Sep 16, 1989


GENEVA, SEPTEMBER 15 (BY CHAKRAVARTHI RAGHAVAN) – India has firmly spurned the efforts of the U.S., Japan, the EEC and other industrialised countries (ICS) to write rules in the GATT that would restrict rights of host governments to regulate foreign investments and expand the rights of TNCS.

In a comprehensive paper on "Trade-Related Investment Measures" (TRIMS) presented to the negotiating group Thursday, the Indian special Secretary in the Commerce Ministry and Chief Negotiator for the Uruguay round, A. V. Ganesan, made clear that only adverse trade "effects" of investment measures could be tackled in the Uruguay round and not investment measures per se.

Even where there were adverse effects as a result of investment measures put in place by third world countries for developmental considerations, any new GATT provisions would have to provide third world countries considerable flexibility.

Also, Ganesan said, any new GATT rules would have to tackle both adverse trade effects arising out of governments-mandated measures as well as those undertaken by the foreign investors and transnational corporations.

The Indian paper is the most comprehensive position paper setting out the Indian views in this negotiating area, and follows a similar one on "Trade-Related Intellectual Property Rights" (TRIPS) presented in July.

Ganesan told a news conference Thursday evening that India would also be putting forward soon a comprehensive paper or papers on "Trade in Services".

While reflecting Indian views and concerns, all the papers he said also took account the general concerns of other third world countries and sought to reflect them also.

India, Ganesan said, was interested in the successful outcome of the Uruguay round in order to correct the present imbalances in the trading system.

There were basic differences in the approach of India on these issues from that of the leading industrial countries.

India’s major interest lay in textiles and clothing, agriculture, and to some extent in tropical products, in "safeguards" where India wanted a comprehensive agreement based on non-discrimination, and generally in issues of access to markets in industrial countries for manufactured exports.

Ganesan and the Indian delegate to GATT, Amb. B. K. Zutshi, denied there had been any softening in India’s positions because of the U.S. actions and threats under S. 301, and reiterated the Indian position, which they noted, had been repeatedly made clear in the GATT Council and Uruguay round bodies.

Both said in their meetings here, which were plurilateral and mostly to TRIMS and Uruguay round issues, with U.S. trade representative, Mrs. Carla Hills, they had not discussed 301. India had made clear it would not discuss or negotiate bilaterally with the U.S.

Asked about the position of the U.S. that the TRIMS Group could not discuss the restrictive business practices (RBPS) of TNCS, since the mandate did not extend to it, Ganesan said that while there was no agreement at Punta del Este to deal with the general issue of RBPS, it was impossible to deal with effects of government-mandated investment measures without dealing with those of TNCS.

Similarly, patent rights could not be dealt without dealing without restrictive practices of holders of such rights. In every industrial country, the patent legislation itself contained provisions against abuse, as a part from general competition laws.

All these were two sides of the same coin, he said.

The TRIMS group is continuing Friday its consideration of various papers presented to it.