POLITICAL IMPETUS FOR THIRD WORLD UNITY NEEDED.

Feb 14, 1989

POLITICAL IMPETUS FOR THIRD WORLD UNITY NEEDED.

GENEVA, FEBRUARY 10 (IFDA/CHAKRVARTHI RAGHAVAN)— A Ministerial level political impetus for unity of the third world countries in the Uruguay round are the greatest imperative, according to Amb. Shrirang P. Shukla of India, who has been the chairman of the informal group of third world countries in GATT since 1984.

At a meeting of the group in the GATT Friday morning, members paid very warm tributes to Shukla, who is relinquishing his post here and returning to Delhi where he is due to take up a position as Permanent Secretary in one of the Ministries in the government.

Amb. Rubens Ricupero of Brazil has been elected to replace Shukla as chairman of the group.

As chairman of the informal group and as Indian delegate to GATT Shukla has been one of the key figures in the preparations for and the launching of the Uruguay round of Multilateral Trade Negotiations, as well as in the subsequent two years of negotiations and the Montreal mid-term review.

In the period leading to the Punta del Este meeting, when there was confrontation between the U.S. on the one side and India and several other third world countries on the other, Shukla with Brazil's Paulo Nogueira Batista and the EEC’s Tran Van-Thinh, forged compromises and evolved what became known as the "common platform" on services that enabled the launching of the negotiations.

As the spokesman of the Group of 77 on trade issues in UNCTAD, Shukla had also played a leading role in the G77 preparations for UNCTAD-VII, and at the conference itself, as well as in the negotiations for the establishment of the Global System of Trade Preferences (GSTP) among Group 77 members.

On the eve of his departure from Delhi Saturday, Shukla discussed with IFDA the experiences of the third world and the imperatives facing the countries of the south at this point.

Shukla noted that in the GATT, though it was an informal group and contained some who were not members of the G77, the third world had remained together and maintained strong unity till the session of the contracting parties at end of 1984.

At that time the third world countries were faced with the push from the United States for the launching of the new round with new themes.

"It was basically a political decision, and many of the third world capitals were not prepared to take a stand that would be considered obstructive of the efforts of the U.S."

It was at this stage that those among them who were prepared to counter and oppose the U.S. decided to take a stand, and this resulted in the so-called "group of ten", Shukla explained.

Even when acting on their own, the group of ten had recognised the bilateral and other difficulties that faced the others, and had kept this in view in any move they made.

The services mandate and its separate track approach, Shukla said, was the direct result of the group of ten and its stand.

Immediately after its adoption at Punta del Este, all the members of the informal group, whether they had been part of the group of ten or not, had acknowledged it, and ultimately it contributed to the greater solidarity of the third world inside GATT and in UNCTAD.

The initiatives that the Group of 77 took on its own for UNCTAD-VII, including the technical work, without waiting as before for the secretariat to formulate its ideas and proposals, as well as the Havana declaration of the group, Shukla recalled was the result of the solidarity that developed after Punta del Este.

At UNCTAD-VII itself, the links that had developed in the GATT between the Group of ten and the European Communities, helped in evolving consensus on the final act, particularly trade.

The United States which took extreme positions at UNCTAD-VII was "isolated", and the Community worked with the Group of 77 to find solutions, just as it had at Punta del Este.

Asked about the Uruguay round negotiating processes over the last two years, Shukla said at the specific level of issues and negotiating groups, the delegates of the third world at Geneva had been trying to do some coordination.

"But there is no back-stopping from capitals, where there is much more bilateral contacts between leading industrial nations and the capital concerned and thus scopes for pressures".

With the negotiating agenda full of very technical and complicated issues, many of the third world delegations at Geneva also lacked the technical expertise to handle it. Many of them did not even have enough "bodies" to field, and smaller delegations had a single person handling all these matters.

As the South Commission had pointed out, though there was scope for differences among third world countries in individual areas of market access, the issues that ought to unite them within the round were much larger and more important. Yet the third world had been unable to evolve a joint approach and position.

The failure was not for lack of efforts at Geneva, but in capitals, Shukla said.

After the South Commission's call, there had been some attempts within the Non-Aligned Movement (NAM) at Nicosia to evolve a common position. Independently, the Group of 77 in UNCTAD had also produced a common position, but which was somewhat diluted at the NAM.

"We have no meetings of third world Trade Ministers", Shukla noted. "There are any number of meetings initiated by the industrialised countries and attended by Ministers from developing countries, but not among developing countries themselves".

At one stage, Yugoslavia had planned to take the initiative for the type of pre-Montreal meeting that the south commission had suggested. But this could not take place.

Despite it, while there were some differences of approach at Montreal, there was also a large measure of unity there.

During this entire period, even when the incipient post-Punta del Este unity could not be maintained and pursued in the Uruguay round, there were the positive developments like the GSTP, Shukla pointed out.

The successful conclusion of the GSTP negotiations was essentially due to the political impetus at Ministerial levels from capitals, provided through the three Ministerial meetings at Delhi in 1985, at Brasilia in 1986 and at Belgrade in 1987.

"The first imperative from the third world viewpoint in the Uruguay round is the need to provide a political impetus at Ministerial level for unity and solidarity in the negotiations," Shukla declared.

The view sometimes propagated that "GATT is a matter of each for himself" and no scope for the Group of 77 or joint negotiations, had no validity in the present situation.

That kind of position had perhaps some validity when GATT dealt only with tariffs and market access negotiations.

"But whether we want it or not, GATT and the Uruguay round are dealing with more basic issues of international economic relations. All the new themes and issues are basically north-south issues. If that is so, it makes it imperative to evolve a common approach".

"There is hence very great need for political coordination among like-minded third world countries".

The view of some that GATT is dead and vertical blocs would emerge or those industrial nations and the far east-pacific rim alone mattered was at best a partial view, which ignored the whole of south Asia, Africa and Latin America.

There was also not one single dominant centre in the north, but a number of them, and this provided an opportunity for the third world.

If there was an emergence of trade along bloc lines, the GSTP would and should be the answer of the third world, Shukla said.

Also, whether in TRIPS or services or in investments, the targets are not other industrialised countries in the OECD, but the countries of the south particularly the bigger economies.

"There is thus a tremendous negotiating and bargaining power and this is not being harnessed".

The real threat to GATT and the international systems arose from the tendency of some industrial nations to pursue their national interest to the detriment of everything else, and almost in a mercantilist manner, irrespective of whether the actions are sanctioned or outlawed by multilateral disciplines.

From an instrument of international cooperation and consensus, GATT is in danger of becoming an instrument of bilateral coercion.

On far more fundamental issues - disarmament, environment, "international terrorism", etc., where there were some basic differences on definition of problems and solutions - the world was moving towards consensus, and a movement towards the negotiating table.

But in GATT the movement is in the other direction.

In the Uruguay round itself, compared to the Tokyo round, at a technical level there has been a more speedy process.

At Montreal, deadlocks developed over agriculture, textiles, safeguards and TRIPS, and the effort is now to find language that would hold things together.

"At the same time, the gut issues of GATT have not been tackled".

"With only 18 months left for the round to be completed, there is the danger of gut issues like safeguards and textiles again being left at the periphery".

But there is pressure to settle the new issues in advance. There is some movement in services for a common approach. But in trips there is an attempt to force a particular point of view. If there is no equal pressure in investments, it is because at the moment the U.S. is not pushing it.

"The danger is now real that the new round will be about new issues, while gut issues like textiles and safeguards would be left behind," Shukla added.