by Chakravarthi Raghavan

Geneva, 5 Apr 2000 -- Consultations in the Goods Council of the WTO over the requests for extension of time-periods under the Trade-Related Investment Measures are to continue, but in the context of the consultations being held by the WTO Director-General Mike Moore and the Chair of the General Council in line with the decisions in February (as a follow-up to Seattle) on the implementation issues.

The Goods Council at its meeting Wednesday discussed the requests for extension of time put forward by the Philippines, Mexico, Colombia, Malaysia, Pakistan, Rumania and Chile.

Most of the requests relate specifically to the automotive industry, but that of Colombia involves the food-processing industry.

(A report in the SUNS 4602 had erroneously identified Indonesia as among the countries who have sought extension of implementation period for TRIMS in respect of the automobile industry).

Since the requests were put in, and the General Council's wider consideration of the issues arising from the failure at Seattle, and the expiry of time-periods for implementation for some of the agreements, the US, EC and Japan have addressed some detailed (and almost insulting) questions to the applicants over the TRIMS, and the steps they had taken.

In the discussions at the Council, the chairman of the Council noted the two-track approach under way - individual bilateral consultations and the multilateral approach to find a solution, in consultations being held by the Director-General and the chairman of the General Council.

Pakistan said it was of the firm view that a multilateral solution should be found by extending the TRIMS deadlines. Consideration of the issue in the Goods Council should be postponed until a decision in the General Council. Mexico too seemed to take the same position, preferring a solution in the framework of the General Council. Brazil also supported a multilateral solution, seeing it to be a better approach than bilateral consultations.

The United States said it was interested in resolving the problem, dealing with each request. This would enable a determination of the individual needs of countries seeking an extension. It had taken part in a number of consultations with the 8 countries and was willing to continue the dialogue. Some of the members had been more responsive to the questions than others, the US said.

Japan also said that it had not received adequate answers to the questions posed by it and said answers were needed to enable Japan to take a decision.

On the question of the general review of the TRIMS agreement, Pakistan said that it attached importance to this review. At the end of the Uruguay Round, the developing countries did not have enough experience of the various aspects of the agreement. But in the five years since the WTO, they had now some experience and the agreement should be reviewed from this light. Pakistan also thought that UNCTAD should be asked to undertake a study on the effect of TRIMS on developing countries, focusing on problems faced by them in eliminating TRIMS, and the effect of eliminating performance requirements on economic development.

The United States however insisted that the review should not result in diluting the TRIMS obligations, but should rather move to enhance it. Nor should the review deal with competition policy, at this stage as these were being considered by a working group on trade and competition policy.

[Article 9 of TRIMS requiring a review, says that in the course of the review the Council for Trade in Goods "shall consider" whether the Agreement should be complemented with provisions on investment policy and competition policy. At the time of the Uruguay Round, developing countries had contended that the TRIMS measures in place in their countries were to counter the anti-competitive 'investment' and restrictive practices of the TNCs, and the only TRIMS they were agreeable to were those already falling foul of Art.III of GATT. But the WTO panels have expanded the obligation by interpreting the reference to Art. III of GATT in TRIMS to mean 'substance' of Art III. This has given rise to a demand from civil society for a rollback of the TRIMS.] (SUNS4643)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

[c] 2000, SUNS - All rights reserved. May not be reproduced, reprinted or posted to any system or service without specific permission from SUNS. This limitation includes incorporation into a database, distribution via Usenet News, bulletin board systems, mailing lists, print media or broadcast. For information about reproduction or multi-user subscriptions please contact < >