Bridges Weekly Trade News Digest • Volume 6 • Number 14 • 16th April 2002

WTO: Market Access Negotiators Stuck Over How & When To Structure Talks

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Delegates meeting on 10-11 April in the WTO’s Negotiating Group on non- agricultural Market Access remained at an impasse with regards to establishing a target date to agree on modalities for trade liberalisation talks on industrial goods. Some developing countries, notably India and Kenya, are resisting efforts to establish a deadline to agree on negotiating modalities. A previous Chair’s proposal had suggested Members could agree on modalities by 31 March 2003 (see BRIDGES Weekly, 9 April 2002), in line with a similar March deadline for agriculture and services modalities.

The Doha mandate in non-agricultural market access

WTO negotiations were launched last November in Doha, Qatar, and the Doha Ministerial Declaration in para. 16 outlines the mandate for the reduction or elimination of tariff and non-tariff barriers for non- agricultural products. The para. also singles out products of export interest to developing countries and less than full reciprocity in reduction commitments for developing countries and least-developed countries (LDCs). It further stipulates that modalities to be agreed "will include appropriate studies and capacity-building measures to assist LDCs participate effectively in the negotiations.

Modalities lay out the framework for how negotiations will proceed, and can include numerical targets, formulas, sector-by-sector, and request/offer approaches. Because they structure how and which tariffs will be targeted for reductions, they can have a significant impact the outcome of negotiations. The single undertaking negotiations, of which non-agricultural market access is a part, are scheduled to conclude on 1 January 2005.

10-11 April Negotiating Group

At the 10-11 April meeting, a group of developing countries, including India, Egypt, the Philippines, and Kenya (on behalf of the Africa Group of WTO Members), rejected as unacceptable a compromise date floated by the Negotiating Group Chair, which targeted 30 April 2003 to agree on negotiating modalities [the Chair's April 2003 date was a compromise based on a previously proposed target of 31 March]. A number of these countries said that there should be no benchmark at all on market access since there was none specified in the Doha Declaration, and that more time was needed to consider the implications of using different types of modalities. China also opposed the Chair’s proposal, arguing that it was difficult for developing countries to adhere to tight deadlines in a variety of negotiating groups.

Another group of developing countries, including Mexico, Brazil and Chile, advocated a more flexible approach to the market access negotiations timing. They said that Members could possibly set an informal deadline for the modalities decision, which would reflect the built-in flexibility in the Doha mandate.

Sources indicated that developing country opposition to a target date reflects a reluctance to endorse a "very ambitious" agenda on industrial market access. In particular, one developing country source said, African countries are not interested in new liberalisation efforts as they have carried out many unilateral reforms as part of adjustment programs dictated by the International Monetary Fund and the World Bank. The source also said that it does not make sense to establish a target date for the modalities decision without having assessed whether technical assistance and capacity building have been sufficient for countries to participate in the negotiations.

For their part, industrialised country Members view a March 2003 deadline as reasonable given that the Doha declaration foresees an end to the overall WTO negotiations on 1 January 2005. While they expressed disappointment with the Chair’s proposal of an April 2003 deadline, they did not rule it out. Developed countries are concerned that if the date to agree on modalities is pushed too late in the year, it will leave them little time to confer with their capitals on what next steps to take in market access before the next Ministerial Conference in mid- 2003, and would present a serious obstacle to finishing negotiations by 2005.

During 2002, the group is scheduled to meet on 11-12 July, 12 September, 4-6 Nov, and 2-3 December. According to sources, the first two meetings are scheduled to focus on discussion of tariff and non- tariff barriers. The November meeting would discuss possible modalities for the market access negotiations.

The Chair’s 11 April proposal also included scheduling a stocktaking session in December 2002 and three meetings in 2003: 19-21 February, 19- 21 March 19-21, and 23-25 April. All 2003 meetings would focus on modalities, starting with review of possible modalities based on a paper prepared by the Chair.

Since Chair Amb. Pierre-Louise Girard of Switzerland — who was formally appointed as Chair of the Group at the 10-11 April meeting — was unable to broker a consensus around his proposal, sources said he would continue consultations in this area in an attempt to reach agreement in time for the meeting of the Trade Negotiations Committee on 24 April.

Other business

Responding to the Doha mandate call for ‘appropriate studies and capacity-building measures,’ the Secretariat is organising a seminar on market access, scheduled for 29-31 May. On the agenda for discussion are tariffs, non-tariff barriers, and databases to be used in the market access talks.

On the agenda item of observer status of international intergovernmental organisations, the Market Access Negotiating Group, like other negotiating WTO fora, decided that this was a matter to be decided upon by the Trade Negotiations Committee, the body responsible for coordinating the negotiations.

Environmental goods

While the issue of environmental goods did not come up in the Negotiating Group session, one diplomat said there was a chance that the Market Access Negotiating Group could consider an analysis of environmental goods as a category, but that major definitional problems remained. "It would be a little tricky to define what could be classified as an environmental good, as it’s a cross-sectoral issue," the source explained, "but the real trick is to get other key Members involved." He referred to sectoral classification in environmental goods already identified at the Asia Pacific Economic Cooperation forum (APEC) as one potential reference point. Another delegate said that this is an area where the WTO Committee on Trade and Environment (CTE) might be able to provide guidance.

At a 22 March meeting of the special session of the CTE, there was general agreement among Members that the CTE would ‘keep track’ of negotiations on environmental goods in the Negotiating Group on non- agricultural Market Access. Reduction or elimination of tariff and non- tariff barriers on environmental goods is part of the Environment mandate under paragraph 31(iii) of the Doha Declaration, but it remains unclear how Members will ultimately address this area.

"WTO Members fight over industrial market access deadline," INSIDE US TRADE, 12 April 2002; ICTSD Internal Files.