New Delhi, Aug 20: India's ambassador to the World Trade Organisation S Narayanan will start the process of consultations with the European Union in Geneva on Thursday on phasing out of quantitative restrictions on imports over a mutually acceptable time-frame.

Consultations will also he held on the same issue on the following day with other trading partners like the US, Australia and other countries in line with the WTO procedures which encourage discussions among its member-countries for sorting out disputes. These discussions, earlier scheduled for next month, have now been advanced by two or three weeks, official sources said.

If no agreement is reached during the discussions, WTO will set in motion a panel to decide the issue. The recommendations of the three-member panel will be binding on the contending parties.

The move for consultations follows the stalemate over discussions at the WTO balance of payments committee meeting in Geneva from June 30 to July 1. Then, the US, EU and Australia had threatened to drag India to the dispute settlement body of the US for persisting with a six-year period for removing the restrictions. The earlier meeting from June 10 to June 11 in Geneva to consider India's phase-out plan over a period of nine years remained inconclusive. The committee's chairman, therefore, decided to suspend the meeting till June 30.

The divergence of opinion among the member-countries on a nine-year time frame proposed by India resulted in the talks remaining inconclusive.Some delegations expressed the view that India should immediately disinvoke use of BoP provisions of Gatt, 1994, and indicated that they could accept a much shorter transition period of two to three years for removing these restrictions. During the informal discussions at the July round, India indicated that with a view to reaching a satisfactory settlement, it would even agree to a phase-out period of six years, as suggested by the BoP committee chairman, if there were to be an agreement provided the elimination of quantitative restrictions was to be in two phases of three years each.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.