Bridges Weekly Trade News Digest • Volume  • Number  • 16th June 2004

NAMA Talks Progress In Anticipation Of Agriculture Breakthrough

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The WTO Negotiating Group on Non-Agricultural Market Access (NAMA) convened in formal sessions on 9 and 11 June, with Members meeting informally between these. Members continued discussing the formula for tariff reductions for industrial goods, with a view to a package to be agreed by the end of July (see BRIDGES Weekly, 9 June 2004). Discussions also focused on how to accommodate the weaker and more vulnerable countries, and on non-tariff barriers (NTBs). A limited number of Members led by the US, Canada and Hong Kong, met to discuss options for how to proceed on zero-tariff initiatives in sectors where there was "critical mass" to support such an approach.

NAMA agreement pending ag outcome

During their round of NAMA talks, Members continued consideration of an appropriate tariff reduction formula. According to trade sources, the meetings saw some increase in the level of comfort Members had with the "Derbez text" — the draft currently under consideration but never adopted at Cancun (see http://www.ictsd.org/ministerial/cancun/docs/draft_cancun_minist_text_rev2.pdf). Although no one is happy with the Derbez text, it could, according to one trade delegate, leave enough space for manoeuvre both for countries in favour of a very ambitious formula and countries looking for significant flexibility. However, an agreement is expected only once further progress is reached in agriculture, currently the centrepiece of the WTO talks (see related story, this issue).

Also under discussion was the issue of how to accommodate weak and vulnerable countries in the NAMA negotiations. In the wake of a letter sent to WTO Members by EC Trade Commissioner Pascal Lamy and Agriculture Commissioner Franz Fischler on 10 May (see BRIDGES Weekly, 13 May 2004), Members disagreed on how and whether to operationalise principles supporting the concerns of the WTO’s poorest countries. . The Lamy-Fischler letter had suggested the weakest countries should not be required to further open their markets, only bind their existing tariffs. This suggestion led to unease in the NAMA group, both because of the implied and unclear differentiation among developing countries, and because some Members felt the issue belonged among other development issues rather than in NAMA specifically.

Members brainstorm on sectoral approach

On 11 June, the US, Canada and Hong Kong organised a plurilateral meeting to explore and garner support among Members on a "critical mass" approach in eliminating tariffs on certain products as part of the NAMA talks. The United Arab Emirates had also submitted a proposal for eliminating tariffs on aluminium to the formal NAMA meeting. A number of developing countries, such as Brazil, which had taken a negative stance on the approach, said that any movement would have to depend on positive outcomes in agriculture and the rest of the NAMA negotiations. After the meeting, the US indicated that support was growing for the "critical mass" approach.

Talks on NTBs remain at a general level

Paragraph 16 of the Doha Declaration states that countries agree to "negotiations which shall aim, by modalities to be agreed, to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries". The issue of non-tariff barriers (NTBs), however, has been given scant attention, as Members have put most of their efforts into finding agreement on a formula for tariff reductions. Noting that some discussion surfaced during the previous round of NAMA talks (see BRIDGES Weekly, 19 May 2004), Chair Johannesson invited Members to comment on how NTBs could be dealt with. Members that recently submitted notifications on NTBs also provided some general information on their experiences.

Overall, Members felt they needed more time to consider NTBs. At this point, Members do not agree on where and how the problem of NTBs should be treated; whether in the NAMA group, in the Committee on Technical Barriers to Trade (TBT); or a combination of the two. Several countries also felt they needed more input from their industries on the situation on the ground, and needed their industries’ involvement.

Wrapping up the NAMA negotiations on 11 June, Chair Stefan Johannesson (Iceland), noted that progress in NAMA was linked to any forward movement in agriculture. He stressed, however, that it was important for the NAMA group to move ahead with its work in order to be prepared to make its contribution to an eventual July package.

The next session of NAMA negotiations are tentatively scheduled for 6-8 July.

ICTSD reporting; "U.S. Urges ‘Critical Mass’ Approach In WTO Non-Ag Market Access Talks," WTO REPORTER, 15 June 2004.