TWN Info Service on WTO and Trade Issues (June07/03)

13 June 2007

End-May 2007 NAMA meetings

On 25 May, the Chair of the WTO negotiating group on NAMA briefed members on his week-long consultations.

He is targetting to reach "full modalities" by 1 August, and will prepare his draft text in the next few weeks.

It is clear the positions were still polarised at the end of May. 

On the central issue of industrial tariff reduction, for instance, he confessed that he simply did not know how to proceed. He has not seen new flexibilities or new ideas from Members on how to do so.

Below is a report of the 25 May meeting.  It was published in SUNS on 30 May.

Best wishes
Martin Khor

End-May 2007 NAMA meetings

 By Goh Chien Yen (TWN),  Geneva 27 May 2007

 Reporting back to members last Friday (25 May) on his week-long consultations, the Chair of the WTO negotiating group on non-agricultural market access (NAMA), Ambassador Don Stephenson of Canada, is to submit his draft NAMA modalities text by 1 August.

Stephenson, who was reporting to members on 25 May about his week-long consultations, took the opportunity to inform members of the work plan.

According to trade officials, the Chair insisted that the working plan is for full modalities by August 1.

He will prepare his text in a couple of weeks in close consultation with the chair of the Agriculture negotiations on format and substance.

The NAMA chair also reported on his meeting with the G4 - EU, US, India and Brazil - in Brussels a week ago.

"The G4 is working hard... and I believe the G4 is being genuine when they say that they are committed to making decisions before the end of June and getting to modalities by the end of July", Stephenson told members during the Friday meeting.

However, it is not clear whether the Chair would be able to produce an accurate and balanced draft modalities paper given the divergent positions of members.

During the Friday meeting, he urged members not to reiterate their positions. "I already know them. They haunt me."

On the central issue of industrial tariff reduction, for instance, he confessed that he simply did not know how to proceed. He has not seen new flexibilities or new ideas from Members on how to do so.

At the previous session of NAMA consultations more than two weeks ago, members were clearly polarized. The developed countries want to see developing countries cut their industrial tariffs in order to gain greater access into their markets.

Several developing countries such as South Africa, India and Argentina pointed out that this is contrary to the developmental mandate of the Doha round, as this will lead to developing countries cutting their industrial tariffs by a far larger extent than the developed countries.

Nonetheless, the Chair was hopeful that intensive consultations at G4 level and also in small groups in Geneva can provide guidance over the next few weeks.

A group of senior officials from the G4 countries are currently meeting in Paris till May 31. This will be followed by another senior officials' meeting from June 11 to 15.

The Chair told members that his draft modalities paper would consist of two columns: one, containing the modalities themselves and the other his explanatory comments. It will not have a column containing the corresponding mandates taken from the various ministerial declarations, as the Chair had done previously in the document "Towards NAMA Modalities" (TN/MA/W/80 dated 19 July 2006).

The Chair had held six small group consultations last week on several issues including on implementation period, special treatment for recently acceded members (RAMs) and flexibilities for small, vulnerable economies and the so-called "paragraph 6 countries".

On the issue of how long it would take for members to implement their NAMA commitments, most countries, according to the Chair, were in favour of following the Uruguay round precedent. In the previous round of tariff negotiations, members agreed to five years for the developed countries and ten years for the developing countries to implement their tariff commitments.

A small number of members wanted this shortened to three and six years for developed and developing countries respectively.

Some developed country members suggested that tariff cuts that would not affect existing applied tariff rates to be implemented immediately after submission of members' tariff schedules.

With regards to the treatment of recently acceded members, given that these countries have undertaken substantial commitments when they joined the WTO and have liberalized their markets further than many existing members, they would be given additional flexibilities.

They could have a higher coefficient in the tariff reduction formula of one and half times more than what other developing countries would be using. This will result in lesser cuts in their industrial tariffs than other developing countries. RAMs would also be given longer implementation period.

The Chair's consultation on the treatment of paragraph 6 countries focused on the specificities of their tariff commitments. These developing country members have less than 35% of their industrial tariff lines bound into the WTO. Consequently, as they will undertake to bind most of their tariff lines, they will not be subject to the tariff reduction formula.

The discussion centered on what these countries' national bound average rate would be and how many percent of their lines would continue to be kept as unbound. The paragraph 6 members, which are mostly developing African countries, want to keep 10% of their tariff lines unbound.

The Chair also reported back on his consultations with the small, vulnerable economies.

For these members, they would not be subjected to the tariff reduction formula as well. Instead, the SVEs have proposed that they "will bind 100% of their non-agriculture tariff lines at average levels reflected in bands."

"All Members that meet the SVEs criteria will ( a) achieve final bound averages in [3] bands, having as a reference a final bound as [28.5%], (b) make a minimum line by line cut of [5%] on [90%] of tariff lines. The remaining [10%] would not be subject to any reductions." +