TWN Info Service on WTO and Trade Issues (Feb08/18)

25 February 2008

Below please find the first of 3 articles on the WTO meeting on NAMA held on 20-21 Feb 2008, to hear responses from WTO members to the NAMA text of the Chair.

This article appeared in SUNS of 21 Feb 2008.  Permission for reproduction is required from SUNS (

Best wishes
Martin Khor

WTO NAMA text comes under strong criticism from NAMA-11
Published in SUNS #6419 dated 21 February 2008 

By Martin Khor (TWN) Geneva, 20 Feb 2008

There were strong criticisms from important developing countries against the Chair's revised text on non-agricultural market access (NAMA) at an informal meeting held Wednesday afternoon to listen to initial responses to the text (issued by the chair of the NAMA negotiating group Ambassador Don Stephenson of Canada on 8 February).

The NAMA-11 developing countries criticized the revised text for "the lack of balance both within the NAMA text and between the revised NAMA text and the revised agriculture text." In particular, the group was disappointed that the Chair did not include its proposals on the range of coefficients and on flexibilities in its revised text.

The NAMA-11 comprises Argentina, Brazil, Egypt, India, Indonesia, Namibia, Philippines, South Africa, Tunisia and Venezuela. Its statement was presented by its coordinator, South Africa, represented by Ambassador Faizal Ismail.

According to diplomats attending the meeting, some of the NAMA-11 members also made strong statements.

Brazil's Vice Minister and chief trade negotiator Mr. Roberto Azevedo reportedly made a "very strong statement" (in the words of two diplomats) criticizing the Chair's paper for its internal imbalance (regarding treatment of developed and developing countries) as well as retaining the imbalance between NAMA and agriculture.

Venezuela, represented by Ambassador Oscar Carvallo, criticized the paper for imposing only one particular vision of coefficients under the pretext that the paper is under the Chair's responsibility, and for leaving out the views of an important group (i. e. the NAMA-11). This was, he said, not helpful to the negotiations, and he expressed doubts that the imbalances in the NAMA text can be corrected in time.

South Africa, speaking for the NAMA-11, said that in his first draft, the Chair acknowledged that the coefficient ranges he proposed was his own but he clarified that in this revised text, the ranges would reflect the members' views.

However, said South Africa, the Chair has now (in the new paper) ignored the proposals of a large number of developing countries (referring to the NAMA-11) that will have to make formula cuts and that will make the bulk of the contribution in NAMA due to the size of their markets.

The NAMA-11 referred to its proposals on a range of coefficients that reflect the less than full reciprocity (LTFR) principle. Yet, the Chair ignored this proposal and instead re-stated his preference for a narrow range of coefficients (19-23) for developing countries.

The NAMA-11 proposed that the revised text should also bracket the views of the NAMA-11. The group's views are reflected in the Comments section of the Chair's paper, but not in his section on proposed modalities.

The NAMA-11 also criticized the Chair for restating his preferred coefficients of 8-9 for developed members. The Chair suggests that these numbers reflect the views of most members that are to make formula cuts.

"However, we clearly recall that a majority of members had called for developed country members to make a greater contribution," said the NAMA-11 statement, and that these members proposed coefficients that are lower than the Chair's preferred 8-9.

The difference in coefficients between developed and developing countries must reflect the LTFR principle in reduction commitments, said the statement. The Chair's range for developed countries does not offer the new market opportunities for developing countries stipulated in the Doha mandate.

The NAMA-11 thus proposed that "the revised draft text should bracket numbers lower than 8-9 for the developed country coefficients."

The NAMA-11 statement also touched on the Chair's proposed link between coefficients and flexibilities for developing countries. It noted that the Chair suggested that there should be such a link and that he suggested a "sliding scale approach" as a trade-off between the two variables.

Its response to this is that the coefficients and the flexibilities serve two different purposes. The coefficient sets the ambition level and the flexibilities assists developing countries to manage the adjustments caused by the deep tariff cuts.

"The NAMA-11 reiterates that the flexibilities are a stand-alone element of the modalities and the numbers in the July Framework are the barest minimum required by developing countries," said the statement.

The NAMA-11 welcomed the Chair's references in his Comments to the NAMA-11 proposals for additional flexibilities than already provided in the July Framework's para 8 but it is concerned that his attempt to make provisions for these additional flexibilities may have "a more perverse outcome."

For many members, the Chair's proposal to remove the numbers in para 8a and 8b of the July Framework is a cause of great concern, said the NAMA-11. "This has created a high level of uncertainty for a large number of developing countries that seek to use these flexibilities."

The group suggested that the revised text must reflect the need for additional flexibilities by using the existing numbers plus x, with x to be negotiated.

The proposal to increase or eliminate the trade test or volume of imports must also be reflected, in line with the agriculture modalities. Also, a possible combination of flexibilities should also be reflected by [and/or].

"The views and proposals of NAMA-11 members must be part of the ranges and flexibilities in the modalities text," said the group. "The Chair cannot foreclose the options that the NAMA-11 proposed at this critical stage. The NAMA-11 demands that its members be afforded the space to negotiate."

It contrasted the NAMA situation with agriculture, where the Chair provided developed countries with "plenty of space to maneuver", reflected in the many proposals and options in brackets. "Developing countries should not be denied a similar degree of room to negotiate.

"The legitimacy of the negotiating process requires that the opportunity to negotiate a fair deal is not denied to some developing countries in NAMA and yet offered to other developed members in agriculture. There should be a balance in the negotiating space available to members in both texts so that we can create a level playing field to negotiate the level of ambition in the horizontal process."

The NAMA-11 also said that in sharp contrast to the NAMA text, the ambition level in agriculture is uncertain and open, as the possible outcome depends on how the 170 brackets are negotiated in agriculture.

The agriculture ambition level thus needs to be clarified within agriculture talks and the horizontal process. The NAMA ambition level thus cannot be prejudged at this stage, said NAMA-11. This comparability in agriculture and NAMA ambition levels has also been mandated in para 24 of the Hong Kong declaration.

The NAMA-11 complained that the Chair's attempt to determine the NAMA ambition within the narrow range he proposed (19-23) and the spread between the coefficients is not consistent with this mandate.

The NAMA-11 insists that the NAMA ambition level must be comparable with the agriculture ambition level.

The statement also said the Chair's text must more adequately reflect the proposals of all developing country groups to enable them to negotiate a fair and development-oriented outcome.

(The SUNS will carry a more detailed account of Wednesday's NAMA meeting in the next issue). +