Aug 5, 1986


GENEVA AUGUST 5 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The GATT Ministerial Meeting from September 15 at Punta del Este, Uruguay, will be a meeting of Contracting Parties (CPS), and will have before it three alternative texts for a declaration launching a new round of multilateral trade negotiations (MTNS).

This was the only outcome of the work of the GATT Preparatory Committee (PREPCOM), which wound up its work on July 31.

The PREPCOM, chaired by the GATT Director-General, Arthur Dunkel, had been unable to agree on any recommendations to the ministerial meeting over the new round, and ultimately decided merely to remit three text before it to the Ministers, with what GATT sources described as "a factual letter of transmittal" from the chairman of the PREPCOM.

The Ministers at Punta del Este will thus be faced with the unenviable task of unravelling the tangles web of the work in the PREPCOM, agree on a programme of negotiations, and launch the new round.

Though there has been talk, both before and after the final plenary, that the Ministerial meeting should proceed only on the basis of one of the texts, purportedly commanding the largest support, this would merely result in a replay of the PREPCOM exercise, without being able to get into substance.

Apart from the decisions in forwarding the texts, the PREPCOM appeared to have got a hint Thursday that at Punta del Este the not politic-economic issue of South Africa and economic relations with it could surface.

Nigeria reportedly made what some participants described as "quite an emotional presentation" of the African preoccupations with the apartheid regime and international actions against it.

And though Nigeria did not make any formal proposals, it apparently referred to exchange of concessions in the new round with South Africa.

The three texts referred to the Ministers are: a draft declaration proposed by a group of ten third world countries, a draft declaration proposed by Switzerland and Colombia, and a draft declaration proposed by Argentina.

The PREPCOM, set up at the Annual Session of the GATT CPS in November 1985, had been mandated to "prepare by mid-July 1986 recommendations for the programme of negotiations for adoption of a Ministerial meeting".

However it became impossible over these seven months of work to reconcile serious differences among participants over the objectives, modalities and issues for negotiations, both in the traditional areas of trade in goods and the priorities to be given traditional areas of trade in goods and the priorities to be given to some or all of them, as well as whether new themes should be introduced into GATT through the new round, proved irreconcilable.

While the PREPCOM, which began its work in January, had long discussions, with individual delegations or groups of them presenting various issues and items to be dealt with, it was never able to pull them all together and get down to the work of drafting a programme of negotiations or a declaration to be adopted by Ministers.

From the beginning, the work of the PREPCOM in this regard became blocked when the U.S., EEC and other major industrial nations, who were pressing for new themes in GATT, insisted on prior commitment or assurances that the new issues would figure in the new round, and the Punta del Este meeting would be able to decide on them.

On the other hand, a group of third world nations, who challenge GATT’s competence or jurisdiction to deal with these new themes – services, investment and intellectual property rights – refused to agree to the new themes being included on the agenda of the new round of trade negotiations.

They insisted that the "services" issue could figure before the Punta del Este meeting only if it was a meeting of GATT CPS, and in the context of earlier decisions for exchange of information to enable the CPS to decide on the appropriateness and desirability of multilateral action.

Until the very last, the U.S., EEC and others pushing for new themes and a new round had been unable even to make up their minds whether the meeting should be that of CPS, governed by GATT rules and procedures, or an ad hoc meeting not controlled by these procedures.

In between an effort was made to put together a group of third world countries and the industrial nations, who could agree on a common draft and present it to the PREPCOM, and thus "isolate" the group of ten, and put through their own draft at Punta del Este by a majority decision.

However this effort became unstuck over the last 48 hours because of serious differences within this group on the issues of trade in agriculture.

This ultimately resulted in the EEC being unable to cosponsor such a paper or even endorse and support it, and without this many of the third world nations involved in the effort refused to commit themselves, only indicating their support to the text being remitted to Punta del Este.

The draft of the Group of Ten (Argentina, Brazil, Cuba, Egypt, India, Nicaragua, Nigeria, Peru, Tanzania and Yugoslavia) dealt only with the issues of trade in goods.

The Swiss-Colombian text, with a different structure, dealt with both the issues of trade in goods and new themes.

After successive revisions, this paper was presented with clean texts on the issues in goods, but had formulations within brackets (implying no agreement among the sponsors and those backing them) on the issues of new themes and on the issue of liberalisation of trade in textiles and clothing and bringing this into GATT.

The third Argentine paper, was in the nature of amendments to the Swiss-Colombian text, keeping the same structure and format of the Swiss-Colombian text, but strengthening its formulations and language in trade in goods.

But it envisaged further continuance of the work of exchange of information on services, leaving the door open for future decisions on multilateral actions, and if so what kind of negotiations and where, and requiring amendments of the general agreement if it was to be dealt with in GATT.

Efforts within the PREPCOM in informal consultations to provide a higher status of some sort to the Swiss-Colombian text had to be given up, because of opposition from others, and ultimately the decision was taken to remit all the three texts, virtually assuring them of equal status, whatever the claims about the extent of support for one or other formulation.

It would now be up to the Ministers at Punta del Este to start de novo, at their own level, or at parallel meeting of officials, to see how a compromise could be reached and consensus achieved.

The opposition within the EEC to the formulations in the Swiss-Colombian text over agriculture proved difficult to resolve.

Ultimately, Thursday afternoon, the EEC sought to have the work of the PREPCOM continued, and for consultations to resume at the end of august.

But this was unacceptable to the U.S., Japan and other industrial countries, and the EEC ultimately gave up the idea, though it put it on record, at the private final plenary of the PREPCOM.

In doing so, the community spokesman, according to an EEC press release said the various drafts did not show "a degree of convergence sufficient for them to serve as the basis for Ministerial discussions".

Even the Swiss-Colombian text, which the EEC thought had received "widest support", nevertheless "gives rise to a number of difficulties for several members of the Preparatory Committee, among others certain developing countries, as well as within the community".

The community spokesman is also reported to have stressed that while it agreed to a CPS meeting, it would not rule out and ad hoc Ministerial Meeting "particularly if it helps solve the controversial problems".

The community spokesman, according to participants, did not explain or elaborate.

But his remarks appeared to indicate that the community might explore the possibility of an ad hoc meeting, outside the CPS meeting, either to deal with the new issues only or along with traditional issues, and/or for launching negotiations outside the general agreement.