INFORMAL NEGOTIATIONS ON AGRICULTURE, SERVICES.

Sep 20, 1986

INFORMAL NEGOTIATIONS ON AGRICULTURE, SERVICES.

PUNTA DEL ESTE, SEP. 18 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The Uruguayan Foreign Minister and Chairman of the GATT Ministerial Meeting here was holding consultations Thursday night with various groups of delegations on some of the major knotty issues before the meeting, including the issue of services.

Conference sources said that only after intense informal consultations and negotiations Thursday night and even Friday would Iglesias be in a position to put forward any compromise text of his own.

The meeting is scheduled to end Friday, but it is now certain that it will run well into Saturday.

At present, Iglesias and his advisors are trying to formulate texts on various issues with a view to consulting key delegations and obtaining their reactions in an effort to build a consensus.

The Plenary of the meeting ended its general debate Thursday evening.

The committee of the heads of delegations also completed its discussion of the several issues -- traditional GATT areas of trade in goods, new themes, and some other items -- that individual delegations raised.

The committee also heard views on the modalities of the negotiations, with most speakers emphasising the need for transparency in the negotiations, and the issue of participation.

On the last, several of the participants said there should be scope for the widest participation, particularly by all third world nations.

India and a few others, including several East Europeans, suggested the adoption of the Tokyo round formula.

Meanwhile, the European Community got its act together on agriculture, with the EEC Council of Ministers providing the commission with a mandate and a formulation on the wording of the agricultural issue to be included in the new round.

The Swiss-Colombian draft, the W/47.REV.2 paper, calls for negotiations including among others "the possible phased reduction within an agreed timeframe of the negative effects of direct and indirect subsidised competition on world markets".

While the Cairnes Group has been trying to strengthen this formulation, the EEC has sought to weaken it, and is insisting on bringing not only its practices and policies but those of others also to the table.

In its formulation, the EEC has now suggested negotiations should improve "the competitive environment by increasing disciplines on the use of direct and indirect subsidies and other measures of support, directly or indirectly, for agricultural trade, including the possible reduction of the negative effects they may have on world markets".

The EEC proposals in effect would involve negotiations, not on the reduction and eventual elimination of export subsidies, but the reduction of their negative effects, and discussing both direct (as EEC's) an indirect support measures (as in the United States) for agricultural exports.

Discussions were going on Thursday night between the EEC and the U.S., and the EEC and the Cairnes Group.

Meanwhile at a press conference Thursday evening, the Indian Finance Minister, V.P. Singh, said that India and other members of the group of ten had come a long way in their approach to the issue of services, and a compromise was possible provided the substantial question of defining the goods and services was met.

India and others had now sought to meet the viewpoints of the industrial nations by no opposing efforts at multilateral discipline in services, and had expressed readiness to enter into discussion about negotiations on services.

"Such a process could start here at Punta del Este. Representatives of governments, in that capacity, could initiate here negotiations that could go into the whole issue. On this major issue there is now common ground".

Services, Singh declared, was not the problem or one on which there was difference of opinion. The problem was in the efforts to establish a linkage between trade in goods and trade in services, opening up the prospects of retaliation against exports of goods, a third world country for reasons of its national policies was unable to open up its markets for services.

"Such a prospect would be oppressive for the developing countries whose service sectors are being used to bring about socio-economic transformation ... hence our insistence against any linkages".

Singh said that despite what might be said now, the scope for retaliation in goods because of services sectors would be real once the two were put into GATT.

And while even without it such retaliation or linkage was taking place, there was no reason this practice should be "legitimised" by putting the two into GATT, Singh insisted.

Singh said he was unable to see the objections to the two separate negotiations, one on goods within GATT, and the other on services outside GATT, by a decision of governments assembled here in that capacity (but not as GATT CPS).

India for one would be ready to agree on a timeframe for such negotiations, if the fear was that these would be interminable.

Asked about Indian reactions to various compromises that have been talked about, the Indian Minister noted that Iglesias was now trying to evolve a compromise, and said he should be given a chance without his publicly commenting on any.

Asked about the U.S. view that the issue should be taken to a vote here, on the basis of the formulations in the W/47.REV.2 text providing for integrated negotiations on all old and new issues within GATT, Singh noted that GATT decided matters by consensus.

"We do not like to have a vote. But if it has to come a vote, it has to come to a vote. But things will not stop with a vote on services. other things too will then come to a vote, both here at Punta del Este, and in future in GATT, and the voting will not all go one way".