8:46 AM Oct 16, 1995

EU DOESN'T WANT STUDIES ON URUGUAY ROUND NEGATIVES

Geneva 14 Oct (Chakravarthi Raghavan) -- While the outcome of the Uruguay Round has presented "specific and significant" increases in global trading opportunities in sectors of interest to the developing countries, greater additional efforts would be needed to relate concessions to supply capacity as well as effects of other agreements including TRIPs, TRIMs and SPA.

This was an outcome of last week's meeting of the UNCTAD Ad Hoc Working Group on Trading Opportunities in the New International Trading Context that the chairman of the meeting Amb. Seung Ho of South Korea presented in a summing up on his own responsibility.

The group is due to meet again in December.

The discussions at the week-long meeting, and the views of the European Union at the final plenary showed that the EU clearly does not want any independent assessments as by UNCTAD and the positive and negative effects of the Uruguay Round agreements.

The EU representative, at the final plenary meeting, argued that the "negative effects" were based on speculation.

However, in the weeks and months before the conclusion of the Round, and since the Marrakesh agreement, the EU is not known to have raised any objections to the projections of benefits -- from a $250 billion to $500 billion welfare gain after 10 years and a minimum of $750 billion trade gains -- that have been coming out of the World Bank/OECD development centre studies nor that of the GATT and the WTO, even though the benefits, whether on the theoretical issues of free trade or by econometric modelling have been based on more speculative assumptions about future effects. In fact EU leaders have been frequently citing these effects to put a quiet on complaints from the South about the overall negative effects of the Round.

The EU also expressed disappointment at the lack of interest in identifying the positive effects.

But India, speaking for the Asian Group, said that while the Group recognized that new trading opportunities did exist, not all of them were immediately available and it was for the Working Group to identify them, underline the difficulties and constraints involved.

The Working Group, the Asians Group spokesman said, should undertake a qualitative assessment of both possible gains and losses.

Bangladesh, speaking for the Least Developed Countries, was disappointed that some developed country members did not wish to engage in a serious discussion of a safety net package of measures to assist the LDCs to confront the problems of adjustment to the post-Uruguay Round trading system and avoid the further marginalization of LDCs.

In a summing-up on his own authority, Amb. Ho of South Korea said that the Ad Hoc Group in the discussions had recognized that the Uruguay Round results presented specific and significant increases in global trading opportunities including in many sectors, both agricultural and industrial, of interest to the developing countries.

The conversion of non-tariff barriers into tariffs and the binding of all tariffs in the agricultural sector, combined with the reduction of export subsidies and domestic support, constituted a binding standstill and rollback commitment and provided a firm basis for the continuation of the process to an open, market-based agricultural economy.

Similarly, the Agreement on Textiles and Clothing provided a mechanism for phase-out within a fixed time-frame of 10 years the discriminatory and restrictive MFA regime which had distorted world trade in this area over three decades.

The positive long-term impact of these commitments was enhanced by strengthened multilateral disciplines on use of non-tariff measures and elimination of "grey area" measures under the Safeguards Agreement.

But any assessment of how developing countries and the transition economies could benefit from the overall opportunities would have to take into account a number of elements.

These, HO said, included less than average tariff reductions, tariff peaks and tariff escalations in a number of sectors of export interest to the developing countries, prohibitively high tariffs on agricultural products subject to tariffication and the postponement of integration of textiles and clothing products into the GATT 1994 to a very late stage.

The tariff quota system and commitments for reduction of domestic support and export subsidies in the agricultural sector, and the integration programme for textiles and clothing, leave considerable room for manoeuvre for governments in implementation of commitments.

Opportunities for the Third World countries could be enhanced if policy measures were applied in a liberal manner, within the parameters of the commitments -- such as allocating tariff quotas in a fair and transparent manner, sparing use of the special and transitional safeguards and priority in allocation of subsidized exports to the needs of the net food-importing developing countries.

Non-WTO members would also face significant difficulties if excluded from the tariff quota system of agriculture or integration programmes of textiles and clothing.

A continuous analysis of trading opportunities presented by tariff reductions and operations of the mechanisms of the Agriculture and Textiles and Clothing Agreements was also necessary if developing countries and interested transition economies were to fully benefit from such opportunities and thus close attention should be paid to the practical details of implementation of these agreements.

To identify trading opportunities in a more concrete manner, greater additional effort was needed to relate concessions of the developed countries to the supply capacity and export interests of developing countries and the LDCs.

Studies should also examine other agreements such as the Sanitary and Phytosanitary Agreements and those on trade-related investment measures (TRIMs), trade-related intellectual property rights (TRIPs) and services.

On the issue of impact the Uruguay Round on the net food importing and the least developed countries, and the various findings on this from the secretariat and other international organizations, the chairman's summing up noted that a view (EU's) was expressed that this issue fell outside the Ad Hoc group's terms of reference.

However, HO's summing up said, others stressed the need to assess the difficulties facing the LDCS, based on careful and solid analysis, in order to elaborate in further detail the remedial measures foreseen in the Marrakesh decisions and to translate them into concrete actions.

The chairman's summary also called for technical assistance at country level to enable individual countries to make full use of the opportunities provided and for non-WTO countries to assist them in their accession process for WTO.

A Swiss-funded and hosted international seminar, organised in cooperation with UNCTAD secretariat, is to be held on 23-24 November, to identify the technical cooperation requirements in the areas of trade promotion and capacity-building in trade policy formulation.