BACK TO MAIN  |  ONLINE BOOKSTORE  |  HOW TO ORDER

TWN Info Service on WTO and Trade Issues (Jan08/04)

29 January 2008


The following article was published in the SUNS on 21 Jan 2008.  Permission is required for reproduction from SUNS (sunstwn@bluewin.ch)

Regards
Martin Khor
TWN


Trade: Trade unions voice concerns over North's NAMA proposals
Published in SUNS #6396 dated 21 January 2008

Geneva, 18 Jan (Kanaga Raja) -- Trade unions from the NAMA-11 developing countries as well as an alliance of trade unions from Latin America have voiced concerns over recent proposals tabled by developed countries at the WTO on market access for non-agricultural products.

The trade unions' concerns are over two communications tabled by the developed countries - a joint paper by Canada, the European Communities, Iceland, Japan, New Zealand, Norway, Switzerland and the United States (TN/MA/W/95) on revised draft modalities for non-agricultural market access (NAMA); and a proposal by the European Communities and the United States (TN/MA/W/96) on further restrictions of flexibilities for developing countries.

Both the NAMA-11 and Latin American trade union statements, which were issued on 17 January, come just as the WTO Negotiating Group on Market Access for non-agricultural products is to hold its first informal meeting of the year on 21 January. According to trade officials, the NAMA Chair has been holding "confessionals" last week and small-group consultations this week.

Taking note of both communications by the developed countries, the NAMA-11 trade unions said in their statement that they were concerned over the positions taken in these communications, in particular on the paragraph 8 flexibilities and further restrictions on these.

Contrary to numerous demands of the NAMA-11 trade unions, the Latin American trade unions and the International Trade Union Confederation, these communications do not provide any relaxing of the current proposed flexibilities in the July draft modalities, they said.

The Latin American trade unions also were concerned that the current negotiation process continues to be governed by the pressure exerted by the countries of the North on developing countries, as reflected by both the communications.

The NAMA-11 trade unions are an alliance of trade unions from the NAMA-11 developing countries including Brazil, South Africa, India, Argentina, the Philippines and Indonesia. The Latin American trade unions include those from Argentina, Brazil, Chile, Colombia, Costa Rica, Honduras, Mexico, Nicaragua, Panama, Peru, the Dominican Republic and Venezuela.

Both the communications by the developed countries were tabled at an informal NAMA meeting in the first week of December. Both the communications were criticized by the NAMA-11 developing countries at that meeting (see SUNS #6382 dated 7 December 2007).

The joint paper (TN/MA/W/95) by Canada, the EC, Iceland, Japan, New Zealand, Norway, Switzerland and the United States noted that on the formula, the Draft Modalities of July 2007 include a Swiss formula with two coefficients to be applied by at least 41 Members. The coefficient for developed Members ranges from 8 to 9, while the coefficient for developing Members ranges from 19 to 23.

The joint paper was of the view that "the difference in these two ranges of coefficients amply reflects the principle of less than full reciprocity."

The joint paper also said that "Calls to expand flexibilities on a generalized basis are not sustainable, threaten to close off even more sectors that may be of interest to smaller and developing Members, and would further diminish trade and development opportunities for the majority of Members."

The paper was of the view that "Given the high numbers in the range for the developing Members' coefficient included in the Chair's text of last July, there will be very few cuts or no cuts into applied rates for a significant proportion of developing Members' tariff lines."

A separate proposal by the European Communities and the United States (TN/MA/W/96) that refers to paragraph 7 of the draft NAMA modalities of July 2007, aims to further restrict paragraph 8 flexibilities by amending the final sentence of paragraph 7 (a).

(The final sentence of paragraph 7 (a) says: "We furthermore agree that this flexibility shall not be used to exclude entire HS Chapters.")

In their statement, the NAMA-11 trade unions said that they have repeatedly demanded that paragraph 8 flexibilities be increased for the developing countries beyond the 5% and 10% currently in brackets in the draft modalities. This demand is based on the need to protect current and future employment in labour-intensive sectors in their countries.

The current flexibilities of 5% exemption of tariff cuts or 10% lesser reduction do not offer sufficient protection to shield labour-intensive sectors and current employment. Nor do they allow for protection of future industrial development and the creation of future employment.

"The communications therefore completely deny the employment needs in our countries, many of them facing unemployment levels above 10% and high rates of underemployment and informal work. These proposals do not recognize and address such needs, but will further worsen unemployment and underemployment in our countries," said the NAMA-11 trade union statement.

The NAMA-11 trade unions called upon governments of the countries that supported communications TN/MA/W/95 and TN/MA/W/96 to "revise their positions and to actively engage in finding appropriate modalities that will allow our countries to protect and create productive and decent employment now and in the future without being forced into high reductions of tariffs on almost all products."

Expressing regret over the position taken on the coefficient in the joint paper TN/MA/W/95, the NAMA-11 trade unions said that the coefficients as proposed in the July draft modalities do not respect the principle of less than full reciprocity.

Moreover, the proposed range of coefficients for developing countries will lead to substantial reductions in applied rates in a large number of countries and sectors, contrary to what is suggested in the communication.

The demands that are made on developing countries are really substantial and do in no manner take into account industrial development and employment needs, the NAMA-11 trade unions said.

The NAMA-11 trade unions called upon governments to:

-- Ensure that developing countries can apply a tariff reduction that is in line with their stage of development, in conformity with the agreed principle of less than full reciprocity, and which should be substantially lower than the cuts undertaken by developed countries and the proposals for tariff cuts currently on the table;

-- Ensure that developing countries' "paragraph 8" flexibilities, as currently set out in the July 2004 framework, are expanded substantially. The flexibilities should allow for both the exemption of tariff lines as well as lesser tariff cuts for a number of tariff lines. Developing countries should not have to choose between these two options;

-- These percentages should be increased to a percentage considerably higher than the current levels in brackets, and criteria with regard to import value should be dropped. This would assist developing countries in managing the adjustment of sensitive sectors and preventing the social disruption caused by job losses and closure of enterprises that would result from further liberalization;

-- These flexibilities should also allow for changes over time in the tariff lines that will be selected to be covered by paragraph 8, so as to respond to future industrial development needs;

-- That no proposals are made in an attempt to break developing-country groupings in NAMA or regional integration groupings.

In a separate statement, the Latin American trade unions noted that in their previous statements to their governments and trade negotiators in Geneva, they expressed their support to the demand of the NAMA-11 trade unions regarding the need to increase developing countries' "paragraph 8" flexibilities beyond the 5% and 10% currently in brackets in the draft modalities.

"This demand is based on the need to safeguard current and future employment in labour-intensive sectors as well as the industrial development of our countries, which are not protected by those percentages," said the Latin American trade unions.

They expressed concern that the current negotiation process continues to be governed by the pressure exerted by the countries of the North on developing countries, as reflected both in the recent communication (TN/MA/W/95) by several developed countries, and that tabled by the European Communities and the United States (TN/MA/W/96).

"We strongly reject the contents of these communications tabled by the countries of the North, as they do nothing but disregard the serious employment crisis prevalent in our countries, which is made evident by growing levels of unemployment, casualization and informality, primarily affecting women and youth," said the trade unions from Latin America.

This situation, which has been caused, to a large extent, by the policies derived from the Washington Consensus, could be worsened by the industrial opening agreements made in NAMA, and certainly further compounded by the social and labour impact of the Free Trade Agreements already signed with the United States and other similar agreements to be established with European Union and Asia-Pacific countries in the near future, they added.

The Latin American trade unions said that they agree with the approach taken by the trade unions in the NAMA-11 countries, "since we consider that their diagnosis and proposals are consistent with the realities of our countries." +

 


BACK TO MAIN  |  ONLINE BOOKSTORE  |  HOW TO ORDER