Service on WTO and Trade Issues (Jul15/27)
30 July 2015
Third World Network
Members "quite far from convergence" on NAMA, says Chair
Published in SUNS #8070 dated 27 July 2015
Geneva, 24 Jul (Kanaga Raja*) -- The Chair of the Negotiating Group
on Market Access for Non-Agricultural Products (NAMA) has reported
that members are "quite far from convergence" and are "not
in negotiating mode".
The Chair, Ambassador Remigi Winzap of Switzerland, gave this assessment
Thursday at an informal open-ended meeting of the negotiating group,
convened to take stock of the latest situation in the NAMA negotiations.
Meanwhile, at an informal meeting on the services negotiations, members
have started to focus on the potential next steps for an outcome on
services at the upcoming Nairobi Ministerial Conference (see below).
According to trade officials, the NAMA Chair said that no new concrete
proposals have been made and members had just reaffirmed their previously
His conclusion was that members were not in a negotiating mode nor
in a mood to compromise.
The Chair was of the view that the negotiating group should not be
spending more time in meetings like this.
While members were afraid to put things on the table (in reference
to new proposals), they did not like the Chair to do it either, said
The Chair considers that the main challenge in the NAMA negotiations
is the fundamental and contradictory position of members on the Rev.
3 draft modalities text, which has the "Swiss formula" of
tariff reductions at its core.
Some members want to stick to this document, while others consider
that it has elements that should be saved. Some others insist that
it is not acceptable as a basis for negotiations.
Some continue to defend the Swiss formula, while others consider it
to be unacceptable because of the "severe" tariff cuts that
it would produce.
According to the Chair, at least in the last few months, a consensus
has emerged in the sense that the Least Developed Countries and Small
Vulnerable Economies should not be asked to do more than what was
envisaged in Rev. 3, and that the principles of Less Than Full Reciprocity
in reduction commitments and Special and Differential treatment are
concepts generally accepted by the membership.
According to trade officials, many developing countries underlined
the difficulty in taking decisions on NAMA while there was a disappointing
situation in the agriculture negotiations and what many viewed as
"a lowering in the level of ambition in the Agriculture talks".
These included Venezuela, on behalf of the Bolivarian Alliance for
the Peoples of Our America (ALBA, comprising Bolivia, Cuba, Nicaragua
and Venezuela), South Africa, Barbados, Indonesia, Argentina, Uruguay,
Brazil, Pakistan, Paraguay and India.
These countries also referred to the "lack of clear signals"
in Agriculture that prevent NAMA negotiations from moving forward.
According to trade officials, developing countries also insisted on
a strong link between the Agriculture and NAMA negotiations, in particular
in respect of the level of ambition.
India said we need to know the impact of possible alternative ideas.
It did not want any more simulations, as everyone knows the effect
of the situation on technical grounds. The problem is political, not
technical, India said.
Lesotho, on behalf of the African Group, said that special and differential
treatment (S&D) is fundamental and members need to stick to the
According to information provided by some delegations, the major developing
countries challenged the developed countries to explain why they should
adopt an average formula framework derived from the results of the
2008 revised draft modalities for market access for industrial goods.
Many developing countries severely opposed the average formula framework
based on the Swiss approach. They said this is not sustainable when
the level of ambition is being lowered in agriculture by adopting
simple percentage cuts, but push for adopting an average framework
in NAMA market access, based on the Swiss harmonizing framework.
South Africa called for adoption of the Uruguay Round approach in
which the developed countries undertake higher percentage cut than
the developing countries to overcome the difficulties posed by the
Members largely reiterated their previous position either in support
of the new average formula framework based on the results derived
from the Swiss formula or adhering to the 2008 revised draft modalities
with flexibilities to so address tariff peaks and tariff escalation.
Ahead of the meeting, the chair had sought to know from the so-called
formula-applying industrialized and developing countries whether they
have an understanding to move away from line-by-line cuts and under
what conditions they can depart from such cuts. In case members could
agree to depart from the application of a Swiss formula for tariff
cuts, "should there be a link or not to Rev. 3 [the 2008 revised
draft modalities] in determining the level of cuts," the chair
Except Argentina, which provided a concrete request-and-offer approach,
there are no proposals in writing from any member until now.
Although there has been considerable discussion on the so-called average
formula framework in the closed-door meetings convened by WTO Director-General
Roberto Azevedo as well as meetings of select trade envoys convened
by Canada, nobody appears to have given the average formula framework
The chair urged members to table their proposals so as to advance
the negotiations instead of restating their known positions, said
a participant familiar with the meeting.
The European Union made a strong case for an average formula framework,
saying that it would be beneficial for developing countries. The EU
said it is not asking for a line-by-line cut as part of the average
formula framework based on the results derived from the Swiss formula.
Members will have the flexibility to decide the tariffs on which they
are willing to cut because of the average formula framework, the EU
Further, the average formula cuts will not bring down tariffs to the
current applied rates, the EU argued. It insisted that results from
the Swiss formula must become the basis for the average cuts as there
is no time for starting from scratch.
The US said it is ready to explore alternative options but is not
prepared to agree to a proposal that would involve "removing
its blood while others remove only water," according to a participant
present at the meeting.
South Africa made a dispassionate case against the Swiss formula which
went against the less-than-full-reciprocity requirement of the Hong
Kong Ministerial Declaration of 2005. South Africa criticized the
average formula cuts based on the results derived from the Swiss formula
in the 2008 revised draft modalities.
Instead, members could settle for a Uruguay Round approach involving
a higher percentage cut for industrial tariffs in the industrialized
countries and lower cut for the developing countries, South Africa
China said it is willing to discuss new approaches but its preferred
option is the 2008 revised draft benchmarks. China also said any new
approach must address tariff peaks and tariff escalation.
India asked the proponents of the average formula framework for clarity
on various elements such as depth of cuts, the manner in which reduction
commitments are determined, the extent of binding coverage, modalities
for unbound lines, treatment of non-ad valorem duties, and degrees
At an informal meeting of the Special Session of the Council for Trade
in Services also held on Thursday, according to trade officials, most
members were doubtful that a work programme on services could be finalized
by 31 July, the deadline set at the 27 November 2014 General Council
The ACP Group said that it is working on a collective paper highlighting
further the Group's position on what the work programme should entail
According to trade officials, some delegations including Korea, Saudi
Arabia and Mexico said that missing the July deadline would not mean
the end of the world.
They were hopeful of a services outcome at the Nairobi Ministerial
Conference in December, which would focus on domestic regulation and
market access, while anchoring a strong development dimension with
flexibilities for developing countries.
According to trade officials, several members including Australia,
Canada, Chile, China, Chinese Taipei, the European Union, Hong Kong-China,
Iceland, Japan, Korea, Mexico, New Zealand, Norway, Pakistan, the
Philippines (on behalf of the "Friends of Emergency Safeguard
Measures" group, comprising Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Thailand and Viet Nam), Singapore,
Switzerland, Turkey and the US said that this objective would only
be reached if intensified negotiations resume immediately after summer.
Several members noted that the services negotiations are more advanced
than the agriculture and NAMA negotiations on account of the work
that members had already undertaken in this area.
According to trade officials, the ALBA (Bolivarian Alliance for the
Peoples of Our America) nations, Argentina, Brazil, India and South
Africa were of the view that the level of ambition cannot be raised
any further until the "landing zones" in agriculture and
NAMA are clear.
South Africa reiterated its reservations on the market access negotiations,
saying that its 2006 offer remains the final offer on the table. It
said that it is looking to find "acceptable" ways to discuss
market access in the broader context of the DDA.
According to trade officials, India said that it is unfortunate that
there is no work programme on services. It is a natural outcome given
the lack of progress in agriculture and NAMA. A work programme would
have been ideal, it added.
According to India, members will now have to think about how best
to advance the negotiations in September, keeping the other core areas
in mind. It reiterated its call for Annex C (of Hong Kong Ministerial
Declaration) to be used, and that flexibilities in market access have
to be ensured.
According to trade officials, Uganda, on behalf of the Least Developed
Countries (LDC), reminded members of the agreed deadline of 31 July
on notifying how members who are in a position to do so intend to
provide preferential treatment to LDC services and service suppliers.
So far, the Council for Trade in Services has received notifications
from Canada, Australia, Norway, Korea and China.
The Chair of the Special Session, Ambassador Gabriel Duque of Colombia,
is expected to make a report on progress on the services component
of the post-Bali work programme to the Trade Negotiations Committee
(TNC) on 31 July.
(* With inputs from D. Ravi Kanth.) +