by Chakravarthi Raghavan

Geneva, 3 Nov 99 -- After some prolonged 'green room' consultations, trade negotiators still seemed far apart Wednesday morning on two crucial issues for Seattle: the implementation issues and the framework for further negotiations on agriculture.

Such a situation is not unusual in any trade negotiation, with the Seattle meet just 27 days away. Chairman of the WTO General Council, Amb. Ali Mchumo had originally said a draft Ministerial Declaration should be readied by this week, to enable governments to consider them in capitals. But this target appears to have been put off till about 14 November.

In agriculture, according to trade diplomats, the US and Cairns group on the one side and the EC and other proponents of 'multi- functionality' of agriculture on the other, have been proposing formulations in the 'consultations' that the others were rejecting.

Japan, among others, insisted that it would not 'negotiate' here or at Seattle the outcome of the agriculture negotiations, and would not go beyond the framework for 'continuation of the reform process', set in Art 20 of the Agreement on Agriculture (AoA).

The consultations are expected to be resumed later this week, with probably the secretariat trying to formulate a new formulation.

There has been a similar stand-off on the 'implementation issues'. The developing countries have formulated proposals for decisions at Seattle on a range of questions for setting right the imbalances in the Uruguay Round accords that have come to light, and the lack of expected benefits to developing countries, and for a Ministerial decision to address and resolve by end 2000 other 'implementation' issues and correcting the imbalances.

The US has been insisting that it could not agree to make any changes in the rules of the Uruguay Round agreements. The EC seemingly more supportive, insists that while some decisions (including perhaps extension of some transition periods) could be envisaged, all the issues and problems raised should be part of a new 'comprehensive round' and a single undertaking, and not amenable to General Council addressing them and finding solutions by end 2000.

But several developing countries have said that without progress and agreements on implementation, they would not be able to agree to anything else.

Meanwhile, the informal heads of delegations meeting Tuesday discussed the issue of 'market access for non-agricultural products', an euphemism for negotiations on 'industrial products', and this too showed some considerable divergences.

Some developing countries said they were not ready to agree to this, while some others belonging to the Cairns group said any reduction of tariff and non-tariff barriers on industrial products was contingent on agriculture reforms and tariff reductions.

Brazil, while not opposing the 'non-agricultural' product negotiations, said that as far as it was concerned, any harmonization of tariffs had to involve conversion of specific duties into ad valorem duties.

While specific duties are found in tariff schedules of many, the developed countries, which often speak of their average low tariffs, have been using it in a manner that it reduces access to exports of developing countries, and is often very high when translated into duty based on value of imported product.

The Council Chairman's text of 19 October had six paragraphs on this subject, under items for negotiations. These called for:

* comprehensive market access negotiations covering all 'non- agricultural products';

* for reduction of tariffs - with alternatives in shape of x % reduction, target amount of overall reduction higher than in Uruguay Round (UR) - with the objective of substantial improvement of access; aiming at broadest possible liberalization by substantially reducing or eliminating tariff peaks and tariff escalation particularly for products of interest to developing and least developed countries; increasing transparency and predictability by (among others) expansion of tariff bindings, harmonisation and simplification of tariffs;

* addressing also non-tariff measures affecting market access, and aiming at reduction or elimination of such barriers.

In a square brackets within this square-bracketed text, are formulations to address horizontal issues such as anti-dumping measures, customs valuation, import licensing, rules of origin, safeguard measures, subsidies, product safety etc:

* for modalities for conduct of these negotiations to be set, with various alternative formulations for these;

* procedures and specific time frames as well as for implementation of results; and

* for taking account of special needs and conditions of developing country members, including LDCs.

In various comments at the informal HOD, New Zealand wanted to bring specifically into the non-agricultural product negotiations, the APEC called for accelerated trade liberalization and a zero-to-zero duty in some ten sectors. The US in addition, wanted the ITA-2 -- extending the tariff liberalization to zero on a new range of so-called information technology products. The negotiations for ITA-2, on which the deadlines have been long past, is deadlocked on the coverage.

The US also wanted that both agricultural and non-agricultural products for market access should be one category, a view rejected by the EC later.

Argentina and some other Cairns group members (a grouping of agricultural exporters) said the issue of industrial tariffs was an area they could discuss, but insisted that it would be linked to agricultural liberalization talks. Also, there should be specific focus on export products of interest to developing countries.

Canada, Japan, Norway, Korea, Australia and Hong Kong supported industrial tariff negotiations, and so did Australia and Hong Kong China. Uruguay stressed the importance of agriculture negotiations and its link to the non-agricultural products issue. The S&D issue had to be made operational and products of special interest to developing countries should be covered.

Kenya on behalf of the African group said they were not yet in a position to express their preferences to one or the other of the formulation, but said the reduction or elimination of tariff peaks and tariff escalation was a priority. They also reserved their position on modalities.

South Africa, supporting Kenya, said the negotiations must focus on problems of developing countries. The concept of restructuring applied both to the developed and developing countries, and the developed countries should undertake restructuring and facilitate transfer of production in their mature industries.

Egypt said the industrial tariff negotiations was not among the mandated negotiations and the focus should be on implementation and the built-in agenda.

India said they wanted to reflect on the US proposal to put both industrial and agricultural tariffs into one basket for liberalisation. On ITA-2, they had not so far seen any proposal and could not agree to its inclusion now.

Colombia wanted the level of ambition on industrial tariffs be parallel to those on agriculture.

Brazil said both tariff peaks and tariff escalation should be addressed. For Brazil, transparency and predictability and security, and harmonization involved also specific duties and their conversion into ad valorem duties.

Barbados and Uganda said they were unable to assume any more obligations and could not accept industrial tariff negotiations.

In summing up the discussions, Mchumo said that while some members had favoured the inclusion of the item, others had opposed it, and yet others wanted it to be linked to agriculture.

The HOD also discussed the issue of fish and fisheries, with a few countries wanting it to be addressed specifically, and a number of others wanting the issue of the fish and fishery subsidies to be dealt with as part of the subsidies agreement review. (SUNS4544)

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

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