TWN Info Service on WTO and Trade Issues (July08/02)
7 July 2008
Third World Network

Trade: Indian industry voices concerns over NAMA Chair's text
Published in SUNS #6505 dated 27 June 2008 

Geneva, 26 Jun (Kanaga Raja) -- The Confederation of Indian Industry (CII) has voiced concerns over the revised draft modalities text of the Chair of the NAMA negotiations, complaining that the text has ignored the core mandate of the Doha Round of less than full reciprocity in reduction commitments and comparability in ambition between NAMA and agriculture.

These concerns were highlighted by the Chairman of the CII's WTO and Trade Agreements Committee, Mr R Gopalakrishnan, in a letter dated 24 June 2008 to WTO Director-General Pascal Lamy.

The letter comes just as Lamy announced in a "Green Room" meeting on Wednesday of his intention to convene a mini-Ministerial meeting starting 21 July for selected Ministers aimed at finalizing some critical elements of the Doha negotiations.

A number of news reports in the media, generally friendly to the WTO, have all characterized the Lamy move as a "gamble".

In his letter to the Director-General, the Chairman of the CII's trade agreements committee said that some aspects in the NAMA negotiations in the last few weeks have been a cause for concern for the confederation's member companies.

"We are of the view that the revised NAMA Draft Modalities text of 19/20 May 2008 has belied the expectations of a vast majority of the WTO Membership specially the developing countries."

"The text had ignored the core mandate of the Doha Round, namely less than full reciprocity (LTFR) in reduction commitments and comparability in ambition between NAMA and Agriculture," said the letter.

Equity and balance to this development-oriented Doha Round can only be achieved if developed countries agree to take a coefficient that would result in a cut of 49% to 51% on their dutiable bound rates with developing countries choosing coefficients that take comparable cuts in dutiable bound rates, added the letter.

"The development dimension of the Doha Round seems to have been turned on its head given the proposal to restrict flexibilities for developing countries to protect their sensitive tariff lines," said Mr Gopalakrishnan.

The anti-concentration clause reflected in paragraph 7 (f) of the revised text does not take into account the sensitivities of developing countries based on livelihood concerns, said the letter to the WTO Director-General.

(Paragraph 7 (f) of the NAMA Chair's draft text states: "[The flexibilities provided under paragraph 7 shall not be used to exclude entire HS Chapters.] [The flexibility in paragraph 7 shall not be used to exclude from the full formula cut entire HS Chapters, or to exclude from any four digit heading in a Member's tariff schedule: (1) more than [half] of the six-digit sub-headings in that heading; or (2) any combination of six-digit sub-headings or national tariff lines in that heading representing more than [50] percent of the total value of the Member's imports of goods classifiable within that heading. For the purposes of subparagraph (1), if a Member uses flexibilities with respect to any national tariff line in a six-digit subheading, it shall be deemed to have excluded that six-digit subheading.])

Such proposals, said the CII letter, render the entire NAMA negotiations meaningless since they do not reflect the economic aspirations of millions of industrial workers in the small and medium enterprises (SMEs) and other sensitive sectors in developing countries. It is therefore, important that these clauses are removed from the draft NAMA text.

Second, said the letter, the linkage of the formula coefficients for cutting tariffs with the NAMA flexibilities is also a cause of concern. "Such linkages seem to defy any rationale since coefficients and flexibilities are two different elements intended to address different objectives."

Third, the proposal on sectoral initiatives for elimination of tariffs in specific sectors is a breach of the mandate since from the very beginning, Indian industry has been opposed to any sectoral negotiations and has been told by negotiators and counterparts in other countries that these initiatives are merely a supplementary and non-mandatory modality.

"By agreeing to more liberal formula coefficients in lieu of participation in sectorals, the NAMA Chairman has moved away from the objective of the development Round. We are surprised on how a supplementary modality like the sectoral initiative could be linked to the core modality of formula coefficients," said the CII letter.

"The Indian industry is against such proposals as they could severely impinge on certain sensitive sectors and industries," added the letter.

Stressing that the Indian industry is willing to work constructively for completing the Doha Round, the CII said that it would like the negotiators from developed countries to ensure that the development objectives set out at Doha are fully met. +