WITHOUT REMEDIAL MEASURES URUGUAY ROUND WILL FAIL.

Apr 12, 1990

WITHOUT REMEDIAL MEASURES URUGUAY ROUND WILL FAIL.

GENEVA, APRIL 10 (BY CHAKRAVARTHI RAGHAVAN) -- Third World countries renewed Tuesday their complaints of continuing serious imbalances in the Uruguay Round and warned that the round could not succeed without "a balanced result of rights and obligations".

The Third World position and assessment of the state of play in the Round was in a statement of "the informal group of developing countries" read out at the meeting of the Trade Negotiations Committee (TNC) by Amb. Rubens Ricupero of Brazil, Chairman of the Group.

The Third World group said that since its assessment made in February, no "substantive progress" had been made in areas of particular interest to the Third World countries while mounting pressure was being exerted to obtain rapid results in new areas, "at times exceeding the negotiating mandate".

"Should this state of affairs not be immediately rectified, the consequences will be extremely serious for the Round. It is time therefore for participants to act in the interest of the multilateral system we wish to preserve and to strengthen it by acting not only in terms of their respective national interests".

There were just 100 days left and everything fundamental was yet to be done to get an overall framework and guidelines of a negotiated package by July.

By July it was necessary to have fundamental agreements, not only because otherwise there would simply not be enough time to finish the negotiations, but also to demonstrate the existence of political will to overcome obstacles and vested interests.

"Developing country experience of the hasty conclusion of past negotiating rounds", the statement said, "is singularly and uniformly negative. One way or the other, questions of importance to them were sidetracked at the last moment. This must not happen in the Uruguay Round. For this reason, this meeting of the TNC should define at global level, and in the specific areas of negotiations, the necessary adjustments to ensure the achievement of a balanced outcome".

"The success of the Uruguay Round", the statement concluded, "cannot be achieved without a balanced result of rights and obligations. Developing countries will not bear responsibility for failure if current imbalances persist".

Complaining of failure to show adequate recognition to the commitment on differential and more favourable treatment to Third World countries, reiterated in the Punta del Este Declaration, the Third World group said the statements and requests in the negotiations were in the opposite direction. There had been no meaningful response to the requests of least developed countries.

The standstill and rollback commitments, an area critical for the Third World, had not been observed and there was "complete paralysis" in the surveillance body.

There were serious imbalances in the manner in which negotiations on market access, rules and new issues had evolved.

In market access groups there had been no agreement on possible ways to reverse protectionist and distorting policies, while in new areas an outline of a framework agreement on services had been drafted and there was attempt to impose in the TRIPs and TRIMs groups disciplines on national policies above and beyond the consideration of their trade effects.

Attempts were also being made to establish linkages in concessions, attempts which Third World countries had rejected and would continue to do so.

In an overall balance in the final package on market access, rules and new issues, the interests of Third World countries should be adequately protected. There must be political decisions on liberalisation of market access, and negotiations in traditional rule making areas should lead to a strengthening of the multilateral trading system. The introduction of the concept of development dimension was also essential for assuring a balance of rights and obligations.

In view of all these, the statement said, the April TNC should adopt a political agreement to build up the structure of the final package. This political decision should indicate the changes needed in market access negotiations, to elaborate disciplines in GATT rules that would ensure competition and adopt provisions in new areas to achieve a balance of rights and obligations among participants.

Referring to specific areas, the Third World statement made the following points:

Tariffs and non-tariff measures: objectives set out in the Punta del Este mandate and the Mid-term Review (MTR) should be fully met, particularly in regard to universal coverage, tariff escalation, tariff peaks and flexibility in commitments by Third World countries.

Tropical Products: fullest liberalisation required the implementation of elements in the Montreal decision.

Natural resource-based products: Fullest liberalisation should be achieved in this area. Attempts to introduce issues, including access to natural resources falling outside the mandate of the group and of GATT, were totally unacceptable.

Textiles: Virtually no progress has been made. To achieve the target of a framework agreement by July, an agreement was required without further loss of time on the basic approach for a definitive phase-out of MFA restrictions. The establishment of global quotas or selective safeguard mechanisms, implying continuance of the present regime in a different form, was totally unacceptable.

Agriculture: Agreement should cover all agricultural products in order to terminate the exceptional treatment of this area in GATT. Commitments would have to be made on modification of national policies to substantially reduce internal support and protection, provide for increased market access, and gradually eliminate export subsidisation. In no case should increase in protection be admitted.

Also, in view of the position of agriculture as a determinant of economic and social development, Third World countries should have special dispensation in respect of the commitments to be undertaken and provided with flexibility for assisting and promoting agricultural development. Concrete measures should also be established to alleviate negative effects of the reform process on net food importing countries.

Rules: Different provisions of the General Agreement and related instruments should be clarified, interpreted or modified in order to ensure:

* Application of safeguard measures on an MFN basis, for a limited time and in a depressive manner,

* Phasing out of all existing measures not explicitly provided for in GATT,

* Prohibition of non-tariff barriers not explicitly provided for,

* No exceptional treatment to any product, category of products or sector,

* Non-use of antidumping and countervailing measures for protectionist purposes or for harassment to exporters, and

* Acceptance of the General Agreement by all contracting parties in a "definite manner".

Any attempt to restrict right of Third World countries to apply provisions of Article XVIII: B would alter the existing balance of rights and obligations under the General Agreement. "No change in the existing rights available to developing countries under these provisions would be acceptable".

New Areas: The elaboration of disciplines in new areas should aim at promoting the dynamic participation of Third World countries in international trade.

Towards this end, the framework agreement for trade in services should include the concept of development dimension and integrated in a practical and concrete way to its different elements, promoting preferential access to markets for Third World countries, linking access to their markets with diversification of domestic services, facilitating the transfer of technology and providing incentives to increase exports of services from Third World countries. The negotiations should concentrate on elaboration of the framework agreement, including sectoral annotations.

On TRIPs, the negotiations should deal with trade effects derived from such rights having full regard to such aspects as economic and industrial development of the Third World countries.

On TRIMs, it was essential to restore the focus of the negotiations to identifying and addressing the trade restrictive and distorting effects, if any of investment measures, without attempting to evolve a multilateral regime on investment.

On the issue of implementation of results in goods and services, and the formal conclusion of the Round, the Third World statement recalled that different types of commitments, timespans, monitoring of fulfilment of obligations, entry into force procedures, overall balance over time of successive application of commitments were all issues which should be discussed and agreed in good time.

Third World participants, the statement added, had expressed their position with the clear intention of contributing to a successful outcome of the negotiations, and had expressed their concerns at the present state of affairs and the risks that the Round was facing because of persistent protectionist trends.

At the same time they reiterated their endeavour to overcome the obstacles lying ahead "but not at the price of resigning their legitimate interests".

"The success of the Round cannot be achieved without a balanced result of rights and obligations. Developing countries will not bear responsibility for failure if current imbalances persist. For this reason the TNC meeting in July is of paramount importance for, in the judgement of developing countries, the success of the Round is at stake".