Jun 17, 1989


GENEVA, JUNE 15 (BY CHAKRAVARTHI RAGHAVAN) The U.S. announced intentions to take unilateral action against Brazil under section 301 of the U.S. omnibus trade and competitiveness act has had further repercussions on the Uruguay round this week.

In preliminary consultations about next week's meetings of the GATT Council, it became clear that while the general issue of "U.S. unilateral actions and threats under its trade and omnibus act, would be discussed in the special GATT council, the specific issues relating to threats against brazil and India would come up in the ordinary meeting of the Council on June 21-22.

Brazil and India have not so far indicated what action they seek from the Council.

But it is becoming apparent that the idea of some of the industrialised countries and the GATT secretariat that the U.S. action should be condemned by participants, with a suitable statement by the GATT Council chair and/or the Director-General would no longer suffice, nor could the matter be brushed under the carpet in some kind of statement like that which emanated from the recent OECD ministerial meeting in Paris.

At informal consultations this week in the Uruguay round negotiating group on non-tariff measures, Brazil reportedly noted that it was the target of U.S. actions under "super 301", among other things for its non-tariff measures, and under the circumstances it would be unable to undertake any negotiations on the subject in the negotiating group.

Meanwhile, and independently, the Indian Commerce Minister, Dinesh Singh, Wednesday cast doubts on usefulness of continuing the dialogue in the Uruguay round until the U.S. 301 issue is resolved.

India too is a target of section 301 actions for its policies towards foreign investment, and for closing its domestic market to foreign insurance. Insurance is a nationalised sector in the Indian economy, and neither Indian nor foreign private enterprise is allowed.

Singh told Indian correspondents that there could be no meaningful negotiations in any multilateral fora like the Uruguay round so long as the U.S. moves for bilateral negotiations and unilateral actions remained unresolved, "and GATT has to decide these things now, and not a year or two later."

Later Singh met GATT Director-General Dunkel, and reportedly advised him that it would not be feasible to seek solutions to the U.S. 301 problem by going ahead with the Uruguay round in the belief that a strengthened GATT would emerge and this would obviate the need for section 301 actions and responses.