Sep 19, 1986

TALK OF FLEXIBILITY AND COMPROMISES AT GATT MEET.

PUNTA DEL ESTE SEP. 17 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The Ministerial Session of the GATT Contracting Parties (CPS) entered its third day Wednesday, AMIDST some corridor talk of slight signs of flexibility and movement on the part of various contending sides toward compromises.

The talk was however based on intangibles, and apparently based on the fact that those involved in fierce public arguments are privately talking on a bilateral and plurilateral basis.

The Conference Chairman, Enrique Iglesias, was optimistic Wednesday morning that compromise agreements to thorny issues would ultimately be found.

The CPS meeting is due to end Friday, but could perhaps go on till the weekend.

Conference sources said midday Wednesday that solutions would emerge only when "the panic button is hit", and that stage is yet to come.

The Plenary of the Ministerial Session continued to hear general statements, with some 20 CPS and observers and organisations listed to speak.

The committee of the whole, at the level of heads of delegations, was due to complete the first round of discussions and views on the hard core topics identifies by Iglesias.

Late evening, the committee completed discussions on the issues in traditional areas -- including standstill, rollback, safeguard, agriculture, and textiles. Thursday morning, the committee was to take up money and finance issues and their links to trade, the question of services, intellectual property rights, and trade-related investment issues.

The speeches at the Plenary continued to show that the picture of two monolithic groups, with hard and rigid positions, is somewhat unreal, and that behind the affirmations of support to the two contending groups, countries within or supporting either side have very many nuances.

While some, belonging to the group of then and their document W/41.REV.1, delivered some conciliatory speeches, indicating their willingness to explore a process on new themes provided their basic concerns would be met, some of the others supporting the Swiss-Colombian drat, W/47.REV.2, in fact spoke more specifically of their problems and objections, and these appeared to be not too different from those being voiced by the Indias and Brazils here so far.

The Sri Lankan Deputy Minister of Trade, M. Wijeratne, told the Plenary Wednesday that his country was interested in the role of services in the growth and development of its domestic economy, and hence "The place of national regulations in this context cannot be compromised".

Sri Lanka is a member of the group of 20 third world nations supporting the W/47.REV.2 document.

Wijeratne went on to point out that the national examinations and exchange of information carried out in GATT over the last 18 months had raised many complex issues and, as the report of the Chairman of that group (Felippe Jaramillo of Colombia) showed, it had been "inconclusive".

GATT's own legal competence and jurisdiction, Wijeratne pointed out, was disputed.

"In this circumstances", he added, "my delegation is willing to consider the initiation of a process for the examination of possibilities for multilateral action in services which would take into account all these factors. As for issues such as investment and intellectual property rights, we believe that there are other fora more competent to handle them".

The Foreign Trade Minister of Sweden, another country supporting W/47.REV.2, while supporting the inclusion of services and new themes on the Agenda of the new round, said Sweden recognised there were diverging views on GATT's competence to deal with trade in services. But GATT could not avoid addressing this important sector if it was to remain the central framework of international trade relations.

The Swedish Minister, Mats Hellstorn, went on to say that accepting to start negotiations on this would not prejudice the issues of legality, and only when negotiations are completed the issue of its incorporation into the GATT system could be considered.

Negotiations could not also imply automatic liberalisation of trade, and there were "a number of perfectly legitimate reasons for regulating certain service activities, which will have to be respected".

Malaysia's Tengku Razaleigh Hamzah -- Malaysia supports the W/47.REV.2 paper as a basis here -- said "there should not be any linkage between the progress of discussions and concessions offered in the traditional issues and those offered for new issues".

Hamzah also underlined the shortcomings in the W.47/REV.2 text, and especially in the area of tropical products, where he said a special negotiating group should be set up to facilitate early conclusion and immediate implementation of results of negotiations.

On the other side of this debate, Egypt and Yugoslavia, both members of the group of ten, indicating willingness to set in motion a process of multilateral action on services, provided a few of their concerns were met.

The Egyptian Minister for Economics and Foreign Trade, S. Abou Ali, said Egypt took note of the priority attached by some industrial countries to the subject of trade in services.

"But we also recognise that the delinkage between trade in goods and trade in services has to be maintained. We all know that services have their own specificity and that domestic regulations aimed at furthering economic development and socio-political goals should be respected".

Yugoslavia's N. Krekic, Federal Executive Council Member and Secretary for Foreign Trade, said that when the international trading system in the field of goods was in such danger for its survival, "we should not wait to reach agreements on issues which are beyond the competencies of the GATT and which have not been well enough elaborate".

This, he said, had been proved by the report on exchange of information on services.

"However", Kreikic declared, "respecting the importance of the sector of services for the economies of many countries and having in mind future development, Yugoslavia is ready to take into consideration how to set in motion a process for multilateral action relating to trade in services".

"We think that for so heterogeneous and so important a sector for the functioning and development of economies, specific and gradual solutions should be sought through a separate process of negotiations".