GATT COUNCIL PUTS OFF ACTION ON SOVIET OBSERVER REQUEST.

Apr 5, 1990

GATT COUNCIL PUTS OFF ACTION ON SOVIET OBSERVER REQUEST.

GENEVA, APRIL 3 (BY CHAKRAVARTHI RAGHAVAN) -- The GATT council put off action Tuesday on the request of the Soviet Union for observer status at meetings of the Contracting Parties and the Council.

In green room consultations Monday the Soviet request apparently ran into some objections from Japan on the timing of the grant of observer status, participants said. Both the U.S. and Japan want the Soviet Union to be given observer status only after the conclusion of the Uruguay Round. The EEC on the other hand has said it would support the request.

The Chairman of the GATT Council, Amb. Rubens Ricupero, told the Council Tuesday that consultations on the request were under way and meanwhile the item would remain on the agenda.

In other actions, the Council extended till 31 July the time for Tunisia to complete its domestic formalities to sign the protocol of accession, and agreed to Guatemala's request that its application for provisional accession to GATT should be converted into an application for full accession. The same working party will now look into this request.

The Council also named Amb. Michael Joseph Lillis of Ireland as the Chairman of the working party looking into the request of Bulgaria for accession to GATT. The Bulgarian request made before the Uruguay Round was launched has been stalled, at U.S. instance, until a few weeks ago over the terms of reference of the working party. This was agreed to only this year.

The Council agreed to a U.S. request for a panel to look into its complaints over Thai import restrictions and internal taxes on cigarettes. In agreeing to the reference, Thailand however underscored the need to take account of the situation of Third World countries under GATT dispute settlement procedures, as well as consultations with relevant international organisations, in particular those dealing with human-health which was relevant to the dispute.

Under any other business, Venezuela, supported by a large number of Latin American countries, complained over the pressures on Venezuela in the working party studying its request for accession, to take on obligations over and above that in the General Agreement and out of line with its development situation. The Venezuelan complaint was supported by Colombia, Uruguay, Argentina, Mexico, Brazil, Chile, Cuba, Peru, Nicaragua, Dominican Republic, Jamaica, and Bolivia and Costa Rica, two observers whose accession requests have been accepted but are yet to complete the formalities.

Latin American sources said that at the last meeting of the working party on March 28, there were sharp differences on the terms of the protocol and no conclusions could be reached. "It was a straight North-South division", one delegate commented.

Earlier, Nicaragua welcomed the U.S. decision to end the economic sanctions and restrictions against it but underlined that reopening of the border for trade was not a guarantee of equal conditions required by GATT for restoration of trade. The U.S. would also have to re-establish the sugar quota which had been withdrawn (and ruled as GATT-illegal by a panel) and restore GSP privileges, withdrawn in 1987, to Nicaragua.

The U.S. delegate, Yusuf Yerxa, said that the U.S. President had made a determination that the national security emergency, used to impose sanctions against Nicaragua and escape GATT obligations by reference to Article XXI, no longer existed and the trade and economic embargo was being withdrawn. The U.S. would also be taking steps to restore the sugar quota to Nicaragua and advise that government on the procedures to be taken to become eligible for the preferences under the Caribbean Basin Initiative and the U.S. GSP schemes.