Feb 1, 1990

TARIFF NEGOTIATION PROCEDURES SETTLED.

GENEVA, JANUARY 31 (BY CHAKRAVARTHI RAGHAVAN)— The Uruguay Round negotiating group on tariffs agreed Tuesday on procedures for negotiations which a GATT spokesman claimed would now unblocked the negotiations and was "a considerable step forward" not only for the tariff negotiations but for the round itself.

The agreed procedures in effect side-stepped the deadlock between the U.S. and EEC whether the modalities for negotiations should be on a request/offer basis as the U.S. wanted or by a general formula approach as the EEC sought.

The new procedure however appeared in effect to provide for an "offer/request" approach instead of the "request/offer" approach that the U.S. had sought. U.S. Trade Representative Mrs. Carla Hills reportedly had offered such a compromise at the informal meeting of some Trade Ministers at Tokyo last November.

The mid-term review accord had called for beginning substantive negotiations not later than 1 July 1989, and participants had been instructed to establish detailed procedures, approaches and methods necessary for the negotiations.

However the deadline came and went by without any agreement, in the face of the U.S.-EEC deadlock over the modalities.

The deadlock in the tariff group also led to deadlocks in other so-called "market access" groups including in areas of non-tariff barriers and natural resource based products.

While the U.S. and EEC are deadlocked on the modalities to be adopted, both are united in their efforts to reduce and bind tariffs in the Third World countries.

Following some intense informal consultations chaired by GATT deputy Director-General Charles Carlisle, the negotiating group agreed Tuesday on the procedures and a timetable for the further stage of negotiations.

Even now, no agreement has been reached on the issue of modalities and approaches, the agreed procedure merely side-stepping the issue.

"Even though we do not have a single modality or approach for the negotiations, the assessment procedure now agreed upon was a way to proceed with the negotiations and ensuring that it was balanced and in fact met the main objective of the mid-term accord and the Punta del Este declaration", he added.

Under the agreement, each participant is to provide the GATT secretariat by 15 March with a proposal for reduction, elimination and binding of its respective tariffs on a line-by-line basis (tariff line in its customs schedule according to various products groups or sub-groups).

The information will be provided according to a specified form giving the tariff item number, the description of the product, the base rate, the proposal and any remarks.

Each participant is also to provide a summary of its proposal, together with a "demonstration" that the proposal is in conformity with the mid-term agreement.

The secretariat is to distribute the proposals received, simultaneously to all participants who have submitted proposals.

The mid-term accord called for a "substantial reduction or, as appropriate, elimination" of tariffs by all participants with a view to achieving lower and more uniform rates, including reduction or elimination of high tariffs, tariff peaks, tariff escalation and low tariffs, with a target amount for overall reductions "at least as ambitious as that achieved by formula participants in the Tokyo Round".

In the Tokyo Round an estimated 30 percent reduction in tariffs was achieved by countries that participated in the general tariff cutting formula.

The mid-term accord also called for a substantial increase in the scope of bindings, including bindings at ceiling levels.

The various decisions were made subject to the understanding that the participation by Third World countries would be in accordance with the general principles governing the negotiations including the special and differential (S and D) treatment.

In summing up the outcome Tuesday, the chairman of the negotiating group referred to this and noted and during the discussions many Third World countries had emphasised the need for S and D treatment and the Punta del Este mandate's stipulation that Third World countries would not be expected to make contributions inconsistent with their individual financial, development and trade needs.

Under the agreed procedures and timetable, the tariffs negotiations are to be conducted in a transparent manner and to this end no later than 18 April participants which have submitted proposals are to hold a first meeting to review and assess these proposals.

"The periodic review and assessment process", the agreement adopts said, "will allow participants to determine whether individual proposals comply with the mid-term agreement".

Participants are to endeavour to submit by 30 April to other participants involved and simultaneously to the secretariat "preliminary request lists for improvements to adjust the proposals submitted".

It was also agreed that in order to conduct meaningful tariff negotiations, data on tariffs, bindings and trade are to be submitted by all participants without further delay.

In the negotiations, current nomenclatures are to be employed. The base rates for negotiations are to be the bound most-favoured nation rate and, for unbound rates, the normally applicable rates in September 1986.