Jul 28, 1988


GENEVA, JULY 26 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Third world countries have generally expressed concern this week in the GATT at lack of progress in several negotiating areas of interest to them in the Uruguay Round.

These concerns were voiced by a large number of third world countries who spoke at the meetings of the Group of Negotiations on Goods (GNG).

The GNG is mandated by the Punta del Este declaration to carry out the GATT Multilateral Trade Negotiations (MTNS) in goods.

In two sessions, Monday and Tuesday, the GNG heard progress reports from the chairmen of each of the 14 negotiating groups, and then heard what a GATT spokesman described as "rather lengthy statements for the GNG", from participants on who they saw the progress in the round so far.

GATT negotiators are due to adjourning for the summer this week, and will resume again in September.

The Uruguay round’s overall supervisory body, the Trade Negotiations Committee (TNC) is due to meet at Ministerial level in Montreal from December 6 for a "mid-term review".

This leaves very little time between resumption of negotiations in September and the TNC meeting in December for major progress in the negotiating areas to produce a balanced package of early accords that could be registered at Montreal.

In a reference to this, the GATT Director-General and chairman of the GNG, Arthur Dunkel, reportedly underscored, at the end of the GNG on Tuesday, the need for hard work and flexibility in the period ahead "to remove the impression of being stuck, and give the impression of movement in order to achieve substantive results at Montreal".

Some participants noted Dunkel’s use of the term" impression".

In making their own assessments the third world countries, with varying nuances, expressed their concerns over the issues and areas where they felt there was uneven, asymmetric or no progress.

The industrialised countries, and particularly the three majors (U.S., EEC and Japan) sought to put a gloss on the negotiating process and quarrelled with the negative assessments of many of the third world delegations.

The United States delegate, Amb. Samuels was "appalled" at some of the "self-fulling comments" and called them Cassandra’s. In his effort to present an optimistic picture, and see the Uruguay round as "a half-full glass, rather than a half-empty one", Samuels claimed "considerable forward movement" in agriculture, and was hopeful that by the time of Montreal, the differences would be reconciled.

The EEC spoke critically of "repetition of litanies", while Japan saw neither ground for pessimism nor optimism.

According to several participants, it was apparent that the industrial countries and the three major trading blocs had wanted and hoped to present a picture of amity and progress, and were taken aback by the critical statements from third world countries.

While not all third world countries gave an overall negative view, even those who claimed to be "encouraged" (Hong Kong) or "not dissatisfies" (the Asian), mentioned several areas of negotiations where they felt there had been inadequate progress, and the issues should be addressed between now and the Montreal mid-term review meeting.

According to the GATT spokesman, the areas where third world countries generally seemed to feel there had been no progress included tropical products, safeguards, market access issues like tariff and non-tariff barriers, textiles and clothing, and agriculture.

Most of the third world countries, he added, also spoke critically of the efforts to widen the mandate of the negotiating group on "trade-related intellectual property rights" (TRIPS).

Earlier, Indonesia, on behalf of the third world textiles and clothing exporters, had expressed concern at lack of any progress in the textiles and clothing negotiating group.

India had made a statement "on behalf of developing countries" critical of the efforts to widen the TRIPS mandate.

In its comments, the EEC criticised the "collective" statement by India on TRIPS, arguing that they were no negotiating resolutions in GATT but dealing with contractual obligations among individual countries, while Japan saw no bar in the mandate to creation of substantive standards in GATT .

GATT Director-General, Arthur Dunkel, who chaired the GNG, reportedly noted that while there had been "useful and constructive" work in each of the groups, though the progress and results had varied from sector to sector "depending on the dynamics of the subject and the political conditioning".

On the TRIPS issue, Dunkel noted that "unfortunately in one negotiating group at least there remained signal divergences of substantive nature on the interpretations of the mandate".

The GNG agreed to hold a meeting from November 16-18, on the eve of the mid-term ministerial review meeting of the TNC at Montreal.

The chairmen of each of the negotiating groups were also advised to prepare their reports, in consultation with all participants, providing a brief description of the work done, and the basis on which ministers (at Montreal) could be called upon to take decisions.

Responding to Jamaica, Dunkel also reportedly was confident that the chairmen, in preparing their reports, would proceed on the basis of consultations and consensus within each group.

Earlier, Brazil’s Amb. Rubens Ricupero, who opened the discussions, said that an overall analysis of the work done in the round revealed that "developing counties" most cherished interests have been disregarded".

The serious imbalances in the negotiations had been "aggravated both by the building up of pressures to speed up negotiations in some new areas and by an effort to paralyse the negotiating process precisely in those sectors from which could be derived real benefits for developing countries as well as for strengthening of the multilateral trading system".

Without a clear view of the outcome on safeguards (emergency protective actions permitted under article XIX of GATT), third world countries would be unable to promote their full integration into GATT.

But on this issue, the industrialised countries seemed "unwilling to give any impetus" to efforts for early elaboration of a comprehensive agreement.

The Brazilian delegate also referred to lack of progress in eliminating "one of the most blatant inequities that plague international trade relations", namely penalisation of efficient producers of tropical products and erection of barriers against further processing of raw materials in their countries.

"If developing countries are denied real benefits in areas of their priority interest, why should they be expected to make effective contributions in areas where an eagerness to advance prompts partners to table proposals that frequently depart from the mandates agreed to and in most cases ignore the application of the principle of special and differential treatment", he asked.

The Brazilian delegate also mentioned the group on GATT articles, where he said, "there was a significant imbalance between the expectations of developing countries ... and the direction that is being sought in the negotiating process".

Ricupero noted in this connection the growing pressures to modify article XVIII, dealing with balance of payments actions that third world countries could take, and the "proportionately greater attention" being sought to be given to this in contrast to article XXIV, XXI, XXVIII, as well the protocol of provisional application.

Article XXIV enables customs unions and free trade areas (like the EEC and EFTA) which have erected barriers to outsiders. Article XXV provides for joint actions by Contracting Parties, and XXVIII to modification of tariff schedules.

GATT itself was never ratified and brought into force, but is a provision treaty through the protocol of provisional application, which has enabled the original signatories (like the U.S.A.) to maintain pre-GATT laws contrary to GATT obligations.

In TRIPS, the insistence by some participants to go further than the mandate had put constraints on Brazilian participation in the group.

"If we add to such insistence the resort to unilateral and illegal actions ostensibly designed to impose a negotiating position, the purpose of the whole exercise in this area is undeniably defeated", Ricupero added.

Amb. Chuk Mun See of Singapore, speaking for the Asian group of countries, said they were not dissatisfied with the general progress.

"But if clear and convincing signals are to emanate from the Montreal ministerial TNC we need to address some of the key issues intensely, between now and Montreal".

Bu the time of Montreal there must be "ample evidence" of progressive implementation of the standstill and rollback commitments. There should also be "demonstration of concrete results" in tropical products, with indication of their implementation in 1989.

There was also need to demonstrate commitment to reform of world agricultural trade, and addressing issues of market access, particularly in tariff and non-tariff measures.

Also, if there was to be confidence to enter into real negotiations on new issues, the third world countries "need to be assured that in the negotiating process, and in the end results, there will not be adverse fallout on their investment and development policy objectives".

The Secretary (top permanent official) of India’s Commerce Ministry, Amarnath Varma said that India visualised "meaningful outcome" at Montreal, but this optimism was related to "pragmatic and reasonable goals".

Everyone should work for agreements that command "universal acceptability", and results would need to be balanced and take account of the interests of all, with adherence to mandate and the ground rules for the negotiations.

Earlier Varma referred to some of the sectors where "some mid-course corrections" were needed for a meaningful outcome at Montreal.

India, he said, saw the negotiations as an opportunity to stem the erosion of the GATT system, which was facing grave dangers due to bilatralism and discriminatory sectoral arrangements, and for this reason attached the highest priority to a comprehensive understanding on safeguards.

The second area on which there was need for progress was in textiles and clothing, where third world countries had been the victims for the longest period of discriminatory restrictions.

Varma also mentioned tropical products and agriculture as other areas where India was looking progress.

On TRIPS, Varma said it would not be "fruitful" to pursue discussion of substantive intellectual property matters in GATT, and it would be unwise to develop agreements in GATT cutting across jurisdiction of other international organisations.

Uniform treatment, irrespective of levels of development, in areas like patents was not "a realistic proposition", the Indian Official added

He also singled out the Functioning Of the GATT System (FOGS) as another area promising early results, and where India favoured "enhanced surveillance" to eliminate the asymmetry in surveillance, and increased Ministerial involvement for improving overall effectiveness of GATT as an institution.

Tanzania’s Amir Jamal said his country had not expected "identical measurable movement" in each of the subgroups, but had expected more progress on issues identified in the Punta del Este declaration as offering "clear tokens of significance and import" for the entire round.

Jamal mentioned in this connection the standstill and rollback commitments, safeguards, textiles, tropical products, and correcting obvious deficiencies and obstacles in tariff and non-tariff measures impairing development as well as trade.

But instead of progress on such issues, there had been "intense treatment" of issues like TRIPS, trade-related investment measures, review of the GATT articles that safeguarded the legitimate interests of third world countries and FOGS.

The imbalances that had surfaced had to be addressed with a sense of purpose and concern, Jamal said.

The Punta del Este declaration was a carefully prepared package, and the multilateral trading system would not benefit it the negotiations did not keep that balance.

While it would be too arbitrary to expect all groups to move "in symphonic concert", the Ministers at Montreal must ensure a reasonably balanced process.

Referring to the political nature of the Montreal review, Jamal also underscored the problems faced by Least Developed Counties (LDCS) like his; whose numbers had grown from 25 to 40.

Foreign trade was only one, and not necessarily the highest priority, for the political leadership of countries like his, struggling with the problems of development, particularly at the present conjuncture of international economic, financial and trade policies and events.

Jamal referred in this connection to extreme vulnerability of these economies to commodity prices and production, of precariousness of rain-fed agriculture production, volatility of exchange rates, debt servicing burdens aggravated by high interest rates, demographic growth, etc.

To all these, Jamal said, must be added, in the southern African context, the cumulative effect of a decade of aggressive policies of a nakedly racist regime intent on destabilising the neighbouring countries.

"All this", Jamal said, "adds up to one simple conclusion: we need time to breathe and develop, and we need a multilateral environment and rules that enable us to do so. We need the Uruguay round to succeed".