Sep 18, 1986

GATT CPS GET DOWN TO TACKLE DIFFERENCES OVER NEW ROUND.

PUNTA DEL ESTE, URUGUAY SEP. 16 (IFDA/CHAKRAVARTHI RAGHAVAN) -- As the Plenary of the GATT Contracting Parties continued to hear general statements, a committee of the whole began Tuesday morning to try to tackle and reach agreement on several of the outstanding issues relating to the proposed new round of Multilateral Trade Negotiations (MTNS), intended to be launched here at the end of the meeting.

The committee of the whole of the CPS is chaired by the Chairman of the session here, Enrique Iglesias, Foreign Minister of Uruguay.

Iglesias has attempted to get around the controversy as to which of the three drafts, remitted by the GATT PREPCOM, should be the basis for further negotiations here, by identifying six issues to be tackled by the committee, along with any others that the CPS individually or in groups, might raise.

The six issues identified by him are: standstill, rollback, safeguards, agriculture, textiles, services, counterfeit goods and other aspects of intellectual property rights, and trade-related investment issues.

The last three are the new themes being pushed by the United States and its supporters, and whose inclusion is opposed by Brazil, India and others in the Group of ten.

Though much of the public attention in the media has been concentrated on the differences over the new issues, and on agriculture, there are in fact serious differences too on the questions of standstill, rollback -- both on their content an level of commitments and their implementation -- as well on the safeguards issues and the question of bringing trade in textiles and clothing under full GATT disciplines (rather than the MFA regime, which is a derogation from GATT).

Apart from these issues identified by Iglesias, there are also indications that some of the commodity-producing/exporting countries plan to bring up this as a separate issue to be tackled, both on some trade-aspects in the MTNS and for parallel actions in UNCTAD and elsewhere on price stabilisation issues.

In the plenary statements Monday evening, some eleven speakers were heard, all of them either supporting the Colombian-Swiss text before the CPS here, or leaning towards it, but with several reservations.

Argentina, which was a co-sponsor in the PREPCOM of the draft of the Group of ten, known here by its document number as the 41/REV. MQ paper, and which later tabled its own draft W/49 with a slightly different approach on services and slightly distances itself from the group of ten, came out with a strong indictment of the three major trading blocks, and their efforts to agree among themselves and force this on others.

The Argentine Foreign Minister, Dante Caputo charged the three with setting up rules on the basis of the asymmetry in world, but pretending there was symmetry and equality of power among nations, and then insisting on these rules being observed by the weak while they themselves, when it suited their interests, disobeyed or disregarded these rules.

Singapore, speaking for the Asian countries, which participated in the efforts behind the Colombian-Swiss text, knows as the 47/REV.2 paper, agreed that this could form "a basis" for discussions and work here, but underlined its shortcomings.

Singapore also made clear that in the new round there should be no linkages between concessions offered on traditional issues with concessions offered for "some other issues that may be agreed upon" -- a reference to the new theme issues.

A misleading argument that some academics have been advancing in support of including the new themes has been that third world countries could open their markets in new themes, where comparative advantage is supposedly with the big industrials, and in return secure liberalisation for third world exports in manufactures and semi-manufactures where comparative advantage has shifted to them.

The United States has cleverly used this to put forward the view that if the third world opens up its markets for services, investments and for TNC rights in intellectual property, the U.S.S would promise not to raise any new barriers to third world exports.

The Singapore remarks, coming from a group of U.S. supporters on the new round, was significant.

Asian sources privately say that within their group there has been the growing view that perhaps the compromise ideas on the new themes, put forward in Geneva in private talks by the EEC -- a separate inter-governmental meeting launching negotiations in services, parallel but legally separate from the GATT MTNS -- would be in the best interests of the third world, and the Asian themselves.

But whether they would come out openly and say so in the negotiations in the committee of the whole remains to be seen.

Singapore also underscored the need for credible commitments on standstill and full implementation of rollback, as a minimum for restoring confidence and to ensure meaningful and successful new round.

The Asian spokesman also stressed the Asian's concerns over trade in tropical products, and pushed for establishment of a special negotiating group on tropical products in the new MTNS -- an idea opposed by the United States, which considers itself to be also a producer/exporter of tropical products (cotton, groundnuts, etc.), and which is doing so under a permanent waiver from GATT rules.