Jan 10, 1991


GENEVA, JANUARY 8 (BY CHAKRAVARTHI RAGHAVAN) – Attempts to get the stalled Uruguay Round negotiations are being renewed in Geneva and key capitals, with the major effort on finding a way out of the impasse over the agricultural reform negotiations.

An informal meeting of the TNC is set for 15 January, but it could just be the start of a process and more in the nature of an information meeting.

By a strange coincidence or timing, it is the deadline set by the UN Security Council for Iraq’s compliance with the demands for its withdrawal from Kuwait.

The Brussels Ministerial session, after the collapse of the talks there last December, has mandated GATT Director-General Arthur Dunkel, in his capacity as official-level chairman of the Trade Negotiations Committee, to hold consultations to promote agreements in all areas.

Since then, Dunkel has visited Washington and is due to visit Brussels Thursday to meet the EC's External Relations Commissioner, Frans Andriessen and the Agriculture Commissioner, Ray MacSharry.

The EC Commission is currently engaged in undertaking some reforms in its Common Agricultural Policy (CAP). The Commission is due to meet Wednesday on this matter, with a crucial meeting on this set for 19 January.

Comments by MacSharry have suggested that the reform, purportedly aimed at ensuring that farm support goes to small farmers rather than the big commercial farms, could involve adopting some kind of deficiency payments as in the U.S.

Some of the agricultural exporting countries, and the EC, had been pushing for inclusion of the U.S. deficiency payments into the category of domestic support to be reduced.

Some Third World nations question whether the proposed EC reform in adopting deficiency payments would in fact lead to basic reforms and liberalisation of agricultural trade.

Andriessen is due to meet with some key Latin American countries at Punta del Este January 25-26.

Soon after, around January 30, Uruguay appears to be organising a wider meeting, expected also to be attended by the U.S.

After Dunkel’s Washington visit GATT sources seemed slightly more optimistic about prospects of the U.S. and EC being able to reach some compromise on agricultural, but were less optimistic on some of the other issues where the U.S. has to give including on the issues of services.

The Swedish Agriculture Minister Mats Hellstrom, who chaired the agricultural negotiations at Brussels, came to Geneva this week for what is describes as briefing Mr. Dunkel about Hellstrom's informal consultations on agricultural at Brussels.

At Brussels on 6 December, Hellstrom had presents an informal text of his own, but the EC was unable to accept it as a basis for further talks and negotiations. As a result, the Uruguay Round talks were adjourned indefinitely the next day.

Hellstrom also had a meeting over lunch Tuesday with a number of key delegates when he reportedly told them that in his view the structure of the paper he had presents at Brussels could still provide a conceptual basis for breaking the agricultural deadlock.

The Hellstrom paper had suggested separate commitments in respect of export subsidies, domestic support and market access.

The paper, he reportedly noted, had met with criticisms from several quarters including objections from Third World countries over its deficiencies in not tackling the "development dimension" and the problems of net food importing countries.

It had also been found "too ambitious" by one participant and as providing "too little" in terms of liberalisation by some others.

Some of the Cairns Group members, as also the U.S., have been saying that the Uruguay Round talks could not be resumed unless an acceptable basis for negotiations is found for the agricultural reform issue and this would necessarily have to involve the EC willingness to undertake separate commitments under each of the heads: domestic support, market access and export subsidies.

Comments by EC diplomats at the lunch for Hellstrom would appear to suggest that the EC would still find it difficult to undertake separate commitments, since this would really involve giving up the CAP.

The U.S. would also appear to have underscored that the conditions for success of the Round in 1991 had become even more difficult than at Brussels and that there was now less interest and support inside the U.S. for the talks.

The impending nomination of Clayton Yeutter, the Agriculture Secretary, as the Republican Party Chairman (a post, which he would take over end February, or early March), could be one indication.

Yeutter has been identified in U.S. with big agribusiness, and some of the names mentioned to succeed him in Agriculture appear to be more with the small family-farm lobbies who are opposed to the U.S. proposals in the negotiations.

Also, with the U.S. and some major industrial economies undergoing recession, governments and politicians would necessarily be more inward looking and unwilling to take on domestic protectionist lobbies, many trade experts note.

The Gulf outlook is another inhibiting factor and if there be an outbreak of hostilities, it would put an end to the Uruguay Round talks.

From the wider perspective of the South, the configuration of forces in the world politics and economy are also changing and the euphoria that swept over the industrialised countries this time last year, after the collapse of the Berlin wall and prospects of other changes in East Europe, have been replaced by worries and concerns including over the likely turn in the Soviet Union.

There are those who believe that in this situation attempts to reopen negotiations and push through compromise agreements in haste could be an even more of a high-risk strategy than the one attempted at Brussels and that the best thing negotiators could do would be to keep things on the back-burner for a time and wait for a more propitious time when genuine compromises could be reached.

The U.S. has been insisting that the Uruguay Round negotiations cannot be indefinitely prolonged and must end with agreements by mid-February to enable the U.S. administration to notify Congress and present the accords to make use of the "fast track" authority.

However, by the experience of the U.S.-Canada negotiations for a free trade agreement, where also some fast-track procedure deadlines were involved, the U.S. Administration uses the Congress and the fast-track procedures as a negotiating ploy.

In the U.S.-Canada talks, where the deadline for notifying Congress had been thought to be October 1987, and Canadian side tried to use the deadline as a leverage by walking out of the official level talks to force ministerial consultations, the U.S. just reinterpreted the authority as requiring no more than netting notification to Congress of a skeleton outline, and that it could go on negotiating until the last deadline for submitting the implementing bills to Congress.

President Bush could also seek extension of the fast-track procedure authority, and it would be granted automatically for two more years unless either House of Congress votes against it.

But the U.S. has been also insisting that no extension of the authority was possible unless a final agreement that would be substantially attractive to the U.S. and the Congress was in sight.