Jul 28, 1989


GENEVA JULY 27 (BY CHAKRAVARTHI RAGHAVAN)— The committee of participants of the GSTP at its meeting here this week has agreed on a number of steps to further the implementation of the agreement and achieve maximum participation in it of G77 countries and strengthen the GSTP as an important instrument of south-south cooperation.

The agreement for a "global system of trade preferences among developing countries" (GSTP) was negotiated and concluded by G77 participants at Belgrade on april 13, 1988, with 48 countries exchanging concessions and signing the agreement, two of them definitively at Belgrade itself.

The GSTP came into force on 19 April 1989, one month after 15 states from the three regions of the group of 77, signatories to the agreement, had deposited their instruments of ratification, acceptance or approval.

Since then nine more countries have ratified, bringing the total as of 25 July to 24 countries, one of whom (Morocco) has applied it provisionally pending its ratification.

Under the agreement, the committee of participants is the intergovernmental body to oversee, facilitate the implementation of the agreement and further its objectives.

At its first meeting here, the committee attended to a number of initial house-keeping decisions, including electing Amb. Marko Kosin of Yugoslavia as its president, adopting its rules of procedure, and having some preliminary discussions on a number of issues for widening and deepening the scope of the agreement, both by encouraging the accession of larger number of G77 countries as well as the trade coverage.

The subjects on which some preliminary discussions and exchange of views have taken place, and expected to be pursued at the next meeting, include the questions relating to financing of the implementation of the agreement and providing technical support, setting up of an institutional mechanism including a secretariat, and issues of trade finance.

The committee is expected to pursue these matters further at its next meeting sometime in end of October or beginning of November.

The committee has set a period of two years from entry into force, as the period within which signatory states must complete their legal processes and deposit their instruments of ratification, acceptance or approval. The possibility of expending this by another year has been left open.

Signatory countries have also been called upon to notify their rules of origin under the GSTP, and also advising various bodies involved in trade within their countries, including customs authorities, and trade organisations as well as business enterprises.

The committee, in another decision, is to review and examine as soon as possible the necessary institutional means for the agreement, including the possibility of establishing a secretariat, to facilitate the operation and further the objectives of the agreement. to that end the committee is to take into account the work already done by its subcommittee on financial and budgetary matters.

The first round of negotiations, and technical assistance to the participating countries, were financed under a G77/UNCTAD/UNDP project agreement, funded out of the Perez- Guerrero trust fund. But these arrangements have come to an end with the entry into force of the agreement.

Pending steps to provide the GSTP with financial resources on a stable and continuous basis, the committee has taken a number of preliminary steps.

Firstly, a GSTP trust fund is to be set up, administered by UNCTAD and with voluntary contributions by GSTP participants and signatories and from other sources.

Participants and signatories making contributions would be able to indicate that their voluntary payments could be considered as advance payments of their possible annual contributions to the GSTP regular budget.

The group of 77, Perez-Guerrero Fund, UNDP, UNCTAD and other international and intergovernmental organisations are also to be approached to extend support to the GSTP process and provide financial assistance for implementation of the agreement as well as for preparatory work and conduct of a new round of negotiation called for by the Belgrade declaration when the agreement was concluded.

The committee also decided to notify to the GATT, the conclusion of the agreement and trade concessions, exchanged and granted, relating to countries who are signatories to GATT and have ratified the GSTP agreement.

GATT rules and provisions of the 1979 enabling clause that permit third world countries to exchange mutual preferences without having to extend them to the industrial countries under GATT’s MFN provisions, require such agreements and concessions to be notified to GATT.

Earlier in reporting to the committee on behalf of the depository government, Yugoslavia’s Amb. Kosin noted that the entry into force of the agreement, "a landmark for economic cooperation among developing countries", had taken placed in about a year of its signature, and with the further ratification, 50 percent of signatories were full participants.

In the period ahead, Kosin said, the committee should be engaged in enlarging the GSTP to enable accession to it by other G77 members.

The committee should not be satisfied with what had been achieved so far, but should have the aim of constantly widening the system, both in regard to number of countries participating and its substantive activity of enhancing trade and economic cooperation among G77 members.

Participants said after the meeting that the initial meeting had been a success, but that several decisions have been put off since many felt that these should be taken with wider adherence expected soon.