TWN Info Service on WTO and Trade Issues (Dec05/17)

15 Dec 2005

New developing-country group on NAMA demands respect for SDT and flexibilities

Hong Kong, 14 December (Martin Khor) -- Ministers of 11 developing countries have taken a joint stand on the negotiations on non-agricultural market access (NAMA), stressing that the principles of special and differential treatment as well as flexibilities for developing countries must be fully respected, if the NAMA negotiations are to make progress.  The Ministers presented a letter today to the chairman of the Conference, Hong Kong Commerce Secretary John Tsang,  with copies to the facilitator on NAMA, Pakistani Commerce Minister Humayun Akhtar Khan, and WTO Director General Pascal Lamy.

The countries have formed a "core group" on NAMA, coordinated by India and South Africa, with other members including Argentina, Brazil, Venezuela, the Philippines, Indonesia, Namibia and Egypt. In their letter, the Ministers said that they strongly believe that tin order to move the NAMA negotiations forward, he following principles must be fully respected:

* Less than full reciprocity in reduction commitments for developing countries through proportionately lower percentage reductions;
* Removal of tariff peaks, high tariffs and tariff escalation, and non tariff barriers in developed country markets on products of developing country export interest;
* Agreement on paragraph 8 (of the August 2004 framework agreement annex B on NAMA) as a stand alone provision of flexibilities for developing countries;
* Substantially increasing the level of bindings at appropriate and equitable levels;
* The NAMA outcome to be calibrated with the ambition achieved in other market access negotiations.

The Ministers referred to two submissions by a group of developing countries on NAMA flexibilities and on Reclaiming Development, which capture important principles to achieve the development dimension of the negotiations.  "Unfortunately we find that these important elements have not been adequately refelected in either the NAMA Chairman's Progress Report or in the draft Ministerial declaration."

The letter added that the principles of less than full reciprocity in reduction commitments by developing countries and SDT were agreed to in the Doha mandate and remain central to the NAMA negotiations.  These have the notion that developing countries should undertake lesser reduction commitments as compared to developed countries, and the commitments should allow for policy space to pursue their development strategies.

"While developing countries are prepared to make a contribution to the NAMA negotiations, we find the developed countries reluctant to offer their fair share," said the letter.  Even though developed countries are highly competitive in industry, they continue to maintain high tariffs, tariff peaks and tariff escalation on various products, particularly of export interest to developing countries.  The unequivoval removal of these is at the core of the Doha mandate.  Further, there are a large number of non tariff barriers and abuse of trade remedial measures, which need to be addressed.

The letter continued that most developing countries continue to reform and industrialise their economies.  Reforms include substantial autonomous tariff liberalisation whereby real market access has already been given.  Yet a number of sensitive sectors still still exist in most developing countries, given their labour intensive nature, revenue implications and contribution to national employment and output.

"These sectors have to be carefully managed, using the same policy tools that were available to the developed countries at similar levels of development.  It is for these reasons that we have been arguing that the paragraph 8 of the Framework Agreement be finally settled as it is a "stand alone" S&D provision with no linkage to the formula or other elements. The figures, presently in brackets, are the barest minimum required by developing countries."

The letter added that the Round provides an opportunity to create a more transparent, predictable and inclusive trading system by substantially increasing the level of bindings by all WTO members. However, it has to be acknowledged that binding of unbound tariff lines is a concession in itself.  Regarding the level at which these tariff lines may be bound, appropriate treatment, which may include marking-up the base rates, would need to be agreed so as to address the sensitivity of these tariff lines.

Said the letter:  "The ambition in NAMA cannot be viewed in isolation.  It has to be proportional to and commensurate with the contributions by developed countries in other market access areas. Developing countries cannot be expected to pay for the much needed reforms in the agriculture sectors of developed countries.  The disproportionate demands presently being made of developing countries would also lead to an imbalanced outcome resulting in the exacerbation of the current difference in the treatment of agricultural and non-agricultural products.  "This is unacceptable as it would jeopardize the development intent of the Round."