Apr 3, 1990
U.S., EEC INSIST ON CHANGES IN BOP PROVISIONS.
GENEVA, MARCH 30 (BY CHAKRAVARTHI RAGHAVAN) -- Industrial Countries appear to be mobilising their forces in order to force changes in the GATT provisions, applicable to Third World countries, on import restrictions for balance-of-payments considerations.U.S. delegate, Amb. Rufus Yerxa, reportedly went before the negotiating group on GATT articles this week to say that changes in the GATT articles in this behalf was an important negotiating objective of the U.S. in the round, and whether the Third World countries agreed to take up this article for negotiations or not, the issue would not disappear. The EEC, and U.S. and Canada have put forward proposals, which would severely restrict the capacity of Third World countries to invoke their BOP rights in Article XVIII: B to impose Quantitative Restrictions (QRs) on imports. The U.S., EEC demands have the support of other ICs, but has been resisted by Third World countries, both those who use these provisions and those who do not. At the last meeting of the negotiating group on GATT Articles, when the EEC presented its proposals, Third World countries, without exception, appear to have opposed any changes and in effect refused to take up the Article for negotiations. Apart from the formal discussions in the group this week, the Chairman of the Negotiating Group, Canada's John Weekes, would appear to have sought to persuade Third World countries to take up the issue and find compromises between their and U.S. positions. The formal presentations and written speeches of the U.S. and EEC were apparently previewed by them at an informal working dinner of Weekes, who too apparently had a formal text of "summing-up" of the discussions which one Third World participant said also appeared to have been prepared in advance. One of the suggestions there, which also surfaced at the formal meeting of the negotiating group, was that the GATT secretariat should be asked to produce a paper analysing the U.S. and EEC proposals and in terms of the present GATT provisions. At the formal meeting, Chile reportedly made this suggestion for a secretariat paper and this was supported by Colombia, but was opposed by Peru and India who saw no need for a secretariat analysis of an issue that had been discussed threadbare without any convergence of views. Other participants said that though the U.S., EEC and GATT officials were presenting the case for revision of Article XVIII: B in neo-classical economic terms, and the policy prescriptions of the World Bank and the IMF - QRs are more inefficient than tariffs, that import restrictions are not efficient way of overcoming BOP problems whose solutions lay in macro-economic reforms, etc. - it was now becoming clear that what the ICs were seeking was to get more market access for their exports in the Third World. A number of Third World participants were reported to have said that the ICs were motivated by neo-mercantilist considerations and seeking to expand their exports in the Third World. A number of demands for liberalisation and increasing market access were being made, and the reform of the agricultural trade by end of subsidies would increase import demands of the Third World and drain their already limited foreign exchange resources. But no one was indicating how the Third World countries were expected to pay for all these, and how they could defend their economies without recourse to the BOP provisions.