Developing countries submit texts for NAMA modalities

20 June, 2006

Several WTO members submitted draft texts last week to the Chair of the Negotiating Group on NAMA for his preparation of the draft modalities paper, which is to be issued this week. Among them were the NAMA-11 and the small and vulnerable economies.

Apart from the "comprehensive set of proposals" submitted by the NAMA-11 group of developing countries on the formula, treatment of unbound tariff lines, flexibilities and other issues, the group also put forward specific draft texts on credit for autonomous liberalization, environmental goods, non-tariff barriers, and sectorals.

On sectorals, the NAMA-11 proposal says: "We note that work is ongoing on initiatives in some sectors. We encourage interested Members to continue their discussions, noting that participation is on a voluntary basis, as agreed in the Hong Kong Ministerial Declaration. The outcome of the sectoral negotiations should be incorporated on a conditional basis in the draft comprehensive schedules of participating members no later than..."

On the issue of environmental goods, the NAMA-11 was of the opinion that given the wide divergence of views, it would not be appropriate to include any modalities language at this juncture. However, if there is to be language NAMA-11 said that it should be as follows:

"The Committee on Trade and Environment in Special-Session (CTE-SS) is addressing the mandate contained in paragraph 31 of the Doha Declaration with a view to enhancing the mutual supportiveness of trade and environment. Without prejudging the outcome of the negotiations, this could be achieved by means, inter alia, of the CTE-SS agreeing on approaches to the reduction or, as appropriate, elimination of tariffs and non-tariff barriers to consensually defined environmental goods and services.

While encouraging the Negotiating Group on NAMA (NGMA) to work closely with the CTE-SS on relevant issues, Ministers note that treating environmental goods in the NGMA before the CTE-SS has fulfilled its mandate would amount to prejudging the outcome of negotiations under paragraph 31iii."

Some developing country members have expressed concerns that the developed country members such as the EU and US are using the negotiations in the CTE-SS as a back-door for greater market access in industrial products.

The NAMA-11 has also submitted a proposal on how credit for autonomous could be incorporated into the NAMA market access negotiations through the formula for making tariff reduction commitments.

The NAMA-11 draft text states: "Noting that some developing countries have bound their tariffs on an MFN basis in the WTO since the conclusion of the Uruguay Round, credit shall be given for such autonomous liberalization provided that the tariff lines were bound before the commencement of the Doha Round. Credit will be effected by allowing the relevant developing country Member to use a coefficient [ ] points higher than the applicable coefficient to that Member in the agreed formula, for undertaking further reduction on these autonomously bound tariff lines."

On the issue of non-tariff barriers, there are two main proposals, one jointly by the US and the EU and the other by NAMA-11. They are largely similar except that in the NAMA-11 proposed text, they have inserted the word "negotiations" to read as follows:

"We reaffirm that negotiations on non-tariff barriers are an integral and equally important element to achieving the objectives of paragraph 16 of the Doha Ministerial Declaration."

The remaining key parts of the NAMA-11 text on NTBs states that:

"Negotiations are now required to be initiated in line with the mandate. We take note of the timelines for negotiation proposals and bilateral requests suggested by the Chairman of the Negotiating Group as a guidance for the work.

Members are instructed to commence text-based negotiations for the NTB proposal that garner sufficient support and continue with the request/offer negotiations to finalise their work in 2006 before the conclusion of tariff reduction process, including the multilaterialisation of the outcomes through inter alia incorporating them where appropriate into Part Iii of schedules. We recall that these non-tariff barrier negotiations include request/offer, horizontal, and vertical approaches and they should also take fully into account the principle of special and differential treatment for developing and least-developed country participants."

The small and vulnerable economies grouping of developing countries distributed a room document last week on how they are to be treated in the NAMA negotiations.

They continue to stress on a paragraph-6 type solution for SVEs in making tariff reduction commitments as opposed to coming under a Swiss formula.

More specifically, these countries proposed to bind 100% of their NAMA tariff lines at "average levels reflected in the following bands": tariffs less than 37%, tariffs between 38 to 47%, tariffs between 48 and 57% and tariffs beyond 58%. The average cut for each bands remains to be determined.

In addition the tariff cuts would be made according to the following conditions laid down by the SVE countries:

"Tariff reductions...shall be on the basis of lower tariffs cuts for those in the lower bands and higher cuts for those in the higher bands";