Dec 21, 1989
NEGOTIATORS STUCK ON TARIFF REDUCTION MODALITIES.
GENEVA, DECEMBER 20 (BY CHAKRAVARTHI RAGHAVAN)— Negotiators in the Uruguay Round GATT negotiations in the tariff area were stuck Tuesday night on efforts to agree on a compromise about the tariff reduction modalities to be applied in the negotiations. The major deadlock was between the U.S. and the EEC, with the former standing firm on a "request/offer" basis of negotiations, and with the EEC standing on its formula approach, and the "benchmark" to be applied to tariff reductions by all to see the extent of the "contribution" by each participant in the tariff cutting exercise. There are also differences between the U.S. and the EEC on the coverage issue, with the EEC insisting that the issue of tariffs on agricultural products would have to be dealt with in the agricultural negotiating group, and the tariff formula or any other formula in the tariff group not applying to agricultural products. The deadlock on tariffs, which were unable to be resolved in so-called "green room" negotiations that went on till around midnight of Tuesday, was holding up the expected conclusion of the year's work at meetings of the Group of Negotiations on Goods (GNG), and thereafter at the Trade Negotiations Committee, (TNC). At the meeting of the GNG Tuesday morning, a number of Third World countries complained about the imbalance in the negotiations and lack of any progress in areas of concern to them. India, Nigeria, Mexico, Brazil, Chile, Pakistan, and Uruguay were among the countries that voiced their dissatisfaction. Nigeria said it appeared that not only would the Uruguay Round not benefit the Third World countries but it would take away whatever flexibility was now available to them - such as through prohibition of subsidies, dilution of article XVIII. Pakistan pointed that though December was set as the deadline for tabling proposals, some Industrial Countries had not put forward any proposals on issues of interest to the Third World like Textiles. India said that the negotiations in all areas had to address the "development" concerns of Third World countries specifically and clearly. But while there was vague oral support, for this, whenever they put forward specific proposals, these were being ignored or dismissed as demand for "blank cheque" or attempt "free ride". Third World countries wanted neither a "blank cheque" nor a "free ride", but wanted their proposals to be considered seriously and their concerns addressed. At a press conference Tuesday, the EEC's chief negotiator, Tran Van Thinh had told newsmen that there was a ninety percent chance of failure in agreeing on the modalities for tariff reductions, and if no agreement were reached they would have to come back in the New Year to find agreements. The tariff group, he said, was faced with two opposing positions: one by the U.S., which wanted application of a request/offer basis, while the EEC had formulated and put forward an across the board formula approach. In the EEC view, a request/offer approach would be more advantageous to a very powerful country like the U.S., whose demands could not be resisted by any one, least of all by Third World countries. Tran however conceded that several Third World countries did not support the EEC formula, and had taken the position that they would put forward their own methods of tariff reduction, and would adopt a request/offer approach. Third World delegations say they had to take account of the fact that for many of them, customs tariffs are not protectionist devices, but revenue raising instruments, since most of them, even the advanced ones, did not have a sufficiently developed tax base of direct taxes. The compromise ideas in tariff cutting that has been under discussion would allow countries to choose either the formula approach suggested by the EEC or a request/offer approach. But regardless of this, a country's reduction should either satisfy a "benchmark" on the basis of the formula approach, an overall weighted average tariff reduction of one third in the participant's tariff schedule. Tran also noted that while the EEC would apply tariff reductions in agriculture that would be decided in the negotiating group in that area, it would make no exceptions. The U.S. approach would enable it to except the textiles and clothing sector, where there are high peaks, to be exempt from any tariff cutting.