Differences remain as NAMA Chair prepares his modalities text

The Chair of the negotiations on Non-Agriculture Market Access (NAMA) at the WTO has reported that he would be working on a text that would reflect members' positions on modalities for the consideration of Ministers at a meeting expected to take place later this month in Geneva.

According to trade officials, the Chair's text, in parallel with a text from the Chair of the agriculture negotiations, is expected by early this week for members to make comments. It will then go to Ministers for their consideration the following week.

At an informal meeting on Friday (16 June), which capped off the week of NAMA negotiations, Chairperson Ambassador Don Stephenson of Canada said that his task amounted to ''squaring the circle'', given the little amount of convergence at this point and the many key issues that remain unresolved.

He said that his text will be a further revision of the document containing the progress report of the Negotiating Group that he had prepared for the end-of-April "deadline" (TN/MA/18/Rev.1).

The text will explain the status of work, the outstanding issues and an explanation of the future work that is still needed.

The text would contain an annex, with three columns: one with the text of the July Framework modified or supplemented by the Hong Kong Ministerial Declaration; the second, with the agreed NAMA modalities - now with many blank spaces signalling lack of consensus; and the third, a text with his comments explaining the options for Ministers and the different positions of members on subjects on which there is no consensus.

The discussions at the informal meeting on Friday focused on the liberalization of environmental goods, which continued the discussion of this issue the day before.

There were deep differences, with developing countries considering a discussion on this issue as being premature, since there is no agreed list (of environmental goods) in the WTO Committee on Trade and Environment in Special Session.

The developed countries on the other hand argued that a mandate already exists in the Doha Declaration and the Negotiating Group should not abdicate its responsibility for advancing the negotiations.

According to trade officials, Pakistan said that there is no agreement on the list because some of the items don't have anything to do with the environment and represent mercantilist interests of some members.

The Chair also invited comments from members on the core elements of the NAMA modalities (the tariff-reduction formula, the treatment of unbound tariffs and "paragraph 8 flexibilities"), saying that if there was something new from members, he would welcome it, but if there was nothing new, members should avoid further discussion.

According to trade officials, no delegation took the floor.

The Chair summarized the situation on the various issues as follows:

• In relation to Paragraph 6 (of the July 2004 Framework), the situation is ''stable'', meaning that the architecture is almost agreed and the only thing pending now is the Ministers' decision on the numbers in the brackets. [Para 6 refers to developing countries with less than 35% of their tariffs bound].
• The LDC issues, in particular, duty-free, quota-free concession for some products, are ''in pretty good shape''.
• On flexible treatment for Recently Acceded Members (RAMs), the view held by many is that a solution could be through longer periods of implementation. A proposal to grant 1.5 times the coefficient to RAMs has much less support, said the Chair.
• On Small and Vulnerable Economies (SVEs), the situation is "disappointing", the Chair said, adding that he is not able to make life easier for Ministers. The divergence among members is on the criteria and on the solution, with members supporting alternatively, the Paragraph 6 or the Paragraph 8 solution.
• On preference erosion, the problem is "unresolved", with some members opposing long implementation periods and others wanting to include it in the "Aid for Trade" package.
• The issue of product coverage also remains unresolved, with some problems with the classification of some marine products.
• On Non Tariff Barriers (NTBs), there is no convergence. One major problem is whether or not to include export taxes as one of the items to be negotiated.
• On the implementation period, the figure of ten years (some consider it a minimum, others consider it a maximum, while yet others say it's subject to what is agreed in agriculture) has been mentioned but is not final.
• On sectoral elimination, the problem is with the Turkish proposal to effectively exclude textiles from liberalization, and the words "over and above" the formula cuts to describe the aim of the sectoral approach.
• On credit for autonomous liberalization, there is a proposal by India for a figure (still not mentioned) on top of the coefficient to be given to countries that are entitled.
• On environmental goods, there is a division among members on whether or not to presently start discussing the liberalization treatment of these goods.

Several proposals were also presented during the week of negotiations that included: one by the NAMA-11 on environmental goods, sectorals, NTBs and autonomous liberalization; a paper by the NAMA-11 on modalities (see SUNS #6048 dated 16 June 2006); a proposal on environmental goods by Canada, EC, New Zealand, Singapore, Switzerland and the US; a paper on NTBs by the EC and the US; one on sectorals by Turkey; a proposal by the small and vulnerable economies' group on how SVEs should be treated; one by China on RAMs (see SUNS #6047 dated 15 June 2006); a revised text by the LDCs on paragraphs affecting them; and a communication from Sri Lanka on the erosion of Non-Reciprocal Preferences (see separate article on some of the specific proposals on NAMA texts).