Biggest trade pact set for signing

PARIS (AFP): More than 120 countries are to gather in Morocco next week to sign the world's most comprehensive trade liberalization agreement since GATT came into being in the aftermath of World War II.

The new pact encompasses for the first time services, intellectual property, agriculture and textiles. The signing is to take place in Marrakesh between April 12 and 15.

The agreement is the outcome of seven years -- three more than originally intended --of marathon negotiations known as the Uruguay Round, since they began there at Punta del Este in 1986. They ended in Geneva last December, marked right up to the end by clashes between the United States and the European Community (European Union).

GATT was negotiated in 1947 as a temporary general agreement on tariffs and trade and came into effect on Jan. 1, 1948, with the aim of promoting freer trade and non-discrimination among trading partners.

Now it is being turned into a permanent World Trade Organization to become a mainstay of international economic relations alongside the World Bank and the International Monetary Fund.

The new body was not on the drawing-board at Punta del Este. Neither were the cuts in customs tariffs of at least 40 percent which have been agreed to, since the original target was a reduction of just one-third.

GATT's half-century of existence has seen customs duties go steadily down from 40 to five percent on average.

Consumption should be boosted as a result, consolidating economic upturn in Europe and Japan and growth in America.

Growth

Once fully operative, the new arrangements will bring extra worldwide growth of between US$230 billion and $270 billion over a decade, the Paris-based Organization for Economic Cooperation and Development has calculated.

The big novelty of the Uruguay Round is its general agreement on trade in services, covering a sector worth more than $3,000 billion a year.

Conflicts of interest involving the United States, the European Union and Japan meant, however, that some of the negotiators' early ambitions had to be reined back.

Citing cultural factors, the Europeans have avoided really opening up their audio-visual market, despite U.S. insistence. The two sides came together, however, in banking and insurance to impose a reciprocity clause, keeping Asian firms out for 18 months until sufficient concessions have been made.

Another innovation, concerning intellectual property rights, regulates copyrights and patents to protect industrialized countries against a rash of counterfeits.

The new agreement strengthens procedures for settling commercial disputes, speeding up the process and giving decisions more bite. Antidumping measures have been toughened.

For the first time an attempt has been made to tackle the thorny issue of farm subsidies. A compromise between the United States and the European Union says subsidized agricultural exports are to drop 21 percent in volume.

Under a multi-fibers arrangement for textiles, developing nations will have to wait l0 years for the industrialized world to dismantle its protectionist barriers.

The World Trade Organization, due to start up next year, is to police implementation of the Uruguay Round decisions and supervise settlement of trade disputes.