Free trade regime in fetters

Internecine wrangling in Europe and the US has hindered the establishment of the World Trade Organisation, which intends to bring about a sea-change in international commerce

Published: Tuesday 15 November 1994

-- The fate of the ratification of the World Trade Organisation (wto), the successor to gatt, seems to hang in the balance. The us government is still struggling to ratify the Uruguay Round by the January 1, 1995, deadline to facilitate the establishment of the wto, which will dramatically change the contours of world commerce by huge tariff cuts and freer trade. The European Commission is vying with the 12 member states of the European Community (ec) for control over trade in the new regime.

The Commission expects to be the ecJ's sole negotiator on trade issues at the wto. However, the member states, particularly France, are pressing for an independent identity on issues such as financial services, intellectual property rights -- and especially on the newer areas of environment and social policy into which the wto is likely to venture.

Hoping for a resolution, the Commission took the issue to the European Court of Justice (ecj) last April. According to The International Herald Tribune, the court officials indicate that a decision would be taken by November 15. Optimistic observers believe that this would pave the way for the European Parliament and member states to ratify the Uruguay Round on schedule.

Germany, the current holder of ec's presidency, however, posits an alternative solution. It has proposed a code of conduct that will allow member states a voice in the wto only if all attempts to reach a consensus with the Commission fail. But disagreements and doubts have driven a wedge between the ec countries. Spain feels that the code would concede too much to the Commission, while Belgium fears quite the reverse.

Officials of the Commission, however, tend to underplay the dispute as they expect the ec to rule in their favour. Many countries are, nevertheless, waiting to see whether the deadline is met by the us and Europe, where the European Parliament must endorse the accord alongwith the parliaments of the 12 ec member states for the accord to be ratified.

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