Bridges Weekly Trade News Digest • Volume 10 • Number 16 • 10th May 2006
NAMA: No Progress Even On Minor Issues; SVE Paper Meets Opposition
WTO non-agricultural market access (NAMA) Chair Ambassador Don Stephenson (Canada) told a meeting of all Member delegations on 10 May that a week of informal consultations had not yielded "any meaningful progress" even on the relatively minor issues being discussed.
Since setting out a work plan for six weeks of continuous negotiations aimed at achieving an agreement on modalities by 16 June, Stephenson has convened a series of meetings involving very small groups of about six countries to discuss a range of issues in the NAMA talks (see BRIDGES Weekly, 3 May 2006).
Some of these consultations focused on the liberalisation commitments that will be asked of countries slated for exceptions to the standard tariff reduction obligations that arise from the Doha Round: least-developed countries (LDCs); countries that currently have binding caps on fewer than 35 percent of their industrial tariffs (the so-called ‘Paragraph 6′ countries, after the pertinent section of the July 2004 Framework); small and vulnerable economies; and recently acceded Members. Others addressed technical issues such the range of products that will be covered by the tariff reduction formula and the effects of the erosion of trade preferences.
Many of these meetings were rather unusual for their composition: two or so strong proponents of a particular position, a similar number of that negotiating stance’s most vocal opponents, and a couple of major WTO powers. Stephenson’s non-bilateral consultations tend to involve either 20-25 delegations or smaller groups of around ten. Sources say that he tried this in an attempt to facilitate progress on issues where Members were staunchly opposed. One delegate suggested that the simple fact that he did not convene any larger meetings to discuss the outcome of thee smaller consultations was a sign that there had not been as much movement as he would have liked.
The chair had suggested that negotiators focus first on these issues before turning their attention to the ‘core’ areas in the negotiations: the tariff reduction formula, flexibilities for developing countries to partially or completely shield some products from tariff cuts, and the treatment of unbound tariffs. Members remain bitterly divided on the latter; Stephenson told the meeting that progress on them would depend on the agriculture negotiations.
New SVE paper draws opposition
A new informal paper on the identification and specific treatment of small and vulnerable economies (SVEs) proved controversial at the 10 May meeting.
The Hong Kong Declaration instructs to Members to "establish ways to provide flexibilities" for SVEs, but "without creating a sub-category of WTO Members." Finding a way of addressing SVE-specific concerns, or even identifying SVEs, without effectively creating a new sub-category of developing countries — which would be anathema to many Members — has proved difficult thus far (see BRIDGES Weekly, 3 May 2006).
Circulated to Members by a group of SVEs the same day, initial reports from trade officials indicate that the paper established thresholds defining SVEs as those accounting for less than 0.10 percent of world NAMA trade, 0.40 percent of world farm trade, and 0.16 percent of overall world merchandise trade (agricultural and industrial goods together). The submission’s 18 sponsors were Antigua and Barbuda, Barbados, Bolivia, Dominica, the Dominican Republic, El Salvador, Fiji, Grenada, Guatemala, Honduras, Jamaica, Mongolia, Nicaragua, Papua New Guinea, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago.
One source suggested that the new paper proposed exempting SVEs from the overall tariff reduction formula, and instead requiring them to bind a to-be-determined percentage of their tariff lines at an average level that will depend on each country’s current tariff structure. The SVEs reportedly also asked for a longer implementation period than other developing countries.
Several developed and developing countries criticised the proposal, including Canada, Chile, Colombia, Costa Rica, Korea, Norway, Pakistan, Peru, and Singapore. They argued that the proposed definition of SVEs rested on arbitrary criteria. Many Members believe that the identification of SVEs for the purpose of industrial tariff liberalisation should depend exclusively on NAMA trade; some criticised the proposal for including farm trade but not trade in services. Taiwan noted that some of the paper’s sponsors had relatively high GDPs.
South Africa, which reportedly helped the SVEs draft the paper along with the other NAMA-11 developing countries, reminded delegations that the SVE group’s concerns were legitimate and deserved an appropriate solution.
Sources say that Stephenson’s meeting with all Member delegations will conclude on 11 May. According to the work plan for the negotiations, his consultations until 19 May will focus on determining which countries will be eligible for the various exceptions, along with the commitments that they would have to make.
ICTSD reporting.