DUNKEL OFF TO WASHINGTON, INFORMAL TNC FOR 15 JANUARY

Dec 19, 1990

DUNKEL OFF TO WASHINGTON, INFORMAL TNC FOR 15 JANUARY

GENEVA, DECEMBER 17 (BY CHAKRAVARTHI RAGHAVAN)— GATT Director-General Arthur Dunkel is going to Washington Tuesday for consultations on reviving the Uruguay Round negotiations.

Meanwhile he has convened an informal meeting of the Trade Negotiations Committee (TNC) for January 15.

But whether the talks will resume on that date is not so clear. The U.S. and some of the Cairns Group members have been insisting that they would not come back to the negotiating table unless they were certain that the EC was ready to compromise on agriculture and be more forthcoming in accepting commitments to reduce subsidies and accept disciplines in all three areas - domestic support, border protection and export subsidies.

The EC Commission was due to consider this week reform of its Common Agricultural Policy, but this appears now to have been put off till first week of January.

The EC Agriculture Commissioner, Ray MacSharry has said it would be a "revolutionary" plan, but other EC sources said it would be more directed towards re-arranging internal support, away from benefits to large farms and towards small farms.

At Brussels, when the negotiations collapsed and the meetings of the TNC were put off indefinitely, Dunkel, in his capacity as Chairman of the official-level TNC, was mandated to pursue "intensive consultations" until beginning of 1991 with the "specific objective of achieving agreements in all the areas of the negotiating programme in which differences remain outstanding".

Dunkel’s Washington visit follows the talks in Brussels on 14 December between EC Agriculture Commissioner Ray MacSharry and U.S. Agricultural Secretary Clayton Yeutter on bilateral disputes, and the EC summit at Rome last weekend.

After the Brussels talks, Yeutter has been quoted (by the US mission's daily bulletin) as saying that he was "more optimistic than last week" about prospects for resolving the impasse over agricultural trade issues that forced a suspension of the Uruguay Round trade talks.

The report further quoted Yeutter as having told reporters that he sensed "people in Western Europe have begun to realise there is strong support in the rest of the world for agricultural trade reform" and that "this is the key to a satisfactory outcome of the entire Uruguay Round".

However, Yeutter is reported to have added, he "would be vigorously opposed" to resuming negotiations in Geneva "unless it was almost assured, ahead of time, that we will reach a final conclusion" and that it was "certainly conceivable" that the talks could still fail.

As against this, the statements after the Rome summit have evoked much less optimism.

The Summit communique has instructed the Commission to step up its efforts to secure resumption of the talks and reach a balanced agreement "in the shortest possible time". In the published statements there were no hints of any direction to the commission to substantially change or modify the EC's position and offers on the agriculture issue.

The President of the Commission, Jacques Delors has been quoted as saying at the closing press conference that "It is not up to the U.S. to tell us how to organise our agricultural policy. The U.S. has asked for too much too soon".

German Chancellor Helmut Kohl's is also reported as having rejected the idea of Germany undertaking a special role to break the agricultural deadlock.

U.S. officials like Carla Hills have publicly stated that they had expected Kohl after his victory in the elections to take steps to change the EC stance on agriculture.

In response to this, Kohl has been quoted as saying that "GATT concerns everyone and everyone will have to find a solution".

However Third World observers at Geneva think that behind all these statements and public postures on both sides, the U.S. and EC might still be engaged in arriving at compromises in agriculture to unblocked deadlocks in other areas where the U.S. and EC have some common interests against the Third World countries and the newly rising competition from them in international trade.

Both the U.S. and the EC have been saying that for a successful conclusion of the Round agriculture is only one of the issues and that progress was also needed in other areas with the Third World making concessions, a view that was also echoed by Arthur Dunkel last week in his meeting, at their request, with Latin American and Caribbean delegations, members of SELA.

While Dunkel has not so far revealed his own thinking on how to revive the talks and what he plans, second hand reports filtering out of the GATT secretariat to delegations and observers suggest that the attempt is to revive the idea of a "mini-package" including compromises on agriculture and substantial concessions from the Third World countries on new themes.

In the various crisis scenarios that the US, EC and GATT Director-General had planned for Brussels was the idea of such a mini-package that would be "attractive enough" for the U.S. Congress and could be put through under the fast-track procedures.

Only the fact that the three had different scripts for the crisis and were unable to control it, resulted in the collapse of the Brussels process, but the objective of all three were perhaps similar and would once again be sought to be pushed through, Third World participants and several observers here believe.