Feb 27, 1991

URUGUAY ROUND NEGOTIATIONS RESTART, NO DEADLINES FOR END.

GENEVA, FEBRUARY 26 (CHAKRAVARTHI RAGHAVAN) – The Trade Negotiations Committee (TNC) agreed Tuesday with the proposals of GATT Director-General Arthur Dunkel for "re-start" of the collapsed Uruguay Round negotiations and for their conclusion as soon as possible but without any new deadlines.

The TNC which met formally at official level, heard a Dunkel statement (and took note of a detailed document circulated to the TNC outlining the Dunkel proposals for further work in each of the negotiating areas) and agreed without comment to them.

Dunkel’s oral statement to the TNC, supplementing the proposals and ideas that he had outlined last week and Monday at various "cluster consultations", seemed principally aimed at meeting the Third World concerns that had been conveyed to him.

Dunkel had met with the informal Third World group Monday where he previewed to them his planned oral statement in order to ensure that none of them would seek clarifications or make comments at the TNC meeting, and thus unravel his fragile package.

The statement reiterated the continued validity of the Punta del Este mandate and the Mid-term Review Agreements, the separate negotiating structures for goods and services and the surveillance mechanism, as well as the mandatory requirement for evaluation of the application of the differential and more favourable treatment for the Third World countries in the results of the negotiations.

In his oral statement to the TNC, Dunkel said that his consultations, in pursuance of the mandate given to him at Brussels, had led him to conclude that "I have now at hand all the elements necessary to enable us to put the negotiations back on track". The "main elements" of his proposed programme of work, Dunkel said, were being circulated as official TNC documents (MTN.TNC/W/69) but "their essence is simple and provide for two main things:

* a basis for restarting the negotiations in all areas in which differences remain outstanding, and

* a proposed work agenda in each of the negotiating areas which could be developed in further consultations which will be started very shortly". Dunkel then went on to make what he called "a number of other points ... as a part of this plan" - all apparently aimed at meeting Third World concerns and objections.

"First", he said, "while in my mind this goes without saying, I must stress that the Punta del Este Declaration remains the basis for all our work in the Uruguay Round and that decisions taken at the Mid-Term Review, also retain their validity. This means, for instance, that the GNG, the GNS and the surveillance mechanism remain in place and retain their status". "Second, I shall be consulting with participants not only on the proposed agenda for further work but also on the way in which that work will be organised". "Third, all participants will be mindful of the requirement that an effective evaluation be conducted of the extent to which the objectives relating to differential and more favourable treatment for developing countries are being attained". "Fourth, I also need to recall that at the Punta del Este meeting, which was held in September 1986, the Ministers agreed that ‘the multilateral trade negotiations will be concluded within four years’ i.e. before end of 1990. At the conclusion of the Brussels Ministerial Meeting all members of the TNC concurred with a proposal by Minister Gross Espiell that consultations be pursued until ‘the beginning of 1991’"."It is now clear that the expectation that the negotiations would be concluded by the beginning of 1991 has not been met. I therefore propose that the TNC agree to continue the negotiations with the aim of concluding them as soon as possible. You will note that I am not suggesting that the TNC fix a date for the conclusion of the negotiations, as experience has taught us that fixing target dates is not always helpful. In other words, we should allow the target date to emerge in the process of negotiation".

There were also a number of "consequential points", Dunkel said. The Mid-term decisions on Greater Ministerial Involvement in GATT and on Increasing the Contribution of GATT towards achieving Greater Coherence in Global Economic Policy Making are not limited in time and therefore remain unchanged by the continuation of the negotiations beyond 1990. The Standstill and Rollback commitments in the Punta del Este Declaration and the Mid-Term decisions on Improved dispute Settlement Procedures and on the establishment of the TPRM remain valid until the end of the negotiations.

Also, in the Mid-Term decisions on Agriculture and on Textiles and Clothing, there were some specific references to the negotiations being concluded in 1990. "I suggest that these references stand modified in accordance with the new agreement on the continuation of the negotiations". The TNC agreed with the statement.

Before adjourning the meeting, Dunkel announced that the TNC would remain on call at short notice.

On Monday, Dunkel had met the informal Third World group in GATT Monday to provide them with reassurances on several points of concern to them about the basis for the re-start of the negotiations, so that none of them would comment or seek clarifications at the formal TNC meeting.

The whole process and the basis evolved by Dunkel for the restart of the negotiations provide such a fragile basis for the U.S. administration to get its fast-track authority renewed that GATT officials have been worried that any comments or attempts to seek clarifications could easily result in the unravelling of this.

Though President Bush's position vis-à-vis Congress is probably very strong as a result of the Gulf war and the U.S. assertion of "power" for his "New World order", U.S. officials and observers have been privately cautioning against taking for granted extension of fast-track authority. It had been earlier thought that extension of authority for Uruguay Round might raise problems, but that extension for negotiating the free trade agreement with Mexico would be easy, and since the extension of authority under the law is not specific to one or the other, things would work out. Latest diplomatic advises from Washington now suggest a reversal of assessments, with the Mexico free trade agreement issue having brought various domestic lobbies together in opposition.

The concerns of the Third World delegations over Dunkel’s expected statement before the TNC for re-start of the negotiations, have arisen over his proposals and ideas outlined in the various cluster consultations he has held, suggesting both areas for technical work and discussions and an agenda and programme of meetings. Except on agriculture, he had not held prior consultations and the formulation of some of Dunkel’s ideas and agenda for further work appeared to change the balance and priorities.

Dunkel and his senior advisors have been apparently advising Third World delegations that nothing "sinister" should be read into these. While some of them have accepted this, they continued to be concerned because of what they fear would be how the U.S. and EC would use them once the processes really got under way after summer. Some Third World sources however note that the problem was not that the GATT officials acted or proposed things out of "sinister" motives but that their view that what was good for the two majors and their business lobbies is also good for the rest of the world.

"While the Third World delegates fell in line with Dunkel’s plea to them not to comment or seek clarifications, there are those who believe still that the entire scheme could prove disadvantageous to the Third World since once the U.S. and EC resolve their mutual differences, they would both join against the South, as easily as they had done over the Gulf.

At the informal Third World group meeting, Dunkel that questions relating to the Multifibre Arrangement would not be brought up before the TNC as such, but at the Textiles Committee (also chaired by Dunkel).The current MFA-4 is due to expire at end of July 1991 and there had been an assumption so far that the Uruguay Round negotiations would result in agreements for integrating this trade into GATT with a suitable transition period and arrangements. The extension of the Uruguay Round without any deadline now means that a decision would have to be taken on the MFA from 1 August.Dunkel indicated at the Third World group meeting that he would continue to chair the various cluster groups he has convened for consultations on further agenda and programme of technical work and discussions, but that the future shape of the consultations and who would chair them etc would be decided in the consultations.

In the programme outlined by him Monday, a second round of consultations would be held in March. The agriculture cluster would meet on 1 March, that on Textiles and Clothing on 5 March, that on services on 8 March, that on Rules 14-15 March, that on TRIMs and TRIPs on 18 Match, on Dispute Settlement and Final Act on 20 March and on Market access on 21 March.These meetings, Third World sources said, would be for purpose of agreeing on the agenda and programme of further work, which would "technically" start after the Easter holidays.However, Third World sources said, Dunkel’s announcement at the TNC meeting about restart of the negotiations, which would enable the U.S. administration to seek extension of fast track authority from Congress, would only mean that the derailed Uruguay Round talks have been put back on track and that for several weeks (until the fast-track situation and the EC's internal reform process in agriculture are clearer) thing would be on the back-burner.