Sep 17, 1986

SANGUINETTI APPEALS FOR FORESIGHT AND POLITICAL INSPIRATION.

PUNTA DEL ESTE SEP. 15 (IFDA/CHAKRAVARTHI RAGHAVAN) -- President Sanguinetti of Uruguay appealed Monday to GATT Contracting Parties for "A supreme effort, reflecting foresight and political inspiration", and launch a new trade round that would end danger or suicidal trade war and promote growth, particularly in the third world.

Julio Maria Sanguinetti was inaugurating the Ministerial Session of the GATT Contracting Parties (CPS), which is faced with the task of agreeing on the subject matter, modalities and participation in a new trade round, and launch it here.

In his inaugural speech, prepared for delivery, Sanguinetti underscored the importance of free trade and access to markets at fair prices to enable third world countries, and specially the debtor countries, to be able to service their debts in an environment of growth.

The Uruguayan President put the setting for the GATT meeting against the background of the current adverse international environment for the development of the third world, as also the democratic reconstruction process now under way in Latin America, whose success depended on capacity of governments to find urgent solutions to problems of income and employment, and modernization of production structures and economy of the countries.

Long term growth in Latin America depended on expansion of exports, in a climate of open import, trade and investment policies - all which were now affected by the adverse international economic situation, and specially the protectionist policies in industrial countries.

The uncertainties and disorderliness of international trade had further reduced the already low investment and capital flows.

Uruguay participation in the meeting was in the sincere hope that Punta del Este would mark the beginning of a new system of international relations, and its domestic efforts would be matched by those in the world at large.

The meeting, Sanguinetti reminded the participants, was taking place at a special time in the history of international relations, when they all had to decide whether they would opt for "open and smooth" international relations, promoting vigorous international trade flows with equal opportunities for all, or "whether we will choose the path of trade wars".

Outlining the achievements of the GATT system in the post-war era, and its present problems and the gradual deterioration that endangered its very existence, Sanguinetti added: "Either an effort has to be made to ensure the complete application of its principles and the modernisation of its structures or it will be overwhelmed by the march of time and the way opened for a period of unforeseeable consequences in international economic relations".

It was paradoxical that when the most powerful countries were undertaking joint study of their macro-economic policies for monetary and financial concertation, "there should be lack of political foresight and common determination to advance along the path of trade liberalization", Sanguinetti pointed out.

Referring to the importance of solutions for the problems of agricultural trade for Uruguay, and other third world countries, Sanguinetti said that unless they began speaking openly about the subject, instead of hiding behind its being "a special case", it would destroy the very basis of future world trade.

Uruguay was not seeking simplistic solutions that would not be viable, but rather seeking a process that would enable them to see light at the end of the tunnel within a reasonable period of time.

No doubt it would involve some difficult adjustments for the industrial world, as had been the experience of Latin America in another context since the beginning of this decade.

For the third world, and for Latin America, the problem of financing was inseparably linked with trade problems.

"Unless our countries enjoy favourable trade conditions, which imply fair prices, access to markets and expended exports, our capacity to meet our debt servicing commitments will be seriously eroded or even destroyed ... we want to tilde up to our commitments and will continue to do so. But we want world trade to become the fulcrum of our capacity to pay and to grow".

Underscoring the importance of a successful meeting here, Sanguinetti warned that a genuine solution to current trade problems could not be achieved on a bilateral basis, but only through a revitalized GATT multilateral machinery and respect for its basic principles.

Punta del Este, the Uruguayan President noted, would not be end of a process, but barely the beginning, and the task here was "to prepare the way for a difficult and thorny negotiating process".

For this it was of basic importance that a spirit of mutual confidence should prevail among all parties.

"There will be no successful negotiating round if the exercise beginning today lacks credibility, and credibility invariably constitutes the basis of the honest performance of any contract".

Appealing for foresight and political inspiration on the part of all, Sanguinetti added: "We aspire to free and universal world trade because we believe in freedom in every sense of the word. A world which is subject to the law of the jungle and in which the powerful prevail is a world of conflict and not of peace".

After the formal inauguration, et for 1800 GMT, the formal meeting of the GATT CPS was due to open, and elect the Foreign Minister of Uruguay, Enrique Iglesias as its Chairman, and adopt the Agenda, before hearing statements of Ministers in the Plenary. Tuesday morning, the meeting will start detailed negotiations in a committee of the whole, chaired by Iglesias, to attack thorny issues and agree on a draft declaration for adoption.