Jul 26, 1986


GENEVA, JULY 24 (IFDA-CHAKRAVARTHI RAGHAVAN) – "We are ready to negotiate, and start a new round of trade talks, but not at any price and under any conditions", Tran Van Thinh, the EEC Representative to GATT told newsmen Thursday.

Tran, was responding to the U.S. charge, earlier Thursday, that by its stand on agriculture, and insisting on treating the new round as one package, the EEC was placing at risk the current efforts to put together a common draft of industrial countries and some of the third world countries, for the September 15 Punta del Este GATT Ministerial Meeting.

While disagreeing with the U.S. view that the EEC position had created "a crisis", Tran said the EEC had four major preoccupations that had to be settled, "in a sufficiently satisfactory way", to enable it to go forward.

These four areas were agriculture, treating the now round as "a single package", "rollback", and "equilibrium of rights and obligations" in GATT.

The last was a reference to Japan, and its trade policies and practices.

"Let it be understood by the U.S. and our other partners: we are ready to negotiate and start a new round, but not at nay price and under any conditions", Tran declared.

While the EEC had clearly stated its position in the efforts, being carried out outside GATT, to evolve a common paper of the industrial countries, the group of 20 third world countries, and the major trading blocs (U.S., EEC, and Japan), it had not waked out of the negotiations, Tran added.

Charging the U.S. whit having gone to the press Thursday over the EEC position, in an effort to create disunity among the EEC members, Tran said if the effort was made to isolate the EEC, "we can look for other alliances".

Tran did not spell this out, but apparently it was a hint that instead of joining the U.S. and others in seeking to isolate the group of ten third world countries, including India and Brazil, the EEC might try to find allies among the ten like India or Brazil.

Over the past week, after Colombia and Switzerland presented a text (with a number of brackets in the formulations), the GATT Secretariat as well as the U.S., EEC, and Japan and some of the group of 20 third world countries have been promoting the idea that most of the GATT Contracting Parties were more or less agreed, and that the group of ten, and India and Brazil within the, were "isolated".

A media campaign has also been launched to pressure these capitals to fall in line, with a spate of stories about the isolation of India and Brazil, after a lunch last week by the GATT Director-General to selected western newsmen.

According to Tran, on agriculture some countries – Australia, Argentina, New Zealand, Hungary, Uruguay and Chile – were looking to suppression of export subsidies.

The U.S. also favoured this, but not as much as these other countries.

This could be one of the objectives in a new round, but commitment to phase it out could not be a pre-condition, Tran stressed.

Explaining the EEC position on the 1984 paper on agriculture of the GATT Committee on Agriculture, Tran in effect said that it had been negotiated and agreed to in a different context, but that the U.S. and others were trying to use the 1984 paper to push the issue of subsidies.

The EEC would not mind some references to the 1984 paper (in the declaration), but it could not be the basis for the negotiations on agriculture, Tran explained.

In the EEC view, if there was a "de-blockage" on the agricultural issue (to the satisfaction of the EEC), a solution could be found on the other three demands of the EEC) – on the negotiations being a single package, on rollback, and on the EEC complaints over Japan’s trading policies.

This appeared to imply that the EEC could accommodate the desire of Colombia, Asian and others who want priority for negotiations on tropical products and early conclusion and implementation of outcome, provided the EEC viewpoint was met on agriculture.

According to some sources within the group of 20, the current problems have arisen in the efforts to evolve a common text, with very few brackets or disputed formulations, which could be "sold" to capitals and presented in the name of 40-45 industrial and third world countries.

The text put forward by Colombia and Switzerland last week has three different formulations on what would be negotiated in agriculture.

--Negotiations shall include an examination of the causes of structural surplus stocks and the means of resolving the problem of their disposal in a manner which does not distort international markets, and of preventing their recurrence, or

--Negotiations shall ensure a balance of rights and obligations and take into account the special needs of the developing countries, the specific characteristics and problems in agriculture and the need to base trade on comparative advance, or

--The 1984 recommendations of the Contracting Parties which were developed in accordance with the 1982 Ministerial Declaration shall form the basis for the negotiations on agriculture, taking into account, inter alia, the approaches elaborated in the work of the Committee on Trade in Agriculture.

In addition, the formulation on agriculture has in its objective of trade liberalisation, improving the competitive environment by increasing disciplines on use of all subsidies affecting agricultural trade including the phasing out in an agreed time frame of export subsidies.

In the text now, the words "phasing out in an agreed timeframe of export subsidies" is put within brackets".

Without a common text, which would imply negotiations on phasing out agricultural subsidies and other issues, Uruguay and some of the third world countries involved in this exercise would apparently find it difficult to persuade their capitals to put their strength behind the effort.