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S Venkitachalam
New Delhi, Sept 19: India has conveyed to the World Trade Organisation its serious concern over what it calls the "unilateral" trade measures resorted to by stronger nations against weaker ones with the avowed objective of gaining market access.
These unilateral measures under national laws of advanced countries may increase in the future and strain the multilateral trading system, India has warned in a paper submitted to the WTO General Council preparatory to the third ministerial conference in Seattle in November.
Citing instances of unilateral trade measures, the paper says that the US had recently instituted measures prohibiting imports of shrimps from some countries if they were not caught in vessels using turtle-excluder devices. The WTO panel and the Appellate Body had ruled that the measure was illegal under WTO law and recommended that the US bring the measure in conformity with its obligation under the WTO within a timeframe.
Yet another instance is the attempt by the US and the European Unionto impose concessions under the Generalised System of Preferences (GSP) subject to the recipient countries committing to comply with certain environmental/labour standard norms. This, the paper notes, is in violation of the enabling clause of Gatt relating to GSP which clearly sets out that GSP must be non-discriminatory, non-reciprocal and generalised.
The GSP seeks to permit duty-free entry of goods emanating from developing countries, facilitating greater market access.
The establishment of WTO and the operation of the strengthened dispute settlement process under it does not seem to have ended the era of unilateral trade measures, bringing the multilateral trading system under permanent threat from the actions of some developed countries.
"Unilateral trade measures do not make economic sense as they are fundamentally against the theory of free trade and comparative advantage and they are clearly indefensible", the paper maintains. Further, unilateral trade measures do not find any sanction orjustification in international law or indeed in Gatt/WTO.
In general, a unilateral measure can take either the form of a threat to withhold some benefit or to withdraw a benefit previously given in the general framework of international law.
The paper argues that any threat or initiation of a unilateral measure is violative of Article 2 of the UN Charter which prohibits use of force or the threat thereof against the political independence or territorial integrity of any state or in any other way inconsistent with the objectives of the UN.Unilateral trade measures will seriously erode the security and preditability of the commitments undertaken by countries with each other.
Clearly, this was not the intention of the framers of Gatt nor does it meet the chief objectives of Gatt as it evolved till the conclusion of the Uruguay Round.
The Uruguay Round and the dispute settlement mechanism were specifically aimed at reducing, if not eliminating altogether, the threat of unilateral trade measures.Countries which maintain national laws authorising unilateral trade measures are, therefore, in clear violation of their obligations under the WTO agreement.
In fact, when the strengthened dispute settlement mechanism was sought to be "sold" to developing countries, the argument advanced was that this was a quid pro quo so that their stronger trading partners would henceforth deal with all their legal claims within the WTO and not resort to unilateral trade measures.
These unilateral trade measures are legally indefensible for the terms of negotiations are set entirely by the party taking measures on the basis of what it considers to be "unfair".
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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