Apr 7, 1990

CONSUMERS CALL FOR ROLLBACK OF PROTECTION.

GENEVA, APRIL 4 (BY CHAKRAVARTHI RAGHAVAN) -- Consumers organisations around the world have expressed dissatisfaction with the pace of negotiations in the Uruguay Round and have called for actions to rollback protectionism in the interest of consumers worldwide and for reassertion of GATT's fundamental principles of non-discrimination and reliance on tariffs.

The call has come in a statement issued on behalf of the International Organisation of Consumers Unions (IOCU) and the Bureau European Des Unions de Consommateurs (BEUC) which is umbrella Organisation of consumer unions in the European Community. The two represent more than 173 consumer organisations in 63 countries.

The statement has called for substantial changes in the current trade rules relating to agriculture and textiles, for reliance on tariffs, non-discriminatory safeguard provisions, greater disciplines on and stricter definition of "dumping" to restrict it to predatory pricing, and paying due regard to social and ethical issues in GATT rules and dispute settlements, as well as more attention to the impact of trade on environment and development.

"The rolling back of protectionism and a reassertion of GATT's fundamental principles of non-discrimination and reliance on tariffs is urgently needed", the statement said.

"However, a sense of urgency is sadly lacking from the current negotiations. The EC has become preoccupied with events closer to home - the completion of the internal market and developments in Eastern Europe. The U.S.A. and Japan, which have a major role to play, have also shown a lack of commitment to the successful completion of the Round. But a strong agreement is vital if the world trading system is to be put on a sound footing".

"Substantial changes are needed particularly in areas such as agriculture and textiles. Here the producer lobbies are very strong, especially in developed countries. But it is time governments stood up to vested interests and demonstrated their commitment to the agreements made at the start of the round in Punta del Este and at the mid-term meetings in Montreal and Geneva".

"The success of the round is vital to consumers in both developed and developing world. Restrictions on trade, whether tariffs, quotas, voluntary restraints or administrative barriers raise prices and reduce consumer choice. Protectionist measures often have a disproportionate impact on consumers and are biased against developing countries".

The IOCU and BEUC supported the EEC position for a formula approach to tariff reduction rather than the U.S. "request/offer" approach, and priority for reduction of tariff escalation on processed and manufactured products exported by Third World countries.

In agriculture they called for end to export subsidies, improved access for Third World processed products, an annual five percent cut for three years (from 1989 levels) in western agricultural support levels, monitoring the impact of these reductions on the poor in all countries, and special bop and agricultural development aid to net food importing Third World countries.

In textiles and clothing they called for a firm commitment to phase out the MFA and liberalise trade in textiles and clothing, a commitment not to replace the MFA with anything similar under another name, a timetable for successive stages in the phasing-out process, a mechanism for independent supervision of the process, and a fixed and non-negotiable date for expiry after which trade in textiles should be handled in accordance with normal GATT rules.

On safeguards, the two complained that countries have been rarely using the safeguard provisions but turning instead to antidumping actions and grey-area measures outside the GATT such as VERs and OMAs, damaging the economy of Third World countries and consumers in the North who suffer higher prices and reduced choice.

While there may a case for safeguard actions in exceptional circumstances, and sufficiently attractive to discourage VERs and OMAs, any safeguard agreement must conform to GATT's fundamental principle of non-discrimination and be of limited duration.

Agreement should hence be reached to allow safeguard actions without compensation provided the action was non-discriminatory, of limited duration, restrictions were steadily reduced, and the costs and benefits of safeguard actions are estimated prior to application. VERs should be specifically ruled out.

On the growing practice of using anti-dumping actions, the two consumer organisations said agreement should be reached in the round to amend the anti-dumping code to restrict the definition of dumping to proven cases of predatory pricing, to require automatic calculations of consumer costs and market impact of anti-dumping duties as well as of industry benefits, ensure that the procedure and information it generates should be available to all interested parties and for limiting the duration for antidumping actions.

While consumers organisations supported the development of internationally recognised standards of health, safety and hygiene and opposed national standards for protection of industry, the statement said, "support for trade liberalisation does not mean that consumers should be put at risk from hazardous goods".

GATT rules and dispute settlement procedures should hence be able to take account of wider social and ethical issues, and governments must be free to introduce national standards, without penalty, provided there was widespread consumer demand and they were applied in the same way to domestically produced products as to imports and there was no discrimination between imports from different countries, the IOCU and BEUC said.

Referring to concerns in the Third World over exports to them of hazardous products, banned or restricted in the ICs, or that they would not be able to meet agreed standards and lose out on liberalisation, the consumers said:

* The principle of informed consent should be applied to trade in potentially hazardous products,

* Third World countries should receive advance warning of changes in health, environmental and consumer protection standards and adequate technical assistance to enable them to meet such standards and benefit from increased access to IC markets,

* Promote international flows of information about hazardous products, as already existed within the EEC.

The two consumers organisations deplored the lack of transparency surrounding much of trade policy discussion.

The initial reviews - of Australia, U.S.A. and Morocco - under GATT's trade policy review mechanism had been "a very disappointing start", providing a lot of factual information but stopping well short of analysis of policies. Consumers should know how much trade protection was costing them, and the TPRM should be the ideal vehicle for this information. There should also be consultations with consumer representatives before major trade policy decisions, and there should be specific GATT recommendations for this.

On intellectual property, the two organisations said that while a greater degree of consensus on issues such as copyright, patents, trademarks and design rights would help to underpin and facilitate the international trading system, it was essential to strike a right balance. From the consumer's viewpoint, the regime should provide the right structure of incentives and rewards for innovation and curb counterfeiting.

"But there are grave risks in carrying new restrictions too far, and any new intellectual property regime must not be allowed to become a barrier to trade and competition ... (and) must recognise that copying, as opposed to counterfeiting, is often an important stimulus to competition and so in the consumers' interest".

"In addition, there are problems for developing countries to stronger intellectual property rights. They pay out billions of dollars in royalties and fees and hold a mere six percent of the world's patents. There needs to be simultaneous agreement on the transfer of technology from the West to the Third World".

"GATT intellectual property controls should not, for example, prevent Third World production of cheap basic medicines to meet their consumers' needs. In addition, international arrangements are needed to govern aspects of behaviour of multinationals. Anti-competitive practices like tie-in clauses which multinationals use to prevent Third World producers of their patented goods from exporting or buying from other companies can be very damaging".