TWN Info Service on WTO and Trade Issues (Mar07/04)

20 March 2007

End-Feb meeting shows no breakthrough in NAMA talks
Published in SUNS #6200 dated 28 February 2007

At the end of Februray, a meeting on NAMA at the WTO heard from the chair of the working group that consultations had not produced any breakthrough, and members continue to maintain a cautious stance, insisting that there should be movement first in agriculture.
He was reporting to the WTO members on 26 Feb.
Below is a report that was published in the SUNS on 28 Feb 2007.

With best wishes
Martin Khor
End-Feb meeting shows no breakthrough in NAMA talks
Published in SUNS #6200 dated 28 February 2007
By Kanaga Raja, Geneva, 27 Feb 2007
Small group consultations on Market Access for Non-Agricultural Products (NAMA) have not produced any breakthrough, and members continue to maintain a cautious stance, insisting that there should be movement first in agriculture, the Chair of the NAMA talks, Ambassador Don Stephenson of Canada, reported on 26 February.
Stephenson was reporting to the membership, at an open-ended consultation, on the so-called NAMA Caucus meetings. Two such meetings have been held since the last NAMA session in January.
The 'caucus' meetings were informal, ambassador-level meetings that took place outside the WTO and were held in parallel with the so-called ''fireside chats'' process taking place in the agriculture negotiations.
Stephenson said that nothing is going to happen inside this Negotiating Group until it happens somewhere else first.
He characterized agriculture as the number one "central tension" in the NAMA negotiations.
The other key issues are: the concept of ''less than full reciprocity'' versus "real market access" or "new trade flows" (the latter two concepts being pushed by developed countries); the "hierarchy of contributions" (the principle that everyone contributes something at their own level of capacity); and sensitive issues or sectors such as preferences for developing countries, textiles and others.
Stephenson further said that the principal obstacle to real negotiations in NAMA is that many Members refuse to discuss the level of ambition in tariff reductions until the level of ambition in agriculture has been established.
He however also said that he has little faith in the theory that NAMA will be easy to resolve after movement is obtained in agriculture.
Croatia, on behalf of a group of 14 Recently Acceded Members (RAMs), submitted a "Negotiating Proposal" (TN/MA/W/83) that calls for differentiated treatment for RAMs within these negotiations.
The group of 14 Recently Acceded Members include Albania, Armenia, China, Croatia, Ecuador, Macedonia, Jordan, Kyrgyz Republic, Moldova, Mongolia, Oman, Panama, Chinese Taipei, and Viet Nam.
According to the proposal, the position of the RAMs, which calls for a differentiated treatment within these negotiations, is legitimate due to the fact that in the process of accession, the RAMs assumed extensive level of commitments in all WTO areas, distinguishing thereby the group from the rest of the membership.
The RAMs consider that the appropriate level of flexibilities that should be awarded to them should be "developing plus" and that such an outcome would involve the following:
* An implementation period 5 years longer than the implementation period for developing countries, a grace period of 5 years and a coefficient that would be 1.5 times higher than the one for the developing countries.
* All RAMs should have recourse to the para 8 flexibilities as amended in the following manner: RAMs should have recourse to apply less than formula cuts to up to 15% of tariff lines provided that the cuts are no less than half the formula cuts, or RAMs may choose exemption from formula cuts for up to 10% of tariff lines.
Additionally, low tariffs of RAMs would be exempted from any kind of reductions within this round. Furthermore, members of the group which meet the criteria for Small and Vulnerable Economies shall have recourse to such treatment, says the proposal.
The proposal cites several reasons including that as a part of liberalization commitments and obligations RAMs have undertaken in the accession process, tariff commitments were set at 100% in binding coverage. The bound rates were close or equal to applied levels, and expressed mostly in ad valorem terms. Furthermore, the tariffs were bound at very low levels (bound average is 10.75%) that is 2.69 times lower than the average final bound tariffs of other developing country members (28.9%).
Also, RAMs' tariff structure reveals that on average 16.77% of tariffs are bound as duty free, while the bulk of them or 77.1% is set at under 15%. These figures clearly indicate that the magnitude of commitments RAMs undertook within the process of accession could be compared only to commitments assumed by other developed members, the proposal said.
According to trade officials, there were no initial reactions from Members to the document.
Meanwhile, new reports were submitted by Members involved in negotiations for "sectoral initiatives" (elimination or harmonization of tariffs in some specific sectors) to update Members on the situation in this area.
The US submitted a paper on its ideas for flexibility options for developing countries in the sectoral initiative.