PROGRESS REPORTED IN ORGANISING URUGUAY ROUND.

Jan 28, 1987

PROGRESS REPORTED IN ORGANISING URUGUAY ROUND.

GENEVA, JANUARY 27 (IFDA/CHAKRAVARTHI RAGHAVAN) – Efforts to complete the organisation of the Uruguay round of Multilateral Trade Negotiations are near-complete, with only a couple of problems still remaining to be solved, GATT diplomats reported Tuesday morning.

The outstanding problems, they said, relate to the negotiating plan for agriculture and one or two other relatively minor points in the area of trade in goods.

Also to be resolved are differences over organisation of the work of the group on services, and in particular the areas to be covered in the initial phase of its work in 1987 and the "elements" to be addressed.

The Trade Negotiations Committee (TNC), the overall body established by to carry out the Uruguay round is due to meet Wednesday afternoon.

The Group of Negotiations on Goods (GNG), which is a subsidiary body to coordinate and carry out the GATT MTNS in goods is due to meet Wednesday morning, while the Group of Negotiations on Services (GNS) to carry out the legally separate and distinct negotiations on trade in services is to meet Tuesday afternoon.

All three bodies are expected to finally approve the package of decisions to enable the actual start of negotiations, with the first of the negotiating groups due to meet in the second week of February.

Intense consultations over the weekend within and outside GATT are reported to have resulted in compromises on all other outstanding points in a package of decisions needed to complete the organisational part of the Uruguay round, and enable the start of negotiations in each of the areas to be covered.

The consultations are reported to have yielded agreement on the mechanism for surveillance of the standstill and rollback commitments, on the negotiating structure, including a calendar of meetings for the first quarter of 1987, and elaboration of negotiating plans on each of the 14 subjects on the agenda for the GATT MTNS in goods.

Third world sources said that it is now clear that each of the 14 subjects would have a separate negotiating group, separate meetings and minutes, etc.

Each would have more or less a similar initial first phase, to be completed before end of 1987 and to be largely devoted to examination of issues and gathering of data wherever necessary, and perhaps also an effort at establishing a common negotiating basis for the subsequent stage of negotiations.

The detailed negotiating plans for the subsequent stages would involve formulation of an agreed negotiating document, clearly setting out the issues and alternatives, and then starting bilateral/plurilateral/multilateral negotiations or exchange of concessions as might be appropriate.

Each of the negotiating groups would have to first formulate these details, and the GNG would then have to approve them, as also decide on a calendar of meetings.

All these, as decisions so far, would have to be through the GATT consensus decision-making process.

There are however still reported to be differences on whether the negotiating group on textiles and clothing should have a separate chairman like others or whether, as the U.S. wants for domestic presentational reasons, the chairman of some other group could also chair the group on textiles and clothing.

The U.S. domestic textiles industry lobby, and powerful congressional figures, do not want any negotiations in textiles and clothing except in the context of a renewal of the Multifibre Arrangement (with MFA-4 due to expire in 1990), and U.S. negotiators are trying to play the tricky game of agreeing to negotiate in GATT and advising their domestic audience that this does not mean anything.

While others sympathise with the U.S. negotiators, the danger is that in the process, very soon, the U.S. negotiators may lose credibility both domestically and abroad.

In the area of agriculture, the major difference is between the European Communities and the so-called Cairnes Group, with the latter trying to accelerate the work in the first stage and ensure that development of a common working document to facilitate negotiations.

There are also some differences on whether the agriculture group should address only the negotiating objectives on agriculture set in the declaration, or also other parts of the Ministerial declaration (in the area of goods).

The EEC wants to ensure the former, while the Cairnes Group wants the latter, so that some of the agreed negotiating objectives in non-agricultural sectors could also be injected into the negotiations on agriculture.

While the Uruguay round involves negotiations in goods and in services as "a single political undertaking", but with no direct linkage between the two at every stage, the U.S. has been trying to set it, by insisting that unless a satisfactory initial phase of work on services could be agreed upon, it could not agree to the package in the area of goods.

The U.S. is also trying through agreement in the initial phase to restore ground lost at Punta del Este in regard to the negotiating objective in services.

It wants to bring national laws and regulations on services under scrutiny, while India and others reject this, underlining that the Ministerial declaration had made clear that any framework in services "shall respect" the policy objectives of national laws and regulations applying to services, and hence any multilateral scrutiny of national laws in inadmissible.

Also the U.S., and to some extent the EEC, want an examination of "barriers" to trade in services, so that their elimination or reduction could be negotiated.

India and others reject this, underscoring the text of the Punta del Este decision which only calls for "expansion of such trade under conditions of transparency and progressive liberalisation and as a means of promoting economic growth of all trading partners and the development of the developing countries".

Third world sources said that they did not see any of the outstanding questions as major obstacles that could block decisions this week on completing the organisation of the negotiations.

However, they said, the dispute in the area of agriculture could perhaps have a link to the parallel efforts outside Geneva, between the U.S. and EEC, to settle their dispute over compensation by EEC for loss of agricultural exports to U.S. and others because of Spain’s accession to the Community.

On this last, both the EEC and U.S. are described as striving to avert a trade war, but if their efforts fail it could cast a long shadow on the Uruguay round.