Feb 21, 1991


GENEVA, FEBRUARY 20 (BY CHAKRAVARTHI RAGHAVAN) – GATT Director-General Arthur Dunkel was due Wednesday to complete his consultations, with a morning meeting with the EC, and then go before some 33 participants (counting the EC as one) and put to them his proposals on agriculture and the overall scenario to re-launch the Uruguay Round negotiations. The meeting on agriculture had been scheduled for Wednesday morning, but it was later put off till the afternoon, apparently to give time to the EC Commission, which was meeting Wednesday at Brussels, to make up its mind.

A key formulation in the Dunkel scenario for relaunching the agriculture, and with it negotiations in other areas, is of separate commitments in the three areas of domestic support, border protection and export subsidy.

A report of a speech by the EC External Relations Commissioner, Franz Andriessen, at Strassbourg Tuesday where he spoke of the EC reduction commitments in agricultural support, but in terms of "globality" of the agricultural support and reductions, suggested the EC has problems with this Dunkel formula. But it was not clear whether the speech meant the EC would be willing to go beyond and comment, reserve its position or reject .the basis for negotiations or whether it would heed Dunkel’s suggestion that no one should comment.

Dunkel has been asking everyone not to make any comments on his proposal, which he would be making on his own responsibility, and without committing any one. It has been clear that any one objecting to the proposals for re-launching the negotiations would have the "political responsibility" for winding up the Round. It is because of unwillingness of anyone to do this that the various protagonists have indicated to Dunkel that they would allow him to restart the process without comment or objections. The Cairns Group has also reportedly told him that for them the bottom line is the acceptance of separate commitments.

On Tuesday Dunkel went before the informal Third World group to tell them that while he had not been able to carry out the mandate entrusted to him at Brussels, namely to promote agreements in all the negotiating areas, his entire effort and consultations had been directed to re-launching the process and put the derailed negotiations back on the track.

Dunkel then outlined to the Third World group the scenario on which he had been consulting key delegations and groups of countries and asked the delegates not to speak, make any comment or oppose his ideas at the meetings of various clusters he is convening.

He later had a meeting with the United States. He has already had meetings with the Cairns Group and the Asian countries and, after a protest by some Africans and Central Americans at the Third World group meeting, offered to "consult" with them too. The only jarring note perhaps at his meeting with the Third World group was a reminder to him that hg could not change the mandate and structure of negotiations: the negotiations are governed by the Punta del Este mandates and in accord with it the TNC had decided at the outset the structure of the negotiations. The negotiating structure involved keeping the goods and services negotiations separate and organised and run under two groups, the Group of Negotiations on Goods (GNG) and Group of Negotiations on Services (GNS), both reporting to the TNC.

Third World delegates would also appear to have pointed out to Dunkel that with the Ministers at Brussels having agreed to a short extension, and the TNC (under the Dunkel scenario) expected to formalise it by extending the Round to be completed "as soon as possible" but without a new deadline, the only change in the Uruguay Round negotiations would be the four-year time-limitation written into the Punta del Este declaration. Nothing else would change - neither the mandate of the negotiations and the structure decided in the declaration, nor questions like applicability of the standstill and rollback commitments for the duration of the negotiations nor the applicability in all areas of the special and differential treatment principle for Third World countries.

Dunkel would appear to have indicated that the various clusters and groups of delegations he has invited to participate in the meetings of the clusters was only related to this initial process of relaunching the negotiations and not its further organisation and running. While Dunkel and his officials are painting the proposals as the outcome of widened "consultations", and cite his various meetings in this regard, these appear to be more a form rather than substance and Dunkel is proceeding on the basis that no one would object, an assurance which he has apparently received from several of the Cairns Group, the Asian and the U.S. But in a situation where no one is ready to take responsibility for winding up the Round, several of the negotiators seemed more concerned with this "form" of consultations - that they too have been involved and are in the picture.

If they have any concerns about substance, they have not so far indicated them or voiced their concerns. Like the major Western capitals, far too engrossed with the U.S.-led coalition's war against Iraq, in many of the Third World capitals too very little attention is being paid so far by policy-makers or even senior officials.

The move to re-launch the negotiations on what is described as a fairly low-key technical level, is aimed at providing a fig-leaf to the U.S. administration to approach the U.S. Congress for extension of fast-track authority (which has to be done before 1 March) and obtain it. Congress has a 90-day time within which it could disapprove the extension or allow an automatically extension.In all his consultations, Dunkel has been telling the delegates that he would not want any one to make any comment or seek any clarifications when he makes his statement at the meeting of the agricultural negotiators he has called in, nor at other meetings of the six or seven clusters in which he is organising and planning to run the negotiations.

His agricultural proposals, while he has been careful to state is only on his own responsibility and does not commit anyone, still makes the point that the EC has been reluctant to accept or commit itself as a basis for negotiations: namely its reduction commitments would be separate in three areas (domestic subsidy, border protection and export subsidy).

But the signals from the U.S. and EC have been confusing. The EC's Common Agricultural Policy (the current or any future reforms contemplated by the Commission) makes these three inseparable, and the Commission's negotiating stance all along has been of its willingness to reduce the overall support (measured by the AMS or other equivalents agreed upon) but with discretion in spreading it among the three categories.

The EC Commission has been engaged in efforts to get a "reform" of its CAP with a view to reducing the budgetary drain on its resources.

The U.S. Agriculture Secretary Clayton Yeutter last week spoke of it in very effusive terms - as the EC "wheels are finally cranking in the right direction" and the proposals of the EC outlined to him (Yeutter) were "mind-boggling as compared to anything that's been contemplated there (EC) for last 20-30 years". At the same time, the EC Commission last week rebuffed the U.S. Trade Representative Carla Hills in her attempts to get direct bilateral commitments from the EC that it would negotiate and accept separate commitments in the three areas. But while this disagreement at political level between the U.S. and EC has been going on, there is also some evidence to suggest that the two are also coming together in other areas (services, intellectual property rights etc) where their joint front would be against the Third World. There have been reports that the U.S. and EC officials are near sorting out, if they have not already done so, the issue of negotiating initial liberalisation commitments on services. This, observers said, could result in a situation where their current differences on application of the most-favoured-nation principle in any services agreement would be resolved and Third World countries getting MFN would depend on the acceptability of their level of initial commitments - an approach that has been used to effectively shut out for example Third World countries from the government procurement code.

The countries who have been invited to participate in the Agricultural Group, according to informed GATT sources, are: Argentina, Australia, Austria, Brazil, Canada, Chile, Colombia, Costa Rica, Cuba, EC, Egypt, Finland, Hungary, India, Indonesia, Israel, Jamaica, Japan, Korea, Mexico, Morocco, New Zealand, Nicaragua, Nigeria, Pakistan, Peru, Philippines, Switzerland, Thailand, Turkey, U.S., Uruguay and Zimbabwe.