Jan 20, 1992

"BUSINESS AS USUAL" DESPITE WAR OF WORDS, SAYS GATT.

GENEVA, JANUARY 17 (CHAKRAVARTHI RAGHAVAN) – While GATT negotiators privately see the outlook for concluding the Round more and more pessimistically, the GATT publicly sought to project a different picture Friday.

"Despite the transatlantic war of words, business in Geneva goes on as usual", and three of Dunkel's four-track process for completing the negotiations is already at work, the GATT spokesman said.

The European Community's insistence on some substantive changes in the Dunkel package, particularly on Agriculture, as well as the transatlantic war of words involving U.S. President George Bush and French President Francois Mitterand has been generally viewed by trade diplomats here as negative for concluding the Round.

The Bush talk of the U.S.-EC differences on trade in strategic terms and using cold war language is seen by several GATT negotiators as having played into the hands of the French.

Bush (trying to shore up support for his re-election and project himself as one defending U.S. jobs) spoke in the-mid-west farm belt spoke of the "EC must hiding behind its own Iron Curtain of protectionism" and promised U.S. farmers and U.S. public: "I will continue to fight for American jobs everywhere. We won the Cold War and we the competitive wars".

Mitterand responded in Paris with a statement in the Cabinet, officially relayed to the Press, that "France is not ready to bow to American demands nor to submit to the interests of any other country, and will not give way".

The remarks of the French Agriculture Minister, Louis Mermaz that the Dunkel package was totally unacceptable has since been followed by a press conference by him.

With Bush in the midst of his re-election campaign, and on Republican primary trail, and France due in March to have regional elections (and Parliamentary elections next year), the idea of GATT officials that the Round could be wrapped up before the election campaigns has been seen to be short-sighted.

Despite these, several Geneva negotiators are suggesting that the Round could still be concluded on the basis of the Dunkel package and that While the Bush-Mitterand exchanges, and the trade disputes have some negative effects, some way would be found to conclude the Round.

U.S. and EC top negotiators were also expected in Geneva Friday for discussions among themselves and with others in an effort to find a way out of the tangle into which the Uruguay Round negotiations have become mired since the unveiling of the Dunkel compromise package.

Due in Geneva, according to reports are deputy U.S. Trade Representative Julian Katz and his aide Warren Lavorel and the EC's chief Uruguay Round negotiator Hugo Paemen.

Some of the junior negotiators have also been talking of finding some "face saving formulae" to enable the EC to accept the package, but responsible observers have begun to doubt any such formula emerging and being accepted.

Some French media, even those friendly to the GATT, have reported (after the remarks of Mitterand, his foreign Minister Roland Dumas and Mermaz) that the Round is now as good as dead.

But the GATT spokesman Friday tried to dispel the general gloom and said: "despite the transatlantic war of words, business in Geneva goes on as usual".

The work (according to the programme agreed Monday at the TNC) will continue intensively and three of the four tracks are already at work, he said.

At the TNC Dunkel had identified the four tracks as negotiations on market access in goods, negotiations for initial commitments on trade in services, and work on cleaning up the draft Final Act for internal and legal consistency.

The fourth track of TNC consideration of the substance of his global package, he had characterised as an exercise "very precise and concentrated" on what could be collectively agreed without unravelling the package as a whole.

While he had said at the TNC that he would be willing to play the role of an "honest broker", since the TNC he has also been reportedly reassuring some of the other delegations, concerned at the "fourth-track" approach and what it might entail, that he was not planning any new proposals or revisions and that it was for the delegations to negotiate among themselves and reach a consensus.

The GATT spokesman said Friday that there was no change in the programme of work (agreed to on Monday).

The texts and proposals written in by Dunkel into the draft Final Act, the spokesman said, "did not fall from the sky".

"Even the figures reflected the discussions that took place between delegations, and there is no reason to be so surprised about the contents of the 15 percent of the package written in by the TNC Chairman", he added.