May 6, 1987


GENEVE, MAY 4 (IFDA/CHAKRAVARTHI RAGHAVAN) – The U.S., EEC and Japan want to tie up any liberalisation of trade in Natural Resource Products (NRPS) to "access to natural resources", but this is opposed by both third world countries and some of the industrialised countries, according to participants.

This issue reportedly came up at last week’s meeting of the negotiating group of the Uruguay round on NRPS, with the discussions showing some fundamental differences among participants.

The U.S., Japan, Switzerland and the EEC were among those wanting to make "access" to natural resources and issue, while Australia, Canada and New Zealand, as well as several third world countries including Peru, Mexico, Brazil and India opposed it.

Earlier, the U.S. reportedly outlined four areas of work for the group: dual pricing practices and consequent subsidisation resulting in artificial increase of exports and unfair competition, supply access issues (to be addressed also in relation to tropical products), government ownership and management of natural resources product trade, and tariff escalation in natural resource products to be deal with through comprehensive "request" and "offer" negotiating procedures.

Supporting the U.S. view that there should be discussion of "supply access" issues in the NRP negotiating group, Switzerland reportedly argued that importing countries would otherwise find it difficult to liberalise their tariff and non-tariff barriers. Switzerland also reportedly supported discussion of dual pricing policies.

The EEC in arguing for inclusion of access issue in the negotiations, reportedly noted that this had been dealt with in the working party on NRPS set up under the 1982 GATT Ministerial Programme.

India however reportedly argued that the negotiating mandate had made no reference to the report of the working party, and the negotiating plan only talked of "taking account of the documentation before the working party". Even within the working party there had been sharp differences on the access issue, and there would be no consensus within the negotiating group on including this issue for negotiations.

As the negotiating objective required, the elaboration of issues should relate to achieving "the fullest liberalisation of trade in natural resource-based products including in their processed and semi-processes forms", and the negotiations should aim "to reduce or eliminate tariff and non-tariff measures, including tariff escalation".

South Korea would however appear to have said there should be no narrow interpretation of the mandate, and there should be a balancing of interests of the "haves" and "have nots" in the area of NRPS.

No agreement could be reached in the group, and consultations are to continue, participants said.

The U.S. supported by Australia, reportedly also flagged the issue of expanding the products to be covered under NRPS, and reportedly wanted the inclusion of some energy related NRPS like oil, gas and uranium. The U.S. would appear to have indicated that it was leaving the issue open for the time being.

India however reportedly said that any possible extension of product coverage would still have to be confined to the issues of "market access" and not "access to natural resources" or other aspects beyond the competence of the negotiating group or GATT itself.

The EEC felt the group should consider for "liberalisation" not only restrictions at the importing end, but also restrictions on NRPS at the exporting end, including "officially encouraged" price-fixing for "officially-condoned" restrictive business practices (RBPS).

India felt that it would not be enough to take account of "officially-condoned" RBPS, but also the RBPS of transnational corporations since their control over trade in this sector, particularly of commodities, was a major obstacle to third world access to markets for their processed and semi-processed commodities.