for its efforts which were then greatly setback by the OECD policies of monetarism, high interest rates and the policyinduced recession, all of which greatly exacerbated the Third World debt crisis.

However, from the point of view of the US and other leading industrialized countries, checkmating the South over the New International Economic Order and maintaining the status quo were not

enough. In the economic arena, after the "adjustment" forced on the Third World via the IMF and World Bank, the US sought to restructure international economic relations on the basis of a US agenda. While there may be some conflicts of interest between the US, Europe and Japan, they have a shared interest in achieving changes to the trading system to stem rising competition from the Third

GATT: A Brief History

On September 20, 1986, at the Uruguayan seaside resort of Punta del Este, ministers of contracting parties to the General Agreement on Tariffs and Trade (GATT) launched the Uruguay Round of Multilateral Trade Negotiations (MTNs), the eighth under GATT auspices.

GATT originally came into being as a temporary arrangement in 1948, largely on the initiative of the US which saw "free trade" as one of the pillars of the post-War order. The U$ envisaged the establishment of an International Trade Organization (ITO) within the UN system as a logical complement to the International Monetary Fund and the World Bank which were set up after the 1944 Bretton Woods conference. The ITO would have responsibility for applying "free trade" principles, laying down rules and arbitrating trade disputes. The "Havana Charter", drawn up at an international conference on Trade and Employment held on the instigation of the UN Economic and Social Council in Havana from November 1947 to March 1948, would have set up the ITO. But although signed by 56 countries, the Charter was never ratified. The US Congress saw the scope of the Havana Charter, which included provisions for the regulation of all restrictive trading practices, trade in staple commoditiesand the movement of capital, as infringing the rights of the US Government to decide US trade policy. Without the support of the US the Charter was still-born.

While the final form of the Havana Charter was still being discussed, a group of 23 countries met in Geneva at the Preparatory Commission of the UN Conference on Trade and Employments Following an initiative from the US, the 23 countries extracted the part of the Charter which provided for the establishment of the ILO which was rewritten to become the General Agreement on Tariffs and Trade. Today only GATT survives from these tortuous

trade negotiations. Recognized de facto as an independent body within the UN, GATT has remained for 40 years a provisional treaty — a contract among governments acceding to it, but not a definitive treaty with its own institutional arrangements. The 98 member countries ("contracting parties") of GATT control 90 per cent of the world's $3 trillion annual trade.

The seven completed "rounds" of multilateral trade negotiations have had as their main objective "the substantial reduction of tariffs and other barriers to trade", one of the principle aims laid down in the General Agreement. The Uruguay Round negotiations, however, are much more ambitious than the previous rounds and encompass many issues beyond the traditional ones dealing with duties and tariffs. It involves renegotiating the rules and principles governing international production and trade, and includes the movement of capital, the rights of foreign investors, the development of technologies, and the trade in and production of services.

One hundred and five countries (including observers) have participated in the Uruguay Round negotiations, and 1,500 negotiation propositions and working documents have been presented. The Round will close with a ministerial conference to be held in Brussels from the 3rd to 7th December, 1990.

Patrick McCully

1. Australia, Belgium, Burma, Canada, Chili, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxembourg, the Netherlands, New Zealand, Norway, Pakistan, South Africa, Sri Lanka, the United Kingdom, the United States and Syria. Most of the information in this article is taken from 'On the GATT, Uruguay Round, and Agriculture', GATT Briefing, No. 1, June 1990. GA TT Briefing is a series of 10 bulletins on the Uruguay Round produced by the European NGO network, RONGEAD, 14, rue A. Dumont, 69372 Lyon Cedex 08, France. Tel. 78.61.32.23. Fax. 78.69.86.96.

World. The US agenda in the Uruguay Round should also be seen against the background of the present state of the world economy and the predicament of the US which, after being in a position of dominance for well over four decades, now feels its hegemony threatened.

Double Standards It is important to understand that not all economic sectors share the same view of liberalization in the US or other industrialized countries. The manufacturing sector, and particularly those older industries which are not involved in the new high technologies, has been suffering from rising competition from the Third World. Thus, industrial capital engaged in traditional sectors wants to draw up protectionist walls around its countries, but finance capital wants to expand by breaking down walls in other countries. This conflict is reflected in the approach to new themes and traditional ones: "free trade" in the new areas and "managed trade" in the traditional sectors.6

GATT was not chosen for this purpose by accident. Third World countries are weak inside GATT, where they only have a tenuous informal group of "less developed contracting parties" which meets from time to time to exchange information, and occasionally presents a joint paper or statement. This is in contrast with the major trading nations who, despite their mutual differences and trade quarrels, have always been aware of their general common interest against the South. The US, EC, Japan and Canada meet regularly to discuss trade issues at so-called quadrilateral meetings and industrialized countries as a whole co-ordinate their positions at the OECD. With very rare exceptions for ceremonial purposes, all GATT meetings are behind closed doors, hidden away from the obtrusive presence of the media or consumer organizations and other public interest groups. However, major TNCs and their lobbying organizations often attend such meetings as "advisors" to their delegations.

In theory, all contracting parties to GATT are equal, and GATT's consensus decision-making process appears to be democratic. But in practice when the weaker trading countries have tried to assert themselves, they have been ignored or told that the countries with the largest share of world trade have more at stake in the trading system and its rules, and so their views should prevail.

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The Ecologist, Vol. 20, No. 6, November/December 1990
Transnationalization

Through the Uruguay Round, the US is attempting to incorporate into the GATT framework intellectual property rights, services and investments — areas of economic activity and relations that are not strictly "trade" issues and whose legitimacy for inclusion in GATT has been sought by prefixing the words "trade", "trade in" or "trade-related" before them. I f the US-led effort succeeds, Third World countries may find themselves obliged to reduce or eliminate conditions regulating the investments and operations of foreign companies on their territories — in mining, manufacturing, and services such as banking, insurance, transport, wholesale and retail trade and professional services like accounting, advertising and legal practices. Under penalty of retaliatory measures against their exports, Third World countries would also be obliged to introduce laws protecting and enhancing patents and other industrial property rights. As a result, Third World consumers could find themselves paying higher prices for products such as essential drugs.7 Even the traditional rights of their farmers to store seed from their harvest for the next season or to breed cattle could be in jeopardy.8

The Uruguay Round could advance the process of the transnationalization of the world economy to an extent where it

"In economic and social

terms, Third World countries and their peoples could be said to be on the point of being

rolled back to the

colonial era."

would not be easily reversible. It could divide the world between the "knowledge-rich" and "knowledge-poor", with the latter permanently blocked from acquiring the knowledge and capacity to be rich. In economic and social terms, Third World countries and their peoples could be said to be on the point of being rolled back to the colonial era. Third World governments would not only be unable to act to advance the economic well-being of their peoples, but would be obliged to protect the interests of TNCs and foreign enterprises and foreign nationals against their own peoples. Governments of independent countries in the Third World would thus be left doing what the metropolitan powers did during the colonial days.

These far-reaching effects may not come about. Much still depends on how the Third World countries act in the remaining period of the negotiations, individually and collectively. But time is running out on them.

References

1. For further analysis, see Lipson, C , Standing Guard, University of California Press, 1985. 2. Panikkar, K.M., Asia and Western Dominance, George Allen and Unwin, 1953, pp.42-43. 3. UN General Assembly Resolution 3281 (XXIX), 12 December 1974, A/9631, pp.50-55; Sauvant, K., Collected Documents of The Group of 77, Vol V, Oceana Publications, pp.567-572. 4. See Kelkar, V., 'On the Reforms of the International Trading System', UNCTAD mimeo, 1986, paras 28-30. 5. Ibid, paras 27-29. 6. * Limit Free Trade with Japan, US is Advised', International Herald Tribune, 25 Feb., 1989; 'US May Reverse Free Trade for Japan', International Herald Tribune, 3 Mar., 1989. The managed trade approach in economic relations with Japan has been advocated in the US by the highlevel private sector business advisory group, headed by the chairman of American Express Company, James D. Robinson III, who is spearheading the drive for free trade in services. 7. The abuse of process and product monopolies in the area of drugs was brought out in the UK in an inquiry by the Monopolies Commission. Until the early 1970s, Italy provided no protection for drug patents, with the result that drug prices in Italy were lower than in the UK. The inquiry found that the British National Health Service was being charged about 40 times the prices at which alternatives could be bought in Italy for ingredients used in two commonly used tranquilizers, Librium and Valium. On the recommendation of the Monopolies Commission, the UK government ordered Roche Products, a British subsidiary of Hoffman La-Roche AG of Basel, to cut its selling prices by 60 to 75 per cent and refund $27.5 million to the National Health Service for overcharging. (Cited in Patel, S.J., 'Indian Patent's Act: Implications of Controversy', Mainstream, 18 February, 1989, pp.12-13). 8. Mooney, P.R., 'Biotechnology and the North-South Conflict', in Biotechnology Revolution and the Third World, Research and Information System for the Non-Aligned and other Developing Countries (RIS), New Delhi, 1988, pp.268-269.

• The Best Book to Read on the Uruguay Round •

RECOLONISATION: Gatt, the Uruguay Round and the Third World

by Raghavan Chakravarthi foreword by Julius Nyerere

Recolonisation is the only available book on the Uruguay Round written from a Third World perspective. It exposes how the industrial countries and their TNCs are attempting to expand their control of the world economy, especially by the introduction of services, foreign investments and intellectual property rights into the ambit of GATT.

Published by the Third Worid Network. 319pp.

A Send cheque and orders to WEC Books, Worthyvale Manor, Camelford, Cornwall, PL32 9TT, England. Price

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A US readers can send cheque and orders to: Michelle Syverson & Associates, 1442 A Walnut Street, Suite 8, Berkeley,

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A A Spanish edition of the book, Un GATT sin cascabel, is available from: Third World Institute, Miguel del Corro

1461, Montevideo

11200, Uruguay.

The Ecologist, Vol. 20, No. 6, November/December 1990

Other Third World Network Books

Available From WEC Books TOXIC TERROR: Dumping of Hazard­

ous Wastes in the Third World A dossier of documents and clippings reloted to toxic wastes end

their export to the Third World. It gives recommendotions on what

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