Bridges Weekly Trade News Digest • Volume 9 • Number 9 • 16th March 2005
NAMA Week Underway, Members Look At New Proposals
WTO Members resumed negotiations on non-agricultural market access (NAMA) with a 14 March meeting of the Negotiating Group on Market Access. Discussions focused on new proposals addressing issues including the erosion of trade preferences, dealing with unbound tariffs, the elimination of low tariffs, and special and differential treatment (S&D) for developing countries.
In an effort to spur progress in the discussions, which have been stalled for want of common ground on how to proceed, NAMA Negotiating Group Chair Ambassador Stefan Johannesson of Iceland has reorganised the NAMA talks along the lines of the agriculture negotiations (see BRIDGES Weekly, 9 February 2005). In addition to plenary meetings where Members will review overall progress, more detailed discussions are to take place in so-called ‘Room D’ meetings open to a maximum of three representatives per delegation. Room D discussions will cover topics including the treatment of unbound tariffs, the tariff-reduction formula, and the products covered by the NAMA negotiations. There will also be small group meetings to discuss highly technical issues.
The Negotiating Group on NAMA held formal meetings on 14-15 March. The rest of the week will see Room D discussions, as well as informal small group, plurilateral, and bilateral meetings before concluding with another session of the Negotiating Group on 18 March.
New proposals put before Members
Several new submissions were introduced to Members during the 14 March plenary session. Many of them are likely to be discussed in greater detail in smaller meetings during the NAMA week.
Benin circulated a communication on behalf of the group of African, Caribbean, and Pacific (ACP) countries (TN/MA/W/53) that attempted to reconcile broader trade liberalisation with the needs of countries that stand to lose greatly from the erosion of trade preferences. The submission outlined three criteria for assessing a country’s vulnerability to preference erosion: the share of exports of a particular product to a specific preference-granting country in the developing country ’s total exports; that product’s market share in the importing country; and the world market share of the exporting country in the product. It then proposed a formula for calculating an ‘index of vulnerability’ to determine which products should receive special treatment while reducing tariffs. The proposal said that applying this methodology yielded common lists of products for ACP countries’ exports to the EU and the US under their respective preference schemes.
Members were broadly encouraging of the ACP Group’s idea, and asked them to come up with specific proposals. A few developing countries pointed out that some of the products identified by this approach could well be of export interest to them, and said that they would prefer not to see slower liberalisation for those goods.
The US tabled a paper on the ‘dual coefficient’ approach it has been pushing in the NAMA talks (see BRIDGES Weekly, 9 March 2005). The submission called for the difference between the coefficients for developing and developed countries — and hence between the resulting tariff reductions — to be small. Yet, the US continued to insist that it would only agree to differentiated coefficients if Members agree to bind all of their tariffs and accept a ‘Swiss formula’ approach that would require higher tariffs to be reduced more sharply. Many developing countries oppose the Swiss formula approach, since they tend to apply higher tariffs to industrial goods than their rich counterparts.
Other proposals examined during the meeting included a 24 February proposal from Mexico, Colombia and Chile to allow Members to choose a balance among binding their tariffs, the depth of tariff reduction, the ability to exclude some products from the tariff reduction formula, and the implementation period for tariff cuts (TN/MA/W/50, see BRIDGES Weekly, 9 March 2005). Norway submitted a paper (TN/MA/W/7/Add.1) outlining a system for rewarding "Members who contribute to a more liberal trading regime" with ‘credit’ — and lower tariff cuts. Norway, joined by Canada, also proposed that Members eliminate low tariffs (TN/MA/W/52). They argued that this would benefit developing country Members since low bound tariffs were concentrated in rich countries.
Delegates considered a methodology tabled by Canada, Hong Kong-China, New Zealand, and Norway (TN/MA/W/53) for converting unbound applied tariffs into base rates that would then be subject to the eventual tariff-reduction formula. The four Members suggested establishing base rates at a level five percent higher than each unbound rate — a one percent tariff would rise to six percent; a 100 percent tariff to 105.
Several of the technical issues raised by these proposals are likely to be discussed during ‘Room D’ and other meetings during the rest of the NAMA week.
ICTSD will provide a full report of the NAMA week in the next issue of BRIDGES Weekly.
ICTSD reporting; " U.S. Details ‘Dual Coefficient’ Approach For World Trade Organization’s NAMA Talks," WTO REPORTER, 15 March 2005.