8:03 AM Feb 7, 1996


Geneva 6 Feb (Chakravarthi Raghavan) -- The World Trade Organization Tuesday established a Committee on Regional Trade Arrangements which among other things will consider the systemic implications to the multilateral trading system of regional trade agreements and initiatives and make recommendations.

The Committee, open to all WTO members, when its Chairman is chosen (after the usual consultation/haggling process in the WTO) will take over the from the over 20 separate individual working parties now seized of this task, the scrutiny of these agreements for compatibility with the WTO obligations of various regional free trade agreements notified to the WTO.

These bilateral, regional or plurilateral trade agreements of a preferential nature, are required to be notified in terms of Art. XXIV of the GATT 1994 and Art V of the GATS, as also the 1979 Enabling Clause dealing with preferential tariff and trade concessions among developing countries and those involving concessions of one or another of the developed countries to developing countries as a whole or groups of them.

The GATT practice has been for each of these agreements for free trade and customs union, and notifications of them, to be scrutinised by a working party which reports to the Contracting Parties. Those covered by the Enabling Clause used to go before the Committee on Trade and Development (CTD), where theoretically the development focus would be brought to bear much more.

But the consensus requirements means that there has seldom been any definite finding, but only setting out of views of those within the agreements and others whose trade interests are affected. The GATT CPs too have been merely taking note of the reports.

With the entry of WTO, there are now some 20 working parties looking into individual agreements and the time and pressure on delegations to staff and attending these meetings had brought up last the idea that there should be a single working party to scrutinise each of these notifications, and which could also look into wider ramifications of this regionalisation process on the multilateral system.

Concerns over these have not been put at rest by a WTO secretariat report last year that suggested that both are compatible and reinforce each other, nor for that matter by the other literature -- from international organizations like UNCTAD or regional bodies themselves or academics and t hink-tanks. The only consensus so far is what UNCTAD Secretary-General Rubens Ricupero recently told an UNCTAD seminar: regional groupings and arrangements have come to stay!

But whether a single WTO body will be any nearer a situation where it will come up with definite findings and recommendations -- in respect of each of the agreements scrutinised and their compatibility with the WTO/GATT/GATS accords (of not increasing the barriers against outsiders), including some of the new requirements under the WTO and Uruguay Round accords that have slightly tightened the disciplines (a definite timetable to achieve the integration of all sectors etc) -- is none too clear.

In the earlier process, there was always an adversarial relationship between the members of an agreement and those outside. Now, with everything under the same body (and the same Chair), there could be a different coalition of interests in the making.

Under the terms of reference of the Committee approved Tuesday, the new body will carry out examination of agreements in accordance with procedures and terms of reference developed by the Council for Trade in Goods, Council for GATS, and the CTD and make reports. It would also take over the outstanding work of existing working parties.

Reporting and review requirements for operation of such agreements and procedures to facilitate and improve their examination is also to be developed.

The Committee has also asked to consider "systemic implications of such agreements and regional initiatives on the multilateral trading system and relationship between them, and make recommendations.