GATT MISSES A DEADLINE, FAILS TO APPROVE NEGOTIATING PLANS.

Dec 23, 1986

GATT MISSES A DEADLINE, FAILS TO APPROVE NEGOTIATING PLANS.

GENEVA, DECEMBER 20 (IFDA/CHAKRAVARTHI RAGHAVAN)— GATT negotiators conceded Saturday morning that they have missed their deadline, December 19, for approving negotiating plans for the MTNS in goods, and decided to suspend their efforts till the second half of January when they will try again.

In an effort to meet the deadline, set in the Punta del Este declaration launching the Uruguay round of Multilateral Trade Negotiations (MTNS), the clocks had been stopped in the GATT friday evening, and informal negotiations were continued till late night, but the effort was finally given up for the present.

GATT officials, as well as key delegates involved in the intricate negotiations, sought to put a gloss over their failure, by telling newsmen Saturday that considerable progress had been made, but that a few points remained to be resolved which could be done in January, so that negotiations would get going from February 1.

But despite the air of amiableness and bon homie they sought to spread, they were unable to dispel the impression that the serious differences, ignored or pushed under the carpet at Punta del Este, have now come to the fore and have so far defied solutions.

In this process, a delegate from a small industrial country conceded in private, "the credibility of GATT and the new round, never very high among third world countries, has received a further set-back, and no amount of assurances of progress can hide this from the public and international trading community".

The ministerial declaration launching the new round named three bodies: the Trade Negotiations Committee as an overall body to carry out the negotiations and under it, the Group of Negotiation on Goods (GNG) to carry out the programme of negotiation in goods decided by the GATT Contracting Parties, and the Group of Negotiations on Services (GNS) deal with the service negotiations (a separate exercise, outside the GATT, but part of a single political undertaking with that in goods).

Among the mandates for the GNG has been one to elaborate and put into effect detailed negotiating plans prior to December 19.

Despite considerable efforts, and intense negotiations over the last few weeks, including night-meanings in a small informal group throughout this week, no agreement on a package of issues could be reached, and the negotiators appeared to have finally decided to suspend their efforts at 0130 GMT Saturday.

The negotiators agreed to renew in January their consultations on negotiating plans and structures for the various subjects to be negotiated under trade in goods, as well as the problems relating to de designation and establishment of a surveillance mechanism to ensure compliance to the Punta del Este commitments for standstill and rollback of protection.

The key group of countries who had been negotiating Friday night found that while they had made some progress on all these issues, there were also some important differences that could not be resolved, and would need further "reflection" in some capitals, and that it would be best to suspend the efforts to reach a compromise, and renew them in the new year.

A key question affecting all the issues on the table, and one on which the U.S. is said to be at odds against the rest of the GATT membership, would appear to relate to the overall role of the GNG in coordinating and running the negotiations in goods as it has been mandated.

The U.S. is now portrayed as trying to go back in the decisions at Punta del Este, but that others are not agreeable, and no progress could be made unless Washington changes its mind, GATT sources said.

One west European delegate said that as at Punta del Este it might have been possible to find a language the hide the differences, and approve negotiating plans now, but the difficulties would have cropped up at the very first meeting of any of the negotiating groups, and GATT would then have had an even greater credibility problem.

At a rare Saturday morning meeting (for GATT) of the GNG, quickly followed by meetings of the Group of Negotiations on services (GNS) and the Trade Negotiations Committee (TNC), the overall supervisory body of the Uruguay round, it was agreed to suspend the meetings of the GNG to reconvene on January 22, and with consultations being renewed in the week prior to that date.

The TNC itself is being scheduled to meet on January 28.

At the meeting of the GNG, GATT Director-General Arthur Dunkel reported that considerable progress had been made on a package of operational decisions, and there were increasing areas of convergence, such as on the issue of surveillance.

Nevertheless a consensus had been reached to suspend the consultations and resume in the new year. While a number of delegations would be disappointed, Dunkel felt that the delay would not affect the start of substantive negotiations in individual groups by the beginning of February.

GATT officials said that though some delegations (including some who had been privy to the informal consultations and decisions to adjourn), perhaps partly for the record, demurred and wanted the discussions to continue, it was ultimately agreed to adjourn them as proposed.

Within the negotiations in goods, approval of negotiating plans which details of the work to be done in the first phase in each subject, the establishment of negotiating groups and chairmen for each group, as well as the setting up of a surveillance body to ensure compliance with the standstill and rollback commitments, have been as a package by everyone.

In addition the U.S. has said that it would view adoption by the GNS of a programme of negotiations in services as part of a package.

The need for a central role for the GNG in the negotiations in goods is now being accepted by almost every participant in the negotiation excepts the U.S.A., GATT sources said.

For the EEC, this is the only way to ensure that negotiations on all fronts of interest to it move forward, and that it is not put into a corner in the negotiations on agriculture where it is in a minority of one, and forced to make concessions without getting its way in other areas.

For the third world countries, only a central role for the GNG would enable them to ensure that the major trading blocs do not repeat their performance of the earlier rounds, particularly the Tokyo round.

In the Tokyo round, the U.S.A., EEC and Japan, negotiated on issues of interest to them, reached accords among themselves and presented it to the others for acceptance on a virtually take-it-or-leave basis.

None of the issues of interest to the third world-, like reduction on tariffs in exports of particular interest to the third world, liberalisation of trade in tropical products, tariff escalation with processing, etc., were ever addressed. And when the third world refused to accept EEC demands for "selectivity", the effort to reach an agreement on safeguards was also given up.

As in past rounds, at the end of the Tokyo round, all these unsolved issues were put on to the GATT work programme, and after the 1982 ministerial declaration, on to the work programme for the 1980’s, but with no efforts at serious negotiations.

Third world countries fear there would be a similar effort this time, within the arena of trade of goods, with U.S. concentrating its focus and attention on trade in agriculture, investment, and intellectual property issues, and the rest being ignored.

Others of particular interest to the third world – tropical products, textiles and clothing, tariffs, non-tariff measures including Quantitative Restrictions (QRS) maintained mostly against imports from the third world, safeguards, MTN agreements and arrangements, etc. - would all be ignored, and finally shoved on to another new work programme, they fear.

By insisting on a central role for the GNG, third world countries would be able to force negotiations on all these issues, and prevent only the new issues taking the centre-stage or making progress.

For the very same reasons, the us does not want any central role for the GNG and would rather have each of the negotiating group to have a large autonomy, developing and changing its negotiating plans and issues as and when necessary.

The effort to agree on plans for individual subjects, and establish negotiating bodies for each subject (as already agreed), also appears to have run into trouble over the role of the GNG.

On the issue of surveillance mechanism, in Friday night’s negotiations, the U.S. is reported to have some concessions that would enable the surveillance body to be set up "to examine" complaints of violations of the standstill commitment and make a report of its proceedings available to the TNC.

However the U.S. is still said to be baulking at a role for the GNG in this.

GATT sources said that the plans for negotiations in agriculture, particularly for the first phase, still remain to be sorted out, as also in some other subjects like textiles and clothing.

There is also agreement on setting up negotiating groups for each of the subjects, but some uncertainty still over joining one or more subject under one group.

However, with all the third world textile exporting countries insisting on a separate group for this and the U.S. alone isolated in opposing this, the U.S. is reported to have now indicated it could go along with a separate group for this.

Within the negotiating plans, no satisfactory way of designating individual phases of negotiations, and in particular the first phase, had yet been found and more consultations would be needed, GATT sources said.

The solutions emerging on individual issues were all said to be "tentative" with everyone insisting on seeing the final package before agreeing to anything.

The issue of developing a negotiating plan or programme of work for services is also yet to be tackles, and the differences resolved.

Though there is no particular deadline for this, the U.S. has made approval of this as a condition for approval of negotiating plans in goods and approval of surveillance mechanism.

Third world countries, as well as some of the industrial countries, have turned around the U.S. insistence on service negotiations being part of a package, "and a single political undertaking", by blocking any agreements in services until their main preoccupations in goods are satisfied, GATT sources said.

Much of the new uncertainties now are also tied up with the uncertainties in Washington.

The U.S. Administration has now decided to seek from congress new negotiating mandate to cover all the subjects for negotiations in the Uruguay round.

It would help in that the final outcome would have to be approved or rejected in toto by congress, and makes the tasks of negotiators from U.S. partners easier. But it would also provide an opportunity for congressional efforts to attach some protectionist restrictions, and there are enough hints of some possible actions or proposals even from the administration.

This has made all the other partners of the U.S. here insist on an adequate surveillance mechanism, and a desire not to move forward in a hurry without knowing what would come out of Washington.

But with an Administration beleaguered by the Irangate scandal, there are doubts here whether the U.S. has any serious political leadership to push trade issues forward over the next year or two, and whether serious negotiations could being until a new administration is in place.

The U.S. Trade Representative Clayton Yeutter, is reported to have lent strength to this view, when he reportedly told some of the delegates that he would not like to tie the hands of the new administration (that would take over in 1989) by entering into commitments in negotiations now.