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Biggest cuts aimed at highest tariffs; exceptions made for developing countries

GENEVA - The US, the European Union and Canada have tabled a joint paper at the World Trade Organization (WTO) intended to bolster negotiations on market access for industrial goods in the ongoing round of global trade negotiations.

The paper proposes that WTO members use a simple mathematical formula both to achieve sizable cuts in existing tariffs and to target especially high rates for reduction.?

Developing countries would be allowed to cut their tariffs less than developed countries, based on their economic status and their commitment to bind their rates, said Deputy US Trade Representative Peter Allgeier in a telephone conference call on Tuesday.

Many countries of South Asia and Africa have not committed to bind many of their tariffs, he said, adding that some of the poorest countries would be allowed even more flexibility, including, for example, a longer time for implementation.

Recognizing that many developing countries would find their tariff preferences in developed countries eroded, he said, the proposal encourages the World Bank and International Monetary Fund (IMF) to help those countries adjust.

Allgeier said the proposal also envisions additional tariff cuts by industrial sector - elimination of tariffs or harmonizing tariffs at lower levels - with an emphasis on sectors of interest to developing countries, especially textiles and apparel.

By 2005 all quotas on textiles and apparel are already scheduled for elimination under the 1993 Uruguay Round trade agreement.

The final deadline for non-agricultural market access (NAMA) and all other negotiations in the current round is January 1, 2005. WTO members' ministers will gather from September 10-14 in Cancun, Mexico, for a major stock taking of the negotiations launched in November, 2001 in Doha, Qatar.

Presenting the proposal in Geneva August 11, Ambassador Linnet Deily, US permanent representative to the WTO, said that with Cancun just a few weeks away, it was important for the US, EU and Canada to "give leadership to the process."

"Our approach provides more detail on how we envisage the linkage between an ambitious formula and flexibility," she said. "It is our hope that this document will be recognized as an effort to bridge a number of the unique constraints that have thus far polarized our discussions on non-agricultural market access."

At a press conference at the EU Mission in Geneva, EU Ambassador Carlo Trojan said the proposal "fully responds to the various needs of developing countries while living up to the objectives of the Doha mandate including special and differential treatment and less than full reciprocity."

"NAMA should not be merely a North-North exercise, but it should meet the increasingly important component of South-South trade as well," Trojan said. "We all know that the greatest economic potential lies in the latter category."

Allgeier and Ambassador Sergio Marchi of Canada also joined the press conference by telephone.

In that earlier session Allgeier described the joint proposal as "an effort by the US, EU and Canada to incorporate what we have been hearing from other countries in a way that gets this balance between ambitious trade liberalization on the one hand but sensitivity to the situations of the developing countries on the other."

"We have very little time between now and Cancun," Allgeier said. "And as important and central as agriculture is, we need to have these other key components, particularly those dealing with market access, ready and able to be included in an overall package for Cancun.

Canada's Marchi emphasized the interdependence of agricultural and non-agricultural negotiations. "We believe that if we could move NAMA it will help us find some movement and traction on agriculture. So we don't see it just as a one-way street. We see it as a two-way street between these two big issues of market access together with services."

The Doha mandate calls on WTO members to "reduce, or as appropriate eliminate tariffs" on non-agricultural goods including "the reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries".

It further specifies that the negotiations should take fully into account the "special needs and interests of developing and least-developed countries," and recognize that those countries do not need to match or reciprocate in full tariff-reduction commitments by other participants.

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