Nov 21, 1990

MINISTERS WILL HAVE PLATEFUL OF QUESTIONS AT BRUSSELS.

GENEVA, NOVEMBER 20 (TWN) – When Ministers assemble at Brussels they will be faced with questions in almost every area of the Uruguay Round negotiations, which, even with clear answers from them, would need considerable further work to draw up agreements.

This was the view Tuesday morning in GATT of the state of play in the negotiations, as GATT Director-General Arthur Dunkel began a series of ten green room consultations in different areas to prepare reports for the Brussels Ministerial meeting.

The reports, according to the time-table announced Monday night be Dunkel, would be available only on November 26 - leaving a whole pile of documents to be waded through by Ministers before they arrive at Brussels to give answers.

"In most UN organisations these days, no document would be considered for a meeting that has not been made available to capitals at least six or eight weeks before, but in GATT this does not apply and Ministers will face a nightmarish task", one delegate commented.

GATT sources provided the following rundown on the state of play in each of the areas:

OUTCOME: There will be a Geneva protocol to wind up the round, but it is not clear which areas of agreement will be in it and which will not be there.

RULES OF ORIGIN: There is a draft with a number of significant outstanding questions to be resolved, and very much in the same position as 2-3 weeks ago. These include whether or not preferential trade should be covered, the nature of the harmonisation of the rules and whether the customs cooperation Council will be involved.

PRE-SHIPMENT INSPECTION: There is a draft at a relatively advanced stage but with one or two important outstanding issues. The main big question is about price verification - about pre-shipment inspection agencies verifying the invoice prices. (The U.S. and EEC are objecting to this).

TEXTILES AND CLOTHING: There is a basic draft agreement, which will go to the Ministers providing a structure. But there are square brackets in very important and significant areas involving the timing of the transition period, the rate of liberalisation process and the restrictions that have to be removed now. Green room consultations are taking place tuesday, but no agreement is expected until Brussels.

AGRICULTURE: A big zero. Nothing to negotiate, as of now, but may be a draft will evolve later in the week.

Sanitary and Phyto-sanitary regulations agreement is in a very advanced stage, but not complete. An outstanding question is whether as EC wants measures taken for environmental and consumer protection reasons are to be included. The issue may have to wait till Brussels. Also to be resolved is question of internal procedures for checking chemicals and hormones, etc.

GATT ARTICLES: There are drafts on II: 1.b relating to fees and charges, XVII State trading enterprises.

On XVIII and the BOP articles, everything is in square brackets and no basis found to negotiate changes in article or interpretation. No indication of any possible progress before Brussels.

XXIV - free trade areas and customs unions, there is a text for interpreting this article but does not command universal support and it is not clear at the moment that draft will work or not. No further negotiations here planned.

XXV - waivers issue. Looking for an agreement for automatic cut-off date for waivers. There is basic agreement except on cut-off date for existing waivers. This last is tied to agricultural negotiations and the U.S. permanent waiver there.

XXVIII - Renegotiations of tariff schedules. There is an agreement.

XXXV - non-application clause. There is a basic text.

Protocol of provisional application of GATT - essentially it is for a decision to end the "grandfather" clause privileges. This is accepted but no date on when it would be implemented.

SAFEGUARDS: There has been a text on the table for a considerable time, and it has been there for some weeks pending agreements on a few important questions. There is the "selectivity" issue where some participants notably the EEC, want the right to apply selective safeguards in exceptional circumstances. It can't be decided until Brussels. Closely linked to this is the question of ending "grey area" measures. Other issues include application of safeguards by Third World countries.

ANTI-DUMPING: There is no basic draft for negotiations. The text put forward by the acting chairman, GATT Director-General Carlyle has not been accepted. More recently New Zealand tried its hand at a text but the EC and the U.S. have turned it down.

TECHNICAL-BARRIERS TO TRADE: Issues largely settled and would go to the Ministers.

IMPORT LICENSING: Issues largely resolved. But outstanding question is whether there should be work on export licensing too.

CUSTOMS VALUATION: All issues resolved and there is a text.

GOVERNMENT PROCUREMENT: Not a part of the Uruguay Round but for domestic political reasons, U.S. considers it part of the round. A draft agreement is being evolved within the government Procurement Code Committee for extending the scope to service contracts and by local government authorities, and entities like PTTs. It is basically an OECD negotiation and agreement.

SUBSIDIES AND COUNTERVAILING DUTIES: Very difficult to know where the negotiations actually are. Perhaps the same situation as in anti-dumping. There has been a draft agreement on the table for some months. At the moment the paper does not seem to provide a basis for negotiations. There will be "green room" consultations during the week and it would then be known whether the text could provide a basis for agreement. In the main there are differences on industrial subsidies between the U.S. which is for ending all of them and the EC which sees a role. There are also questions about graduation of Third World countries by per capita criteria and share in world exports in one or more sectors. Both are considered "too generous" by the EC and U.S. If lowered, it may not be acceptable to several of the Third World countries.

DISPUTE SETTLEMENT: There are texts at a very advanced stage. The outstanding questions relate to establishment of panels, adoption of reports of decisions of appellate bodies, question of authorisation for retaliation for non-implementation through withdrawal of concessions and about complaints relating to non-violation of GATT obligations.

TRIPS: A great deal of progress has been made and a new draft for Brussels is likely to be ready Thursday when the negotiating group is to meet for forwarding to Brussels. There are green room consultations Tuesday and text could be drawn up in the light of that.

There is more or less complete agreement on trademarks, a basis for agreement on geographical indications and on industrial designs. There is progress on patents and identification of issues needing ministerial decisions - particularly about extending patent rights to pharmaceuticals, chemicals and question of biotechnology - which has been the subject of a demonstration before GATT Tuesday by the Greenpeace.

There is also the question of compulsory licensing where things are in an advanced stage in setting out the various conditions to be satisfied before authorising licensing. There is large measure of agreement on enforcement, but none so far on dispute settlement nor on transition.

Other questions include those on patents on basis of first to invent or first to file and whether conditions for compulsory licenses will apply also to government use of patents - an issue involving the U.S. where there are no conditions and not even requirement to search for and notify patent holder and compensate him.

TRIMS: There is an attempt to prepare a new draft, by rearranging the previous chairman's text. Essential problem remains about automatic prohibition of certain investment measures and whether TRIMs agreement should include control of anti-competitive and-restrictive business practices of investors. Some of these will have to go to Brussels.

FOGS: Large area of agreement on surveillance and periodic meetings of CPs at level of Ministers. Outstanding questions relate to a political declaration about "global economic policy-making" and in that weight to be given to effect of fluctuations in exchange rates. Also pending is the question raised by the U.S. for a GATT steering committee or management board in between Ministerial meetings.

SERVICES: A new draft is to be ready this week. The new draft is putting into shape in legal form what the negotiators have agreed upon.

But there are also other outstanding problems – about application of MFN principle particularly in sectors like transport, telecommunications, basic telecommunication services, financial services, audio-visual. There will be new attempts to draft sectoral annexes also. Discussions on financial sectoral annex has made no progress and is unresolved. A lot of work still to be done.