Jun 24, 1992

AND NOW LOOKING TO LISBON AND MUNICH.

GENEVA, 23 JUNE (CHAKRAVARTHI RAGHAVAN) Trade negotiators at the GATT appear to be now looking to the outcome of the European Community's Lisbon Summit this week-end for a possible break in the logjam on Uruguay Round negotiations.

The bilateral U.S.-EC talks on agriculture, and efforts to reach a settlement in the light of the EC's decisions on its own reform of the Common Agricultural Policy, have now reached a stage where the U.S. is reportedly waiting for answers from the EC to its "offers" (at the Washington talks in May between- U.S. Secretary of State James Baker and the EC Vice-President Andriessen).

Subject to other EC compromises in this area, the U.S. is reported to have agreed to settle on a 20 percent volume ceiling on subsidised exports and a slightly longer period for the EC to phase-out the direct payments to its farmers (as part of the CAP reform) - payments that the EC wants to put into a "green box" so as not to be challenged for subsidisation, but which the U.S. and others appear to be willing to accept only for a time-bound period of adjustment.

The EC Commission is reported to be divided on this issue, as also the member-States, with France (where elections are due early next year and where the farmers are strenuously o posing any reforms, and are supported by the opposition) still strenuously opposed and blocking any possible U.S.-EC deal.

The issue is now on the agenda of the EC Summit at Lisbon.

GATT negotiators meanwhile say that efforts to give a push to the negotiations - via resumed market access and service negotiations - have failed.

In the services sector, some of the deadlocked frame work issues could not be resolved, while in bilateral negotiations with some of the key developing countries, both the EC and U.S. are pressing for market openings for their own service industries, while pleading "political problems" at home against the "requests" from the developing countries for market openings for their service industries with some labour-intensive advantages.

In the market access group too, with the U.S. and EC deadlocked on agriculture, and the U.S. holding out on industrial-products, the developing countries including ASEAN and other major players have made clear that there could be no progress without the U.S. and EC putting on the table their clear offers.

In this context, last week Arthur Dunkel appears to have sounded out some delegations on the idea of calling a Ministerial level meeting of the Trade Negotiations Committee to resolve the deadlock.

However, this does not appear to have met with any support.

Most Negotiators feel that at this stage, such a ministerial meeting would only take the pressure off the major ICs to settle the problem.

"In any event", another negotiator remarked with cynicism, "Ministers don't come to negotiate, but only to put their signatures on agreed texts. At least after Punta Del Este, Montreal and Brussels, we should be wiser".