Bridges Weekly Trade News Digest • Volume 7 • Number 28 • 21st August 2003

North-South Divide Persists As WTO Market Access Talks Move Towards Cancun

Do More

Subscribe to Bridges

* required

Email Address: *

Country: *
Albania Algeria American Samoa Andorra Angola Anguilla Antarctica Antigua And Barbuda Argentina Armenia Aruba Australia Austria Azerbaijan Bahamas, The Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia Bosnia and Herzegovina Botswana Bouvet Island Brazil British Indian Ocean Territory Brunei Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Cape Verde Cayman Islands Central African Republic Chad Chile China Christmas Island Cocos (Keeling) Islands Colombia Comoros Congo Congo, Democractic Republic of the Cook Islands Costa Rica Cote D'Ivoire (Ivory Coast) Croatia (Hrvatska) Cuba Cyprus Czech Republic Denmark Djibouti Dominica Dominican Republic East Timor Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands (Islas Malvinas) Faroe Islands Fiji Islands Finland France French Guiana French Polynesia French Southern Territories Gabon Gambia, The Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guinea Guinea-Bissau Guyana Haiti Heard and McDonald Islands Honduras Hong Kong S.A.R. Hungary Iceland India Indonesia Iran Iraq Ireland Israel Italy Jamaica Japan Jordan Kazakhstan Kenya Kiribati Korea Korea, North Kuwait Kyrgyzstan Laos Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macau S.A.R. Macedonia, Former Yugoslav Republic of Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Mexico Micronesia Moldova Monaco Mongolia Montserrat Morocco Mozambique Myanmar Namibia Nauru Nepal Netherlands Antilles Netherlands, The New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island Northern Mariana Islands Norway Oman Pakistan Palau Panama Papua new Guinea Paraguay Peru Philippines Pitcairn Island Poland Portugal Puerto Rico Qatar Reunion Romania Russia Rwanda Saint Helena Saint Kitts And Nevis Saint Lucia Saint Pierre and Miquelon Saint Vincent And The Grenadines Samoa San Marino Sao Tome and Principe Saudi Arabia Senegal Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa South Georgia And The South Sandwich Islands Spain Sri Lanka Sudan Suriname Svalbard And Jan Mayen Islands Swaziland Sweden Switzerland Syria Taiwan Tajikistan Tanzania Thailand Togo Tokelau Tonga Trinidad And Tobago Tunisia Turkey Turkmenistan Turks And Caicos Islands Tuvalu Uganda Ukraine United Arab Emirates United Kingdom United States United States Minor Outlying Islands Uruguay Uzbekistan Vanuatu Vatican City State (Holy See) Venezuela Vietnam Virgin Islands (British) Virgin Islands (US) Wallis And Futuna Islands Yemen Yugoslavia Zambia Zimbabwe

Employment Sector: *

First Name:

Last Name:

Organisation:

Enter the letters shown above:*

Download this issue

See also

Gaps between developed and developing countries on how to structure negotiations on liberalisation of industrial goods continue to hold back agreement on a modalities text prior to Cancun. As BRIDGES Weekly went to press, market access talks were revolving around a 1.5-page informal paper that would appear as an annex to a new draft Ministerial Declaration expected to be released on 22 August. The draft Ministerial text and any annexes will ultimately be forwarded to trade ministers at the fifth WTO Ministerial Conference from 10-14 September in Cancun, Mexico.

The annex, prepared by the Chair of the Negotiating Group on Non- Agricultural Market Access (NAMA), Amb. Pierre-Louis Girard, earlier this week, is a compromise option that provides general guidelines based around a draft modalities paper he released earlier on 16 May (see BRIDGES Weekly, 17 July). The annex is designed to elicit guidance from ministers at Cancun on how to proceed with the market access talks and bridge outstanding North-South differences.

Disagreement centres around both market access formulas and provisions on special and differential treatment (S&D) for developing countries. The US, New Zealand and other developed countries are pushing for stronger, more specific language on market access in the annex, while India, Brazil and other developing countries are concerned that too much specific content would prejudge an outcome at the Ministerial. The Chair’s annex text, according to trade sources, is an attempt to find a balance between the high level of ambition of some Members on the one hand, and S&D, less than full reciprocity and equal participatation in the process on the other.

Developed country modalities proposal meets with resistance

At an informal Heads of Delegation meeting on 12 August, many developing countries rejected a contribution from Canada, the EC and the US on modalities (JOB(03)/163, available at http://www.ictsd.org/ministerial/cancun/docs/163.pdf) that suggests more drastic cuts than those contained in Girard’s 16 May paper and would require steeper tariff cuts in developing countries than in industrialised states. The Canada/EC/US paper forwards an ambitious tariff reduction formula designed to harmonise tariff lines by reducing high tariffs by a significantly greater margin than low tariffs. Pakistan said that the proposal was inequitable, as developing countries — which tend to have higher tariffs on industrial goods — would be required to cut their tariffs drastically, while developed country Members would only need to make marginal cuts.

On S&D the Canada/EC/US paper suggests that credits could be granted to developing countries that either bind more than 95 percent of their tariffs or bring their bound rates closer to the level of applied rates. Credits would be put toward a reduction in these countries’ tariff formula cut. Here again developing countries opposed. Mexico’s ambassador Eduardo Perez Motta told other Members that such an approach uses S&D "as a reward," while Pakistan said that the provisions were for developed, and not for developing, countries. India said that the S&D component of the industrialised countries’ paper was "unclear" and doubted whether there were any benefits for developing countries.

At a formal meeting of the NAMA on 13-15 August, Members for the most part discussed a ‘Possible Options’ paper drafted by Chair Girard (available at available at http://www.ictsd.org/ministerial/cancun/docs/155.pdf), which attempted to integrate some of the concerns expressed on his draft modalities paper since May. A number of developing countries said the Options paper complicated things by adding another variable requiring negotiation in the tariff reduction formula, and by requiring higher tariff cuts from developing countries. The Chair responded by saying the second introduced variable (the average of the base tariff rates, which could be capped at a certain level to be determined by Members) was in fact a way to compensate the effects of the first. Developing countries also reiterated their concerns that sectorial tariff elimination as specified in the original draft be made voluntary, not mandatory, as currently specified. On 19 August, Chair Girard released a revised version of his May draft (TN/MA/W/35/Rev.1, available at http://docsonline.wto.org) which to a great extent reflected the changes suggested in his Options paper. However, since talks have now shifted to discussing the content of the annex paper, this revised modalities paper has been put on the back burner until after Cancun.

Kenya indicated that the Chair’s Options paper had not given enough attention to the concerns expressed by African countries. In a paper circulated on 11 August on behalf of a number of developing African states (TN/MA/W/40), Kenya said that the Chair’s proposed tariff reduction formula would lead to a worsening balance of trade in poorer countries, as tariff cuts on their generally higher rates would not be matched by reductions in rich economies. Kenya added that the Chair’s modalities on S&D should be based on objective criteria, instead of ambiguous language.

Links to agriculture

Some Members are now making more explicit links between the NAMA talks and negotiations on modalities in agricultural liberalisation. Brazil, India, Mexico, South Africa and Malaysia all said last week that they are reluctant to move on NAMA until there are concrete results in the agriculture negotiations. Brazil has taken this one step further by saying there should be a link between market access and talks under the Rules Negotiating Group, for instance on anti-dumping.

Mexico asked the EC how it could expect developing countries to make deep commitments in industrial tariffs while it continued to stall in the removal of its agricultural subsidies.

ICTSD reporting; "Trade: Rich Countries Stake Bets on Industry," IPS, 12 August 2003; "US-EC-Canada Proposal On Non-Agricultural Market Access Draws Angry Response From Developing Countries," THIRD WORLD NETWORK, 12 August 2003.