Apr 8, 1988

GSTP AGREEMENT ONLY THE FIRST STEP

BELGRADE APR 6 (IFDA) While Belgrade will witness the final stage in the creation of the Global System of Trade Preferences (GSTP), it should also mark the beginning of further steps for mutual co-operation among third world countries, the Yugoslav Foreign Trade Minister, Nenad Krekic, suggested Wednesday.

Krekic was addressing the opening session of the senior officials meeting of the GSTP negotiating committee.

"The completion of the first round will in no way mean that our task is at an end," Krekic declared.

"It will constitute merely the beginning of a system, from which developing countries, and that means the majority of mankind, expects a great deal".

A senior UNCTAD official, Diogo A. N. De Gaspar, Director of the GSTP Project administered by UNCTAD who also spoke at the opening session, said the signing of the agreement by Ministers here next week would "demonstrate beyond any doubt the political maturity of the developing countries".

"It will demonstrate that with determination, the developing countries can act together in pursuit of common goals... it will demonstrate that the developing countries have the capacity to translate political commitments into operational content".

Underscoring the paramount importance of development of mutual third world trade, Krekic said: "once the GSTP is set up, the prerequisites for other forms of mutual co-operation will be established."

"In our view mutual economic co-operation among developing countries should become one of the corner-stones of our future development, enabling U.S. to achieve our accepted aim of the strategy of collective self-reliance... the creation of GSTP is one of the instruments in our struggle for the improvement of our economic and political position".

Outlining the tasks before the senior officials, Krekic said that preferential customs treatment, though very important, was not by itself sufficient, and new incentives should be sought for faster development of mutual trade.

Such incentives need not be limited to trade but could also comprise other forms of co-operation - industrial, financial, strategic and technical co-operation, technology transfer and the like.

Incentives for such co-operation should be sought through trade policy measures of countries.

"This is where we have to seek ways and means of co-ordinating on policies, and it is all the more vital to consult one another on an increasing number of issues," Krekic said.

"If we want to reach lasting positive results in the promotion of our trade, we have to provide for constant and systematic incentives helping the business communities in our countries to follow the economic policy of our respective governments."

"The development of trade", he said, "should become a constant concern. Permanent efforts should be made to improve our position in international trade and speed up our economic and social progress".

The creation of the GSTP was not only in the political interest of third world countries, but also a vital need.

Without this and other similar arrangements, third world countries would not be able to speed up their development or reduce the gap between them and the industrialised world.

The GSTP itself would not meet third world requirements entirely, since the main problem was a "lack of goods to be exchanged", due to their under-developed industries, increased technological lag, debt burden, unemployment, famine in some countries, and other handicaps.

The system to be created at Belgrade would not have used up all the potentials for mutual co-operation.

All third world countries should be part of the system, and the least developed should benefit from it. While they should not be required to provide full reciprocity, all participants in the system should nevertheless extend some concessions to each other.

Experience had also shown that trade and financial issues were closely inter-linked. There were also issues of credit arrangements for trade, insurance, and so on.

All these issues, the Yugoslav Minister said, would also need to be tackled.

In relation to the GSTP, Krekic said that the senior officials meeting should consider guidelines and define tasks for the next round of negotiations, which were indispensable, and the preparations for which should start immediately after the Belgrade meeting.

"There should be no hesitation", Krekic said, "in continuing negotiations for extension of product lists, removal of non-tariff barriers and across-the-board tariff decreases, long-term arrangements, establishment of joint ventures, development of industrial co-operation and technology transfer among themselves".

The chairman of the negotiating committee, Marko Kosin, saw the GSTP as "the cornerstone of economic co-operation among developing countries, and the symbol of collective efforts undertaken within the framework of the strategy of collective self-reliance."

While 32 countries had already exchanged concessions, Kosin expected this number to increase significantly over the next two days.

De Gaspar said that while the GSTP process had gathered considerable impetus, and the legal requirements for GSTP to become effective would be met, "the rally cry (here) must be for all members of the group of 77 to be part of this historic achievement."

He noted that since the GSTP idea was first mooted at Mexico city in 1976, third world countries had passed through difficult years with "harsh if not crippling impact" on their economies.

But, despite hard times, they had not been discouraged in their search for effective and viable alternatives to their development aspirations, "and GSTP has indeed stood as a beacon pointing the way forward for trade co-operation among developing countries."

"If a need exists for U.S. to remind ourselves of the enormous benefits that a credible GSTP holds in store for the developing countries, I will simply recall that it stands to reason that there is an imperative, born from experience, for developing countries to take full advantage of the enormous economic potential of the developing world which is by all accounts considerably under-utilised."

The Belgrade meeting, De Gaspar said, should conclude the first round of negotiations, and consider the future negotiating and other activities after the Belgrade meeting.

There is a need, he added, for signatories to conclude their acceptance and ratification procedures as expeditiously as possible.

The GSTP, De Gaspar pointed out, has been envisaged to be negotiated step-by-step and subsequently improved and extended in later stages.

The dynamism of the negotiations should hence be maintained with a view to increasing country participation and widening the product coverage.

Another issue concerning the main lines of the future programme related to the timing of another round of negotiations, including the modalities and approaches for such negotiations.

Also, until the agreement enters into force, some supportive activities to bring this about will have to be carried out and, toward this end, some institution or authority would have to be entrusted with this responsibility.

A pragmatic approach, he suggested, could be for the signatories to the agreement to be entrusted with this task.

For this purpose, it would be necessary to provide the necessary mandate in the final declaration or conclusions of the meeting._