Oct 13, 1987


GENEVA OCTOBER 9 (IFDA/CHAKRAVARTHI RAGHAVAN) – The next Ministerial Session of the Negotiating Committee for the Global System of Trade Preferences (GSTP) is now set to be held in Yugoslavia in the first half of April.

A decision to this effect was taken Friday at a Meeting of the Negotiating Committee. The actual dates are to be fixed and announced by Yugoslavia as the host country.

The setting of this date in effect implies that the first round of negotiations is to be completed before the end of March.

In the light of fixing the dates now for the next Ministerial Meeting, the Negotiating Committee and its Bureau are to work backward and fix the dates for the further stages of work to complete the first round of negotiations.

In May 1986 at Brasilia, the Ministerial Session of the GSTP Negotiating Committee launched the first round of negotiations, set a time-table for various stages, and decided to hold another Ministerial Meeting at the end of the first round of negotiations.

The Brasilia Meeting asked participants to notify participation not later than October 1, 1986, submit request lists not later than December 31, and start and conclude negotiations not later than September 1987.

Thereafter, it agreed, a Ministerial Session of the Negotiating committee would be held in Yugoslavia, in principle in September 1987.

The negotiating process has been running behind schedule.

Countries are still coming forward with notifications to participate in the first round – Saudi Arabia doing so as late as last week. Some of the participants still are in the process of preparing their "request" list.

Within the GSTP Negotiating committee while there is the view that the time-table should be kept flexible, to enable the largest participation, there is also the feeling that without a firm cut-off date now, the negotiating momentum would be slowed down, if not lost.

Though running six months behind schedule, given the fact that this is the first effort by third world countries at negotiating and concluding a global preferential trading arrangement, the delay is not seen by UNCTAD Officials and key participants (who have experience of GATT negotiations) as serious or one to be viewed with concern.

UNCTAD Officials, who are providing the technical backstopping for the negotiations, note that for many of the participants this is the first time they are involved in negotiating trade concessions through request and offer list process.

In the GATT rounds, the major negotiations have been among the principal trading blocs (U.S., EEC and Japan), and while some of the major third world countries have been involved in putting request lists and negotiating, there have never been any serious negotiations.

The third world nations, and particularly the smaller ones, have largely benefited in GATT from the multilateralisation on a MFN basis of the concessions exchanged. In GSTP now they have to seriously negotiate for benefits by offering concessions.

While the GSTP envisages various negotiating techniques, the first round is proceeding at the moment on a product-by-product negotiations of trade preferences.

This approach involves a bilateral exchange of requests and offers of trade preferences related to tariffs, para-tariffs and non-tariff trade control measures.

In the area of non-tariffs, the negotiating objective would include in particular preferential relaxation of Quantitative Restrictions (QRS) of licensing and import prohibitions with a view to directly reducing the impact of such restrictions on intra-participants’ trade.

Of the 81 member-countries of the G77 who are members of the GSTP Negotiating Committee, 70 are participating in the first round of negotiations, and of them 40 have tabled "request" lists addressed to one or more of the participating countries.

According to figures given by the UNCTAD secretary-general, the lists cover 1.500 different products and account for over 100 billion dollars of current trade among the third world countries.

The tabling of request lists has been followed by three rounds of bilateral consultations (May 25 to June 5, June 24 to July 3 and in September), between requesting countries and those to whom requests have been addressed.

Over 1.200 such bilateral meetings have been held, and according to the participants contributed to better identification of products in request lists and to the relevant concessions sought.

On the basis of these consultations and the request lists, in the next phase, participants (to whom requests have been addressed) would have to consider, prepare and table offers of concessions.

Negotiations would subsequently take place on the basis of these concrete requests and offers.

Under the GSTP scheme, the agreed concessions between bilateral partners are to be followed by multilateralization of the negotiated concessions on a MFN basis to all GSTP countries, with adjustments that might be deemed necessary.

There are exceptions to this rule.

Concessions extended exclusively to least developed countries need not be multilateralized and extended to others. Nor need preferences within economic integration groupings or concessions linked to direct trade measures and sectoral agreement, which the parties decide not to extend to others.

Participants who have no entered into direct negotiations with each other could also be excluded from the multilateralised MFN benefits by the other party concerned. This right, to be exercised at the time either participant accepts and joins the agreement.

This provision will act as a leverage and incentive to countries (whether or not they had put in a request list) to negotiate with those who have addressed requests to them.

On completion of the bilateral and/or plurilateral exchange of concessions, the negotiating committee will undertake a multilateral review and finalisation of the concessions, and the whole package of schedules of concessions will be annexed as schedules to the GSTP agreement.

This will presumably take place at the April meeting in Yugoslavia.

The GSTP agreement, and the schedules annexed, would come into effect when 15 countries (drawn from the Asian, Africa and Latin America and Caribbean regions of the G77) which have exchanged concessions among themselves, have signed and ratified the agreement.