Feb 28, 1991

URUGUAY ROUND "BACK ON TRACK"; BUT IS THERE STEAM BEHIND IT?

GENEVA, FEBRUARY 26 (CHAKRAVARTHI RAGHAVAN) – The Uruguay Round is "back on track" and "we now have a ‘platform’ as a basis for further negotiations in all areas of the work programme or agenda for a series of meetings from now until further notice", GATT Director-General Arthur Dunkel told newsmen on Tuesday.

But while he tried to give the picture of "back in business", his responses to various questions and even what he himself termed "speculative answers" suggested that while the train has been put on track, it yet to get an engine and work up a momentum that can push or pull and reach a destination or indicate when. Dunkel, who had not met the press after the collapse of the Uruguay Round at Brussels, was speaking at a news conference after the TNC formal meeting Tuesday morning for restart of the Round.

The GATT press office provided newsmen with copy of Dunkel’s note to the TNC, the programme of work that Dunkel had proposed for the official level TNC meeting (MTN.TNC/W/69), but would not give out the introductory remarks that Dunkel had made in the TNC, which the official document itself clarified should be read in conjunction with the introductory remarks.

As Dunkel put it at his press briefing, he has just managed to avoid an "erosion" of what has been done in four years of negotiations and by avoiding the trap of setting new deadlines, has merely managed to establish what he hopes would be "necessary conditions" for re-start of the negotiations.

"Today no responsible negotiator can tell you what his target is", Dunkel said in response to the question that most negotiators did not believe any serious negotiations were possible before the U.S. gets its fast track authority and hence not before June.

"There are too many elements to take into account and it would be a gamble to try to fix a target", he argued.

"If you want to have an agreed target it will be a long process and to enter into negotiations now about the target would have meant delaying the rest of the work of substance. The priority now is to bring negotiators back to the negotiating table. There are many things and priorities for individual participants - agriculture, services, intellectual property, etc. This is why I recommended targets should emerge from the negotiating process". Reminded that till now there had been delegations and officials who had been arguing that without deadlines and targets nothing would move, Dunkel said they would have gone on arguing about deadlines over the next 2-3 months and nothing would have happened and it would only have delayed the start of the negotiations and this was the dilemma facing the negotiators. He would not even speculate that targets and deadlines could emerge over the next 2-3 months.

"For the last four years I myself have set down deadlines. But it never worked. I would rather get to substance and then we will see", Dunkel said. Coming from the GATT head who over the last six years had ignored advice from the Third World but had gone about organising and running negotiations on the basis of fixing deadlines and planned "events" (ministerial meetings, formal or informal) as suggested by the major trading partners, it was quite a change.

But whether this change will be reflected in substantives are as of negotiations or merely be a tactical one remains to be seen.

Dunkel was also hesitant whether any substantial progress in negotiations could be expected until the EC ministers agree on the internal reforms of the common agricultural policy (CAP) - which according to all reports might take months.

"It is a difficult question to answer, because it depends on the way negotiations progress, on the political choices of participants during the negotiating process", Dunkel said. If one looked on the GATT negotiating processes since inception it was also difficult to make a distinction between decisions taken by governments on "so-called autonomous basis" and those on basis of recognition that in a world of interdependence nobody could act totally in isolation. The major difficulty in his consultations was in the need to avoid a mix-up between negotiations proper and establishing the conditions for re-starting the negotiations. A major step had been taken in agriculture by everyone agreeing "to conduct negotiations with a specific objective" and this was a major achievement.

He had no direct assurance that the Bush administration would seek and get fast-track authority but he had indications to this effect just as in respect of the EC's desire to conduct internal reforms of the CAP. Since Brussels it was clear that several of the countries - EC, Switzerland, Korea, etc. - are busy trying to reform their agriculture, making it less protectionist.

At Brussels the Uruguay Round was near failure, and if it had not been restarted now, they would have had to recognise a definitive failure to conclude the Round. This would have had "a serious impact on the business community". The moment the U.S. negotiators had seen and accepted the work programme proposed by him at the TNC, and it was used by the Bush administration to seek extension of fast track authority "from that moment the U.S. negotiators would be credible vis-à-vis their negotiating partners", Dunkel said as to whether U.S. negotiators would have any credibility with their trading partners before getting fast-track authority. He did not believe the fast-track authority would not extended, given the statements of President Bush and leading members of the Congress about their interest in a strong trading system.

Though over the next few weeks the negotiators would be engaged in technical work, the distinction between technical and non-technical work was easier said than done. Even currently, Dunkel said, negotiators were discussing substantive questions.

Dunkel said that one of the consequences of the extension of the Round was that decisions would have to be taken about the MFA-4, which was due to expire on July 31.As Chairman of the Textile Committee he would be convening a meeting soon to examine the situation on the prolongation of the MFA. Since participants were negotiating the integration of this trade into GATT through the Round, they might not want to prolong the MFA for far too long nor renegotiate a new protocol.

This appeared to imply that the MFA-4 would be rolled over for the duration of the Round whose completion however has still no deadline beyond the decision it should be "as soon as possible". There are indications that the extension of the MFA-4 is what the U.S. and EC have been seeking (the U.S. textile negotiator has actually said it should be prolonged till 1993). This is also favoured by some of MFA exporting countries, whose quota holders have a quota-rent that they are loath to forego and are pressuring their governments in this direction.

Asked by a Japanese correspondent about the status of the Hellstrom text (the secretariat text put forward at Brussels by the Swedish agriculture minister as a basis for negotiations in agriculture but which was rejected by the EC, Japan and Korea), Dunkel said that it had been an "important source of inspiration" for his consultations but no longer prevailed. "We have here quite a cemetery of papers. Like the Japanese offer on agriculture which never reached us, it (Hellstrom text) is also in the cemetery here", Dunkel commented.

Dunkel said that the TNC had agreed to fully respect the institutional arrangements for the negotiations set at Punta del Este which meant acceptance of the GNG, GNS and the Surveillance mechanism. But the working structures would be evolved on the basis of his consultations when the specific structures needed would be determined. His own inclination was to have "a much lighter" structure than the 15 negotiating groups before.

As for measures to ensure transparency so that all the 100 participants would know what was going on, Dunkel said the programme of work for further negotiations had been "seen" by all participants and that he would use the instrument of informal TNCs to keep everyone informed, but that on specific questions "you cannot negotiate with everyone". Dunkel’s answers and choice of "seen" rather than "consulted" seemed to suggest that in the negotiations ahead there will be even less transparency than before.