Feb 16, 1990
TWO MORE MARKET ACCESS GROUPS AGREE ON PROCEDURES.
GENEVA, FEBRUARY 14 (BY CHAKRAVARTHI RAGHAVAN)— Two more negotiating groups on market access issues in the Uruguay Round - the negotiating group on Tropical Products and that on Non-Tariff Measures (NTMS) have agreed on procedures for negotiations. Under the mid-term accord, the negotiating group on Tropical Products (TPs) was to have done this in May last year, while the group on NTMs had been directed to establish by June '89 the framework for future negotiations. But no agreement could be reached till now because of the deadlock (between the U.S. request/offer approach and the EEC formula approach) on modalities in tariff negotiations. Despite the deadline set for July 1989, no agreement could be reached until January when the modality issue was bypassed by agreeing to an "offer/request" procedure. This opened the way for agreements this week in the two other markets access groups. Agreement is still to be reached in the Negotiating Group on Natural Resource-based products. The procedures agreed upon in the Tropical Products group is virtually identical to that in Tariffs (SUNS 2307), and is on an "offer/request" basis. Along with their "offers" for reduction, elimination and binding of tariffs on a line-by-line basis, to be submitted by 15 March, participants are also to submit proposals for elimination or reduction of any non-tariff measures affecting trade in TPs. The GATT secretariat is to circulate all the proposals received to all participants who have submitted proposals. As in tariffs, participants who have submitted their proposals are to hold a first meeting, no later than 25 April, to review and assess these proposals. This is to provide for conduct of negotiations in a transparent manner. By 30 April, participants are to endeavour to submit to others involved, preliminary request lasts for improvements to adjust the proposals submitted. In the area of NTMs, after several weeks of informal consultations, the negotiating group has agreed on a framework and procedure for further negotiations. The agreement has bypassed the problem in the group of GATT consistent and inconsistent measures. The latter have to be eliminated or brought into conformity with the General Agreement under the "rollback" commitments undertaken at Punta del Este. Only GATT consistent NTMs are to be the subject of negotiations in this group, as per the mandate and the negotiating plan. Delineating these two proved an intractable problem, with those maintaining inconsistent NTMs wanting to get something in return. The agreed framework and procedures for negotiations provide for three different approaches: multilateral rule making approaches, multilateral formula approaches on particular measures, and for "request/offer" approaches. Under the first, the EEC has tabled proposals for agreement in principle an rules of origin (the EEC in essence calls for everyone the Uruguay Round to accept the general principles - for test of "substantial transformation" to decide on the country of origin of an imported product, as different from that of the U.S.A which applies a percentage value added test. The EEC envisages the Customs Cooperation Council later deciding on technical issues and standards that might arise in the application of this. Though the EEC has not clarified, it is believed that the EEC proposals would have a bearing on the issue of "screw driver assembly" operations by exporters trying to escape EEC actions against them whether of antidumping or "selective safeguards" that the EEC seeks to incorporate into GATT - Japanese plants set up in other countries, whether of the Third World or in the U.S.A (as in case of electronic printers, etc.), by importing parts and assembling for shipment to the EC (thus avoiding the antidumping actions) or Japanese cars assembled elsewhere to get around the safeguard actions in France or Italy. There are also indications that the EEC and U.S. want to bring under this "rule-making" approach proposals to deal with the wide practice of many Third World countries for "pre-shipment" inspection procedures, intended to facilitate customs clearance at import point and ensure that there is no fraud, but which TNCs find irksome since it also helps in attacking their transfer-pricing policies. The procedures for the "request/offer" approach to deal with individual NTMs in a country that another country feels acts as a barrier to its exports, reiterates the Punta del Este declaration and its guiding principles including the special and differential treatment and non-reciprocity approach for the Third World countries. Yet, the proposed "request/offer" procedure is likely to open the way for a series of demands by the U.S., EEC and other major ICs on Third World countries, and for some kind of "bindings" to enable "retaliation" in the event of reintroduction at some future date of an NTM that is reduced or eliminated now, even if the reintroduction is on such GATT authorised grounds like balance-of-payments crisis or as a "safeguard" measure. In respect of the "request/offer" approach, participants are to submit by 15 March initial request lists, which can be modified or supplemented at any time. Negotiators might thus find themselves facing unlimited request right till the end. The agreed procedure also provides for what could be described as conditional "transparency": The requests submitted to the participant concerned are to be made available to the secretariat which, in consultation with the requesting party, will prepare summaries of each request list to be made available to the negotiating group. The initial request lists are also to be provided to individual participants "except to those to whom the requesting participant objects". The procedure provides for "recognition" of liberalisation measures "already adopted by participants, and towards this end they are to give details of measures adopted and the "precise recognition" they are seeking. There are to be bilateral consultations on initial request lists, to clear up technical points. Also, plurilateral discussions involving participants with "shared interests" are to be encouraged, and participants are to consult to identify areas of shared interest. Initial "offers" in response to initial requests are to be submitted so that negotiations could begin as soon as possible and no later than 15 May 1990. Participants could offer to implement some measures either immediately or over a time-frame to be agreed. In the submission of offers, special attention is to be given to requests emanating from Third World participants. Participants are also to ensure special treatment for least developed countries "which may take the form of advance implementation for them of liberalisation measures". Participants are also invited to submit by 15 March 1990 proposals aimed at ensuring that concessions to reduce or eliminate non-tariff measures are not subsequently nullified or impaired. The negotiating group is to begin examination of these proposals preferably by 12 April. Also, to ensure that objectives, principles and guidelines (which includes "transparency") adopted for negotiations are met, the Chairman is to provide the group with a list of participants who have made request and/or offers, and request participants to inform the group on developments in the negotiations. With respect to requests, this last is to include, inter alia indications as to participants of which request had been made, the number of tariff lines for each request list, the NTM categories and product categories involved. In respect of offers it would also include indications as to whom the offers have been made. In its proposals on "rules of origin", the EEC has made clear that this is only for non-preferential trade, and not various preferential systems (GSP, Lome or arrangements with EFTA or Mediterranean Countries, etc.), each of which have their own rules. The general principles governing rules of origin, the EEC suggests, should be dealt with in the Uruguay Round while any "possible approximation" of these rules, after agreement on principles, should be carried out in the Customs Cooperation Council. In the framework of GATT, the EEC wants CPs to commit themselves to respect the principles of: * Non-discrimination in applying rules,