May 16, 1991

DUNKEL LOOKING TO U.S.-EC DEALS ON URUGUAY ROUND?

GENEVA, MAY 15 (TWN) The days of passing the buck around the globe to avoid crucial political challenges on trade policies are long gone and the focus of world attention was clearly on U.S. and the EC and could "neither be diverted nor avoided", GATT Director-General Arthur Dunkel has warned.

Dunkel made these remarks in London Wednesday while addressing the European Atlantic Group. A copy of his prepared text was released to the press by the GATT secretariat here.

The speech suggested that Dunkel was looking to and promoting the idea of U.S.-EC bilateral deals to conclude the round successfully and as soon as possible.

Dunkel said that while all participating governments had a responsibility to themselves and to the rest of the world, Washington, Brussels and the EC member-states had to take the first steps to break the log-jam and Dunkel was confident they would be talking bilaterally in coming weeks seeking changes in their negotiating positions that were so badly needed.

Two pre-conditions for a serious restart of substantive negotiations in the Uruguay Round, he said, were whether the U.S. administration would secure from Congress an extension of its fast-track authority and whether the European Community could negotiate "authoritatively, responsibly and comprehensively on all subjects including agriculture".

Dunkel said that while some tough choices had to be made on the Uruguay Round issues in Tokyo, Seoul, Ottawa, Brasilia, Helsinki, Berne and other capitals, the focus was now clearly on Washington, Brussels and other capitals of the EC and "the world's attention can neither be diverted not avoided".

A successful conclusion of the Uruguay Round, the GATT official claimed, would allow the world "to pursue goals of enhanced affluence in industrial countries, to bring the developing countries into the mainstream of international economic and trade relations and to facilitate the protection of environment and work towards fulfilment of other human objectives".

The failure of governments at Brussels to achieve the political breakthroughs for successfully concluding the negotiations showed how difficult were the choices posed - and it did not merely concern agriculture.

Only a balanced and substantial package of results on subjects ranging from market access, textiles, and strengthened rules to new areas like services and intellectual property rights would satisfy all participants.

And while the Uruguay Round negotiations had been remarkable for its genuine multilateralism - with active participation of many more governments than in any previous trade negotiations of this kind - it had fallen to Brussels and Washington "to set the scene which will permit a concluding phase", Dunkel said.

While at high political levels the U.S. and the EC were committed to bring about a major result in the Round, whenever (in the negotiations) this political resolve was sought to be translated into the nitty-gritty of negotiations "we appear to suffer from something akin to a dialogue of the deaf".

"If the strategic military alliance (across the Atlantic) is as strong as ever, trade relations are bedevilled by accusations, self-righteousness, mutual understanding and the inability to distinguish special-interest pleading from the general public good as seems possible".

Referring in this regard to the GATT Council review of the U.S. and EC trade policies (under the Trade Policy Review Mechanism), Dunkel said there was a remarkable similarity in the balance of praise and criticism handed out in each case:

"Either the U.S. and EC are both paragons of open trade virtues with just the occasional lapses from the straight and narrow, or they are both rough players whose good points are largely obscured by their frequent reversions to foul play. Whatever the case, there is not much to choose between them. So trade policies and rhetoric founded on the idea that one side is all white and the other all black are bound to be both futile and counter-productive".The political processes involved in the U.S. and the EC for bringing about substantial reforms, Dunkel conceded, were fraught with complication and difficulty - in the case of the EC the pain of securing some kind of consensus among 12 powerful member states and in the case of the U.S. negotiating within the multilateral system was a headache when it involved the scrutiny and direct responsibility of the Congress for trade law.

While both sides were working under pressure, and both systems were democratic processes, and while the political risks for the European governments and the United States were being carefully and endlessly weighed and assessed, the rest of the world was having to sit on its hands and watch potential economic-benefits slip away. The uncertainty was also having unsettling effects on investment decisions across a wide range of sectors.

While every effort could and would-be made to conclude the Round this year, if it was humanly possible, and the secretariat could provide ideas and texts to facilitate work of negotiators, "agreements could not be imposed and could not be dragged out of. thin air", Dunkel said.