The Uruguay Round is in crisis as a result of the continued deadlock on agriculture. There are grave fears that the Round will fail - unless a breakthrough on agriculture is achieved in coming weeks. The remaining differences appear neither extensive nor insurmountable, but their resolution requires the exercise of political will by world leaders. It is essential that G7 leaders demonstrate that will, their leadership and their joint responsibility to unblock the negotiations. The Cairns Group is willing to play its part in searching for a final settlement.
These were the main conclusions of Cairns Group Ministers, meeting in Geneva on 27-28 June to consider prospects and options for bringing the Uruguay Round negotiations to an early and successful conclusion.
Taking into account the serious situation in the Round, Ministers decided to remain on call and to take further action as appropriate.
Since December last year with the tabling of the draft final act by GATT Director General Arthur Dunkel, a successful Uruguay Round outcome has been within grasp. However, despite efforts over the past six months, the political steps necessary to reach a final settlement hive not been taken. Negotiations have drifted to bilateral discussions between major participants without positive results. As a consequence there is now a very real danger of failure.
Cairns Ministers said that while the draft final act does not realise all the demands of negotiators, it would overall deliver a trade liberalising outcome across all issues and represented the best compromise achievable after more than five years of intensive effort. Further delay will endanger a successful conclusion - without a breakthrough on agriculture, the further work required on detailed commitments across all market access areas, including services, cannot proceed.
In this context, Cairns Ministers believed that the time had come for all to judge the draft final act as a package. Cairns Ministers therefore thought it important to signal now their own governments' readiness to accept that package as the basis for concluding the negotiations and to work intensively to complete the Round. They urged all others to reciprocate that commitment.
Cairns Ministers stressed that a successful Uruguay Round and a strengthened multilateral system were now more than ever needed. by developing and developed countries alike, in the current difficult world economic environment.
It is widely acknowledged that a successful Round and renewed trade growth would assist economic recovery, debt servicing capacities and employment generation throughout the world. Conversely failure could only further restrict economic growth opportunities, encourage protectionist policies, seriously weaken the multilateral trading system and endanger the trade and economic reform steps underway ? including in many developing countries.
Cairns Ministers recalled that G7 leaders had declared that no issue has more farreaching implications for the future prospects of the world economy than the successful conclusion of the Uruguay Round. They had committed themselves to remain personally involved and ready to intervene with one another to resolve differences.
Cairns Ministers therefore called upon the G7 Summit leaders to respond to the crisis that now overhangs the negotiations ? and the seriously adverse consequences that would flow from failure. They stressed that the G7 countries had a particular responsibility for resolving their differences over the package, especially on agriculture. Without such a resolution, the entire Round will remain paralysed.
Cairns Ministers understood that the remaining differences separating major agricultural trading countries had narrowed and were by no means insurmountable. The major requirement was the exercise of political will on the part of key participants.
Cairns Ministers, reaffirming their commitment to a substantial result an agriculture, noted that they remained, as they had been throughout the Round, ready to participate in the negotiations in a constructive way. The Cairns Group is therefore prepared to play a part in the search for a final settlement and in securing its acceptance multilaterally. In so doing, the key consideration is that the outcome be genuinely trade liberalising and consistent with the central principles and reform modalities in the draft final act.
Cairns Ministers stressed that it would be intolerable for the multilateral system to have the Round fail for the want of a final political step. Now is the time to take that step.