Dec 14, 1990


GENEVA, 12 DECEMBER (CHAKRAVARTHI RAGHAVAN)— The 46th annual session of the GATT Contracting Parties opened here this afternoon over-shadowed by the failure at last week's Brussels meeting of the Uruguay Round Trade Negotiations Committee.

The major trading partners sought to avoid mutual recriminations and even comments on the Brussels fiasco.

However, Brazil, while avoiding polemics but citing both Marxist philosopher Gramcy and more traditional Hegel, provided an assessment and debunked some of the myths and fallacies that have been propagated in recent periods about the GATT and the Round.

Egypt, Peru and Venezuela were among those who made brief remarks, while the European Community's chief delegate, Amb. Tran Van-Thinh, said that participants should not be too upset over missing 7 December deadline for the Round and that this was not the first time that the deadlines for a GATT MTNs had not been met.

As one of the participants put it, with the major trading partners and the GATT secretariat still recovering from the Brussels fiasco of a stage-managed crisis which ran out of their control, the CPs meeting followed by the traditional reception of the Chairman of the CPs gave the appearance of an Irish wake.

Unlike at CPs' meetings of the last four years, the delegates found it difficult to separate the regular GATT work from the Uruguay Round negotiations and failures at Brussels.

As the Chairman of the CPs, Amb. John Weekes of Canada put it, while it was difficult to isolate one from the other, and uncertainty in one must be reflected in the work of the other "the work of the GATT must go on".

Governments, especially of the Third World countries and others undergoing economic reform needed it as much as ever and decisions to trade, invest and create jobs had never been more dependent on a stable and coherent trading system, Weekes said.

Referring to the "collective frustration and lost opportunity" of the Brussels meeting, Weekes argued this was not the time for "despondent introspection ... nor for recrimination".

It would be a brave person or rash gambler, he said, who could make the assumption that if the Round failed they could still count on the status quo.

Without reinforcement and extension of the trading system world trade prospects were likely to regress seriously. With all its admitted imperfections, the current system might no longer be able to serve as one of the principal engines of economic and social growth and development.

Brazil’s Amb Rubens Ricupero, who initiated the general debate and spoke from a prepared text, focussed on some of the myths surrounding the Round and the GATT which both before and after the launching of the Round have been very much propagated by major trading partners and leading GATT officials.

Among the myths put to the test at the Brussels meeting and found to be false, Ricupero said, were two "popular fallacies" (about GATT and the Round): "that of a 'Super-GATT' or a smaller group of like-minded countries willing to take on new obligations and that of a supposedly outmoded system unable to cope with challenge of new issues, presumably because of reluctance of developing countries".

(In the run-up to the Brussels meeting the major trading partners and the GATT Director-General, and the media that uncritically follow their line, had been speaking of the dire consequences if agreements were not reached on the new themes (like intellectual property, investment, services and changes in GATT articles and rules) and the package as a whole were not accepted by everyone).

(The U.S. and EC, and GATT officials, had been saying that either the ICs would form a "Super-GATT", abandoning the present system, or if there were only a few "recalcitrant" Third World countries like Brazil or India invite them to leave GATT)

It became evident in the Brussels discussions, Ricupero said, that the potential for conflict inherent in trade was in direct relation to magnitude of contradictory interests among partners and that these were much bigger among the mighty than between them and smaller partners.

The new issues, he said, had played only a "marginal role" in generating the present stalemate and the negotiations had "stumbled" as in the Tokyo Round on the "continuous failure of the system to absorb and accommodate the most traditional, most ancient and less complex and sophisticated kind of trade: that in agriculture, textiles and footwear".

This situation was difficult to understand or accept, he said.

Firstly, liberalisation in these areas was long overdue and should have started when GATT was agreed upon decades ago.

It was difficult to move ahead without removing these stumbling blocs. There was an overwhelming lack of proportion (in the negotiations) between agriculture and textiles on one side and areas only indirectly related to trade on the other.

Secondly, there was an overwhelming lack of proportion, as far as the direct impact on trade was concerned, between agriculture and textiles on the one side and areas, which were only indirectly related to trade on the other.

There was no credibility in insisting on imposing uniformly equal rules for all in those sectors, regardless of differences in levels of development, while a whole range of exceptions, derogations and waivers on an important volume of trade flows were carefully being preserved. There was a "glaring contradiction" between prohibiting export subsidies in industrial goods and defending them in agricultural trade.

Thirdly, countries, which were more reluctant to face competition in traditional sectors, were exactly those who could afford the economic means and social conditions of restructuring.

"If they are not prepared either to adjust or to progressively abandon areas in which they are no longer competitive, there will be no scope for extending the multilateral trading system into new and uncharted waters", Ricupero pointed out.

It was impossible to escape t e reality of the present predicament. There was no way of evading either the centrality of agriculture or need to take on board the smaller partners "developing, developed and former centrally planned economies" with concrete and important interests at stake.

To build on a firm basis, they had to make sure that the political will to meet those conditions would be there "before setting new deadlines or committing themselves to a renewed effort".

"A fresh start must be fair, that is, has to accommodate the reasonable interests of all, has to rely on free consent and open participation of large and small, and has finally to be moderate and realistic which does not mean indefinite acceptance of situations badly in need of a ‘perestroika’", Ricupero said.

Referring to the talk in recent weeks "about all sorts of crises, managed, constructive or real ones", Ricupero quoted Antonio Gramsci "that the crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear".

The old in the GATT context, Ricupero added, was the "frustrating inability" to do away with the backlog of unfinished business of the past which was poisoning the air and spreading all kinds of morbid miasmas throughout the atmosphere.

They had to put an end to procrastination and settle once and for all the score with the past. For in trade, as in the great theatre of history, "only those who master their past will be able to avoid being condemned to repeat it".

Among the other speakers, Peru’s Oswaldo de Rivero said that the Brussels meeting should not be dramatised nor the Uruguay Round negotiations overemphasised.

Egypt suggested that their objective should be to safeguard the four years of work on the Round and ensure a balance of rights and obligations that would secure an equitable trading system.

Venezuela regretted that blockages in agriculture had paralysed the entire Uruguay Round negotiations.

But Amb. Tran Van-Thinh for the European Communities suggested that they should not be upset in missing the 7 December deadline.