Jan 29, 1991

EC SELLING ITS "MINI-PACKAGE" FOR URUGUAY ROUND?

GENEVA, JANUARY 27 (BY CHAKRAVARTHI RAGHAVAN) – EC Commission vice-president and Foreign Relations Commissioner, Franz Andriessen, after his weekend talks in Punta del Este with a group of Latin American Ministers, was due Monday in Washington for talks with U.S. trade officials on revival of the stalled Uruguay Round talks.

Even as Andriessen was travelling, and trying to persuade the Latin Americans as well as the United States and Canada to revive the Uruguay Round talks on the basis of the Commission's ideas for agricultural trade reforms, EC officials in Geneva appeared to be not to optimistic though avoiding a pessimistic tone.

This view of the EC's assessment came after a meeting Friday, at level of Geneva diplomats, between the EC and members of the ACP (African, Caribbean and Pacific) group of nations who enjoy preferential trade and aid agreement with the EC under the Lome pact.

At Punta del Este Andriessen met with Ministers from six Latin American countries - Argentina, Brazil, Colombia, Chile, Mexico and Uruguay. All except Mexico (a net food-importing country) are members of the Cairns Group of Agricultural exporters.

Andriessen would appear at Punta del Este to have tried to persuade the key Latin American countries on the need for rescuing the negotiations and safeguarding the continuance of the multilateral trading system by scaling down ambitions.

Some media reports from Punta del Este, on the scaling down of ambitions, suggested that the EC believes that negotiations should be confined to some five areas, (agriculture, textiles, tropical products and other market access and services), instead of the original 15.

But sources in Geneva said EC ideas involved also other new themes (intellectual property for example) would need to be part of the "modest package" in order to attract U.S. support if there is to be "scaling down" in agriculture.

In any event, the EC believes agreements should be reached quickly and provide for a multilateral framework to continue negotiations in the future.

However, the reports said, there were still differences on the agricultural reforms and what the EC would do and whether the commission's plans (for budget reasons) to reform its domestic support policy and its claims that this would increase access to its markets and reduce subsidised exports would in fact do so.

In their talks with the ACP diplomats, the EC diplomats would appear to have sought to explain their efforts to revive the negotiations through bilateral and plurilateral talks with the Latin Americans and North Americans, in terms of the EC's worries that in the absence of a quick and successful conclusion of the talks, there was the danger of regionalism and regional blocs, sidelining the multilateral GATT trading system.

The EC officials would appear to have argued that there was not much time left and the overall situation was such that the opportunity of evolving a package might slip.

The situation now was very different from the pre-Punta del Este world (of 1986 when the Round was launched), and if nothing happened by end of February, the world faced prospects of regional trading blocs.

The EC also would appear to have plugged its line that without a successful conclusion of the Round and agreements on implementation (presumably a reference to its idea of a Multilateral Trade Organisation to implement the agreements and provide a forum for future negotiations in the areas covered by the Round), there was the danger of the U.S. revival of unilateralism through S. 301.

According to some participants, there were not many comments but that the ACP delegates stressed the EC's commitments on trade with the ACP countries who, unlike some of the leading Third world economies of Asia and Latin America, were not the EC's competitors in the area of manufactures. There would also appear to have been some references to the erosion of the ACP preferences under the EC's offers in agriculture and tropical products.

There were also some oblique questions raised whether there was any guarantee that through the successful conclusion of a modest package or agreements the U.S. would not only remove the S. 301 from its statute books but would not re-enact it at some future time, without an international agreement that would subscribe the U.S. Congressional authority in this area under the constitution?

Third World diplomats in Geneva said that a clearer picture would probably emerge only next week.

A senior U.S. official, Julian Katz is due to come to Geneva for talks with the GATT Director-General and the EC, on a "platform" for agricultural negotiations. Katz has been quoted in the press as saying that the U.S. administration would seek an extension of the fast-track procedures and negotiating authority from Congress but on the basis of the EC's willingness to compromise on agriculture.

Latin American and Caribbean senior negotiators are also meeting from 30 January at Punta del Este at a seminar under UNCTAD auspices. Originally it had been hoped that this meeting would also be attended by ministers, including from the U.S. and EC and some who had chaired the Ministerial sectoral consultations at Brussels. But now the meeting would be mainly a Latin American and Caribbean affair for exchange of views but without decisions.