Apr 27, 1989

SAFEGUARDS - CONSULTATIONS TOWARDS CHAIRMAN'S TEXT?

GENEVA, APRIL 26 (BY CHAKRAVARTHI RAGHAVAN)ó The chairman of the Uruguay round negotiating group an safeguards, Georges Maciel of Brazil, is holding informal consultations Wednesday with a view to presenting a draft text for negotiating a comprehensive safeguards agreement.

The mid-term package of accords on the Uruguay round, finalised at the recent meeting of the TNC at high official level at Geneva, has mandated the chairman to produce such a text as a basis for negotiations, and without prejudice to the right of participants to put forward their own texts and proposals, preferably before end of April.

The decision also calls for negotiations to begin on the basis of the chairman's draft text by June 1989 at the latest.

Safeguards is one of the important systemic issues of the GATT multilateral trading system where agreement has eluded negotiators over the last 16 years, since it was put an the Tokyo round agenda.

The problem has been over the demands of the industrialised countries, particularly the EEC, for the right to take "selective" or discriminatory safeguard measures against third world exports. The lack of multilateral disciplines on safeguard actions of the powerful has resulted in the proliferation of "grey area" measures and generally brought into, disrepute the system itself.

While the mid-term package in this area did not go as far as the third world countries had wanted, in terms of firm guidance for negotiators, nevertheless it has reaffirmed that the comprehensive safeguards agreement should be "based on the basic principles of the general agreement", and should aim to "re-establish multilateral control over safeguards, inter alia by eliminating measures which escape such control".

Both these are seen by third world countries as a reference to the fundamental GATT principle of non-discrimination and most favoured nation treatment and for disciplines over "grey area" measures which by definition are discriminatory.

At the meeting of the group Monday, third world countries reportedly stressed the need to proceed with the negotiations as agreed to at the April meeting of the Trade Negotiations Committee (TNC) at Geneva.

Hong Kong, India, Pakistan and Jamaica were among those who reportedly spoke, noting that there were already several proposals on the table (from third world countries), and

Negotiations should now proceed on the basis of the TNC document.

India reportedly underscored references in the chapeau to the "basic principles" of GATT as well as "multilateral control" over the grey area measures.

The major players in the trading system, it was noted, had not submitted any proposals of their own. If they were unable to do it, the chairman should prepare a draft text on the basis of proposals on the table and informal discussions with the others.

This was supporter by other third world participants.

The industrialised countries generally took the line that the agreement and the chairmanís draft should be "broad". While they did not spell it out, this was seen by third world participants as implying that the text should not deal with the specific issues that have blocked agreement in the Tokyo round, in the subsequent GATT work programmes, and now.

The EEC would appear to have said that it would try to provide its "contribution", perhaps implying the chairman should not prepare a draft before then.

Chairman Maciel, while agreeing that his draft or text should be " broad", reportedly noted that it would also need to provide a focus for negotiations. This might mean some risks would have to be taken in formulating a first draft on some basic issues.

The group which held a formal meeting Monday is due to meet again Thursday.