Sep 16, 1986


PUNTA DEL ESTE SEP. 13 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Chairman designate of the GATT Ministerial Meeting here next week, Enrique Iglesias of Uruguay, as well GATT Director-General, Arthur Dunkel, expressed confidence Saturday about a successful outcome, despite the many uncertainties facing the meeting.

"I am confident, because I believe in the good sense of everyone. I cannot believe the world has an urge to commit collective economic suicide", Iglesias told newsmen at a Press Conference.

Meanwhile groups of delegations were holding bilateral and plurilateral consultations among themselves this weekend on the eve of the opening Monday afternoon of the Ministerial Meeting of the GATT - Contracting Parties here - Monday afternoon.

As now envisaged, after the meeting is opened Monday by the President of Uruguay, Julio Sanguinetti, and an opening address by Iglesias who is the chair the conference, the Plenary would hear statements from Ministers, while a negotiating committee of heads delegations would be meeting separately to negotiate on the text of the draft declaration that the Ministers could adopt.

In addition, Iglesias announced, he himself would hold private consultations to "deblock" any complications.

The Ministerial Session is convening at an improvised Conference Centre at the Hotel San Rafael at this holiday resort here. The GATT meeting will take place in what is normally a Casino during the holiday season here, and in a sense the GATT meeting here will be a major gamble that would determine the future of international trade relations, and of economic relations, affecting both the industrial and third world countries.

At a press conference Saturday afternoon, on the eve of the opening of the meeting, Enrique Iglesias, the Foreign Minister of Uruguay, the Chairman-designate of the meeting, and Arthur Dunkel, both struck a note of caution about the very difficult negotiations a head next week, while at the same time confident that the meeting would end with agreements, and launch a process of negotiations.

"The consequences of failure here are so serious for everyone that I discern a desire on the part of all to find agreements", Iglesias told newsmen.

Unlike past rounds, which dealt with the past and the present, the new round and the issues it would deal with are those concerning the future, of the next 20 o 30 years, and required considerable political will on the part of all, the two argued.

Meanwhile, according to conference sources, Iglesias is currently working on a paper of his won that he could present to the meeting at some stage as a possible compromise.

The GATT CPS meeting Monday technically is faced with three alternative drafts - one by the group of ten, known by this document number as the 41/REV.1, another by Switzerland and Colombia known as the 47/REV.2, and an Argentinean draft, as an amendment to this, known as the 49. The US and its supporters and those involved in the 47/REV.2 document want their paper to be the basis of next week's meeting while those supporting the 41/REV.1 are opposed to this.

To present a somewhat misleading picture of their actual strength the countries involved in the 47/REV.2 effort are now calling themselves the G-47, which gives the impression of a group of 47 countries.

Any outcome here is going to depend on whether India, Brazil and those opposed to putting services and new themes into GATT would be prepared, as they seem to be, to oppose the adoption of anything involving this by consensus, and whether in that event the US and its supporters are willing to take things to a vote here, the first time that such issues would be decided in GATT by vote, or whether wiser counsels would prevail, and the US would agree to work for a compromise along lines suggested by the EEC.

Apart from the fights over the new themes, talks are also going on this weekend over the agriculture issue among the major protagonists, with reports that France and the US are also directly holding talks to avoid a bruising fight but find some compromise.

Iglesias at his press conference Saturday, underscored the importance of the meeting taking place in a third world country and Latin America, and said that while there was now some effort at macro-economic policy coordination in money and finance, it was time that trade, which had now become as important, also came under some similar effort at coordination and cooperation.

Iglesias said for the third world countries, the most important objective at Punta del Este would be to stop the growing protectionist trends and distortions in the world trade.

The second objective would be to return to previous achievements and reinforce the rules and principles of GATT in trade, and this would mean a rollback of protection. A third objective, he added, would be to deal properly with the basic issue of agriculture.

some of the third world countries, Iglesias noted, also want to ensure clarity in negotiations, if any on services, to be sure what would be negotiated and how, and what the potential risks were to the third world countries, and to be sure of the linkages between the negotiations in services and that in goods.

"Success at Punta del Este", Iglesias added, "would be if we are able o achieve something here in which words would reflect the attitudes. In other words, we should not enter into a scheme here where we hide behind ambiguous or ambivalent texts attitudes which would not be conducive to fair play and fair negotiations. If we can get that, this meeting will be a success. It will not be enough to have a text, we must have an attitude of fairness in negotiations", Iglesias declared.

Iglesias also underlined the linkage between the debt issue and the issues of trade, and the ability of the debtor countries to export and have adequate prices for their exports. The countries of Latin America he underlined, has suffered a 15 to 20 percent decline in their terms of trade, and this was responsible for the net transfer of resources from the region.

The issue hence was increasingly once again the question of terms of trade, unlike in the 70s when the third world countries had been able to obtain better terms of trade. The issue of debt and transfer of resources was hence becoming more and more a trade issue, and it was increasingly not merely a commercial policy issue, but a structural issue, the structural problems of the world economy, Iglesias added.