Oct 15, 1987


GENEVA OCTOBER 14 (IFDA/CHAKRAVARTHI RAGHAVAN) – The European Community was due Wednesday to table a paper before the Uruguay Round GATT Negotiating Group on Tropical products its proposals for trade liberalisation in this sector.

At a meeting with third world delegates Tuesday evening, the EEC Delegate, Amb. Tran Van-Thinh reportedly gave a broad outline of the proposals and said that the EEC weans aware of the frustrations among the third world countries of failure in GATT to deal with this issue fore more than two decades despite repeated promises of industrialised states in previous rounds and Ministerial declarations.

The EEC was aware that on the outcome of the liberalisation efforts in Tropical Products would depend the participation of third world countries in the Uruguay Round, in his view.

The EEC was aware of the varying and sometimes contradictory interests among the third world countries on this issue; such as between the ACP countries that had special preferential arrangements with the EEC and others. But these differences should not be exaggerated, and solutions could be found.

If for example as a result of this exercise there was greater liberalisation in all markets, the ACP countries would gain more by increased access for example in the U.S. and Japan than they would lose on the EEC markets through competition.

The EEC proposals, to be unveiled Wednesday afternoon at the meeting of the negotiating group, would cover tariff and non-tariff barriers and domestic taxes inhibiting consumption.

In the tariff area they would be willing to negotiate reduction or elimination of duties on basic products, significant reduction or elimination on semi-processed products, and up to 50 percent on finished products.

In the non-tariff area they would be prepared to remove residual quantitative restrictions (QRS) and negotiate reduction or elimination of consumption taxes.

The latter vary from product to product and EEC member country to member country.

Such taxes are maintained in Denmark, The FRG, Italy, Belgium, Greece, Portugal, and in France.

While no overall figures were available, in the case of west Germany alone, such internal taxes account for six billion Deutsche Marks (about 3.2 billion dollars).

Tran reportedly indicated to the third world group that the EEC would want the coverage to be extended to "all tropical products", and not merely those exported by third world countries which have been to focus of traditional discussions in GATT.

This would mean some products exported by EEC Mediterranean Countries and by the U.S. would come in, and other third world countries would be asked to "liberalise" imports of these.

The EEC would also differentiate between "agricultural" and "industrial" products, with action on some of the tropical products with close relationship to products in the agriculture area (cane-sugar and beet-sugar for example) to be contingent on negotiations in agriculture area.

Tran also indicated that in return for the concessions on semi-processed and processed products, the EEC would expect to be assured of access to raw materials "under fair conditions" – meaning that the third world countries concerned should reduce or eliminate their export taxes on raw material exports, and end other export restrictions.

The EEC would also expect "burden sharing" to be undertaken by others – U.S., Japan and other industrial countries should also do their share of liberalising such imports, as also other third world countries.

Also, the countries that would benefit should reciprocate, and make reasonable offers in other areas.

After Tran’s briefing, third world countries said they would want to await the fine print in the EEC proposals before commenting. On the face of it, some of the EEC ideas were attractive, but there were also lots of catches.

Firstly, they noted all the concessions or liberalisation the EEC and others were now being asked to do were what they had committed themselves to do in late 1950’s, but did not implement them. The QRS, most of which were illegal, in any event should be rolled back under the Punta del Este declaration without any reciprocal concessions being demanded.

Others like assured and equal access to raw materials were not now covered by GATT, and one could not ensure access under fair competition to only one of the industrial inputs, and not others like technology or capital, etc.