Oct 6, 1988


GENEVA, OCTOBER 4 (IFDA)The GATT secretariat has sought a 750,000 Swiss francs appropriation in the 1989 budget in anticipation of decisions at the Montreal mid-term review for setting up within GATT of a trade policy review mechanism (TPRM), and operating such a mechanism in 1989.

The budget request, through the GATT budget committee, is to be considered by the GATT council at its meeting this month, and will then go before the GATT contracting parties who are holding their annual meeting from November 7 to 9.

The Montreal ministerial meeting of the Uruguay round trade negotiations committee, for a mid-term review of the progress of negotiations, is scheduled for the week of December 5.

The U.S. and some other industrialised countries, as well as the GATT secretariat itself, have been pushing for an enhanced role for the secretariat of the GATT, and as a part of it for a so-called trade policy review mechanism (TPRM).

The idea, and the proposals for a TPRM formulated so far in the Uruguay round negotiating group on the functioning of the GATT system (FOGS), have run into opposition from a number of third world participants, who are insisting on a strict observance of the mandate, namely enhanced multilateral surveillance in GATT.

Such surveillance, they insist, should also be confined strictly to their GATT obligations, and not stray over to an examination of wider macro-economic and development policies and objectives of third world countries, and in terms of vague GATT-fund-bank philosophies.

Despite these sharp divisions of views, that again came to the fore at last week's meeting of the FOGS negotiating group, the secretariat reportedly has sought the SF 750,000 appropriation for the TPRM.

In its explanations, the secretariat refers to the Montreal meeting and the possibility of ministers agreeing to advance implementation, at least provisionally, pending final conclusion of the negotiations, of decisions taken by ministers at Montreal in certain areas.

Such a decision, the secretariat points out, could involve additional demands on secretariat staff and other resources, and the financial costs of absorbing such demands within existing budgetary appropriations.

However, the secretariat anticipates a possible decision at Montreal in respect of the TPRM, and a possible decision to operate the TPRM in 1989.

Such a decision, the secretariat says, could not be operated through redeployment of existing resources or by hiring additional staff proposed in the budget.

And while the precise decisions on TPRM or the implementing actions in 1989 could not be anticipated, the secretariat has argued that additional expenditure in hiring staff would be unavoidable "if a possible decision by ministers supporting such a mechanism and to make it operational, in some suitable manner, in the course of 1989, is not to be frustrated because of lack of budgetary provisions".

According to GATT sources, this is the only area where the secretariat has sought budget provisions in anticipation of the Montreal decisions.

According to third world delegations familiarly with budgetary practices in the UN system, normally appropriations are sought or made only after the competent intergovernmental legislative body. has agreed to the substantive policy and work programme.

But this process is now sought to be reversed in GATT, with the secretariat arguing that the utilisation of the appropriation and incurring of actual expenditure would be contingent on the Montreal decisions, and subsequent approval by the GATT council.

However, the contributions of individual contracting parties to the budget would be on the basis of the agreed scale of assessments on the entire budget, including the 750,000 SF appropriation now sought.

Also, in the rest of the UN system, the U.S. and other industrial countries pressing the concept of budget freeze have been insisting that any new work should be through redeployment of existing resources and avoiding duplication with activities already being carried out in other parts of the UN system.

This does not seem to apply to GATT.

Some third world participants say that the GATT secretariat has put the request as part of the general budget request for 1989, so that it cannot be blocked by any country or group of countries without blocking the GATT budget itself.

This way in effect prior approval of the GATT CPS could be secured, even ahead of the Montreal meeting.