Oct 15, 1991

U.S., EC AND GATT VERSUS SOUTH?

GENEVA, 14 OCTOBER (CHAKRAVARTHI RAGHAVAN) The United States, European Communities and the GATT secretariat appear set, over the next few weeks, to mount a coordinated process to conclude the Uruguay Round on terms whose contours have already been privately agreed upon by the two majors.

This is the assessment of competent observers as the negotiations move this week into a more intense and even more non-transparent process by which the chairmen of the seven negotiating groups have been charged by GATT Director-General Arthur Dunkel to evolve clean texts of agreements in all areas by the end of the month.

Dunkel's intention (with U.S., EC backing) is to finish all these and get agreements on all these matters before the end of the year, leaving only the bilateral and plurilateral negotiations for exchange of concessions in market access and initial commitments in services, to be finalised early in the New Year.

This coordinated approach of the mayors and the secretariat, and aggressive tactics to achieve it, with the problems of the Third World being ignored as minor or micro issues, were apparent at last Friday's "green room consultations", attended by some 30 invited countries at level of heads of delegations, according to some Third World sources.

The chairmen of the groups have been asked pressed by Dunkel who chairs the official-level meetings of the Trade Negotiations Committee as well as the Agriculture and Textile negotiating groups, to evolve clean texts by the "negotiating process", and where it is unlikely as it seems, with their own compromise texts.

Though unofficially GATT (and U.S. and EC officials) seem to be privately telling western media that this is the intention, at the moment these texts are not being acknowledged officially as intended to be a "take-it-or-leave-it" texts, but merely described as a second revision of the texts in the draft Final Act that was before the Brussels Ministerial meeting (MTN.TNC/W/35 Rev 1).

But in reality the texts that will be produced are likely to become a take-it-or-leave-it texts, and likely to be those that the U.S. and EC have privately agreed upon and could live with, but not publicly acknowledge. They would be presented as revised texts of the chair of various negotiating groups.

At that stage the distinction between a "revision" and a "take-it-or-leave-it" text would be mere semantics. Those having differences and difficulties with the texts would have to fight to put their viewpoints or alternatives in - and could easily be "isolated" in the even more non-transparent ways of negotiations being carried on.

At the last meeting of the rule-making group dealing with balance-of-payments, when the chairman of that group, found a number of Third World delegations still opposed to taking up the issue and making changes in the GATT provisions, even though the consultations themselves were informal and hardly 20 delegations present, he announced that he would hold further informal consultations, meaning bilateral talks, one Third World participant at the meeting said.

Other chairmen too are moving in this direction, participants said.

In his consultations last Friday with heads of delegations, when Dunkel was asked by some Third World delegations about an intermediate process between the revised texts which could be a basis for further negotiations, and agreements on them, would appear to have come down heavily by accusing them with raising "micro problems" while he was trying to deal with "macro-problems".

The EC, which itself has been pushing Dunkel to produce an "agricultural text", too would appear to have fallen foul of those Third World delegations who were unwilling to make the GATT official an arbiter of their country's destinities, by threatening to "squeeze" them and about how the Third World countries being the sufferers if the Round was not concluded.

Third World delegates privately say that the Dunkel thrust now, backed by the U.S. and EC from behind, is to push for all the texts - frameworks - to be readied in a clean form and presented to governments so that they could agree on them, leaving only the negotiations on market access in goods and for initial commitments in services to be negotiated bilaterally and settled in the first few weeks of the new Year.

With the Third World countries being pushed to make concessions in these various areas - intellectual property, investment and services, as well as for tightening GATT rules against them - on the basis they would get concessions in the market access areas, negotiators from these countries would be making concessions on the basis of vague promises.

Though Dunkel has been telling them that none of the agreements would be final until everything is final, this kind of negotiating process would make it even more difficult for the countries concerned to withhold their assent on the frameworks that would be already tentatively agreed. At that stage early in the new year, each developing country in reality would be looking at what it gains in market access, and it will be easy to isolate one from the other.

The GATT officials have been encouraged by the informal meeting of EC trade Ministers in Amsterdam last friday, where it reportedly became clear that with Germany having changed its stance on agriculture and willing for cuts in subsidies to its farmers, the French and Irish are now isolated within the EC in their opposition to agriculture concessions.

This would make it easier for the U.S. and EC to privately agree on an agriculture deal which could then be presented as text proposed by Dunkel who chairs the Agriculture Committee.

The U.S. would now appear to have set its own sights lower in agriculture, and persuaded some of the Cairns Group to do the same, namely to settle at this stage for an agreement whereby the EC would accept separate commitments for reductions of domestic support, border protection and export subsidy.

The U.S. would appear to be willing at the moment not to push the EC on the domestic support too much, but concentrate on tariffication of border protection and firm commitments to reduce export subsidy.

The U.S. approach would appear to be that once the rules are clear, the exact quantum of reductions could be less now (to make it more palatable to EC domestic lobbies), but lay the groundwork for future bilateral or other negotiations to reduce them more.

When this is combined with strong gains for the U.S. and EC on intellectual property and other issues where the South has to give, it is viewed as saleable to the U.S. Congress.