Bridges Weekly Trade News Digest • Volume 12 • Number 36 • 30th October 2008

Sectorals on Hold for Now in WTO Industrial Goods Talks

Discuss this articleShare your views with other visitors, and read what they have to say

Negotiations toward a deal to liberalise trade in the industrial sector have picked up again, the new chair of the WTO’s committee on industrial goods said last week, but multilateral talks on controversial sector-specific liberalisation initiatives will be put on hold while the key players in that debate work to hammer out their differences.

The new chair, Luzius Wasescha of Switzerland, has held consultations with more than 47 delegations since he took over from Canadian Don Stephenson of Canada as head of the committee on non-agricultural market access, or NAMA, at the beginning of October. The new chair is scheduled to continue the meetings this week.

The “starting point” for those talks will be the draft text released on 10 July this year, Wasescha said in a ‘transparency session’ with WTO Members on 22 October, an approach to which no Member objected.

Sectorals left alone for now

Wasescha said that delegations on both sides of the debate on sectoral initiatives agreed that multilateral talks on the matter should be shelved to allow Members to negotiate one-on-one and in small-group settings.

“With regard to sectorals, both the proponents and the sceptics are not keen to engage in a multilateral process at this stage,” Wasescha told journalists after the meeting, Reuters reported.

The controversial measures would require developed countries to eliminate all tariffs on the goods covered by the agreement, while developing countries would be allowed to retain low duties on a small number of products. Sectoral initiatives have been proposed in 14 sectors, including auto parts, bicycles, chemicals, electronic products, fish products, forestry products, gems and toys.

Developed countries have argued that sectoral tariff cuts, which would go beyond the demands of the standard tariff reduction formula, should only take effect once a ‘critical mass’ of countries that account for a significant proportion of total international trade in the product have signed on to the agreement. Since participating countries would extend tariff cuts to all WTO Members, proponents of sectorals are eager to avoid ‘free riding’ by any major economies.

Indeed, developed country business groups have said that a Doha deal must require the robust participation of both developed and emerging economies in sectoral initiatives. They have also said any agreement must include an ‘anti-concentration clause’ that would prevent developing countries from focusing their tariff-reduction flexibilities on a limited number of industrial sectors.

But Indian industry groups have argued forcefully for a minimal anti-concentration clause, and have said that sectoral initiatives must be purely voluntary and should offer no incentives for participation. The measures, the Indian critics say, favour developed countries and would hurt small and medium enterprises in India.

‘Formula and flexibilities’ also on the backburner for the moment

Wasescha said he would also put off negotiations on the critical ‘formula and flexibilities’ in the industrial goods talks - measures that will set countries’ future tariff levels and determine the extent to which developing nations will be able to shield some products from full duty cuts. These core issues would have to be addressed at a later date, Wasescha said, after he has gotten a better understanding of where Members stand.

But the chair indicated that, starting this week, consultations would be going forward on the erosion of tariff preferences and on special flexibilities for Oman, South Africa and Venezuela. Non-tariff barriers and the treatment of recently acceded Members and small and vulnerable economies would also be addressed. Wasescha further indicated that he planned to begin raising the core ‘formula and flexibilities’ issues in meetings with Members the week beginning 10 November.

Wasescha told Members that he is working under the assumption that he will produce a draft text before the end of the year, but that much work lies ahead.

“If the members engage and do the work, it’s feasible, not easy but feasible,” Wasescha told journalists after the meeting, Reuters reported.

And while the chair stressed that only the Members could produce any real progress in the talks, he did leave open the possibility that he could insert himself more forcefully into the process. “Either a solution is found among Members themselves, or the chair will have to impose one,” he said.

ICTSD reporting. “WTO revises industry sector approach in Doha push,” REUTERS, 23 October 2008.

One response to “Sectorals on Hold for Now in WTO Industrial Goods Talks”

ICTSD • NAMA-11 Issues Warning on Sectorals 6th November 2008 at 09:16
[...] Developing Countries Disagree On Industrial Market Access ApproachSectorals on Hold for Now in WTO Industrial Goods TalksNAMA Talks Blocked Due To Standstill On Agriculture: ChairGoods Council: Members Repeat Past [...]