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Small group consultations have restarted on non-agricultural market access, but the most divisive issues will not be addressed in the near term.
The new chair of the NAMA negotiations, Swiss Ambassador Luzius Wasescha, briefed the membership on 22 October on the consultations he had held with 47 WTO Members and announced a programme of more intensive meetings of with individual countries and groupings on issues of particular concern to them.
Ambassador Wasescha said it was clear that Members wished to use the 10 July draft modalities text (TN/MA/103/Rev.2) as a ‘starting point’ for further negotiations, rather than the 12 August report, in which the previous NAMA chair Don Stephenson outlined his vision of the state of play after the collapse of the ‘mini-ministerial’. An earlier compromise proposal put forward by Director-General Pascal Lamy will also be put aside, at least for the time being. During the ministerial, several developing countries emphatically rejected the notion – present in both texts – that developing countries that agree to participate in steep sector-specific liberalisation initiatives would be allowed to maintain higher tariffs on other industrial products (Bridges Year 12 No.4 page 9).
The sectoral approach has been pushed particularly strongly by the EU and the US, which consider that the tariff cuts envisaged in Doha Round are not sufficient to create significant new market access opportunities in major developing countries. The latter, however, eye such initiatives with profound suspicion, not least because many of them they have important defensive interests in the very sectors proposed for deep tariff cuts, including chemicals, electronics and industrial machinery.
Sectorals, Core Issues Set Aside
Chair Wasescha noted that neither the proponents nor the opponents were keen to engage in multilateral discussions on sectorals at this stage. Instead, interested Members would meet one-on-one or in small groups, a process that could lead to different outcomes for different sectors, he said. Should talks on any individual sector be successful, negotiators could adapt the modalities language accordingly.
The tariff reduction formula and flexibilities available to developing countries are at the heart of the negotiations and remain a major subject of contention. Ambassador Wasescha said he would address this issue when he had a clearer view of Members’ positions, possibly not before late November. He also noted that Argentina had not joined the ‘growing consensus’ around the numbers in the July draft. Argentina has argued throughout the negotiations that the NAMA modalities would let developed countries make smaller percentage cuts than developing countries, contrary to the principle that less-than-full reciprocity would be required from the latter. Argentina also contends that there is an unacceptable imbalance between rich country concessions in the farm talks and what is asked from developing countries in NAMA.
The Way Ahead
Over the first week of November, the chair intended to conclude his consultations with individual countries (Oman, South Africa and Venezuela) and groups that are seeking special treatment, including recently acceded Members, small and vulnerable economies, and countries worried about the erosion of their trade preferences that would result from a general lowering of tariffs on manufactured products. A ‘transparency session’ involving the entire membership is tentatively planned around mid-November, followed by informal sessions to run through all issue areas.
Ambassador Wasescha may issue a revised modalities draft before December. However, he has warned Members that a chair is only a facilitator, not a deal-maker, and urged them to engage in direct dialogue with each other. The lack of such engagement has plagued the NAMA talks from the onset, and only started to emerge in the immediate run-up to the July ministerial.
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