Info Service on Trade and WTO Issues (July08/16)
Deep divisions still in NAMA on mini-Ministerial eve
The meeting was the first opportunity for the WTO members as a group to express their views on the third revised draft modalities for NAMA which was issued on 10 July by the Chair of the NAMA negotiating group, Canadian Ambassador Don Stephenson. It was also the final NAMA group meeting before the series of meetings linked to the WTO mini-Ministerial starting 21 July.
the meeting, the NAMA 11 group of developing countries, and also individual
Several developing countries called for a change in the set of two coefficient ranges (for developing and developed countries), arguing that with the present ranges in the text the developing countries are being asked to cut their tariffs too steeply while the developed countries are being asked to do less, thus violating the less than full reciprocity principle that is mandated for the NAMA negotiations.
The NAMA 11 however also expressed appreciation that there was some improvement in some issues, such as the concerns of developing countries that are members of customs unions, the treatment of unbound tariffs and non tariff barriers.
developed countries expressed greater satisfaction with the Chair's
text, and wanted the numbers (especially those on the formula) to be
the basis of an agreement. The
At the start of the meeting, Stephenson said he had tried to help clarify the options. The difficult issues remain open but he would continue with discussions on some issues in the next few days.
NAMA 11 group, represented by
On these issues there has been no consensus and it has always been understood that they will be the subject of negotiations in the final stages with Ministerial participation, said NAMA 11. The group complained that "once again your text has maintained a narrow range of coefficients for developing countries that predetermines the level of ambition in NAMA and ignores the stated positions of the NAMA 11 on the issue of the range."
NAMA 11 comprises
The NAMA 11 added: "In addition the level of ambition set for developing countries subject to the formula remains too onerous, and the spread of the coefficients still fails to meet the requirement of the mandate for less than full reciprocity in reduction commitments. The spread of the coefficients between developed and developing countries is still too narrow and needs to be widened."
The NAMA 11 also recalled that the majority of members that are to undertake formula cuts called for a coefficient of 5 for developed countries. However, this proposal is not reflected in the text, said NAMA 11. (The text proposed a coefficient within the 7-9 range for developed countries).
Added the NAMA 11: "Paragraph 24 of the Hong Kong Declaration requires that there shall be a comparable level of ambition between Agriculture and NAMA. The level of ambition in the third revision of the agriculture text is still uncertain. The chair of Agriculture has provided different options and ranges in several key areas of interest to developing countries. Not all the alternatives would fulfil the Mandate for substantial improvements in market access."
The group said it was pleased that the text had recorded the progress made in the negotiations in several other important areas, such as the mark-up for unbound tariffs, implementation periods, and non tariff barriers. It also noted the efforts made on some architectural issues, reflected in paragraph 7 a, b and c (which linked the degree of flexibilities from full tariff cuts to the ranges of coefficients to be chosen).
In addition, the more complex issues of how to provide for the disproportionate impact of the formula on some members have been addressed, after many months of intensive negotiations on the flexibilities in paragraph 7e (relating to SACU members) and 7f (relating to Mercosur members).
The group however emphasised that in both these provisions and in the more flexible architecture provided in 7 a, b and c, the text has not provided any additional flexibilities.
11 said it also appreciated the attempts made in the text to address
the special needs of
the issue of the anti-concentration clause, the NAMA 11 said: "The
negotiation preceding the text clearly failed to arrive at any consensus
on the need for such a clause in the NAMA modalities. The NAMA 11 objects
to any further attempts to constrain the flexibilities provided for
in paragraph 8 of the July framework agreement and re-affirmed in
On the issue of the linkage between the sectorals and the coefficients and flexibilities, NAMA 11 said there was wide support for the view that there was no such linkage that was envisaged by the mandate and that the Chair's previous draft text that called for a system of credits had no mandate behind it, and that the proposed system of credits in the previous text's paragraph 7(I) created some significant systemic concerns.
"In your current draft text you have removed the so called hard linkage in the text by removing paragraph 7(I) but you have chosen to insert a so-called soft linkage between the sectorals and the coefficients and flexibilities in paragraph 9 of your third revised text.
"This linkage that attempts to create a link between the sectorals and the ambitions of some members to "balance the overall results of the negotiation on non-agricultural market access, which includes the coefficient in paragraph 5 and the levels of flexibilities and related provisions of paragraph 7" is clearly not mandated.
"The sectorals are clearly non-mandatory as recorded in paragraph 9. The ambitions of some members to seek more market access recorded in paragraph 9 cannot be given greater legitimacy when it is in contradiction to this mandate."
11 also spoke on issues that relate to other developing countries in
the text, such as those with low binding averages (so called
"However, the revised draft text suffers from similar attempts to raise the level of ambition for these groups that is beyond their development capacity," said NAMA 11, adding it fully supports the efforts of these groups to secure a more balanced and fair outcome in the NAMA negotiations."
is also not possible to negotiate on the basis of the coefficient ranges
given by the Chair, said
Stancanelli told journalists that in the agriculture text, developed countries were asked to reduce their average tariff by 54% and developing countries by up to 36% (which is two thirds of the level of developed countries). However, in NAMA there was an opposite relationship, as the coefficients mean that developing countries have to cut their tariffs by 53-58 per cent whereas developed countries have to cut by less, i. e. 43-49 per cent.
This, said Stancanelli, is the reverse of less than full reciprocity and is unacceptable. Without changes to the figures, there is no possibility to assist the Ministerial (to succeed). Changes have to be made to the text for the Ministers to reach agreement. He reiterated the NAMA 11 proposal that the coefficient for developing countries should be at least 25 points higher than the coefficient for developed countries.
China said that the level of ambition must be fair and balanced, and it regretted that this element (of fairness and balance) is not there in the two balances, i. e. the balance between agriculture and NAMA and the balance in NAMA itself (between developed and developing countries).
the sectoral approach,
recently acceded members (RAMs),
added that the coefficients needs to be altered. The flexibilities for
developing countries cannot be violated. On the anti-concentration clause,
this is not acceptable to
United States said it had come optimistic to this meeting because it
sensed that members were ready to see compromises, but now listening
to a couple of interventions, it feel disturbed. One of these interventions
was by NAMA 11, it said. On the numbers in the brackets, we don't like
them either, but the agreement must be on the basis of the numbers that
are in those brackets, said the
supported flexibility, but within the ranges, and also tied to the ranges
of the coefficients as it stands now. It referred to some members that
mentioned that the gap between the coefficients between the developed
and developing countries goes against the less than full reciprocity
principle, but for the
the anti-concentration clause, the
erosion of preferences, the
The EU said there was clearly an improvement in the text, which now had less brackets. It is good that the coefficients are unchanged but the link between coefficients and flexibilities means a watering down of ambition, added the EU. It said the anti-concentration clause is key for the EU because we want to have meaningful market access in all sectors. On RAMs, it was concerned about the footnote in the paragraph related to RAMs, as it raised the possibility of further negotiation to the flexibilities, and this is unacceptable, said the EU.
After the meeting, Stephenson told the media that following the issuing of his new text, there had been discussions on the issue of products affected by preference erosion, with a line by line discussion on tariff lines.
was also discussion with representatives of "
He added that the whole text is not a consensus text but still a Chairman's text. On issues like anti-concentration and the link between sectorals and the formula, and on the overall ambition level, there are still deep divisions.
"I think that members today spent most of their time signaling each other about the positions they will take next week in the TNC process," he said. +