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TWN Info Service on Trade and WTO Issues (Dec08/10)
5 December 2008
Third World Network

Trade: NAMA Chair highlights three main challenging issues
Published in SUNS #6604 dated 4 December 2008

Geneva, 3 Dec (Kanaga Raja) -- The Chair of the non-agricultural market access (NAMA) negotiations at the WTO, Ambassador Luzius Wasescha of Switzerland, highlighted at an informal open-ended meeting on Tuesday, the sectoral initiative, preference erosion and country-specific flexibilities as the three main challenging issues in the negotiations.

Amb. Wasescha of Switzerland was reporting on his recent consultations to resolve some outstanding issues in NAMA.

On the sectoral initiative, the Chair told the membership that "many things have to happen before we can make progress."

At a press briefing after the informal NAMA meeting, Wasescha indicated that the issue of the sectoral initiative "for sure" will go to the Ministers.

Asked whether the sectoral initiative would be a deal-breaker, the Swiss envoy said "I wouldn't qualify it as a deal-breaker, but it's a serious, difficult question which has to be put on the adequate track."

On the issue of preference erosion (the situation of countries affected by a possible delay in liberalization for certain tariff lines in some big markets), the Chair told journalists that Ministers will have to address the political definition of what "disproportionately affected" means, and that he would not be surprised if some of the country-specific issues (Gabon, Oman, Venezuela, South African Customs Union and Argentina have requests for special treatment) would also land on the table of Ministers.

At the informal meeting, the Chair announced that members will have a new modalities text before next week, although the text might come out a couple of days later than the one prepared by the Chair of the agriculture negotiations.

According to trade officials, the main problem in the sectoral initiative is two-fold: on the one hand, the need by some countries (US, Japan and Canada) to have more clarity and predictability regarding other members' commitment to participate in specific sectoral initiatives in order to have a successful outcome; on the other hand, the reluctance or impossibility by others to provide such assurances or commitment at this stage (China, India, Brazil and others).

On Mexico's call for providing the incentive of compensation (in terms of a higher coefficient) for participating countries, the Chair said this has now collapsed and "it is no longer on the table."

But issues such as product coverage, possible establishment of sub-sectors, and special and differential treatment for developing countries are still on the table.

The Chair said that the key now is to find adequate language that can give comfort to everybody. The detailed negotiations on participation and product coverage will come after the establishment of modalities.

With respect to the sectoral initiative, according to trade officials, China voiced concerns over attempts to change the mandate, which says that participation in the sectoral initiative is non-mandatory.

On preference erosion, trade officials said that the membership is still deeply divided on the problem of the erosion of preferences for countries that have preferential access for their products in the US and EC markets, both on the composition of the list of tariff lines affected and on the growing list of countries considering themselves as being disproportionately affected by a solution.

The Chair said that there is need for a political definition of the concept of "disproportionately affected".

On country-specific flexibilities, trade officials said that some members (such as the US, EC and Japan) said that they are still not convinced by the merits of some of the requests for special treatment, different from that of other developing countries.

They are asking for more specific, reasonable and rigorous documentation to justify the cases, in particular those of Venezuela and Argentina, and why the current flexibilities cannot accommodate their concerns.

According to trade officials, the question of Gabon has been solved, the one on Oman is almost solved and there are new consultations on the request of South Africa on behalf of the South African Customs Union (SACU).

The Chair asked the membership for generosity and for providing "a special menu" for those that cannot digest what is on the table.

Meanwhile, speaking at a press briefing after the informal meeting, Ambassador Wasescha, in providing an assessment, said that there are fair chances to solve additional questions by the end of this week, but this requires additional consultations. Therefore, he said that his text will come out at the very end of this week.

At the beginning of next week, there will be an open-ended meeting where members will be able to react to his new text.

The Chair noted that the sectoral initiative is one issue "for sure" will go to the Ministers. "Of course, we don't know yet in what form, but this will be on the menu for ministers."

On preference erosion, he said that Ministers will have to try their hand on a "political definition" of what 'disproportionately affected' could mean.

He would also not be surprised if some of the country-specific issues would also land on the table of the Ministers.

"All other aspects, I am very optimistic to solve them together with the members," said the Chair.

Asked about the need for narrowing down before the Ministerial, the differences on the three issues of the sectoral initiative, preference erosion and country-specific flexibilities, and the fact that this has not happened, the Chair, to provide an illustration of the situation, quoted someone (whom he declined to identify) as saying that the sectoral initiative could be to the December process what the SSM (Special Safeguard Mechanism) was to the July process (which resulted in a failed Ministerial that month).

"This does not mean that we are not working on this. On the contrary, we are working hard to get the conceptual aspects right to simplify the number of questions which will be put to the Ministers in the context of the issues, and the Ministers will have to assess whether there is a balance."

The alternative in preference erosion is that "we re-open the whole package and then we are on a cruise for at least two or three years, and then the whole system will be disproportionately affected," he said.

The Chair pointed out that the tricky issues in the sectoral initiative are the link with the Single Undertaking; the conceptual clarity on what does mandatory or non-mandatory mean for developing countries; and the timing, that is, the discussion on what has to be fixed now and what has to be put in a work programme after the adoption of the modalities.

Asked if the sectoral initiative would be a deal-breaker, he said "I wouldn't qualify it as a deal-breaker, but it's a serious, difficult question which has to be put on the adequate track." +

 


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