RI against inclusion of social clause in world trade agreement

JAKARTA (JP): Indonesia is opposing industrial countries' efforts to link trade with labor conditions in the General Agreement on Tariffs and Trade (GATT) that will be signed in Morocco next week.

"Indonesia, like other developing countries, is concerned over efforts to link trade and labor, which will be counter- productive," Foreign Minister Ali Alatas told reporters here yesterday.

The United States and France have agreed to push for clauses on labor conditions to be included in the planned trade agreement, which will be finalized at a formal meeting of GATT ambassadors at their April 12-15 meeting in Marrakesh, Morocco.

"The efforts are not productive because they are forced while the Marrakesh meeting is expected to merely endorse what has thus far been achieved," Alatas said.

He said the meeting should only clean up the text of the December agreement, instead of introducing additional clauses.

Meanwhile, Reuters quoted senior diplomats and negotiators as saying in Geneva that the dispute over links between trade and labor conditions overshadowing the world trade summit are close to a solution.

Compromise

They said a compromise on the issue, which has pitted the United States and France against developing countries, was likely to be finalized at a formal meeting of GATT ambassadors later on Thursday.

"We have to keep our fingers crossed but I believe we have a solution that preserves everyone's rights and interests," a senior Asian envoy from ASEAN told Reuters.

Andrew Stoler, acting head of the U.S. mission to GATT, the General Agreement on Tariffs and Trade, said he hoped an agreement would emerge from the ambassadors' meeting called by the world trade watchdog's Director General, Peter Sutherland.

"But nothing is in the bag until it is in the bag," Stoler said. "I can't say right now that there is a deal, but I definitely hope so."

A European official said the outlines of a compromise had emerged at an informal meeting of trade envoys chaired by Sutherland late on Wednesday. "My guess is he will come forward with a solution later today (Thursday)," the official said.

Washington has been insisting that the trade-and-labor link -- which developing countries fear could lead to tariffs on their goods -- be put on the agenda for the World Trade Organization (WTO) at the meeting in the Moroccan city.

At the April 12-15 gathering, foreign and trade ministers from 121 countries and territories are to sign the final act of the seven-year Uruguay Round, completed last December cutting trade barriers and setting up the WTO.

The meeting had been intended as a triumphal finale to the long negotiations, whose outcome is widely seen as offering a major boost to the world economy. GATT analysts say its wide- ranging accords -- which will open up lucrative markets for farm produce, textiles and services -- amount to an overall cut in tariffs on industrial goods of around 40 per cent.

Declaration

The ministers are due to issue a declaration committing their countries to work for a new-shape international trade system, administered by the WTO and based on market economics, aimed at eliminating poverty and promoting development.

But the labor issue, raised by the United States late in March, has threatened to dampen the celebrations and focus attention on a problem that divides rather than unites developing and developed countries.

It also seemed likely to derail the establishment at Marrakesh of a Preparatory Committee, to begin planning the organization and work of the WTO -- which will absorb the 46-year-old GATT.

U.S. officials demanded, against fierce resistance from developing countries, that wording be agreed for the declaration and the PrepCom mandate effectively linking lower workplace standards and labor costs in many poorer states with the price of their goods on world markets.

Negotiators from Asia, Africa and Latin America saw this as camouflage for a desire in industrialized states, where labor unions fear the effect of greater competition on jobs, to establish new protectionist barriers. (07/riz)