Nov 18, 1988

NO FINAL DECISIONS BY MONTREAL MEET ON GATT ISSUES.

GENEVA, NOVEMBER 16 (IFDA/CHAKRAVARTHI RAGHAVAN)The Montreal Ministerial mid-term review meeting of the Uruguay round Trade Negotiations Committee (TNC) would not be able to take any final decisions on negotiations about amendments to GATT, or application of GATT provisions or its codes or new GATT provisions, GATT contracting parties have been assured.

This has come out in an exchange of correspondence between the delegation of Jamaica and the GATT director-general, copies of which were provided as an official document to the Group of Negotiations on Goods (GNG), which held a formal meeting Wednesday.

At the meeting, chaired by the GATT director-general Arthur Dunkel, the GNG also reportedly heard complaints from third world countries over the uneven nature of the work as reflected in the reports of the 14 negotiating groups coming under the GNG.

Later, the GNG went into informal consultations, to consider the reports of individual negotiating groups and see whether any recommendations could be agreed upon and/or what issues should be sent up to the Ministers for decisions.

The TNC is the overall body established by the Punta del Este meeting to carry out the negotiations - both the GATT MTNS in goods launched as a formal decision of the Contracting Parties, and the separate one on trade in services launched by Ministers meeting on the occasion of the GATT CPS meeting.

The TNC is meeting at Montreal from December 5-8 for what is described as "mid-term review" of the negotiations.

The GNG, the GNS, and the Surveillance Body on the implementation of the standstill and rollback commitments are to report to the TNC, and on the basis of these reports the Ministers are to undertake the mid-term review.

Third world participants said privately, after the morning's formal GNG meeting, that not only had the progress of work in the 14 negotiating groups been uneven, but different yardsticks had been adopted by different chairmen on the type of reports to be made to the Montreal meeting - both in respect of recommendations for decisions and on the future orientation of work.

Some chairmen, they said, had taken the position that they would put into the part only those recommendations that commanded a consensus, thus automatically ruling out anything to which one or the other participant had strong objections.

But in other groups, the chairmen had been reportedly pushing recommendations not commanding any consensus or even a sizeable majority, and framing the recommendations in such a way as to call for "decisions" by the Ministers.

It might be pure coincidence, but a fact, one participant said, that the consensus approach was being insisted upon in areas of primary concern to the third world, and where industrial countries have been dragging their feet - such as on safeguards, or textiles and clothing.

But in other areas of priority interest to the U.S., EEC and other industrial nations - new themes like Trade-Related Intellectual Property Rights (TRIPS), or institutional themes under the Functioning Of the GATT System (FOGS) such as for creation of trade-policy review mechanism - the other tendency was visible.

In some areas like dispute settlement, even reaffirmation of GATT provisions like special and more favourable treatment to third world countries, reiterated in the Punta del Este mandate, were being sought to be excluded because of objections from the U.S., EEC etc, the participant said.

At the formal meeting Wednesday morning of the GNG, Zaire on behalf of the African States is reported to have conveyed the African concerns and dissatisfaction over lack of attention and progress in the negotiations on issues of concern to them.

Indonesia, on behalf of the third world countries grouped in the International Textiles and Clothing Bureau (ITCB), also read out a statement calling on the GNG to satisfactorily reflect in its recommendations to the ministers some of the elements for future work put forward by the ITCB in the negotiating group on textiles and clothing.

Informal consultations have also been going on this week within the GNS on the nature of its report - with some fundamental and serious differences within the group an the approach and content of the report.

With intensive private negotiations an the GNG issues now going on under the chairmanship of the director-general, the GNS consultations and negotiations are expected to resume next week.

Within the GNS, the U.S., Australia and a few other supporters of the GNS have been pushing for commitments and directives from the Montreal meeting an what GATT director-general last week called "nailing down" the principles of a future "general agreement on trade in services" or deciding the future orientation of work to enable these principles to be nailed down.

This approach is being resisted by a number of third world countries who are insisting on a balanced approach, fully reflecting the totality of the Punta del Este mandate in this area, as well as all the five elements identified in the negotiating plan.

Some third world participants said that it was in the context of these varying approaches and trends, and the efforts of some industrialised countries, and chairmen of some groups, to make recommendations calling for "decisions" by Ministers at Montreal with some "mandatory elements" for future negotiations, that Jamaica raised in the GNG the issue of delineation of jurisdiction of GATT Contracting Parties and the Ministerial meeting of the TNC.

In a letter, dated october 21, Jamaican delegation sought the GATT secretariat's legal advice on these issues and made a distinction between "decisions" of GATT Contracting Parties within the framework of the general agreement and the MTN codes in GATT, and "decisions" by the TNC which did not affect the contractual arrangements among Contracting Parties but might give "guidance" or "impetus" to the negotiations.

In the reply conveying "the preliminary views" of the secretariat, the director-general has cited the wording of the Punta del Este declaration that participation in the negotiations on amendments, application or for new provisions in GATT would be open only to Contracting Parties.

"The principle that only parties to an agreement can decide on amendments to it is an established principle of international law," the director-general agreed.

However, he added, other results that did not fall in this category could be decided by the TNC.

In this view, Dunkel said, it seemed clear that results of negotiations on amendments or application of GATT provisions or some new provisions could not be "finally adopted" by the TNC, but would have to be "submitted for approval" to a body representing the Contracting Parties - the session of the GATT contracting parties or the GATT Council.

Results in this category, Dunkel said, were the proposed new procedures in dispute settlement, proposals for a trade policy mechanism in the negotiating group on the Functioning Of the GATT System (FOGS).

Results in other negotiating groups (within the GNG), such as tariffs, non-tariff measures, natural resource based products, textiles and clothing, MTN agreements and arrangements, subsidies and TRIMS (Trade-Related Investment Measures) appeared to fall in a category where the TNC could take a decision, Dunkel said.

Third world participants said that neither in the group an disputes settlement nor in the fogs group were there agreed conclusions, even on issues mentioned by Dunkel. In the others, they said, the U.S. and others had resisted substantial recommendations, and the recommendations merely voiced intent to negotiate to achieve the objectives.

Dunkel said that there might be "grey areas" between these two main types of matters for decisions, "but the results so far produced seem to fit neatly into one or the other of the two categories".

On the textiles and clothing issue, Darryl Salim of Indonesia, chairman of the ITCB, had sent a letter last week to Dunkel over the failure of the negotiating group to adequately reflect in its report, the proposals of ITCB members an the various elements about future negotiations which the Ministers should agree upon at Montreal.

These elements, Salim said in a statement to the GNG and made available to the press, included:

--Commitments to engage in substantive negotiations early in 1989,

--Agreement to be reached within the Uruguay round on modalities for integration of this sector into GATT,

--Agreement to begin the phasing out the Multifibre Arrangement (MFA), upon expiry of the present protocol in 1991, and

--Agreement that the process of integration would be gradual and progressive and completed within a specified time-frame to be agreed upon during the Uruguay round.

Salim told the GNG that there had not been "a satisfactory reflection" of these elements in the report by the chairman of the negotiating group an textiles and clothing, and hence this matter should be taken up by the GNG to arrive at a satisfactory outcome for the Montreal Ministerial meeting of the TNC.

The representative of the EEC, Tran Van-Thinh, reportedly told the GNG that some of the viewpoints aired in the GNG had been too pessimistic, and had not sufficiently reflected the nuances in the reports of the various groups.