Apr 22, 1988


GENEVA APRIL 20 (IFDA)— Industrialised countries reportedly sought information in GATT Tuesday about the agreement on global system of trade preferences (GSTP), which was concluded and signed at Belgrade an April 13, according to GATT sources.

The subject was reportedly raised by the United States at the meeting of the GATT’s trade and development committee (TDC), which is chaired by Sri Lanka’s Parameswaran Nagaratnam.

The U.S. delegate reportedly wanted to know when they could expect a notification in GATT about the agreement.

As far as 'notification' in GATT was concerned, Tejic reportedly added, the countries who had signed the GSTP agreement at Belgrade were now entering into the stage of ratification, and after 15 countries had ratified and the agreement entered into force, the signatories would in due time notify GATT under the 'enabling clause'.

The 'enabling clause' is a decision of the GATT contracting parties on November 28, 1979, sanctioning preferential treatment by industrialised countries to third world countries under GSP schemes, and for regional or global arrangements among 'less developed contracting parties' - the GATT term for 'developing countries' - to enter into regional or global arrangements for mutual reduction or elimination of tariffs, and for mutual reduction or elimination of non-tariff measures, an products imported from one another.

The arrangements under the 'enabling clause', whether of GSP or other more favourable treatment by industrial countries for third world countries, or regional or global preferential arrangements among third world countries, are to be sanctioned exceptions to the GATT requirement of most-favoured-nation treatment.

The provisions of the enabling clause for mutual preferential arrangements among third world countries is subject to some conditions:

--The reduction or elimination of non-tariff barriers on products imported from each other is to be "in accordance with criteria or conditions, which may be prescribed by the contracting parties",

--Should be designed to facilitate and promote trade of third world countries and not raise barriers to or create undue difficulties to trade of other CPS,--Shall not be an impediment to reduction or elimination of tariffs and other restrictions on MFN basis.

Also, any CP taking action under any such preferential arrangement

--Shall notify the contracting parties and furnish them with all information deemed appropriate,--Afford adequate opportunity for prompt consultation at re-quest of any interested CP with respect to any difficulty or matter that may arise.

Contracting parties (sessions), if requested to do so by such a CP, shall consult with all contracting parties concerned with respect to the matter with a view to reaching solutions satisfactory to all CPS.