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TWN Info Service on WTO and Trade Issues (June 07/15)

18 June 2007


Trade Unions voice concerns on NAMA talks

Trade unions from developing countries have voiced concerns over the position of the developed countries in the NAMA negotiations, and urged the NAMA-11 developing countries to maintain unity in the face of pressure from the developed countries.

In a declaration issued to the NAMA-11 Ministerial meeting on 11 June, the NAMA-11 trade union group said that efforts to bind countries such as South Africa, Indonesia, Argentina and others to positions set out in the EU and US proposals will seriously damage these countries' prospects of industrial development.

The unions warned of "massive job losses in societies already characterized by high levels of unemployment."

The NAMA-11 trade union group comprises trade unions from Argentina, Brazil, Venezuela, South Africa, Egypt, Tunisia, Namibia, India, Indonesia and the Philippines.

The report below was published in SUNS on 14 June.

Best wishes
Martin Khor
TWN

Trade Unions voice concerns on NAMA talks

By Kanaga Raja (SUNS), Geneva, 13 June 2007

Trade unions from several developing countries have voiced concerns over the position of the developed countries in the non-agricultural market access (NAMA) negotiations, and have urged the NAMA-11 developing countries at the WTO to maintain their unity in the face of pressure from the developed countries.

In a declaration issued to the NAMA-11 Ministerial meeting that took place on 11 June, the NAMA-11 trade union group said that efforts to bind countries such as South Africa, Indonesia, Argentina and others to positions set out in the EU and US proposals will in many cases seriously damage prospects of industrial development and growth in these economies.

"In a number of cases, it will result in massive job losses in societies already characterized by high levels of unemployment."

The NAMA-11 trade union group comprises trade unions from Argentina, Brazil, Venezuela, South Africa, Egypt, Tunisia, Namibia, India, Indonesia and the Philippines.

The NAMA-11 developing country coalition in the WTO also consists of the same countries.

(At their Ministerial meeting on 11 June, the NAMA-11 Ministers adopted a Ministerial Communique that amongst others emphasized the objective of achieving a fair, balanced and development oriented result in accordance with the mandate. It also stressed that a difference of at least 25 points between the coefficients of developing and developed countries takes into account the principle of "less than full reciprocity in reduction commitments", that requires developed countries to do more than developing countries.)

In their declaration, the NAMA-11 trade union group welcomed the NAMA-11 Ministerial meeting, as well as the opportunity for dialogue between the NAMA-11 governments and the NAMA-11 trade unions.

They recalled the goal of the current Round of WTO talks - to foster development and growth in the economies of developing countries.

The unions expressed concern that the position of developed countries to cut industrial tariffs in developing countries will have major negative effects.

Given the new energy in the negotiations and the announcement of the preparation of draft modalities by the Chair of the NAMA negotiations, the trade unions said that it is extremely important that the NAMA-11 group meets at the highest level and ensures a strong position over the next weeks and months in the NAMA negotiations and the finalization of modalities.

The trade union group also welcomed the recent proposals made by Argentina on behalf of the NAMA-11, and the proposal made by South Africa last week, both of which reiterate the NAMA-11 position for a minimum 25-point spread in the coefficients between developed and developing countries, as well as the request for additional flexibilities, beyond the current percentages in brackets.

According to the unions, the current draft proposals only permit developing countries very limited flexibilities. They are only allowing for the exemption of 5% of their tariff lines from the very deep tariff cuts envisaged in the so-called Swiss formula.

This will mean that protection of sensitive and labour-intensive sectors in developing countries will be substantially reduced with massive job-loss consequences.

"We are extremely concerned that the intensification of the negotiations over the past weeks and the pressure put on developing country governments for more flexibility in their positions, will lead to compromises in the area of NAMA."

"These compromises, if they take the form of additional concessions beyond what we see as an already low spread between the two coefficients, will undermine what workers and governments in our countries need."

The trade unions emphasized the need for absolute unity in the NAMA-11 position to avoid individual governments being pressurized to damage the NAMA-11 position.

"What is at stake is the very right to industrial development by our countries in the future. The efforts to force our economies and governments to relinquish the policy space and flexibility used for many decades by others, will have devastating consequences."

The trade unions called on the NAMA-11 members to maintain their unity in the NAMA negotiations in the face of pressure from developed countries, and to closely cooperate with the NAMA-11 trade unions.

The NAMA-11 members were also urged to strongly advance the position developed to date on tariff reduction and "Paragraph 8" flexibilities.

(Paragraph 8 flexibilities set out in the July 2004 framework refer amongst others to developing countries having longer implementation periods for tariff reductions and applying less than formula cuts.)

For the development component to be realized, said the trade unions, the EU and US as well as other developed countries need to respect the right of developing countries to maintain their policy space, to acknowledge the vast inequalities in economic power and wealth that remain between developed and developing countries, and to agree to the very reasonable and just proposals that have emanated from the NAMA-11.

To that end, the trade unions called on the EU and US 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.

The EU and US were also urged to 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.

At the same time, 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, said the trade union declaration.

The EU and US were also called upon to make unconditional offers of greater market access in agriculture, which must not be linked with NAMA.

The benefits from market access in agriculture are likely to flow to a few countries only, and are likely to benefit capital-intensive agriculture.

"Industrial development and jobs in manufacturing in our countries should not be exchanged against these. Even in countries that benefit from market access in agriculture, it is not right to have a trade-off between future industrial growth and agriculture."

The trade unions also called on all WTO members to ensure that the Doha Development Round benefits developing countries.

"By agreeing to some of the proposals currently on the table or by relaxing the group's current positions, this round will not deliver on its aim of promoting development for the world's poor. If anything, it will keep them in low-level agriculture and minerals extracting jobs," the trade union declaration concluded. +

 


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