May 27, 1989

GATT HOPES URUGUAY ROUND WON'T BE DERAILED BY SUPER 301.

GENEVA, MAY 26 (BY CHAKRAVARTHI RAGHAVAN)— The GATT secretariat Friday avoided any direct criticism or comments on U.S. actions naming Japan, Brazil and India as target countries for possible unilateral trade measures, but hoped that the Uruguay round processes would not be affected and everyone would pursue their commercial objectives multilaterally in the Uruguay round.

GATT spokesman David Woods who faced several questions at his weekly briefing on the announcements in Washington Thursday under the U.S. "super 301" and "special 301" provisions, said it was for individual GATT members affected to react and that he expected the issue to come up at the GATT council meetings set for June 21-22.

None of the countries named, whether the three under "unfair practices" (Brazil, Japan and India) or the many more under the parallel actions on intellectual property had any comment, noting that they were awaiting instructions from their capitals.

The GATT spokesman noted that at the moment no GATT right had been violated, through any unilateral trade actions or retaliations that were clearly illegal in GATT, and that while some countries and practices had been named no actions had yet been taken.

The spokesman declined to say whether the U.S. announcements were or were not a violation of the standstill commitment that no participant would take any measure to improve its negotiating position, arguing again it was for the participants to take a decision.

(The issue of GATT legality of section 301, has already been raised as a dispute in GATT by Brazil, over actions taken against it for refusing to yield to U.S. demands on patent protection for its TNCS in pharmaceuticals).

The dispute has been referred to a GATT panel. However, the U.S. has so far not agreed to the terms of reference, and is reportedly resisting any wording that would involve judgement on its law vis-a-vis GATT obligations.).

He however drew attention to recent comments and concerns expressed by the GATT director-general about inadmissibility of unilateral trade retaliations and measures, and his speech last week in united states warning against "imprudent" U.S. actions under super 301 that would harm the Uruguay round negotiating process.

The spokesman however declined to say whether the GATT secretariat now considered the U.S. announcements as "imprudent" or it was "disappointed" at the announcements, arguing it was for participants in the round and members of GATT to decide.

"However", he added, "we would be disappointed at any action which is taken unilaterally. For that is clearly outside the obligations. But of course at the moment we have an announcement naming some countries and some practices, but no action has been taken. When action is taken it is a question of whether it is contrary to GATT or not and that has to be raised on an appropriate basis".

The GATT spokesman recalled that in his Annapolis speech last week, Dunkel had warned about the potential for damage to the Uruguay round by any "imprudent decisions" under super 301, and had also repeatedly spoken about the need to avoid unilateral trade actions without the authority of GATT.

In a reference to the fact that the hit list has been narrowed (by dropping South Korea, Taiwan, and the EEC and its twelve member countries), and only Brazil, India and Japan had been now named, Woods said that it could be argued that the Thursday night announcement by Washington was more limited in scope than at one time had been feared by many GATT members.

"Equally", he added, "it should be recalled that the U.S. officials continue to stress that GATT and Uruguay round continue to be centred pieces for united states trade policy. It is to be hoped that all governments concerned will now put their main negotiating effort into the critical phases of the Uruguay round".

Asked about Dunkel's remarks reported in the press that the listing of priority countries "could conceivably be used in a positive way to reinforce Uruguay round", which implied that using it to force negotiations was acceptable, Woods suggested the report was probably a reflection of the questions by the journalists and that Dunkel did not confirm that view.

"But certainly it would be our position that anything that invigorates the negotiating process may be helpful. The Uruguay round is there for participants to secure commercial benefits and to do it on a multilateral basis".

When correspondents insisted on a GATT reaction noting that while the U.S. might not have taken any actions it had started on that path, woods merely recalled several recent statements of Dunkel against tendencies for unilateral trade actions to gain trade advantages, and that there was no provision in GATT permitting such unilateral trade retaliations.

Asked whether Dunkel had discussed with Mrs Carla Hills her recent statements that irrespective of what GATT might hold about legality of s.301, the United States would continue to use its provisions to pry open markets, woods merely say that during his recent visit Dunkel had met Mrs Hills and had discussed section 301 and the Uruguay round.

He added that Mrs Hills had several times made the point that this was a piece of U.S. legislation on the statute and that she as USTR was required to implement it and "that is what is doing as I understand it".