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TWN Info Service on WTO and Trade Issues (Oct07/08)

11 October 2007


NAMA Chair reports on small group consultations

An informal meeting of the Negotiating Group on Market Access for Non-Agricultural Products (NAMA) was held on Monday 1 October at which Chairman Ambassador Don Stephenson of Canada reported to members on the small group consultations that took place over the past four weeks.

Below is a report on the meeting.  It was published in the SUNS on 3 October.  It is reproduced here with the permission of SUNS.  Any reproduction or re-circulation requires the prior permission of the SUNS (sunstwn@bluewin.ch). 

Best wishes
Martin Khor
TWN


NAMA Chair reports on small group consultations
Published in SUNS #6336 dated 3 October 2007
By Kanaga Raja (SUNS), Geneva, 2 Oct 2007

An informal meeting of the Negotiating Group on Market Access for Non-Agricultural Products (NAMA) was held on Monday 1 October at which Chairman Ambassador Don Stephenson of Canada reported to members on the small group consultations that took place over the past four weeks.

In what was described as a transparency exercise, the informal meeting heard the Chair informing members of the outcome of bilateral meetings - or "confessionals" - that he held with about 24 members representing a wide spectrum of the membership.

The small group consultations were on non-formula issues that included Small and Vulnerable Economies (SVEs), Recently Acceded Members (RAMs), product coverage, countries with small percentage of tariffs bound (Paragraph 6 countries), Least Developed Countries (LDCs), and preferential tariff erosion.

The informal meeting also held a discussion on Non-Tariff Barriers (NTBs), with the major focus on a proposal submitted by a large group of members that included the NAMA-11, the African Group and the LDC Group on a mechanism to deal with NTBs (see below).

As regards the process, Ambassador Stephenson told members that his idea is that it would be useful for agriculture to get slightly ahead, and for NAMA to start with non-formula issues first. The reason is that to engage deeply in the formula (for tariff reduction) discussion, members have said that they need a feedback from the results in the agriculture negotiations.

According to trade officials, the Chair said that he plans to build from small discussions into larger ones and then slowly begin to move towards a more intensive discussion on NAMA.

He added that he expects guidance to revise the text that he submitted in July. He also said that members only have a month or so to provide the basis for a revised text.

Ambassador Stephenson was of the view that modalities are needed on NAMA and agriculture by the Fall (presumably, November), or at least by the end of the year, otherwise there is a real risk that the Doha Development Agenda will drift off into an uncertain future. He said that some members have said that "the time is now or never".

The Chair also said that he was encouraged by what had been seen and heard in some of his consultations during the last weeks.

There have been signs of flexibility and openness expressed, and this is extremely positive, he said, adding that this however did not happen in all the consultations that he held.

On Recently Acceded Members (RAMs), the Chair said that these members want special provisions to take into account the commitments made during the negotiation process. They have also now asked for Albania to be added to those already exempted from tariff cuts.

According to trade officials, Chinese Taipei, the new coordinator of the group, has submitted a proposal (a menu approach) asking for additional flexibilities that go beyond those in the Chairman's paper in July.

These flexibilities are: longer implementation period and longer grace period; a higher developing-country coefficient; and greater flexibilities than those normally given to developing countries.

The Chair said that some non-RAM members indicated that it would be impossible for them to accept such additional flexibilities. Others had "strong concerns".

The Chair added that another issue that came up during the consultations was who among the RAMs is developed and who is developing. Some said that the issue should be taken to the membership (the General Council) to decide, but the Chair wondered whether there is enough time for this approach.

On Paragraph 6 countries (12 members with low percentage of bound tariffs), Ambassador Stephenson said that there were "signs of flexibility".

There is a call for these members to bind as high a percentage as possible of their tariffs at an average of 28.5% (the current tariff average of developing countries). These members reject the call that the percentage of bindings should go up to cover 90% of their tariffs. Instead, they want much less - maximum 70%.

On product coverage (fish products and animal feed that are classified for some as agriculture and for others as NAMA), Japan and Switzerland, the two countries concerned, have been unable to alter their position. They want a deviation from their tariff schedules to be accepted by others. The Chair reported that this was not his most successful meeting.

The Least Developed Countries want provisions for duty-free, quota-free market access, emanating from the Hong Kong Ministerial, to be formalized by members, and that the current agreed 97% of products be extended to 100%. These countries also want simplification of Rules of Origin, more capacity-building measures, and additional products on the list of products affected by preference erosion.

The Small and Vulnerable Economies (SVEs) said that they will be tabling a new proposal in the coming days.

Following the Chair's report on the previous weeks' meetings, the informal session turned to a discussion of Non-Tariff Barriers.

According to trade officials, there was a new proposal by a group of countries, which was praised widely for having a very large and diverse group of members as co-sponsors.

The proposal (TN/MA/W/88) on a mechanism to deal with NTBs is a merger of previous NAMA-11 and EC proposals. The co-sponsors of the proposal are the African Group, Canada, European Communities, the LDC Group, NAMA-11, New Zealand, Norway, Pakistan and Switzerland.

Ambassador Ujal Singh Bhatia of India introduced the proposal. According to trade officials, he said that the proposal has two parts. The first is a mandatory and time-bound question-answer session where members can seek information/clarification or otherwise raise specific trade issues.

The other is a problem-solving part that would be voluntary and aimed at arriving at a mutually acceptable solution. Ambassador Bhatia said that this mechanism would in no way affect member's existing rights and obligations under the WTO Agreement.

The proposal, in the form of draft legal text of a Ministerial Decision on Procedures for the Facilitation of Solutions to Non-Tariff Barriers, recognized that there is a need for facilitating the expeditious consideration of non-tariff barriers through comprehensive and flexible procedures of a conciliatory nature involving a facilitator who actively assists Members in finding mutually acceptable trade solutions that aid exporters and importers.

According to the proposal, any Member may seek to solve through recourse to the procedures set out any non-tariff barrier (NTB) [scope to be determined], which it believes adversely affects its trade.

It added that the procedures are not intended to serve as a basis for the enforcement of specific obligations under the WTO Agreement or for a subsequent dispute settlement procedure, or to impose new obligations on Members. The procedures shall be applied in the context of relevant WTO Committees.

The proposal also said that at all stages of the procedures, particular consideration shall be given to the special situation of least-developed country Members involved in the procedures. In this regard, Members shall exercise due restraint in raising matters under these procedures involving a least-developed country Member and solutions explored shall take into consideration the specific situation of the least developed country Member involved, if any.

On the procedures for solving NTBs, the proposal stated that any Member may, individually or jointly with other Members, submit in writing to the Member concerned, a request to initiate these procedures. The request shall identify and describe the specific measure concerned and provide a detailed description of its trade effects. The Member to which the request has been submitted shall provide, within [20] days, a written response containing its comments on the information contained in the request.

Upon their submission, the request and response shall be notified to the relevant WTO Committee and shall be circulated to all Members. The Chairman or one of the Vice Chairmen of the relevant WTO Committee shall convene a meeting of the parties to inter alia address any outstanding issues and explore possible next steps.

Regarding the appointment of a facilitator, the proposal said that upon agreement between the parties to launch the procedures, they shall appoint the Chairman of the relevant WTO Committee, or one of the vice Chairmen, as facilitator, unless one of the parties requests that another person serve as facilitator. If the parties cannot agree on the appointment of a facilitator within [15] days of the launch of the procedures, the [Chairman of the Council on Trade in Goods] shall appoint the facilitator within [25] days of the launch of the procedures and after consulting the parties.

The role of the facilitator under the procedures shall be to actively assist the parties, in an impartial and transparent manner, in bringing clarity to the NTB concerned and its possible trade effects.

The facilitator may offer advice and propose solutions for the parties' consideration taking into account the information presented by the Parties; meet individually or jointly with the parties in order to facilitate a mutually agreed solution; and seek assistance of the WTO Secretariat and, after consulting with the parties, consult with relevant experts and stakeholders.

The procedures shall be completed within [60] days from the appointment of the facilitator. The procedures end with a written factual report by the facilitator, in consultation with the parties, to the relevant WTO Committee, providing a brief summary of (1) the NTB subject to these procedures; (2) the procedures followed; and (3) any mutually agreed solution reached as the final outcome of these procedures, including possible interim solutions.

Any mutually agreed solution shall be implemented in conformity with Members' rights and obligations under the WTO Agreement, said the proposal.

According to trade officials, the United States said that it did not see the need for a new WTO procedure to address NTBs. It nevertheless tabled a paper incorporating drafting suggestions, which in its view, clarifies the text and makes it more realistic and flexible.

Mexico, Korea and Japan also had reservations over the group proposal. According to trade officials, Japan expressed doubts about the need for such a mechanism, as it might interfere with the work of dispute settlement. It also said that the power of the facilitator is not very clearly expressed in the proposal. Japan felt that the US paper was better.

Korea said that the elements in the proposal were vague. It supported the modifications submitted by the US.

According to trade officials, Venezuela, Pakistan and New Zealand rejected the US draft. According to Venezuela, some of the suggestions submitted by some members would eliminate the effectiveness of the proposal that the group has co-sponsored.

New Zealand said that the US paper undermines the original objective and weakens the effectiveness of the proposal submitted by the group of members.

Ambassador Stephenson said that the joint proposal by the large group of countries has enough support to imagine an eventual consensus. There needs to be more text-based discussions on this. The Chair said that he expects that he can include the text on the NTB mechanism in his next NAMA text.

China introduced two proposals on NTBs - one, to harmonize fireworks standards and the other, lighter standards.

Japan submitted a new simplified proposal for more transparency in export restrictions. According to trade officials, Japan's proposal was still strongly opposed by Malaysia, India, Venezuela and Argentina.

On the other hand, Japan rejected the notion that its proposal goes beyond the mandate of the negotiations. It said that the proposal only calls for more transparency without imposing new disciplines and without affecting the right of countries to impose restrictions.

According to trade officials, the Chair concluded the session by saying that he will continue to consult in small groups. He said that nobody should be worried about these small group meetings as all the rights of Members are protected. Transparency sessions will provide adequate information to all.

Trade officials said that small group consultations have been scheduled for the rest of this week. The Chair's intention is to reserve the week of 22 October for open-ended sessions.

 


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