OVERVIEW

CONFIDENTIAL

6. AT INDIAN REQUEST, THE PREPCOM ENGAGED IN A GENERAL REVIEW OF #ITS WORK TO DATE. DEVELOPED COUNTIES (DCS), LED BY THE US, WERE GENERALLY POSHTINE AND ANXIOUS TO BEGIN DRAFTING A MINISTERIAL DECLARATION. THE US STRESSED THAT ITS INTEREST IN NEW SUBJECTS COMPLEMENTED THE IMPORTANCE T ATTACHED TO THE IMPROVEMENT OF EXISITING DISCIPLINES ON, FOR EXAMPLE, SAFEGUARDS, QUANTATIIVE RESTRICTIONS AND AGRICULTURE.

7. HARDLINE LDCS (BRAZIL, ARGENTINA, HINDIA) STRESSED DIVERGENCES AND REITERATED THEIR PRECONDITIONS FOR NEGOTIATIONS. BRAZIL AND INDIA STRESSED THE LINKAGE WITH THE RENEWAL OF THE MFA. BRAZIL (BATISTA) REPEATED ITS INSISTENCE THAT PRIORITY SHOULD BE GIVEN TO ENFORCING EXISTING GATT RULES. DECISIONS TO LAUNCH A ROUND OR TO INCLUDE NEW SUBJECTS COULD ONLY BE TAKEN BY CONTRACTING PARTIES.

8. DUNKEL SAID THAT THE GATT SECRETARIAT WOULD CONTINUE ITS CONSULTATHONS BUT WAS NOT YET READY TO TABLE A DRAFT DECLARATION.

PHASE 2

9. DUNKEL SAID THAT THE NEXT PHASE OF THE PREPCOM'S WORK WOULD FOCUS UPON THE TERMS AND CONTENT OF THE MINISTERIAL DECLARATION. HT WAS THEME TO IDENTIFY THE SPECIFIC OBJECTIVES OF THE NEGOTIATIONS AND WHICH SUBJECTS SHOULD BE INCLUDED IN THE ROUND. HE CALLED FOR DEBATE ON THE SUBJECTS UPON WHICH THE SECRETARIAT HAD PRODUCED PAPERS (THE

PREPCOM SERIES).

STANDSTILL AND ROLLBACK

10. A PROLONGED DEBATE CLARIFIED AREAS OF DIFFICULTY BUT BROUGHT NO ADVANCE IN POSITIONS. IT ESTABLISHED THE LINKAGE BETWEEN STANDSTILL AND ROLLBACK WITH THE EC AT ODDS BOTH WITH THE LDCS AND THE US ON ROLLBACK. DISCUSSION WAS DOMINATED BY SUSTAMINED EC CRITICHSM OF THE HARDLINE LDC TEXT (PREPCOM (86) W/3), PARTICULARLY HITS ROLLBACK PROPOSAL RELATIVE TO TEXTILES. THE LATTER PROVOKED A LENGTHY DISCUSSION ON THE RENEWAL OF THE MFA WHICH EMPHASISED ITS LINKAGE WITH THE NEW ROUND. HARDLINE LDCS DEFENDED THEIR POSITION ROBUSTLY.

11.

OTHER DCS, WHILE AVOIDING DIRECT CRITICISM OF THE LDC TEXT, RESTATED FAMILIAR POSITIONS AT VARIANCE WITH IT. THE US REPEATED THAT IT WAS READY TO GO BEYOND HITS 1982 COMITTMENTS AND PHASE OUT MEASURES INCONSISTENT WITH THE GATT BY THE END OF THE ROUND.

SAFEGUARDS

12. THE DISCUSSION REPEATED LONG-STANDING DIVISIONS BETWEEN THOSE (MOST LDCS) WHO INSIST ON AN EFFECTIVE SAFEGUARD CLAUSE INCORPORATING THE MFN PRINCIPLE AND THOSE (NOTABLY EC) FAVOURING SELECTIVITY. THE EC (TRAN) LED THE DEBATE BY TACKLING THE CORE

CONFIDENTIAL

|PROBLEMS

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