Jan 14, 1991

SOME CONTRADICTORY SIGNALS FROM BRUSSELS.

GENEVA, JANUARY 11 (BY CHAKRAVARTHI RAGHAVAN) – GATT Director-General, Arthur Dunkel, who held consultations in Brussels Thursday with the European commission on ways to restart the stalled Uruguay Round talks, is reported by GATT sources to be satisfied and encouraged by the talks.

At Brussels Dunkel met with the EC Commissioners Frans Andriessen and Ray MacSharry separately and together, and also met with the EC President, Jacques Delors.

Dunkel, in his capacity as Chairman of the Trade Negotiations Committee has been mandated to hold consultations with a view to promoting agreements in all areas. He has already visited Washington and has convened an informal TNC meeting for 15 January. He is also expected to have some informal consultations prior to that with some of the Third World delegates.

After Dunkel’s meeting in Brussels a report in the Financial Times said that the Commission had refused to make a fresh offer to cut farm subsidies, but had suggested to Dunkel that its responses and refinements of the offer, put forward in the agriculture consultations at Brussels on 6 December could be the basis for restarting the negotiations.

At Brussels, the EC had refused to accept a paper put forward by the Swedish Agriculture Minister, Mats Hellstrom (involving the concept of commitments in each of the three areas of domestic support, market access and export subsidy), but had suggested that its own responses to the questions posed in the draft documents referred to the Ministers could be the basis.

Though nothing was precisely put down on paper, the EC at Brussels had said it would agree to cut domestic support by 30 percent, would accept market access commitments involving a 3-5% increase in imports, would exclude from its "rebalancing" concept oilseeds and soyabeans (but apply it to feedgrains substitutes like corn gluten), and would agree to some disciplines in export subsidy tied to a volume tonnage of exports.

However, at Brussels others did not consider it good enough to be the basis for further negotiations.

It is not very clear whether the same offer, in perhaps different formulations and nuancing, would be acceptable to restart the negotiations both in agriculture and, what is more important, all the other areas as the EC is apparently demanding.

There are some agricultural exporters who think they might as a gesture of goodwill be ready to explore, on the basis of the EC position or new formulation and taking that as the starting point, the possibilities of a worthwhile agreement in agriculture, but that they would not be ready to restart the entire consultations and negotiations for a "global package" on the EC's position.

It is not expected that the informal TNC would provide any concrete understandings.

Andriessen is due to go to Latin America, where he is due to meet the five Latin American Cairns Group members and Mexico on January 25-26 at Punta del Este. He is thereafter due to go to Washington for consultations with the U.S.Uruguay has been promoting a meeting at Punta del Este on January 30, to which the U.S. and EC are also to be invited, as also all Latin American participants in the Round, and the with the participation of the UNCTAD Secretary-General, Kenneth Dadzie and the GATT Director-General, Arthur Dunkel. There is also talk that a few of the Ministers who conducted the consultations at Brussels would also be invited.

The names of the Malaysian Trade Minister and the Swedish Trade Minister (who conducted the TRIPs and TRIMs consultations) are also being mentioned. The invitation for the wider Punta del Este meeting on January 30 is reportedly to be issued by UNCTAD as part of its Uruguay Round technical assistance project for the region (and reports from Latin America have been talking of an UNCTAD-organised meeting) and thus would not be identified as one organised by Uruguay or convened by its Foreign Minister Gross-Espiell.But some Latin American delegates privately are however chary, particularly on its impact on the other Third World countries of Asia and Africa. They note that the wider meeting would not be a mere regional meeting, to which some Third world countries from outside the region are invited, but one of the region with two of the principal trading partners.

This could create the impression that with help of some Latin Americans, and in return for some agriculture deal, an effort is being made to put through an overall deal including in some of the rule-making areas and new themes.