Bilateral accords no concern of others!

by Chakravarthi Raghavan

Geneva, 18 April 2001 - - The United States contended in effect Wednesday that a bilateral agreement between two members to reach an agreed solution to their trade problems in the textiles and clothing sector, and which did not affect trade of other countries, was of no concern to others.

The Council for Trade in Goods (CTG) was considering Wednesday on a request by seven developing countries that the CTG exercise its ‘oversight’ function under the Agreement on Textiles and Clothing, and consider the US-Turkey bilateral agreement for Turkey restraining its exports to the US, and which the Textiles Monitoring Body (TMB) has said is not based on or justified by any of the ATC provisions.

While the restrictions had been notified in the US Federal register, both Turkey and US, have not notified the WTO, and beyond the bland statement that their bilateral agreement is in accord with the WTO, the two have not acceded to the request from the TMB and provide the justification.

The issue had been brought up before the CTG by Colombia, Costa Rica, India, Indonesia, Pakistan, Peru and Hong Kong China. These countries had asked the CTG to exercise its oversight functions in relation to the TMB and its supervision/administration of the ATC.

The complaint of these countries was supported by Malaysia, Korea and Brazil.

The United States said the complaint was ‘bizarre’, and that it was a bilateral voluntary agreement between Turkey and the US and concerned only the trade between them and provided for an agreed solution. In the US view, the agreement did not affect other countries, and was not a systemic issue to be raised thus.

In the US view, no country had shown that the mutually agreed settlement between Turkey and the US had harmed the trade interests of others. The issue should not hence be considered by the CTG, but could at best only figure in the mandated review by the CTG before the completion of each stage of implementation.

India however challenged the US view that the voluntary accord could not be a systemic issue, and underlined that in terms of the WTO and GATT, ‘nullification and impairment’ did not require actual trade damage. Also, the CTG’s specific mandate under Art.8.11 for a major review before end of each stage of implementation, did not preclude its functions of general oversight role of subordinate bodies, and specifically of the ATC and the requirements for transparency.

On the issue of the extension of time sought by countries in respect of their obligations under the TRIMS agreement, the chairman said further consultations were needed to find an overall solution to the issue.

The Philippines reiterated its readiness to discuss bilaterally, plurilaterally and multilaterally its difficulties in implementing TRIMS.

The US raised a complaint against the Philippines, and the dispute has been referred to a panel, but the constitution of the panel and hearings have been held up, pending further consultations between the Philippines and the US, with the US agreeing not to ask the WTO DG to constitute the panel, by naming panellists.

In other comments, Malaysia said that the 2 years + 2 years formula for extension (that has been mooted, but on a case-by-case basis) should be made available to all countries who have requested extensions.

Pakistan, Thailand and Hong Kong China supported the formula.

But the US said it was looking forward to an amicable and satisfactory solution, based on specific cases.

The CTG also discussed a request for waiver from Switzerland for the trade preferences it was giving, effective 1 April 2001 and for a period of three years, to Albania and Bosnia-Herzegovina - giving them the status of least developed countries for duty free access to Swiss markets for all industrial products, and most agricultural products.

The Swiss request was supported by Canada, the EU, Malaysia, Hungary, Slovenia, Peru, the Czech Republic, Turkey and Norway. Argentina and Australia said they would not block a consensus.

The United States, while expressing support, however said that it would be submitting questions to Switzerland on its preferences, and could not agree to the waiver request at this meeting.

The CTG agreed to revert to the issue at its next meeting in July. – SUNS4879

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

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