Jul 4, 1989
GATT BOP COMMITTEE SUSPENDS CONSULTATIONS WITH SOUTH KOREA.GENEVA, JUNE 30 (BY CHAKRAVARTHI RAGHAVAN)— The GATT Balance of Payments committee has decided to suspend its consultations with the Republic of Korea over its trade restrictions under article XVIII: B and will resume them no later than week of October 23, the GATT press office announced Friday.According to GATT sources, the consultations will resume only after the international monetary fund completes its own scheduled article IV consultations under the IMF’s general surveillance provisions. In the consultations with the BOP committee, which began Monday, South Korea offered to discuss with the BOP committee conditions under which it might be willing to disinvoke its use of article XVIII: B to impose quantitative and other restrictions on imports. Firstly, South Korea said, it should be given "sufficiently long grace period" for further liberalisation and phase-out of existing restrictions maintained under BOP cover. Secondly, the BOP Committee should reach an understanding that Korea "will not be subject to any unilateral actions or to multilateral legal challenges in terms of GATT provisions during the agreed grace period." GATT sources said that draft conclusions, prepared by the secretariat, was more or less acceptable to most of the countries. However, the U.S. wanted more stringent conditions and greater discipline in using BOP cover, as well as for monitoring and surveillance during the 'grace period'. This was not acceptable to South Korea, and probably would have run into opposition from many of third world countries who would not like to create a precedent against them for the future. Since the IMF’s report to the committee on the South Korean situation was based on 1987, and new IMF team for consultations is due soon, the BOP Committee decided to put off further consideration, the sources said.