TWN Info Service on WTO and Trade Issues (Jul05/15)

28 July 2005

NAMA Chair conforms impasse in NAMA talks

In the past week, the chair of the NAMA negotiating group had been holding meetings with small groups of members.  On 26 July, he informed an informal meeting of the NAMA group that there was an impasse on several of the key aspects of the NAMA talks.  Therefore he is unable to propose "first approximations" of modalities for the General Council meeting of 27 and 29 July.

Below is a report of the 26 July meeting.

with best wishes
Martin Khor


NAMA chair confirms impasse in NAMA negotiations

Geneva 27 July 2005 (Martin Khor) -- The talks on non-agricultural market access (NAMA) are at an impasse on key issues and the consultations at the WTO this week could not come up with agreement, according to Ambassador Stefan Johannesson of Iceland.

Johannesson who is chairing the NAMA talks was briefing an informal meeting of the group late Tuesday afternoon on the state of his consultations.

He confirmed that there would not be any "first approximation" text on NAMA and that instead he would make a report to the Trade Negotiations Committee meeting on Thursday, based mainly on the report he had issued on 8 July.

Johannesson said he had held four small consultations in recent days, mentioning the issues of product coverage, formula, and unbound tariffs. There was, he said, still an "impasse" on the structure of the tariff-reduction formula. Though a Pakistan proposal was discussed, there was no agreement on it.

On the treatment of unbound tariff, there had been "some movement" to a linear mark-up to deal with low unbound tariffs. He added the differences are not as much as one may assume and a lot of ground had been covered.

More important than the formula is the balance between ambition and flexibility, he said. As for the numbers in the coefficient, he hoped this would be discussed as soon as possible in the autumn. He also indicated that any movement in NAMA would still depend on what happens in the agriculture negotiations.

After the Chair's briefing, Venezuela stated its concern that it had not been invited to be involved in the consultations, and thus how could it be expected to provide its views? It was alluding to the exclusive nature of the NAMA consultations to which only a few countries had been invited.

Kenya expressed concern that the Chair had not reported on its concerns on NAMA, namely the situation of countries which have bound less than 35% of their tariffs, and the erosion of preference.

Johannesson's assessment that differences on key issues are small and that only "an extra mile is needed" did not tally with reports by diplomats involved in the negotiations.

There had been strong disagreements even within the small group of 15 countries called together to discuss the tariff-reduction formula on Tuesday: the US was sticking to its "simple Swiss" formula with two coefficients within sight of each other while India and Brazil rejected the Pakistan proposal of simple Swiss with coefficients of 6% for developed countries and 30% for developing countries. Jamaica was reaffirming the need for multiple coefficients for different developing countries to take account of each country's development needs.

Just as significantly, while Johannesson and developed countries had pushed the line that what was more important than the formula was the linkage between the level of ambition of the formula and its coefficients on one hand and the degree of flexibilities for developing countries, this attempt at linkage was strongly opposed by developing countries (including Brazil, India, Kenya and Jamaica).

They had argued that flexibilities were already provided for in the Doha mandate and the August 2004 framework, and should not be diluted or mixed up with the formula.

Meanwhile, a regular meeting of the negotiating group on trade facilitation early this week also concluded, with six new papers presented. Part of the discussion was on how to operationalise technical assistance and capacity building for developing countries, according to a trade official.

The chair of the group, Ambassador Muhamad Noor Yacob of Malaysia, is expected to present a factual report of the negotiations to the Trade Negotiations Committee Thursday.