Developing countries’ proposal on industrial tariff cuts angers the West

GENEVA: At the conclusion of the week of negotiations on non-agriculture market access (NAMA) last Friday, the NAMA11 group that include India dropped a bombshell. The group called for coefficients between 10 (for developed countries) and 35 (for developing countries), as well as additional flexibilities for developing countries, since those that are on the table “are not good enough”. In the coefficient formula the smaller the coefficient the bigger the tariff cut, whereas the bigger the coefficient the smaller the cut. The reaction to the NAMA11 paper by the rich countries was hostile.

The NAMA 11 also includes Argentina, Brazil, Egypt, Indonesia, Namibia, Philippines, South Africa, Tunisia and Venezuela. As per the US , the proposal from NAMA11 goes far beyond the parameters, if a balance has to be arrived at. The EU criticised the latest paper of NAMA 11, noting that some “members are hardening their positions”.

It may be recalled that at the previous NAMA meeting the developed countries had insisted that a coefficient of 10 for themselves and 15 for the developing country members be imposed. A separate intervention by South Africa also called for additional flexibilities in the paragraph 8 which allow developing members to shelter some sensitive sectors from the full application of the formula under certain conditions.

Argentina, which introduced the paper, stated that there was a serious problem in the multilateral trading system for the imbalance which exists between the developing and developed countries is against the developing countries. Its representative stated that there was a necessity for matching the level of ambition between NAMA and agriculture, and in agriculture this level of ambition is modest while the demands made by developed countries on developing country members are “exaggerated”.

The paper has several statistics and comparisons, some of which were challenged or put in a different context by other WTO members. Interestingly other developing country members such bas Chile, Colombia, Ecuador, Costa Rica, Hong Kong, Mexico, Uruguay were cool to the NAMA 11 paper, which they felt was not flexible and realistic.

NAMA chairperson Ambassador Don Stephenson of Canada reacted by commenting that the latest important guidance did not make his job easier, and though he was of the opinion he had presided over an inclusive and transparent process, there is still no consensus in some crucial issues, adding that “now I cannot consume any more statistics and I cannot take any more notes”.