Apr 17, 1990

DIFFICULT TO SEE "REAL CONVERGENCE" IN NEGOTIATIONS.

GENEVA, APRIL 11 (BY CHAKRAVARTHI RAGHAVAN) -- The GATT Director-General Arthur Dunkel struck a subdued and sombre note Wednesday about the outlook for the Uruguay Round negotiations and said "It is difficult at this stage, in respect of substantive aspects of the negotiations, to find points of real convergence".

Dunkel was addressing a press conference at the end of the meeting of the Uruguay Round Trade Negotiations Committee this morning. The TNC, which met Tuesday and Wednesday, and was preceded by a meeting of the Group of Negotiations on Goods, had completed a review and assessment of the status of negotiations in the 15 areas of negotiations.

It named Uruguayan Foreign Minister, Dr. Hector Gross Espiel to chair the final Ministerial meeting of the Trade Negotiations Committee at Brussels December 3-7.

Dunkel said he himself viewed the negotiations on Textiles and Clothing and Agriculture as two areas where the TNC would have to keep a very close eye.

Dunkel, who had been adopting an upbeat view all along about the negotiations, told newsmen that there was no room for satisfaction but there was also no room for pessimism.

Earlier, participants at the TNC reported that it had now been agreed in the TNC that by July the TNC should have "the profile of a global package".

Earlier at the GNG and at the TNC Dunkel had talked about reaching "provisional agreements" in as many groups as possible. But at the TNC Tuesday the Chairman of the Informal Third World Group, Brazil’s Amb. Rubens Ricupero, had asked for text of Dunkel's ideas about the course of negotiations till July and time to reflect on it. Ricupero had sought clarification on what Dunkel really had in mind about "provisional agreements" and whether this would be in all areas or only in some.

Key Third World delegations had made clear that they could not envisage a similar situation as at Montreal mid-term review, when some groups had accords and others not, and those that had reached accords were put on "hold" while agreements were sought in others. At the TNC Tuesday, Ricupero had had spoken of elements of an agreement in all the groups while India’s B. K. Zutshi had stressed need for "parallel progress" in all the groups.

Dunkel told newsmen that four key messages had come out of the debate in the TNC: collective support for multilateralism, keeping to the level of ambition agreed to in the Punta del Este Declaration, awareness of the vast political and economic changes in the world not envisaged at Punta del Este, and the relevance of the Uruguay Round and multilateralism to all these changes.

Dunkel while repeatedly emphasising the role of rules and disciplines evolved in the round ensuring competition could only envisage the issue of disciplines on corporate monopolistic and cartel practices reducing competition being tackled in the next round of a new GATT.

The debates, he said, had shown a clear and collective commitment to multilateralism and had brought out the need for a "strong, reliable and implementable" dispute settlement system. There was also a wide consensus on keeping to the level of ambitions set at Punta del Este in 1986.

The discussions had also brought out the recognition that the political and economic map of the world had changed dramatically since the launching of the round, and the changes were in a direction which made a strong multilateral trading system even more indispensable.

The economic reforms taking place in Latin America and some of the African countries, the evolution of the East European and Central European economies and the Soviet Union's formal application for GATT observer-ship, and preparations for such a move in countries like Mongolia, Dunkel said were some of the changes that had not been envisaged when the round was launched.

Everyone realised that these changes had made the Uruguay Round even more relevant. The uneasiness in the tone of several participants was related to the fact that they were aware that their responsibilities now went beyond defence or protection of national interests and they were negotiating in a wider dimension. What was happening now (in the negotiations) was comparable to the post-war efforts that resulted in the present international economic system including GATT.

In a number of areas the lines of negotiations were beginning to emerge and negotiators were focussing on what would happen after December - when there would be internal debates in countries over ratification of agreements. The debate was moving in the direction of an approachment between the GATT and the real world outside and real users of GATT.

"However", Dunkel said, "it is difficult at this stage in respect of the substantive aspects of negotiations to find points of real convergence. But everyone concerned had a clear commitment to negotiate and their statements gave a good perspective of the parameters that would govern the negotiations".

There was total agreement among the negotiators about the July deadline and a commitment "to try and have by July the profile of a global package".

Since the commitment was to negotiate and reach specific agreements, these would have to be drawn up in clear and specific legal texts, not an easy but difficult task but nevertheless achievable if there was agreement on basic elements.

The TNC had also agreed to keep a tight control on the process. Negotiating Groups had been asked to work very hard, with the more successful ones having the task of carrying the more reluctant ones. If there were blockages, either there would have to be extraordinary sessions of the TNC or bilateral and multilateral consultations, Dunkel added.

"I myself consider the negotiations on Textiles and Clothing and Agriculture as two areas where the TNC will have to keep a close eye".

"In Textiles you have 35 years of sin (when trade has been derogated from GATT rules) and in Agriculture you have had 40 years of sin. A lot of vested interests have grown up in these areas and all participants have to do substantial work to change the direction of their policies which had been applied till now".

"To sum up, there is no room for satisfaction but there is also no room for pessimism. July is a very important deadline and if we do not have the profile of a global package by them we will be in trouble", he added.

In the earlier discussions in the GNG on Monday, where specific issues had been addressed by various delegations, two key areas had been recognised, Dunkel said.

These were the importance of access and further opening of markets and the competition aspect - rules which would govern competition in trade in safeguards, subsidies and so on, and for settlement of disputes.

In the negotiations while there had been progress on market access in horizontal approaches (tariffs, non-tariffs), in the vertical approach areas (agriculture, textiles and clothing, natural resource-based products and tropical products) things were mot moving.

On the competition aspects everyone recognised that this was a very important and fundamental aspect of the round and it was not merely a question about antidumping or rules of origin or GATT articles but also in negotiations relating to TRIPs and TRIMs, which were seen in terms of global competitive environment.

Delegations were also beginning to think in terms of the shape of the institution and the secretariat to ensure multilateral implementation of the results. This, to Dunkel was a good thing since it showed people were working on the hypothesis that the round would be successful.

"We in the GATT secretariat", Dunkel said, "have a clear view about should be the new shape of the new secretariat of a new GATT. But we don't want anyone to think we are working for our own ambitions. Therefore we would like to be quiet on this. When the time comes we will have our word".

Asked about his repeated emphasis on "competition" and how he envisaged competition being established when GATT was merely trying to discipline governments and not the corporations and their monopolies and cartels in international trade, Dunkel said that this was very much in the minds of a large number of negotiators. It was not for him to make predictions "but perhaps the next round will look very closely at restrictive business practices".

Earlier, Dunkel was asked about his inability to discern any points of convergence.

Convergence in negotiations, he said, could be reached after a difficult process. This was why convergence had to be reached by July. He could perhaps easily write a note for himself on the position of each participant and deduct from there what would be the "give" and the "take".

But in a number of areas clear cut proposals were on the table and this was serving to bring negotiators to focus on key problems. What he was hoping to achieve in several areas was to have texts on the basis of which negotiations could be focussed.