URUGUAY ROUND WILL FAIL IF THERE IS NO PACKAGE BY JULY.

Feb 28, 1990

URUGUAY ROUND WILL FAIL IF THERE IS NO PACKAGE BY JULY.

GENEVA, FEBRUARY 26 (BY CHAKRAVARTHI RAGHAVAN) -- If no balanced overall package of results in the Uruguay Round emerges by July, there will be no package in December at Brussels and the round will end in failure, several Third World delegates warned Monday.

The Ambassadors of Argentina, India, Singapore, Tanzania and Uruguay made these comments at a press conference where they released the text of a joint statement adopted by the "informal group of developing countries" in the GATT on Friday.

The text was released Monday after it had been officially handed over to the GATT Director-General, Arthur Dunkel who is also the chairman of the official level meetings of the Uruguay Round Trade Negotiations Committee.

Besides adopting unanimously the statement, the group has decided to meet weekly to follow the developments in the round, and exchange information and views. Several participants said that there was a general mood of frustration within the group.

In the absence of the Chairman of the group, Amb. Rubens Ricupero of Brazil, who is attending a meeting of the Board of Governors of the Common Fund in Amsterdam, the joint statement of the Third World group was handed over to Dunkel by Amb. Felipe Jaramillo of Colombia, and the five delegates held the press conference to release the statement and underscore what they considered to be the seriousness of the situation facing the multilateral trading system.

When a newsman suggested that negotiations on problems not solved now could be carried over, Amb. Leopoldo Tettamanti of Argentina said that there was no way of continuing the negotiations beyond the December meeting in Brussels.

"If there is no agreement on integration of Agriculture into GATT, if there is no agreement on the modalities for integrating Textiles and Clothing into GATT - even though in both cases there would be a period of transition before full integration - there would be no agreement in the Round", Tettamanti declared.

The Third World diplomats said that the statement of the group was a "precautionary warning", and they were saying it now lest they be told later that if only they had spoken out earlier agreements could have been reached.

"We are now in the political stage of the negotiations, after considerable technical preparations", Tettamanti said.

"We still have many technical questions to solve but the time has arrived to confront crucial questions and take political decisions now. We can't wait till December to take political decisions".

There were a number of imbalances in the negotiating process, and to obtain good results out of the round, it was necessary to correct these imbalances confronting them, he said.

The present situation was due to two elements: lack of political will on the part of the Industrial Countries and their failure to take account of the development dimensions.

"We do not want to be free riders, but the situation confronting us in our countries have to be taken into account ... If this economic dimension is not taken into account and dealt with more pragmatically and adequately, if no agreement on a package is reached in the next 3-4 months before the summer recess, despite all our goodwill we will be starting a period of frustration and moving into a situation of crisis and risk the failure of the Round".

"It is not good enough to tell us that everything will be alright in the end, we have to know now the nature of the global package", Amb. Julio Lacarte of Uruguay said.

"The developing countries have been negotiating in good faith ... we cannot ask our governments at the final moment to take any package coming out of the round. In every one of our countries all parts of the government are involved in the negotiations and its implications, unlike in past rounds when only one or two ministries used to be involved. We have to know sufficiently in advance to be able to analyse and weigh the outcome".

Amb. Balkrishan Zutshi of India charged that there was extreme reluctance on the part of the ICs to address the "development dimension", whether in the market access groups or in the new areas.

In the beginning the Third World countries were told that though the Punta del Este mandate had specified the special and differential treatment concept as a guiding principle, there were no concrete proposals on the table and hence it could not be tackled.

"Now we have proposals on the table, but we have not heard any comments from the Industrial Countries, and there is still reluctance to address these issues", he said.

On the other hand there were a series of proposals, for example in relation to the GATT Articles, where whatever flexibility was available to Third World countries were being sought to be changed.

"This broad frame of mind does not augur well for the negotiations", the Indian delegate added.

The imbalance, Amb. Chak Mun See of Singapore said, was primarily between the market access negotiating groups vs. those on rule making and new areas.

"We see some brinkmanship. While retaining the options in the old areas, they are pushing ahead in the new areas as also in rule-making - in extending disciplines and relaxing rules of competition through antidumping provisions, safeguards, etc.".

There was still no agreement on modalities for integrating Textiles into GATT. There seemed to be an attempt to keep things unsettled till the last moment.

Referring to the push for "selective safeguards", Amb. Amir Jamal of Tanzania said that if this was to be the position in traditional areas of trade in goods, if after so many years the trade in Textiles was still to be in derogation of the GATT rules, what would happen with selective safeguards in the new areas.

Tettamanti said that to say that Third World countries were trying to block the negotiations would be wrong.

However, they were giving an "early warning". The Third World countries were not the demanders of the round. From the beginning they had doubts, since their past experience of the GATT was not "very favourable".

"Agriculture has not been governed by GATT for over 40 years, Textiles and Clothing for over 30 years .... From the beginning we went into the negotiations with open eyes. We have been negotiating, but time is running short. This round will end in the first week of December in Brussels. This was the political decision and mandate of our ministers. We have to know where we are by July. If the situation in July is the same as now, it will go wrong, not merely for us but for the entire Uruguay Round and the multilateral system".

If an agreement were reached in Agriculture, if modalities were agreed to in Textiles, there would still be a period of transition after Brussels. If an agreement on Services were reached at Brussels, negotiations for liberalisation would begin thereafter.

"But we need to know clearly. If you say that we will continue to discuss Agriculture in the future, or if you say we will continue to discuss Textiles in the future, we will say NO".

Zutshi contrasted the situation in the negotiations on Textiles with that in Services and Trips. In Textiles they were yet to decide on the particular modality to adopt for integration. The present arrangements of derogation from GATT had been in force now for 30 years, and very complex and technical issues would need to be sorted out, and transition arrangements and period would have to be agreed upon, even after a decision was taken on the particular modality to be adopted. All these things would have to be decided between now and July, and they still had no time-table for this.

In contrast, in Services they had a time-table and by July they would have some kind of a draft outline of an agreement. The same process was emerging in TRIPs.

In Natural Resource-based products there was no agreement even on procedures, leave aside the modalities for negotiations.

A decision on modalities was to have been reached by last July in Tariffs, but by January 30 they had only agreed on procedures to put the proposals on the table.

"The surveillance body to oversee the standstill and rollback commitments undertaken at Punta del Este had achieved no results so far", Lacarte pointed out.

The issue of selectivity of safeguards was also of great concern. "To continue to insist on that cannot but cause considerable concern amongst us as to what we are getting in this negotiation".