URUGUAY ROUND TNC TO MEET ON OCTOBER 27.

Oct 24, 1986

URUGUAY ROUND TNC TO MEET ON OCTOBER 27.

GENEVA OCT. 23 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The Trade Negotiations Committee set up to oversee the Uruguay Round of Multilateral Trade Negotiations is to hold its first meeting here on October 27.

Informal consultations have been taking place on the organisational set-up of the TNC, and other bodies envisaged for the conduct of the Uruguay Round of Multilateral Trade Negotiations.

As envisaged in the Ministerial Declaration adopted at Punta del Este launching the Uruguay Round, it will have two legally separate exercises - a new round of multilateral trade negotiations under GATT in goods, to be carried out by "a group of negotiations on goods" (GNG), and a separate negotiations on services, with a separate group on negotiations on services (GNS) to deal with the service matters.

The Declaration of the Ministers, "meeting on the occasion of the special session of Contracting Parties at Punta del Este, which launched the Uruguay Round, set up the Trade Negotiations committee (TNC) to function and report to the Ministers.

The Declaration also envisages two other bodies.

The part of the declaration launching the negotiations on goods, adopted as a decision of the GATT Contracting Parties, envisages a group of negotiations on goods (GNG) to run this part of the negotiations.

The separate decision on services envisages a group of negotiations on services (GNS) to deal with the service matters.

The group on negotiations on goods and the group on negotiations on services are both to report to the TNC, which in turn would report to the Ministers, meeting on the occasion of the special session of the GATT Contracting parties.

As the Chairman of the Punta del Este meeting, Uruguayan Foreign Minister Enrique Iglesias, put it in his statement from the chair before the adoption of the declaration, the decision on negotiation on trade in goods is a decision of Ministers in their capacity as Contracting Parties to GATT, while that on services is "as representatives of governments meeting on the occasion of the special session at Punta del Este".

The two negotiations are thus legally separate exercises, though the result of a single political undertaking.

The informal consultations now going on here are aimed at agreeing on the Chairmanship and other organisational details of the three bodies, so as to ensure the maintenance of their separate legal identities.

It has been proposed for this reason, that Iglesias should himself chair the TNC, the GATT Director-General should chair the GNG and Felipe Jaramillo of Colombia (who had chaired the previous exchange on information on services groups) to chair the new group on services.

While Iglesias will preside over Ministerial periodic meetings of the TNC, any official level meeting, it has been suggested could be chaired by the GATT Director-General, Arthur Dunkel in his personal capacity.

All these are subject to Iglesias agreeing to undertake this continuing responsibility.

The Punta del Este declaration said the TNC, which is to carry out the Uruguay round of negotiations, "shall meet as appropriate at Ministerial Level".

Apart from the specific provision for periodic ministerial meetings as appropriate, the declaration envisages that the TNC should set up "appropriate mechanisms", to carry out surveillance, including periodic reviews and evaluations, of the standstill and rollback commitments undertaken at Punta del Este by the Contracting Parties.

Apart from the view that the surveillance mechanism should be neither the TNC itself nor the GATT Contracting Parties (or the GATT Council), there appears to be no firm agreement on the mechanism.

Some industrial countries particularly do not see any immediacy for this decision, but third world countries and other industrial countries feel that the mechanism to be important, and should be in place quickly and ready to start functioning say within a matter of weeks.

One of the first complaints that will come up before the surveillance mechanism will be the discriminatory tax on imported oil being levied by the U.S. for a "superfund" to clean up the environment -- 11.2 US cents a barrel on imported oil against about seven on domestic oil.

This is a clear violation of article three of GATT, which in such cases, calls for equal treatment for domestic and imported goods.

The U.S. user tariff fee of 0.22 percent on all imports, as a revenue raising measures, though purported to be a user fee, would be a violation of article two of GATT, which requires that such fees should be commensurate with the cost of the services rendered.

Both the discriminatory tax on imported oil for the super-fund, and the levy of the fee would thus be a violation of the standstill commitment of the U.S. at Punta del Este.

The statement from the chair at Punta del Este, before the adoption of the declaration, has also spelt out some other issues to be tackled by the TNC.

In his statement before asking the GATT CPS to adopt the part of the declaration on the MTNS in goods, Iglesias had noted that representatives of certain governments had expressed concern regarding a number of problems relating, in particular, to commodities, natural resource based products and tropical products, and that they were concerned that solutions to their problems should be found and implemented quickly.

Certain African governments, he noted, had also put forward specific proposals.

Though the conference attached great importance to these concerns, it had not been possible to complete consideration of those proposals at the conference.

"It has therefore been agreed that they will be considered by the trade negotiations committee foreseen in the declaration".

The part of the declaration launching the trade in goods negotiations, adopted by the CPS, has mandated the group of negotiations on goods, among other things, "also decide upon inclusion of additional subject matters in the negotiations".

Some of the overlap in the functions of the TNC and the GNG, particularly those relating to the surveillance mechanisms and inclusion of additional subject matters in the negotiations on trade in goods, have arisen because of the last-minute compromise over separate exercises on goods and services that enabled the Uruguay round to be launched.

These compromises were clinched in the early hours of Saturday September 20, among a small group of negotiators, with the compromises, including the separate parts of the declaration and decisions, being cobbled together into one draft by the Secretariat, which had played no active role in the negotiations themselves.

However, in the process, the original draft versions where TNC was mentioned in relation to the negotiations on goods, were not changed to GNG, due to what is being described as "clerical errors".