Feb 25, 1991

DUNKEL SCENARIO - A "BREAKTHROUGH" OR "PIG IN THE POKE".

GENEVA, FEBRUARY 21 (BY CHAKRAVARTHI RAGHAVAN) – As GATT Director-General Arthur Dunkel convened and presented to successive "clusters" of consultations, his proposals for re-starting the collapsed Uruguay Round negotiations and the agenda for this, Third World delegations are beginning to become wary of the scenario. After the "consultations" Wednesday on agriculture, Dunkel has since held consultations on "textiles and clothing", "services", and "rule-making" clusters. He is due to have consultations Friday in two other clusters: TRIPs and TRIMs, and Dispute Settlement and draft Final Act, on Monday on "market access" and has scheduled a meeting of the TNC for Tuesday.

He has also scheduled a press conference for Tuesday afternoon. In evolving and presenting an "overall scenario" for restart of negotiations, he had met with key delegations and countries on agriculture and outlined to them the basis he would propose for the re-start of the negotiations.

But he did do so in other areas, and had told Third World delegates who had sought some clarifications that they should trust him to faithfully reflect the state of affairs as at end of the collapsed Brussels Ministerial meetings.

So far the scenario, of getting everyone to agree not to comment on his proposals and papers presented at the "consultations" and which by their very nature are informal, has proceeded without any hitches.

All the Dunkel proposals for each of the negotiating areas or clusters for re-start of the negotiations are to be formally brought before the meeting of the Trade Negotiations Committee on 26 February and the TNC asked to give the go-ahead.

In each of the clusters, he has mentioned the mandate given to him at Brussels - to conduct intensive consultations with the specific objective of achieving agreements in all the areas of the negotiating programme in which differences remained outstanding.

He has also referred to the stipulation that the consultations were to be on the basis of MTN.TNC.W/35/Rev 1 (the draft final act, containing various texts sent from Geneva to the Ministerial meeting, along with communications of various participants on these) and taking account of the considerable amount of work carried out at Brussels though these would not commit any delegation.

While this is non-controversial and factual, the fine print in his statements, outlining the issues to be dealt with for reaching agreements and the manner in which he has formulated agendas for further work when the negotiations re-start in each of the individual clusters, show an emerging pattern of imbalance.

This imbalance emerges in terms of the basis for re-start of the negotiations in particular areas and the agenda of "technical work" proposed as between areas or issues where there are some tough and basic differences on sensitive, issues between the U.S. and EEC, those "sensitive" issues involving the U.S. and the Third World, and the third group of issues which are "sensitive" for the Third World but on which there is some commonality in the North.

In agriculture, the most important "sensitive" area of difference between the U.S. and the EC, a study of the fine print of the wording of the Dunkel proposal suggests that the agreement of all participants is only to "conduct" the negotiations. That the conduct of negotiations is to "achieve specific binding commitments" in the three areas can at best be taken to favour the agricultural exporters in terms of the basic principle of international negotiations, namely, "negotiating in good faith" - a principle that has not been much evident in the negotiations since Punta del Este.

In the case of Textiles and Clothing, where the draft text for agreement (that had been suggested by the chairman of that negotiating group) had run into opposition from the Third World on specific points and these were referred to the Brussels meeting in the shape of "commentaries", Dunkel’s proposals have referred to them in terms of the page number of the text for Brussels.

They are gut issues, as "guttish" as agricultural subsidies and variable levies. They include the timespan for transition before full integration, whether trade in products already under no restriction should be immediately integrated into GATT or still in stages, should there be increase in growth rates, the transitional safeguards issue and such "sensitive" issues to the importing ICs.

Perhaps the intention was, unlike in the agricultural text where the "specific" commitments in three areas had to be dealt with, however vaguely, to enable the U.S. to claim "breakthrough" and get fast-track authority through Congress, in the Textiles and Clothing case media reportage should not help the U.S. Textile and Clothing lobbies to pressure Congress against extension.

However, as observers here note, the relevant industrial and trading interests of the North have their men either in the secretariat itself or representatives here who easily have access to all the documents and their fine print and the only people who will be denied "equal access" to information would be the general public and consumer groups.

The sensitivity hence appears to be only in terms of media reportage which, in the absence of inability to manage information as effectively as the allies are doing in the Gulf War, has to fall back on vague words which could be interpreted by delegations and secretariat officials on non-attributable basis to guide newsmen to adopt a particular line.

The inherent bias (in dealing with North-North and North-South differences) comes out even more clearly in terms of the proposals in Dunkel texts on "services" and "rule-making". In the "services" text, in setting out the agenda for further work in the consultations, the balance and priorities that had been set by the Group of Negotiations on Services in the text sent to Brussels has been changed to suit the U.S.A position clearly brought out in the text for Brussels was that the negotiators must settle on a draft multilateral framework of rules and principles governing the "trade in services" and on that basis there should be "offers" and negotiations on initial commitments which would be incorporated into schedules to be attached to the services agreement.

The Americans had however been insisting on bringing up front the "initial commitments" and when this became difficult to justify - since it was impossible to offer or negotiate commitments on initial liberalisation without knowing the general rules and disciplines or framework against which the liberalisation would work they came up with the "conditional most-favoured-nation" approach. This isolated them from everyone, with the EC taking up a position strongly against it, though recently there are reports of U.S.-EC modus vivendi on this emerging. In the Dunkel paper on services now while he has noted the "agreement among participants" on work being done in three specific areas - framework, initial commitments and sectoral annexes (for modifications or derogations for particular sectors from general framework) in suggesting the agenda for technical work, he has subtly modified the order as - commitments, framework and annexes.

This technical work, he has further said, could relate to clarification and evaluation of offers and establishment of negotiating procedures. The idea of arrangements of a general character and MFN exceptions to them has also been suggested. In the rule-making group (a cluster that involves some very different areas and GATT rules), he has noted that issues were closely related to the "political problems" facing the negotiations and of overlap of political and technical questions in these.

In the subsides and countervailing issue, the Dunkel paper suggests that the problem of "special and differential treatment for developing countries" is an area for technical work, and as such brought up front in the agenda for work beyond next week.

In anti-dumping, where as in agriculture no text or draft basis for negotiations could be agreed upon and the ministers at Brussels were faced with "commentaries", Dunkel has alluded to these but without suggesting even a tenuous basis for negotiations (as he did in agriculture), he has suggested that "technical work" be restarted. In safeguards area, the only programme is for participants being given an opportunity to comment where they stand and where they should go from here and whether any technical work might usefully start.

In GATT articles, where after four years of discussions there has been no agreement to take up for negotiations the provisions on balance-of-payments, the idea of taking it up for negotiations is kept in the picture.