TWN Info Service on WTO and Trade Issues (Nov07/17)

12 November 2007

New NAMA text also postponed to end-November

The revised text on modalities for NAMA will most likely come out at the end of November, instead of mid-November.

The postponement follows a similar delay in the issuing of a revised draft text on agriculture modalities.

This was announced by the NAMA chair at a NAMA meeting on 5 Nov.

The meeting also discussed the treatment of LDCs and countries with low tariff bindings.  There was no progress on these.

Below is a report that was published in the SUNS on 7 Nov.  It is reproduced here with the permission of the SUNS. Reproduction or recirculation requires the permission of SUNS (sunstwn@bluewin.ch).

With best wishes
Martin Khor
TWN

New NAMA text also postponed to end-November
By Martin Khor, Geneva 6 Nov 2007

The revised text on modalities for non-agricultural market access (NAMA) in the WTO's Doha negotiations will most likely come out at the end of November, instead of mid-November.

The postponement follows a similar delay in the issuing of a revised draft text on agriculture modalities.

The chair of the NAMA negotiating group, Ambassador Don Stephenson of Canada, announced the new deadline for his revised modalities paper during an informal NAMA meeting on Monday (5 November) afternoon at the WTO.

The open-ended meeting (to which all delegations are invited) also discussed two categories of members - least developed countries and countries with low level of tariff bindings. There were divergences of positions on these two issues, with the Chair concluding that there was no progress.

Stephenson told the meeting that since a delay has been announced for the issuing of the agriculture modalities paper, and since the two processes are linked, there will also be a delay of one or two weeks in the NAMA process, and in the issuing of his revised text.

The first draft of Stephenson's modalities paper was issued in July. Many of the proposals in the paper has since met with strong opposition from various groupings of developing countries, including his range of coefficients used in the tariff-reduction formula, the figures for average tariff levels to be achieved by small and vulnerable economies, and the figure for the new level of tariff bindings to be achieved by countries with low tariff bindings.

Last Friday, the chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, had announced that he would continue some consultations and thus would delay issuing his revised text.

He indicated to some diplomats that instead of mid-November, his paper may come out at the end of November or even the beginning of December.

The pushing back of the deadlines for the two papers is making it even more of an uphill task to finalise the modalities before the WTO takes its break in December.

This week, Stephenson is holding open-ended NAMA meetings on several issues. On Monday, the meeting discussed Least Developed Countries (LDCs) and the treatment of countries with a low level of tariff bindings.

There will be no open-ended meeting on Tuesday which is scheduled for bilateral consultations. On Wednesday, the meeting will be on special treatment for Small, Vulnerable Economies (SVEs) and Recently Acceded Members (RAMs).

On Thursday, the meeting will be on the key issue of coefficients for the tariff-reduction formula and flexibilities for developing countries and on the Friday agenda is the problem of Members affected by the erosion of trade preferences and the effects on others of possible solutions.

At the Monday meeting, there was no progress on the two issues discussed, according to trade officials.

On the LDC issue, the LDC Group had submitted draft language to revise the Chair's July text, aimed at strengthening the market access benefits to LDCs. The meeting discussed the LDC proposal. Some countries opposed the LDC proposal for what they thought was going beyond the mandate provided.

The WTO's Hong Kong Ministerial Conference in December 2005 agreed that developed countries shall, and developing-country Members declaring themselves in a position to do so, should provide duty-free and quota-free (DFQF) market access for all products originating from all LDCs by 2008 or no later than the start of the implementation period.

It also agreed that developed countries having difficulties at this time to fulfil this commitment would provide DFQF access for at least 97 per cent of products by 2008. The Ministerial Declaration also agreed to ensure that preferential rules of origin are transparent and simple.

Stephenson's July 2007 text calls for the full implementation of these decisions "as agreed".

The LDC group (with Lesotho as coordinator) has proposed that the Chair's text be amended to include a concrete timetable for the provision of 97% DFQF market access for those countries still in the process of defining their participation, and also for fulfilling the commitment on the remaining 3% of products. The Group also requested stronger language on Rules of Origin and a provision for technical assistance and Capacity Building.

Stephenson told the meeting that the LDCs are making four requests:

-- They have tabled a list of additional items (that are affected by preference erosion) that they would like covered in annexes 2 and 3 of the July 2007 text.

-- They want a clear road map of the implementation of DFQF provisions of the Hong Kong Ministerial Declaration (97% of products as well as the remaining 3%).

-- A commitment on simplification of Rules of Origin for relevant products.

-- A strong commitment on provisions of Technical Assistance and Capacity Building for LDCs.

At the meeting, several developed countries said that the language proposed by the LDC group, especially on rules of origin, went beyond the mandate given in Hong Kong.

Japan said that the LDCs should not increase their demands at this stage. Australia, New Zealand, EC and US said that they did not want to re-negotiate Rules of Origin and they were uncomfortable about strong language in the NAMA text.

The meeting also discussed the treatment to be given to developing countries with low binding coverage (they have bound 35% or less of their industrial tariffs) and which are often referred to as the "Para 6 countries" as their case is mentioned in Paragraph 6 of the August 2004 framework.

These 12 countries (Cameroon, Congo, Cote d'Ivoire, Cuba, Ghana, Kenya, Mauritius, Nigeria, Suriname, Zimbabwe, Macao and Sri Lanka) are exempted from having to apply the Swiss formula cut, but are obliged to increase "substantially" their binding coverage and to reduce their average tariff level to a maximum of 28.5% (the present average level of developing countries).

In his July 2007 text, Stephenson suggested that these countries have to increase their binding to at least 90% of tariff lines. This is objected to by the "Para 6" countries, who want the binding to be a minimum of 70% of tariffs.

During the discussions of the past fortnight and of Monday itself, different figures had been suggested by different members.

At the meeting, the Chair asked whether 80% of binding coverage was acceptable. However, there was no conclusion even after a long debate, with figures ranging from 70% to 100%, according to trade officials.

Mexico and Costa Rica suggested that the tariff average could be raised 28.5% to 30% in return for a 90% binding coverage. But this was opposed by many developed countries and some developing countries which were of the view that the 28.5% level had been agreed to and should not be re-negotiated.

The Chair remarked that the discussion and the figures mentioned had "turned the clock back a couple of years" and regretted that this meant that there had been little progress on this issue.