SINGLE MARKET WOULD BENEFIT ALL TRADE PARTNERS, SAYS EEC.

Mar 22, 1990

SINGLE MARKET WOULD BENEFIT ALL TRADE PARTNERS, SAYS EEC.

GENEVA, MARCH 20 (BY CHAKRAVARTHI RAGHAVAN) -- The 1992 Single market in the European Community would bring benefits, not just for the Community, but all trade partners, the Commission of the European Community asserted Monday evening.

The Community spokesman, Gerard Vernier, was speaking at the sessional committee of the UNCTAD Trade and Development Board on an item related to bilateral arrangements and regional economic integration, especially those having a major impact on world trade.

However, while Vernier made some detailed comments on aspects of the secretariat report, he gave no specific responses to the G77 statement and the detailed points made there, but contended himself merely with some general observations.

The Community, he said, was "dismayed" by the "pessimistic" view of the seventy-seven about the 1992 programme. In almost every aspect where a vision of the future must be chosen, the pessimistic tone had prevailed, he complained.

This "unrealistic and lopsided" view, Vernier said, was not the best approach for Third World countries to face the challenges of the future. There was no ground to talk of the temptation (of the EEC) to pass costs of structural adjustment to the Third World or charging an "admission" price for access to the EEC markets or of Europe’s "long history of national protectionism".

The issue of "reciprocity" was also misunderstood, he added.

While rejecting some of the conclusions of the secretariat and of the Group of 77 on likely adverse effects on Third World countries, the EEC representative conceded that such a major change in the world economy as the Single market required "some adjustment" both in the Community and trading partners.

Vernier also reiterated that "open international trade and trade liberalisation" remained the guiding principles of the EEC trade policy, and referred to the community's willingness to liberalise financial services and growth in volume of imports of manufactures from the Third World countries since 1981 as proof of this policy.

The EEC spokesman made no detailed comments on the Group 77's assessments that protectionist policies would prevail, merely saying that there would be "a few difficult sectors" which might require "particular measures" but that such measures would be "time limited and degressive".

Commenting on the secretariat's report, Vernier said that 1992 and Uruguay Round were complementary and mutually reinforcing in the joint pursuit of trade liberalisation.

These developments would bring new economic opportunities as well as challenges for Third World countries and the latter's capacity to take advantage of the opportunities and meet challenges would depend not only on their economic structure and level of development out also on their own initiatives.

It would be primarily the Third World countries with "flexible production capacity" that would take advantage of the enlarged European market and the new opportunities it offered for increased earnings.

However, he conceded, there were problems and dangers that should not be played down: the varying capacity of the EEC's partners to take advantages of the opportunities offered by the single market combined with the worldwide trend towards liberalisation would lead to greater competition on the EC market.

"In this situation the weakest could well find the going initially much harder and they must be able to count on receiving special consideration and support under our development policy".

The EC representative referred in this connection to the Lome-IV agreement, and the new orientations being considered for EEC cooperation with Asia and Latin America.

The EEC spokesman also questioned the UNCTAD comments that the elimination of the powers of EC states under Article 115 (to restrict goods originating outside but coming in via another member-State), could well result in residual national quantitative restrictions being continued community-wide.

"The Community's firm objective", he said, "is to liberalise. Following the Commission decision of 1987, the criteria for approving and applying exceptional measures are more restrictive. In 1988, protection measures under Article 115 fell by 20% and measures by 70%. We have recognised that there will be a few difficult sectors, which may require particular measures. However, we would emphasise that any such measures would be time limited and degressive".

As regards standards, as well as testing and certification, for most products the 1992 requirements would be mutual recognition among member-States. This meant that an exporter would only have to satisfy the legislation of one state, choosing the member-country whose legislation suited him best, and once the product was imported it would qualify for free circulation within the whole Community.

The possibilities of coming up against delays imposed by customs officials (raised in the UNCTAD report) would "most probably prove to be imaginary", he added.

However, "some adjustment on our part and that of our trading partners might be necessary as the Community had to respond to the political demand for higher levels of health, safety, environmental and consumer protection".

"We will cooperate closely with our trading partners, particularly with developing countries through cur existing technical cooperation arrangements to address any particular problems", the EEC spokesman added.

The fears, in the secretariat report, that the Community might be "inward looking" and might tend to shift the burden of adjustment to third countries, Vernier said were "wholly unfounded" and ignored the long-standing and oft-repeated commitments of the Community at the highest level that in the context of 1992 it would remain open to the world.

He cited in this connection the EEC's willingness to open up entire new sectors of the economy, such as financial services, and the increasing volume of the EC imports of manufactures from the Third World countries to suggest that these were the facts of "an outward locking Community firmly wedded and committed to the open multilateral trade system".

The EC spokesman however did hot deal in this connection with the G77 statement which had contrasted the Community's claims with its postures in market access issues in the Uruguay Round and its demands on Third World countries on new themes or in the attempts to secure right of "selective" safeguards.

The Community, Vernier said, was "particularly disappointed" over the Secretariat's report of the potential in the Community to resort to anti-dumping measures to reduce the effects of 1992 on industry facing structural adjustment, and argued that there was no link between anti-dumping measures and 1992.

Beyond saying that the GATT recognised the desirability of increasing trade liberalisation through economic integration the EEC spokesman also refused to enter into a discussion in UNCTAD on GATT Article XXIV (which lays down the conditions and procedures for forming customs unions and free trade arrangements).