Apr 29, 1989

SAFEGUARDS GROUP TO GET CHAIRMANíS DRAFT TEXT BY MID-JUNE.

GENEVA, APRIL 28 (BY CHAKRAVARTHI RAGHAVAN)ó The Uruguay round negotiating group on safeguards will meet in the last week of June to begin negotiations on a comprehensive safeguards agreement, as mandated by ministers in the mid-term package, according to GATT sources.

The chairman of the negotiating group, Georges Maciel of Brazil, has reportedly advised the participants that as required by the mid-term package he would come forward, in time for the June meeting, with a draft text as a basis for negotiations.

In the first two years of work in the group, the safeguards negotiations have been stalled on two basic issues: applicability of the GATTís most-favoured-nation provision to safeguard measures (or emergency protective actions taken by importing countries) and the question of bringing "grey area" measures under GATT control - either by their withdrawal or by making them conform to GATT.

The MFN issue and the EEC insistence on right to take selective or discriminatory actions had blocked agreement on this issue in the Tokyo round. Subsequently, there has been a proliferation of "grey area" measures.

At the 1982 GATT ministerial meeting, the ministers agreed, on a "best endeavour" basis, to bring such measures into conformity with GATT or eliminate them. Not only has been there no 'best endeavour" to carry this out, but since then these measures have proliferated even more covering more and more sectors of trade.

The latest U.S. trade law has also in effect encouraged and domestically legitimised such measures.

The negotiating group had met Monday, the first meeting after the April TNC accords including on safeguards, to hear the views of participants.

The chairman at that time had reportedly indicated that he would try his hand at producing a draft, perhaps before the meeting concluded on Thursday. However, the EEC and other ICS would appear to have been cool to this idea, and in effect sought to discourage him from doing so.

At the April meeting of the TNC, while the third world's call for explicit language was not agreed to, compromise formulations dealing with the MFN issue and the "grey area" measures were agreed upon.

There was no specific reference to the MFN, but the Punta del Este mandates's call for an agreement rooted in "basic principles" of GATT was reaffirmed. The "grey area" measures were dealt with by underscoring to bring measures that now escape GATT multilateral control being brought under such control.

The chairman of the negotiating group was asked to formulate a draft text, which could be the basis for negotiations to commence, by June.

In the two years of its work so far, the negotiating group has received a number of proposals from third world countries, but none from the major players.

At Mondayís meeting of the negotiating group, third world participants underscored the importance of moving into negotiations on this important systemic issue.

It was noted that so far none of the major players had put forward any proposals, though some of then had indicated their thinking in interventions in the group at earlier meetings.

Third world countries tried to encourage the chairman to produce his own draft, as mandated. The EEC and other industrialised countries however hinted that he should not be in a hurry, but should await their own contributions and in any event should produce take a broad approach, meaning presumably he should skirt the sticking points.

After two days of informal consultations, it would appear to have been agreed that the major players, as also other countries should put forward their proposals or clarify their earlier

proposals.

It is hoped that they would do so before the end of May.

Maciel reportedly has indicated that he would produce a draft text, as he had been mandated, by middle of June, in time for the next meeting of the group set for June 26-27.