sharply at the informal meeting of the "friends of the chairman".

At earlier formal and informal meetings of the PREPCOM, efforts to start negotiations either on the basis of the various issues, or on the basis of the text of the group of ten formally tabled early in July, had been blocked by the U.S., EEC and others on the group that they could take up the drafting only after there was agreement to deal with the new themes in the new round.

At Thursday’s meeting of the "friends of the chairman", when Yugoslavia, Brazil and others wanted to take up drafting work, even on basis of the Swiss-Colombian text, Switzerland reportedly said they were unprepared to proceed to a detailed discussion of the first part of their paper on traditional GATT issues, but could begin discussing formulations on new issues – services, investments and intellectual property rights.

India, Brazil and others in the group have said that they could not deal with the new themes in the PREPCOM, but could discuss at Punta del Este the issue of "services" only if it was a meeting of GATT CPS, and in the context of earlier decisions of GATT CPS on services, including the separate exercise on exchange of information under a group chaired by Felipe Jaramillo, and any recommendations out of that group.

Jaramillo is reported to have advisee Thursday that he planned to hold informal consultations on any possible recommendations over services to the Punta del Este meeting, if it was a CPS meeting.

India is reported to have suggested that they should begin work in the group of "friends of the chairman", and try to formulate texts at least on some of the priority issues posed by Dunkel, including the nature of the Punta del Este meeting, as well as "important" issues identified at the 1986 GATT CPS’ meeting.

In November 19896, when the GATT CPS decided to set up the PREPCOM, the chairman of the CPS had said that it had "emerged" from the debate that "the questions of standstill and rollback, treatment of developing countries and safeguards should constitute important issues for the work of the Preparatory Committee".

Third world sources said that at the Thursday meeting it proved impossible even to take up these issues and agree on drafts, whether on the basis of the G-10 paper or the Colombia-Swiss text.

Australia reportedly said that along with the "important" issues identified in the chairman’s statement in 1986, other important issues like "agriculture" should also be taken up.

When India and others in the group of ten reportedly agreed to take up agriculture also in this context, the EEC spokesman is reported to have said that agriculture was a major concern of the community "but not an obsession".

The EEC had four major preoccupations – agriculture, "globality" of the negotiations (issues in the new round being dealt with as one package), rollback, and balance of rights and obligations, and euphemism for EEC-Japan trade relations – and these would have to be addressed.

Tran is then reported to have added that he was however willing to start discussion on agriculture and the important issues identified in the statement of the chairman of the GATT CPS in 1986, but would then disassociate himself with the efforts centred elsewhere around the Colombia-Swiss text.

The "friends of the chairman" are to make another attempt on Monday, third world sources said.