Bridges Weekly Trade News Digest • Volume 12 • Number 37 • 6th November 2008

NAMA-11 Issues Warning on Sectorals

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A group of major developing countries released a statement last week rebuking efforts to create incentives for countries to join sector-specific liberalisation initiatives in the WTO’s industrial goods negotiations.

Dated 27 October, the statement (TN/MA/W/108) by the NAMA-11 group of 10 developing countries outlined the group’s concerns that sectoral initiatives are becoming an integral part of the non-agricultural market access (NAMA) negotiations. According to a declaration agreed at the 2005 WTO ministerial in Hong Kong, participation in the measures should be purely voluntary.

The US and some other developed countries have pushed for liberalisation initiatives in 14 sectors, including auto parts, bicycles, chemicals, electronic products, fish products, forestry products, gems and toys. The measures would either eliminate or drastically reduce tariffs on goods in the sector in question.

While the NAMA-11 countries do not object to supplementary voluntary sectoral deals, they say that linking participation in the proposals to an overall Doha deal effectively make them obligatory.

“For the NAMA-11 any attempt to elevate sectoral negotiations negates many aspects of the NAMA mandate and the ministerial directions governing the negotiations,” the statement said.

Such deals, the group said, would likely hurt the poorest developing countries that rely on preferential access to developed markets.

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 (see BRIDGES Weekly, 30 October 2008, http://ictsd.net/i/news/bridgesweekly/32370/). This view has upset China, which, though not part of the NAMA-11 group, is also critical of the sectoral proposals. Given the size of the Chinese market, Beijing considers the ‘critical mass’ approach to be code for Chinese participation.

But of the NAMA-11 group members, the signature of the Philippines was absent from the statement. Manila “did not sign the statement because [we are] unsure of the real status among [WTO] members [of whether sectoral deals] are voluntary or mandatory,” Senior Trade Undersecretary Thomas G Aquino said, reported Business World.

The division highlights the fact, which has been underscored by WTO Director-General Pascal Lamy, that many serious issues — in addition to the contentious special safeguard mechanism that has scuppered the agricultural talks — must still be addressed if the Doha trade talks are to be brought to a successful conclusion.

The NAMA-11 group is made up of Argentina, Brazil, Egypt, India, Indonesia, Namibia, the Philippines, South Africa, Tunisia and Venezuela.

ICTSD reporting; “Developing countries warn against WTO sector deals,” REUTERS, 4 November 2008; “RP breaks ranks in WTO talks,” BUSINESS WORLD, 5 November 2008.