Nov 27, 1990
CONSUMERS CONCERNED OVER LIKELY FAILURE OR WEAK COMPROMISES.
BRUSSELS, NOVEMBER 26 (TWN) -- Consumers organisations the world over are deeply concerned that the Uruguay Round would either end in a weak compromise or outright failure with "disastrous consequences" either way for international trade relations and the world economy. These concerns have been outlined in a joint policy statement issued here by the IOCU (International Organisation of Consumers Union) and the BEUC (Bureau European Des Unions de Consommateurs). The joint statement outlined the consumers proposals in various key areas and called for at least 50 percent cut in agricultural protection over the next ten years, ending the MFA "once and for all" over the next six years, a safeguards agreement based on non discrimination, fairer anti-dumping rules and tariff cuts. On intellectual property protection, the IOCU and BEUC said except for counterfeiting no case had been made out for a GATT regime on intellectual property protection. The IOCU is a federation of consumer groups worldwide while the BEUC is the umbrella Organisation of consumer organisations in the European Community. Together they claim to represent 175 consumer organisations in 63 countries. Consumers, the joint statement said, have a major economic interest in the current trade negotiations and in the promotion of a more open trading system. Failure of the Uruguay Round would have disastrous consequences for international relations and the world economy. Protectionism and trade disputes would increase leading to recession, unemployment and higher prices and reduced choice for consumers everywhere. This would be particularly damaging to the economies of the Third World and the emerging democracies of Eastern Europe. A large share of the blame for failure so far to agree on any substance in the negotiations, the joint statement said, lay with the three major trading partners and their pursuit of "unacceptably protectionist and short-sighted policies" in particular sectors and have failed to contribute to the climate of cooperation needed to roll back protectionism and liberalise trade. AGRICULTURE: Agricultural protection in 1989 had cost the U.S., Japan and EC respectively ECU’s 60.9 billion, 52.5 billion and 88.5 billion or per head of population ECU’s 250, 430 and 273. These policies have placed a heavy burden on their own economies and consumers as well as on Third world countries. The two consumers’ organisations called for agreements to * Cut internal support by no less than 50 percent from it average level during 1986-1990. The cuts should be effected over 10 years beginning 1991, with special attention given to reduction of support for most protected commodities and those of export interest to the Third World. * Improve market access opportunities in line with reductions in market support and allow greater access for products, including processed products, from the Third World. This should be achieved by full tariffication of all border measures and their steady reduction. The proposals for "rebalancing", thus effectively increasing protection on some commodities, should be dropped, as they are contrary to the mid-term accord. * Reduce exports assistance by an amount greater than other forms of support over ten years from 1991 until it is eliminated. Deficiency payments on exported products, such as U.S. cereals, should be included in this process. TEXTILES AND CLOTHING: The MFA, by the time the current protocol expires in 1991, would have been in place for 17 years. It harms consumers in the ICs by restricting their choice of clothes and increasing the cost - $500 per household in the U.S.A. and an additional five percent on retail price in the U.K. It also harms people in the Third world. The MFA should hence be got rid of once and for all: * The phase-out process should be based on existing MFA arrangements and completed in six years; * All the important details of the phase-out - including base levels, growth rates, transitional safeguards, etc. - should be clearly set out in the GATT agreement and not left to later negotiations; * Restrictions an some productions should be removed immediately as a "down payment" and it should be on a broad basis including all restrictions on children's clothing and products from LDCS; * Any special transitional safeguard measures should be based on the criterion of "serious injury" in line with Art. XIX of GATT, and should apply only to products restrained under the MFA and only during the phase-out period. Normal GATT safeguard rules should apply to products that have been liberalised; * Role of the textile monitoring body should be confined to monitoring compliance with the agreement and it should not be linked to progress in other areas. Restructuring GATT along more protectionist lines is a totally unacceptable way of phasing out MFA. SAFEGUARDS: The GATT safeguards clause should be amended to allocation to be taken without compensation provided it is non-discriminatory, of limited duration, restrictions are steadily reduced and costs and benefits of proposed safeguard actions are estimated prior to application. Moves to allow selective safeguards, even as a short-term measure, should be resisted. FAIRER ANTI-DUMPING RULES: The only economic justification for anti-dumping measures is to prevent use of predatory pricing to drive out competition - evidence for which is extremely rare. Anti-dumping actions raise prices to consumers, either through duties or price undertakings and restrict choice. They have been used with increasing frequency by the EC and U.S. The ease with which importing countries can pursue anti-dumping actions and levy duties targeted at the world's lowest cost supplies has meant that the anti-dumping code has come to be used instead of safeguards to provide protection. The measures are discriminatory and conceal the degree of protection and thus undesirable from the viewpoint of consumers. The anti-dumping code should hence be amended to require tighter rules for measuring dumping margins and determining injury, require published calculations and assessments of cost of anti-dumping measures to consumers and the economy and the benefits to industry, ensure that procedures and information generated are accessible to all interested parties including consumers and require all anti-dumping measures to be of limited duration. TARIFFS: Priority should be given to reducing tariff peaks and tariff escalation particularly on products of export importance to the Third World. INTELLECTUAL PROPERTY PROTECTION: There are agreements on intellectual property administered by the WIPO. Tighter rules could help underpin and facilitate international trade only if the right balance is struck. From the viewpoint of consumers, rules on protection of intellectual property should provide the right structure of incentives and rewards for innovation and curb counterfeiting. But there are grave risks in carrying new restrictions too far and creating unacceptable barriers to trade and competition, raising prices to consumers and restricting choices. Copying, as opposed to counterfeiting, is often an important stimulus to competition and hence in the consumers' interest. In addition, there are problems for Third World countries in stronger intellectual property rights. There should be simultaneous agreement on transfer of technology from the West to the Third World. International rules on intellectual property protection should not prevent Third World production of cheap basic medicines to meet their consumers' needs. IOCU and BEUC are not convinced that, with exception of counterfeiting, the case for a GATT regime to protect intellectual property has been made. If there is to be such a regime, it must not result in unjustified barriers to trade and competition. STRONG EFFECTIVE GATT: * The trade policy review mechanism country reports must include a full analysis of the impact of trade measures on the economy and the consumers and open criticism of unjustified protectionist measures; * GATT should be given substantial additional measures to enable it to do its job effectively.