GSTP: A major instrument for promotion of trade among developiong countries

New York (G-77) -- The GSTP came into being after a long process of negotiations during the Ministerial Meetings of the Group of 77, notably at Mexico City in 1976, Arusha in 1979 and Caracas in 1981. The Ministers of Foreign Affairs of the Group of 77 in New York set up the GSTP Negotiating Committee in 1982. The New Delhi Ministerial Meeting, held in July 1985, gave further impetus to the GSTP negotiation process. The Brasilia Ministerial Meeting held in May 1986 launched the First Round of GSTP Negotiations. At the conclusion of the First Round in April 1988 in Belgrade, the GSTP Agreement was signed by 48 countries members of the Group of 77, which exchanged trade concessions in the course of the Round. The Agreement entered into force on 19 April 1989. Forty-one countries have ratified the Agreement and have become participants.

Since its entry into force the Agreement has been operating smoothly and trade transactions under the GSTP have been considerable. Building on this success, further efforts to expand the GSTP membership and product coverage were undertaken.
The GSTP Agreement provided that the special needs of the least developed countries should be clearly recognized and concrete preferential measures in favour of these countries should be agreed upon. The least developed countries will not be required to make concessions on reciprocal basis. In spite of the advantages of the preferential concessions available to the least developed countries participants, few least developed countries are members of the GSTP Agreement. Efforts need to be made and technical support be extended to assist those countries in acceding to the Agreement with a view to ensuring that their exports receive GSTP preferential treatment in general and exclusive tariff preferences in favour of the least developed participants in particular.
The Second Round of GSTP Negotiations was launched in Teheran in November 1991 with the aim of facilitating the process of accession of the GSTP and carrying forward the exchange of trade concessions. The Negotiating Committee for the Second Round, set up under the Teheran Declaration, adopted its plan for the Second Round and established four negotiating groups.

The first application for accession to the GSTP by a sub-regional grouping of developing countries has come from MERCOSUR, the Southern Common Market. MERCOSUR has submitted its offer list to the GSTP participants with a view to initiating negotiations with interested participants and concluding accession to the GSTP Agreement.

Negotiations have been intensive in the area of product-by-product negotiations. Participating countries have submitted their request lists relating to tariff, para-tariff and non-tariff concessions to the countries to which requests were addressed. After a number of bilateral consultations, participating countries moved to the negotiation phased and held five sessions of bilateral negotiations. Trade concessions were exchanged and some of the participating countries made progress in their bilateral negotiations. A number of delegations were assisted by experts from their capitals. The participation of these experts enhanced the negotiating activities among partner countries. Participating countries have been invited to pursue their negotiating activities vigorously with a view to establishing meaningful results of their product-by-product negotiations.

Negotiations proceeded in the area of across-the-board tariff negotiations. Negotiations are also progressing on direct trade measures, sectoral and non-tariff agreements, as well as long- and medium-term contracts. Negotiations in these areas progressed only slightly in view of the complexity of the issues involved.
The smooth operation of the Agreement on GSTP and the conduct of the Second Round of GSTP Negotiations constitute historic developments of political and economic significance. The members of the Group of 77 now have their own autonomous framework for preferential trade relations among GSTP members. They launched their Second Round of GSTP Negotiations to facilitate the process of accession and to carry forward the exchange of trade concessions. The GSTP has been considered the cornerstone of their economic cooperation and through this instrument they may be able to cope with the developments in international relations and to avoid the marginalization of the South. All efforts should be made to support the GSTP as a major achievement of the Group of 77 and one of the means of their collective self-reliance.

To date 40 developing countries members of the G-77 and Mexico have ratified the GSTP Agreement and become participants:

Democratic People's Republic of Korea
Iran (Islamic Republic of)
Libyan Arab Jamahiriya
Republic of Korea
Sri Lanka
Trinidad and Tobago
United Republic of Tanzania
Viet Nam