WAY OPENED FOR RESUMPTION OF URUGUAY ROUND PROCESSES.

Apr 11, 1989

WAY OPENED FOR RESUMPTION OF URUGUAY ROUND PROCESSES.

GENEVA, APRIL 10, BY CHAKRAVARTHI RAGHAVAN -- With the approval by the Trade Negotiations Committee (TNC), Saturday, of mid-term agreements in four deadlocked areas, as well as of the accords reached at Montreal in the eleven other areas which had been put "on hold". The way has been cleared for the resumption of the Uruguay round negotiating processes.

The TNC, which met at high official level, approved the accords reached in textiles, agriculture, safeguards and trade-related intellectual property rights (TRIPS), and the mid-term review package as a whole.

This also opens the way for the implementation of the modest mid-term package of concessions in tropical products, improvements in GATT dispute settlement procedures and the functioning of the GATT system, including the establishment of trade policy review mechanism for Multilateral surveillance of trade policies of countries - all part of the mid-term review package.

Taken as a whole, third world countries have lost more than they have gained in the mid-term package that has now emerged, and which sets cut the framework of negotiations for the next 20 months in the Uruguay round.

Whether viewed in terms of the balance within these subjects, or the overall balance in the 15 areas of negotiations in the Uruguay round, the third world countries have gained little but have yielded more in new areas, and in ways which would have deleterious effects on their future prospects for development and well being of their peoples.

The Montreal results in tropical products is at best very modest, and do not tackle the basic issues that the industrialised countries agreed to solve 26 years ago.

In all other areas of interest to the third world, and which would enable them to get improved access for their exports in the markets of industrial countries, all the decisions in the mid-term package are no more than procedural decisions.

Even on matters of "procedure" where negotiators have been at impasse, the package has provided no clear guidelines to negotiators on the procedures to be adopted to ensure substantive negotiations.

In agriculture, the framework for negotiations, and particularly in terms of negotiating rules and principles for long-term reform of agricultural trade may benefit third world countries in the long run. But in the short-term, the standstill or freeze on government support is so loosely warded that third world exporting countries, facing competition from subsidised exports of the U.S. and the EEC may get little or no relief. They may even find subsidies increasing on some individual products.

Even in terms of the long-term accords and commitments, as the mid-term accord showed, once the U.S. and EEC reached accord among themselves (and on the basis of their mutual interests only), the others have little say but to accept it.

In contrast, on matters of interest to the industrial world, the framework agreements achieved provide clear guidance to the future course of negotiations. This was so in respect of services at Montreal, and has been even more so in respect of intellectual property here. In some ways the latter could prove to be more damaging to the future of the third world.

The Uruguay round negotiating processes had been brought to a halt at the Montreal ministerial mid-term review meeting, when no consensus could be reached on agriculture, textiles and clothing, safeguards and TRIPS.

The Montreal meeting put the results achieved in eleven other areas "on hold", mandated the GATT Director-General Arthur Dunkel, who is the chairman of the official level meetings of the TNC, to hold consultations in the four areas, and for the TNC to meet at high official level in the first week of April to review the whole package.

From January, Dunkel held a series of consultations, in the four areas and produced working papers, on the basis of which intense consultations were held since March

These consultations resulted in accords in the four areas. The accords on agriculture and TRIPS were reached on Friday night, and in textiles and safeguards Saturday. These were presented as a package, together with the results achieved in eleven other areas at Montreal, to the plenary meeting of the TNC and approved.

Even normally, the GATT consultation and decision-making processes are "non-transparent", with accords reached among a limited number of countries, "invited" to these conclaves by the Director-General, and then put to the rest of the GATT membership for formal approval.

The consultations this time were even less transparent. Even the chairman of the GATT Contracting Parties excluded from the process. GATT itself functions on consensus basis, with every Contracting Party deemed equal, but in the consultation processes, GATT officials have always proceeded on the basis of "trade-weights", and on the assumption that what is good for the U.S. and EEC and their TNCS must be good for the rest of the world. This was even more evident this time.

Both in the consultations, and in the papers he prepared, Dunkel opted for the "power approach", namely to promote a settlement between the U.S. and EEC on the major issue that divided them, namely agriculture, and then force through accords in other areas through the joint pressures generated by these two.

Dunkel focussed the consultations an agriculture, and once the U.S. and EEC reached accords, turned the attention to TRIPS where the two joined hands against the third world.

The consultations were then focussed an textiles (where the issue of freeze on further restrictions proved intractable and solutions were ultimately reached which not only does not provide for freeze but could be interpreted as requiring third world countries to open their markets).