TWN Info Service on Trade and WTO Issues (July08/30)
23 July 2008
Third World Network

Trade: Clash on NAMA on the cards as NAMA-11 attacks text
Published in SUNS #6523 dated 23 July 2008

Geneva, 22 July (Martin Khor) -- Ministers of key NAMA-11 countries have strongly criticized the latest text on non-agricultural market access (NAMA) during the open informal Trade Negotiations Committee meeting at the WTO, taking place in parallel to the negotiations in the exclusive Green Room meetings.

South Africa's Trade Minister on 22 July at the TNC introduced a NAMA-11 Ministerial Communique and also made a lengthy statement detailing the problems with the text issued on 10 July by the Chair of the NAMA negotiating group, Canadian Ambassador Don Stephenson.

A day earlier, Argentina's Minister also made a strongly critical statement at the TNC, saying that the text was not fit to be used for this week's process at the WTO. Asking developed countries to cut tariffs by less than developing countries is "completely out of the question."

At the same time, the Venezuelan Minister attacked the NAMA text for giving "small vulnerable economy status" to major developing countries which only have to cut their tariffs by less than 30% whereas developing countries' reductions were 40 to 60 per cent.

The charge that the NAMA text is imbalanced and has to be corrected was also made by Ministers of Brazil and China and India's top trade official. (See separate article).

The NAMA-11 Ministers' positions are in contradiction to the demands made by Trade Ministers of the USA, EU and Japan, who are asking the "emerging developing countries" to have deep NAMA commitments so that they can "sell" their own agriculture commitments to their national constituencies. (See separate article).

A major clash in the Green Room between the NAMA-11 countries and the major developed countries is thus to be expected.

South Africa's Minister said that the development commitment in the Doha Declaration is under threat and that while it is important to conclude negotiations as soon as possible, "this cannot be at the expense of the Round's development content."

Meaningful outcomes in agriculture with changes in rules and that allow developing countries to realize their comparative advantage is the essential measure of the developmental content of the Round, said South Africa.

There is no indication that South Africa farmers will obtain any new market access into developed countries' agricultural markets and also that there will be no real cuts in their overall trade distorting domestic support.

South Africa said in the last two years the NAMA texts that emerged consistently ignored the positions of NAMA-11 (which South Africa coordinates). It is difficult to accept a process which ignores our positions. In contrast to the agriculture text, the NAMA paper is highly circumscribed. It sets out a narrow range of coefficients and offers flexibilities with a double constraint in terms of percentage of tariff lines and trade volumes that can be covered.

"We cannot accept proposals that reverse the principle of less than full reciprocity for developing countries," said South Africa. It criticized demands that result in developing countries having to reduce their tariffs deeply and in excess of the cuts by developed countries. "These demands are inconsistent with the Doha mandate and cannot be a basis for concluding the Round."

Demanding an adequate level of flexibilities, South Africa said the minimal levels given cannot accommodate developing countries' concerns. It is also deeply concerned that the new proposals on anti-concentration and sectorals will further limit the already limited flexibilities. These proposals can lead to the breakdown of this process.

Noting that South Africa is asked to make cuts in applied tariffs in 60% of tariff lines and at rates of 25% in sensitive sectors, the Minister said anything short of a significant expansion of flexibilities and an appropriate increase in coefficient will be politically, economically and socially very difficult to justify in a country with 23-26% unemployment. "At outcome cannot be at the expense of our industrial development prospects or at the expense of deepening unemployment and poverty."

Argentina said agriculture is far from "stabilized". On domestic support, there must be effective cuts in OTDS, product specific disciplines in amber and blue boxes and the green box payments must not be trade or production distorting.

It added that the NAMA draft is "not fit for this horizontal process" since the Chair did not factor in the views of developing countries. If the principles and mandates of the Round are not respected, the process would be meaningless. It stressed the principle of less than full reciprocity in reduction commitments, and para 24 of the Hong Kong declaration on comparable ambition in agriculture and NAMA.

Although Argentina is willing to compromise, "accepting that average cuts for developed countries could be lower than those for developing countries is completely out of the question."

Meanwhile, the Ministers of the NAMA-11 met on 20 July in Geneva and issued a Communique. It said that the "Ministers viewed the text as being seriously imbalanced."

The Ministers reaffirmed the NAMA-11 position that the spread of coefficients between developed and developing countries needs to be made consistent with the mandate and the principle of less than full reciprocity in reduction commitments.

They regretted that the proposal continues to ignore the positions of the NAMA-11 on the issue of the ranges, and pays no attention to the needs of an important group of developing countries.

They said the proposal on the coefficients will "need to be the subject of further negotiations as it imposes onerous and disproportionate obligations on those developing countries that will be required to undertake formula cuts."

They rejected any attempt to further constrain the already limited flexibilities provided in the modalities text, particularly the very recent anti-concentration proposals.

"Ministers reiterated that an adequate level of flexibilities is an essential element of the final package. Ministers reiterated that sectoral negotiations should remain voluntary and that there could be no linkage between sectoral negotiations and the coefficients and flexibilities.

"Ministers reaffirmed the centrality of agriculture in the DDA, and reiterated that Paragraph 24 of the Hong Kong Ministerial Declaration requires that there shall be a comparable level of ambition between Agriculture and NAMA.

"Ministers observed the progress in several other important areas, including the mark-up for unbound tariffs, implementation periods, and non-tariff barriers. The Ministers urged that an equitable outcome be achieved that takes into account the particular development situation of Venezuela." +