4:54 AM Sep 7, 1994


Geneva 7 Sep (Chakravarthi Raghavan) -- GATT diplomats and negotiators get back to work on Monday amidst a somewhat more uncertain outlook, than before they broke off for summer recess at end of July, about the World Trade Organization and its entry into force on 1 January 1995.

The Institution and Legal affairs subcommittee of the WTO's Preparatory Committee, headed by Singapore's Amb. Kesavapani is meeting Monday, with focus on the transitional arrangements.

The Trade and Environment Committee is holding a two-day meeting from Tuesday, to discuss the issues of packaging and eco-labelling.

Other issues on the rather tight schedule at the GATT, from between now and end October, including the issues of Chinese accession (as also of Taiwan) and the choice of a successor to GATT Director-General Peter Sutherland.

The political developments leading to the resignation of Rubens Ricupero as Finance Minister of Brazil, many Third World diplomats say in a regretful tone, at the least, may have clouded his chances of a successful candidacy. There are three other officially announced candidates (Mexico's Carlos Salinas, Italy's Renato Ruggeiro and South Korea's Kim Chul Sum), with a few more in the wings in the event of a deadlock around any of these.

But the principal issue of private debate among GATT diplomats is the reports from Washington about the new uncertainties over the US Congress acting on the WTO acceptance in time for the 1 January target set for the WTO entry into force. There is even talk as to whether US would repeat history.

The Marrakesh Agreement sets no minimum criteria for entry into force, and the actual entry date is to be set by the "implementation conference", due to meet at senior official levels, on dates yet to be set but to be between 6 to 15 December.

But the entry into force will depend very much on the four majors -- US, EU, Japan and Canada -- and a sizeable mix of others ratifying the accord before the entry date.

The US Congress is due to resume, after the summer recess, next week and with a logjam in its legislative agenda before the November elections. A long list of legislative logjam, in a Washington report in Wednesday's Financial Times, does not even mention the WTO implementation legislation!

The Senate minority Republican leader Dole, has spoken of putting off action till next year and there is talk of other uncertainties.

In the case of the European Union, the ratification/acceptance issue has been muddied by jurisdictional fights over who should it: member-States, European Commission and the European Parliament's role. The EU's Court of Justice is due to give a ruling sometime in October.

According to Japanese sources, Japanese Diet would be able to act, if necessary through the convening of a special session, but is awaiting full Japanese translation of all the agreements to be in the hands of the members of the Diet.

The transitional arrangements issue to be tackled by the Kesavapani subcommittee of the WTO Prepcom relates to the fact that the GATT 1994 and GATT 1947 (with their differing rights and obligations) are said to be legally distinct instruments, and may thus co-exist.

There had been some talk that the GATT 1947 would be kept going for a transition period of two years, to enable all those of its contracting parties eligible to become ab initio WTO members, but have to undertake the domestic legal processes, to complete them and become members, and meantime have a contractual framework for their trade relations.

However, the US is reported to have been suggesting that simultaneously with its acceptance of the WTO (and its entry into force?), the US will withdraw from the GATT 1947 to avoid two sets of varying and contrary obligations.

This would not only leave those facing delays in joining the WTO and its GATT 1994 with a situation of lack of multilateral trade framework visavis relations with the US, but raise a number of other questions about issues pending in the GATT 1947 (and the Tokyo Round agreements and codes) -- including many pending disputes and panel rulings all of which will be governed by GATT 1947 and its rights and obligations.

Once the WTO enters into force, its members have three options (according to a GATT secretariat July discussion paper before Kesavapani committee): withdrawal from GATT 1947 and becoming WTO member, remain a GATT 1947 contracting party without becoming a WTO member or remain GATT 1947 cp and also become a WTO member.

In terms of the Protocol of Provisional Application of GATT 1947, and the various access protocols, any cp can withdraw from GATT 1947 after sixty days notice.

In terms of the Vienna Law of Treaties, a treaty will be deemed to be terminated, if all parties to it enter into a subsequent treaty on the same subject matter, and the provisions of the latter or otherwise it becomes clear that the parties intend on the subject to be governed by the latter treaty.

But to the extent they are compatible, under general rules of international law on successive treaties on the same subject, earlier treaties would continue to apply.

The WTO's dispute settlement understanding suggests that its procedural and substantive rights would apply in respect of GATT 1994 and its rights obligations from the date of WTO entry into force, and earlier disputes among parties continuing to be governed by GATT 1947 and/or the Tokyo Round agreements.

Unless there is some agreed decisions within the WTO on these issues, and how countries should deal with it, atleast during the transition period of two years envisaged, the multilateral trade framework could become even more complicated.

Also to be decided are the committees and subsidiary bodies and procedures of the GATT 1947 which would be continued under the WTO, under the GATT 1947 or Tokyo Round agreements only or under both.