Situation unchanged in NAMA talks, reports Chair

8 June, 2015

Third World Network
Published in SUNS 8033 dated 3 June 2015
Geneva, 2 Jun (Kanaga Raja) -- The growing disquiet and discontent among the large majority of developing countries over the non-transparent manner in which talks over the post-Bali work programme are taking place at the WTO surfaced Monday at an informal meeting of the Negotiating Group on Market Access for Non-Agricultural Products (NAMA), as also at an informal Heads of Delegation (HOD) meeting in the afternoon.
At the informal HOD, according to one trade diplomat, the Director-General spent more time complaining about some media reports, which he did not name, of his consultations with a small group of members, and what another delegate ridiculed as advice from the DG on what delegations should tell the media.
The WTO media office would not provide on Monday any details of the views of delegations at the informal meeting, which took place in Room W at the WTO.
At the informal meeting of the WTO Negotiating Group on Market Access for Non-Agricultural Products (NAMA) also on Monday, described as an "informational meeting", the Chair (Ambassador Remigi Winzap of Switzerland) reported that there has been no change in the situation in the NAMA negotiations in the last few weeks.
In their own interventions, several delegations are reported to have complained over the way the negotiations are taking place, with proposals of unknown origin being put forward as the basis for further talks (presumably in reference to the Chair's note).
The meeting, some diplomats noted, also saw a walkout by Argentina, after it had complained of the state of the negotiations and complaints over what some developing country delegations viewed as "lack of transparency" and attempts to push forward demands of some for market access in industrial products, while not negotiating on all the three pillars of the agriculture negotiations, the bench-mark for the Doha Round.
India and South Africa were reported as having repeatedly insisted that the proponents behind the "five approaches" outlined in the informal note of Ambassador Winzap, identify themselves, and that it was not possible to negotiate on the basis of "approaches" from unidentified proponents.
In his remarks, the Chair, Ambassador Remigi Winzap of Switzerland, said that the Swiss formula for tariff reduction, even if favoured by many members, seems to be extremely difficult for others. He also said that the level of ambition in NAMA will be set by the agriculture negotiations.
According to trade officials, the open-ended meeting heard Argentina voicing strong criticism of the current stage in the negotiations, saying that the negotiations amounted to a "dialogue of the deaf".
The two-person Argentinian delegation subsequently walked out of the meeting room (see below).
Ambassador Winzap told the informal meeting that the concrete challenge in NAMA is that at present, members only aired some ideas but there had been no concrete new proposals, except one tabled by Argentina, on a request-and-offer approach, which was not accepted.
He said that it will be very difficult to have new proposals open for discussion if there is no progress on agriculture.
According to trade officials, many developing countries showed continued reluctance to fully engage in the NAMA discussions in the absence of clarity on the level of ambition in agriculture.
Some expressed concern over the reduction in the level of ambition in agriculture and what they considered was the setting aside of fundamental concepts like Special and Differential Treatment (S&D) for developing countries, the principle of less than full reciprocity in reduction commitments by developing countries, and, in general, of the many flexibilities that are included in the mandate, trade officials added.
The Chair said that all these flexibilities are still on the table and there is no question that they would be left aside.
According to trade officials, Ambassador Winzap also mentioned the "potential approaches" that were brought to his attention in his recent consultations, some of which are variations of the Swiss formula for tariff reduction and its coefficients.
Earlier in May, the Chair had issued a note in which he had suggested five "potential approaches" that were brought to his attention. He however did not reveal the proponents of these approaches.
The five "potential approaches" mentioned by the Chair are:
i. Increasing the coefficients of Rev. 3 (the 2008 revised draft modalities for industrial products) for developing and developed Members.
(The coefficient in the Rev. 3 draft for the developed countries was 8 and between 20 and 25 for the developing countries with a set of flexibilities such as certain percentage of unbound tariffs or a percentage of tariffs without cuts for sensitive products);
ii. Taking the average of line by line reductions according to Rev. 3, using the coefficients 8 for developed and 25 for developing Members (but without flexibilities), as starting point for applying a cut of the overall tariff average;
iii. Same as under (ii), but starting from a reduced reference level (e. g. average of cuts multiplied by a number smaller than 1);
iv. Taking the average of line by line reductions according to Rev. 3, using the coefficients 8 for developed and 25 for developing Members (without flexibilities), as starting point for applying an average cut of tariff lines; and
v. Following an approach for the so-called formula applying Members similar to what Rev. 3 envisaged for other Members, such as SVEs (i. e. grouping Members according to levels of their existing bound tariff averages). (See SUNS #8025 dated 21 May 2015.)
According to trade officials, many developing countries, including South Africa, India, Argentina, Egypt, Venezuela, Ecuador and others, refused to consider these approaches, saying that they were no basis for negotiations.
Pointing out that they came from an obscure origin, the developing countries asked the proponents to come up with new proposals in writing for a thorough consideration.
They also voiced concern about strict parallelism between market access in NAMA and market access in agriculture.
They said that market access is only one of the three pillars in the negotiations in agriculture (the other two being domestic support and export competition).
According to trade officials, among those that showed reluctance to fully engage in NAMA in the absence of clarity on the level of ambition in agriculture were Ecuador, on behalf of ALBA (Bolivia, Cuba, Ecuador, Nicaragua, and Venezuela), Brazil, South Africa, India, and Argentina.
South Africa pointed out that the country has an important industrial strategy and it is very interested in following these NAMA negotiations.
The five-point proposal by the Chair was of great concern to South Africa, because it will complicate the process and narrow the options that are available.
In the absence of knowing the level of ambition in agriculture, South Africa said that it cannot discuss tariff-cutting options in NAMA.
It also said that S&D and the principle of less than full reciprocity are not mentioned in the proposals by the Chair.
These are essential for South Africa, it underlined, adding that the new proposals should be proposed by the proponents.
The Southern African Customs Union (SACU, consisting of Botswana, Lesotho, Namibia, South Africa, and Swaziland) said that greater clarity is needed in agriculture before it can engage in NAMA.
According to trade officials, India supported Brazil, Ecuador and South Africa. It reminded members on the need for transparency and a bottom-up approach.
According to India, the ownership of the five proposals made by the Chair is obscure. The Rev. 3 NAMA text and Rev. 4 agriculture text are the texts on the table, and any new proposals should come from the members themselves.
India also reminded members of the mandate in paragraph 16 of the Doha Declaration (with regard to the negotiations taking fully into account the special needs and interests of developing and least-developed country participants, including through less than full reciprocity in reduction commitments.)
According to trade officials, India was of the view that if the ambition is lowered, it will be unable to engage. The base of the negotiations in NAMA is the bound rate, it added.
On the question of sequencing, it said that agriculture is the one that sets the level of ambition.
It will be extremely difficult for India to engage in the negotiations unless we are clear on what the level of ambition is in agriculture, it added.
According to trade officials, Argentina supported Ecuador, India, Brazil, Egypt and South Africa.
On the five proposals by the Chair, it said that ‘we don't know where they come from although it seems obvious to us who is behind it.'
According to Argentina, the Swiss formula is not in the mandate and the five proposals by the Chair are a reformulation of the Swiss formula, and that it is a cosmetic change.
There should not be a strict parallelism with agriculture, because agriculture has three pillars while what is being talked about in NAMA is market access, it said, adding that in agriculture, gross distortions are allowed, but in NAMA, they are not.
Agriculture must set the level of ambition, it said, and pointed out that less than full reciprocity and S&D are not reflected in the proposals by the Chair.
Voicing criticism of the current stage of the negotiations, Argentina said that the developed country members did not accept a re-calibration of their own ambition but were imposing the re-calibration on others.
According to trade officials, Argentina said that it would leave the room before Canada began its presentation on how different methodical approaches like "cut of average" (overall cut) or "average of cuts" (tariff line cut) would impact on some of Canada's NAMA tariffs. The two-person Argentinian delegation then left the room when the Canadian Ambassador started speaking.
According to trade officials, the European Union, which had floated some of the new ideas in informal consultations with the Chair, said that restarting from nothing would seem contrary to the objective of concluding the Doha Development Agenda this year.
According to the EU, the Rev. 3 text did not lead to any agreement, but we should not throw out the entire text.
The US said that it was not a proponent of any idea but would see how the idea of averaging could work.
According to trade officials, the US agreed with Brazil that the ambition in NAMA will be balanced with ambition in agriculture. Still, it said that it cannot wait.
The US further said that its bound tariff rates are the same as the applied rates, and are "very different from others in the room. So the US will provide market access".
The Chair asked members to continue working and to consider new ideas since the work has to be done in all areas of the negotiations.
"Yes, Agriculture has not evolved, but it doesn't mean that nothing is happening anywhere else. The overall result needs to be balanced," Ambassador Winzap said.
(See also separate article on the informal NAMA meeting.) +