Mar 21, 1988


GENEVA MAR 17 (IFDA/CHAKRAVARTHI RAGHAVAN) The need for a stable, predictable and liberal international trading environment was underscored here Thursday by the president of Uruguay, Julio Maria Sanguinetti.

Sanguinetti, on the second day of his visit to Geneva, was speaking to GATT delegates.

Earlier, he had a meeting with the GATT Director-General Arthur Dunkel and other senior officials, and addressed a press conference.

On Wednesday, the Uruguayan President had met with the Swiss Foreign Minister, Rene Felber, and paid an official visit to the headquarters of the international red cross here.

Sanguinetti, now on a European tour, is due to leave for Brussels Friday, and then on to Leningrad and Moscow for a visit to the Soviet Union. In his address to GATT delegates, and earlier at the press conference, Sanguinetti underscored the need for fight against protectionism, and the need for liberal international trading environment to enable countries like his to export more, earn more, and invest for further growth.

Referring in particular to the problems of agricultural trade, and loss of markets for Uruguayan exports because of subsidised exports by the industrialised countries, Sanguinetti said:

"Our farmers can compete with farmers abroad, and our industries with other industries. But our farmers can't compete with treasuries of industrialised countries".

He cited the case of Egypt, which used to take 30-35 percent of meat exports of Uruguay, but was no longer importing from his country because of cheaper imports from industrialised countries, who were able to provide them cheap because of government subsidies.

On the Uruguay round, Sanguinetti underscored the need for maintaining steady progress, and achieving results within the time frame of four years set at Punta del Este.

He appeared to play down in this regard the concept of "early harvest", arguing that early and interim results should not be a substitute for the more permanent and lasting solutions and agreements needed.

At his press conference, Sanguinetti said he had not specifically discussed "early harvest" with Dunkel and GATT officials.

"What we are concerned with", he said, "is the end result and this depends an how negotiations develop. If negotiations take an optimistic turn, and if significant results are in fact achieved, it will pave the way for a future path. But if the medium term results are a substitute for final end results, then that is not what we have in mind. Rather than an early harvest we should think in terms of a final end harvest".

But Sanguinetti's remarks on third world debt, and the optimistic assessment he put on the Latin American debt renegotiations, was received with some surprise by third world delegates, and particularly by several Latin American diplomats, who noted that Uruguay was a member of the Carthagena group and a party to the Acapulco declaration.


Sanguinetti told the GATT delegates that contrary to earlier forecasts Latin America had not gone over the brink due to the debt, and solutions were being found through refinancing and rescheduling.

Mexico, he said, had recently concluded agreements with "some positive elements", and Brazil and Argentina were also negotiating and seeking "new and imaginative solutions". "If we allow ourselves to be paralysed by external debt, we will have a vision of the world based on the past which will jeopardise solutions, in the future", he argued.

"We have to continue to refinance the debt. Our economies must grow. And they can't grow without investment and just terms of trade. Only growth of the economy can ensure solutions to debt, and for this we would need funds from abroad. Our debts will not diminish but increase because of the needs of greater investment".

His remarks on debt were received with some disappointment by the Latin American diplomats.

While none of the third world diplomats critical of his remarks wished to be quoted on record, one of them regretted that Sanguinetti had lost the opportunity to highlight the Latin American and third world case on this issue.

At his press conference, where he had made a similar optimistic statement on debt, Sanguinetti was reminded that other Latin countries, and international organisations including the Economic Commission for Latin America and Caribbean, had even recently made a more pessimistic assessment.

Also, the recent Mexican effort to retire old debt at secondary market rates, had proved a failure, with only a little over one billion dollars being retired, and even that at a discounted rate not favourable to Mexico.

Sanguinetti however claimed that debt negotiations had brought in some new positive elements.

Five years ago, he said, the prevailing orthodox view was the issue should be dealt with between debtors and creditors.

Now the approach had changed.

Also, linking debt servicing to exports was no longer a heresy. Each debt negotiation brought in something new, and "this has given us a degree of optimism".

The debt issue, he added, would not be solved in the next decade. "We would continue to live in indebtedness. Debt can be solved only through growth. Solutions are possible only in a framework of growth, more production, more trade, more investment, and more indebtedness".

Sanguinetti also sought to discourage efforts to unite the third world countries inside GATT on the trade issue, arguing that confrontations between the industrial and third world countries would lead to a dead-end road.

He commended in this connection groupings like that of the cairns, including industrial, East European Socialist and third world countries, who had come together on specific issues, as on agriculture.