Jan 13, 1992

DUNKEL OPENS WAY FOR CHANGES ON BASIS OF U.S.-EC ACCORDS.

GENEVA, JANUARY 10 (CHAKRAVARTHI RAGHAVAN) GATT Director-General Arthur Dunkel appears to be trying to put a cap on any open and detailed debate and discussion, and negotiations to change parts of his pre-Xmas package on the Uruguay Round but left the door open for changing the texts on the basis of a consensus to be determined by him through an even more non-transparent process of private consultations by him.

Dunkel's plans for the further processes in the Round with the aim of concluding it by mid-April became evident after a series of consultations he has had this week with negotiators, including at a "green room" meeting Thursday evening, and his press conference comments and remarks on Friday.

At the "green room" consultations, Dunkel had outlined his idea of a so-called four-track approach from l3 January when the TNC meets to consider the compromise "global package" which he had put forward at the TNC meeting of 20 December.

Both in his consultations and at his press conference, Dunkel sought to discourage any detailed discussions or comments on his "global package" or any parts of it at the TNC meeting on 13 January, and said the time for acceptance or otherwise or the package would come at the end when the market access negotiations are completed and the country schedules had been filed.

His four-track approach, as indicated by him in his "green room consultations", according to participants, involved continuing market access negotiations on goods, negotiations on initial commitments on services, "cleaning up" the text for legal and ensuring consistency, and "fine-tuning" the text.

While the EC seemed to be supportive of this "fine-tuning" and the U.S. was non-committal - with both seeing in this a way of getting changes they desire, the EC in agriculture and the U.S. in TRIPs and some other areas, without parts of the package they have already agreed upon being reopened by the Third World - several other participants reportedly were cool and reserved or opposed.

Several of the Cairns group members, and particularly countries like Australia who have publicly announced their acceptance of the "package" wanted to have full clarification of the "fine-tuning" before they would commit themselves.

Though some of the Third World participants chose to see some protection for themselves in Dunkel's views that changes could only be through "consensus", the six years of the Dunkel consultation processes have shown that once the U.S. and EC are agreed, the other Europeans, Japan and the ICs fall in line, and the non-transparent "consultation processes" to ascertain consensus could isolate individual countries and force them to accept.

At his "green room" consultations, Dunkel asked participants not to talk to the press, but reports of it found their way into the western media "friendly" to GATT - and the timings involved - the end of the consultations and the deadlines for the editions concerned was such that it was an easily deducible conclusion that the leakages came out of the GATT officials.

One of these reports spoke of the "fine-tuning" having been always envisaged, but it was not so evident apparently to those involved in Thursday's "green room" consultations.

At his press conference, Dunkel did not mention the word "fine-tuning", and was evasive, despite persistent questions, on the extent and scope for changes that could be made in his package.

He however indicated that between now and the conclusion of the round, changes could be effected through his "fourth-track".

He envisaged in this "fourth-track" process delegations or groups of them, who would negotiate among themselves, reaching an agreement (presumably on changes in his text) and come to Dunkel with the proposed changes and for Dunkel to ascertain whether there was a consensus and if Dunkel found one for incorporation of the changes.

He made it very clear that there were no longer any individual negotiating groups and the only focal point for negotiations and consideration of the draft texts was the official-level TNC chaired by him which, in practice, meets formally only to hear his statements and adopt pre-cooked decisions - which are evolved through "green-room" and even smaller caucus consultations.

Dunkel's answers to some persistent questions suggested that this process in the fourth-track would be even more "non-transparent" than in the Uruguay Round negotiations so far: with no delegation formally presenting the proposed changes for others to discuss in an open forum and ascertain the extent of consensus or lack.

Agreeing with a questioner who sarcastically noted that the process indicated was very "confusing" even if the confusion was in his own mind, Dunkel said that it was confusing but that "confusion is part of life and solutions will come through an act of patience".

Reports out of Brussels and Washington and elsewhere have made clear that the majors, each for their own reasons, want some changes in the texts - in parts and areas where the compromises have come out of Dunkel's "arbitration and conciliation".

The EC has also made clear that in order to enable it to accept the package, all the "direct payments" intended to be made to the EC farmers under the CAP reform programme would have to be put in a "green box" - support measures that could not be challenged or made actionable - either under the agriculture programme or under the other GATT provisions.

The preliminary report of the U.S. farm bureau, analysing the Dunkel package, makes clear that in the U.S.-EC bilateral talks on agriculture (in November and December), the two had discussed the idea of "a separate category of domestic supports that would be subject only to ceiling limits - as opposed to actual cuts - did not find its way into the GATT paper".

"This idea", the U.S. farm bureau's analysis said, "would have allowed virtually all new EC support programmes (under the EC's Common Agricultural Policy reforms) to be exempt. It would have also allowed most US programs to be exempt".

Dunkel's remarks at his press conference suggested that when the market access negotiations were completed, he would then bring - the private U.S.-EC accords and face individual countries with the choice of either agreeing to them or take the responsibility for "wrecking the round" and blocking "market access opportunities".

In his remarks to the 20 December TNC (some hours after which. delegations got the complete and consolidated text of the draft accords, including compromise proposals by him on outstanding points where negotiations had not produced agreements), Dunkel had envisaged consideration of the draft at the TNC iii January as a package and envisaged the completion of the "Final Act" through negotiations covering three areas:

Market access negotiations in goods, negotiations on specific commitments on internal support and export competition in agriculture (where his framework has laid down the overall figures for reductions and modalities, with details to be filed in each country schedules) and on initial commitments on trade in services.

Two other steps he had envisaged was the mandated action of the Group of Negotiations on Goods in conducting a final evaluation from the viewpoint of benefits to the developing countries in terms of the special and prefernetial treatment promised to them and for the entire body of agreements to be "reviewed for legal conformity and internal consistency".

And while Dunkel and his spokesman had stopped short at that time of calling it a "take-it-or-leave-it-text", the impression left on delegates (after the TNC) was that the 13-14 January TNC meeting was to enable governments to express themselves on the draft Final Act, but that governments had to bear in mind that opening up parts of the package could unravel the whole package.

The "fine-tuning" concept now being toured appears to be aimed at preventing a general opening up of the package but bring about changes that the majors might agree upon.

Dunkel told newsmen Friday that though he had read in the papers that governments would come to the TNC to say whether they would take his package or reject it, he himself had always been clear that the time for taking or rejecting would have to await the results of the round including in the market access in goods, initial commitments in services and the agricultural commitments.

At the Mondays TNC, Dunkel said: "the question I am going to put is much simpler: 'have we reached the stage in the round at which we can decide to conclude it in the next weeks?'. Tell us if it is 'yes' or if it 'is not'".

His own consultations showed there was a "strong consensus" that a stage had been reached when the negotiations could enter into its final sprint to get the "missing elements", namely the results of the market access negotiations.

During this period of market access negotiations, he as chairman of the TNC would be ready to hear and listen to what any participant had to say in respect of the process and the programme of work. In this process governments were not going to come with "Xmas gifts" to their partners nor could they postpone making decisions.

The Monday's TNC would be an opportunity for all delegations to make a "political assessment of the situation and give their support to the final sprint exercise".

Dunkel was faced with a number of persistent and probing questions as to the extent to which changes were possible and how this would be effected.

He was generally evasive, but said governments would have to look at the package and not come to the TNC looking for Xmas gifts on the tree or for making changes. "If they do so, it will unravel the process and no one wants it".

The accords had to be looked upon as a package and there was no way of concluding the round or adopting a package without agriculture being a part of it.

But groups of countries could come to him and indicate they had agreed on some change and ask him to ascertain from the others whether there was a consensus for such changes and if this was the case, and if there was consensus, changes could be made.

Dunkel noted that by 31 March 1992, it was envisaged that the market access negotiations, including that on the U.S. zero-zero option "offer" would have been concluded and results incorporated into the package.

(The draft act also envisages countries filing by 1 March 1992 various information and data relating to their agricultural commitments and existing supports in terms of the AMS and tariffication by conversion of non-tariff restrictions into tariffs).

From the international calendar of events, Dunkel added, the time for concluding the Round and initialling the Final Act would be after Ramadan and before Easter.

GATT participants said that the final meeting, scheduled to be held in Rabat, Morocco, is being thought of in these terms to be held after 5 April and before 15 April.