NAMA's Two Tracks

26 February, 2005

Geneva Negotiators today start a week-long session on the Doha Development Agenda's nonagricultural market access and will address some "straightforward" questions on "two tracks" suggested by negotiation group Chairman Don Stephenson (WTD, 2/24/06).

Sensitive and politically difficult issues in so-called "track-one" pertain to the coefficients to be used in the "Swiss" formula for cutting industrial tariffs, how to treat unbound tariffs and preference erosion for smaller developing countries.

The second track which will be discussed this week relates to product coverage, ad valorem equivalents, non-tariff barriers, "paragraph eight" flexibilities for developing countries and the proportionality between enhanced market access for farm products and industrials. The second track will help prepare the NAMA text a method that closely reflects what was done during the Doha farm negotiations two weeks ago.

The "Friends of Ambition" in the NAMA negotiations led by the United States, the European Union, Canada, South Korea and Singapore have submitted a list of questions of their own to the chair. They address issues such as the tariff-cutting formula for industrials, treatment of unbound tariffs and "paragraph eight" flexibilities.

But different developing-country coalitions particularly those led by Brazil, India and South Africa insist on deciding the exact relationship between farm market access talks and NAMA before moving forward, diplomats said.

Mr. Stephenson has decided to let high-level political negotiators deal with the "track-one" issues beginning at the "Group-of-Six" ministerial meeting in London on March 10. Ministers from the United States, the European Union, India, Brazil, Australia and Japan will participate.

During his recent visit to Washington, World Trade Organization chief Pascal Lamy told US Trade Representative Rob Portman that the figures for the formula's coefficients must be decided at the London meeting in order to reach full negotiating modalities both in agriculture and NAMA by the end of April, sources told WTD.

Ought to Be Two Coefficients US

Mr. Portman reportedly responded that there ought to be two coefficients one for industrialized countries and one for developing countries and they should be "close" to each other. The WTO chief is understood to have suggested that the two coefficients should be in the range of one to three, implying that the coefficient for developing countries should be three times higher than the developed country coefficient.

But much will depend on the results of the simulations being run by the United States of four coefficients 2, 5, 10, 15 for industrialized countries and 15, 20, 25, 30, 35 and 40 for developing countries. A coefficient of 10 for developed countries and 20 for developing countries might be accepted at the end, some sources have indicated.

Against this backdrop, NAMA negotiators will meet briefly in a plenary session today and then break up into bilateral and plurilateral groups to address the 17 issues raised on product coverage which were finalized before the Hong Kong ministerial meeting last year.

Ambassador Stephenson wants members to answer three issues regarding uncompleted work in converting all industrial tariffs into ad valorem rates. First, members must indicate when they will submit their information on AVEs. Second, they should state what difficulties are being encountered in submitting the information. And, third, members should state their approval of the AVEs already submitted.


On nontariff barriers talks lagging behind other areas in the NAMA negotiations Chairman Stephenson wants to know from members how to proceed on "developing bilateral, vertical and horizontal approaches" to the negotiations. He also wants members to clarify and submit information on specific nontariff barriers.

Finalizing details based on the December Hong Kong ministerial declaration on "paragraph eight" flexibilities one of the most contentious issues of the negotiations also is high on the agenda. "Paragraph eight" flexibilities for developing countries as set out in the July 2004 framework agreement provide for less than agreed cuts for a certain percentage of their products. There are two caveats that the proposed "paragraph eight" reductions should be no less than half of the formula cut and that they should not exceed a certain percentage of imports.

Lastly, the chair wants members to address the most difficult issue of balancing and the proportional treatment between the agriculture and NAMA market access negotiations as set down in the Hong Kong ministerial declaration. Mr. Stephenson asks how a comparably high level of ambition in market access for agriculture and NAMA can be assessed and ambition achieved in a "balanced and proportionate manner" consistent with the principle of Special and Differential treatment.