LDCs' challenges in NAMA negotiations

11 November 2015

Despite the fact that the central pillars of the negotiations have stalled, including for NAMA, it is essential that WTO members agree on the approach to take to continue discussions within the organisation.

 

With the WTO 10th Ministerial Conference (MC10) only a few weeks away, negotiations do not seem to be following the path hoped for by most developing countries. On the contrary, obstacles have been piling up since the ministerial conference in Bali (MC9) where Ministers mandated WTO members to develop a clear and detailed work programme with the aim of concluding the Doha Round. First, the adoption of the protocol of amendment that would enter the Trade Facilitation Agreement into the WTO legal framework proved difficult. In addition, even though a new deadline for the development of a work programme was set for 31 July 2015, until now no consensus could be found. To date, in spite of some proposals divergences on negotiating aspects which are known to be difficult have not been resolved. Furthermore, given the evolution of the discussions, it now seems clear that an agreement will not be reached on the central pillars of the negotiations  that is to say agriculture, NAMA and services  before the Nairobi Conference.

Since the April 2011 progress report on multilateral trade negotiations within the framework of the Doha Development Agenda (DDA), no significant progress has been made. On the road to MC9, this question had been set aside due to the difficulties encountered. The conclusion of the Bali Agreement however revived this issue in favour of the programme to be developed to close the DDA. As compromises for agriculture negotiations have proved to be impossible and considering the de facto link established with NAMA negotiations, WTO members have clearly acknowledged that all areas need to be taken into account to find mutual concessions; however, this was unsuccessful.

In this context, a natural question to ask would be whether discussions will still continue within the WTO on issues that will not be decided in Nairobi, Kenya. Will certain WTO members, mainly developed countries, give in to the temptation to find solutions outside of the multilateral framework? In this context, it is also important to revisit the Least Developed Countries (LDCs) stakes in NAMA within these negotiations.

The status of negotiations on NAMA

Negotiations on non-agricultural market access (NAMA) have revealed considerable differences between key Members. Developed countries and emerging countries do not share the same perspective on modalities for sectoral negotiations. Opposing points of view led to a stall in the negotiations. Most developing countries think that the negotiations should resume where they stopped in 2008 (revision 3). However, developed countries believe that the global economy has evolved and are calling for new approaches. Several formulas have been brought to the table in the past months, in addition to the Swiss formula which no longer seems to satisfy everyone, but no consensus has been reached so far.

In addition, developing countries would like to keep the special and differential treatment (S&D) that has always underpinned multilateral trade negotiations. This principle aims to ensure that less effort is required from developing countries regarding commitments or implementation delays. In this area the systemic stakes are high. However, developed countries believe that emerging countries should devote more efforts than other developing countries.

The difference of opinions between emerging and developed country members regarding the appropriate level of ambition has been the main stumbling block for NAMA negotiations since mid-2008. However, this impasse has had an adverse effect on the entire DDA, since NAMA  along with agriculture  is one of the key drivers of the multilateral negotiations. This field presents challenges for all WTO members, including LDCs.

What are the challenges for LDCs related to NAMA?

The Doha Ministerial Declaration called for negotiations to lower or eventually remove tariffs, including tariff peaks, high tariffs and tariff escalation. It also urged WTO members to address non-tariff barriers, particularly for products of export interest to developing countries and LDCs. All this was, among others, supposed to be implemented through the “less than full reciprocity” commitments, in accordance with Article XXVIII bis of GATT 1994 and the provisions quoted in paragraph 50 of the Doha Declaration.

Since 2008, NAMA negotiations have been taking place within the framework of the fourth revision of the draft modalities on non-agricultural market access. For LDCs, which are exempt from tariff cuts, the issue is the obligation to increase the scope of their binding coverage. Another aspect of interest to LDCs is the erosion of their preferential status caused by industry initiatives, regional agreements or decisions made by their trade partners. Finally, the issue of duty-free quota-free market access is crucial for LDCs and is part of the NAMA negotiations. Indeed, they are mainly interested in this issue.

What could the next WTO ministerial conference bring?

Despite little progress on the Doha Round, the possibility of concluding a package for LDCs in Nairobi is being declared more and more. However, no one can predict the content of this “package” with certainty. There is a widespread fear that WTO members will only agree on a “non-binding” package based on “best endeavour” decisions. In this respect, it is essential that binding commitments be adopted in favour of LDCs in December.

Will one of the aspects of this package relate to NAMA? There is no indication of this. In any case, even though there seems to be a general understanding that LDCs will be allowed to keep the flexibilities to which they are entitled, they must make sure that their interests are taken into account. For example, they could put forward a content component regarding development in this area. It could be a mechanism to temporarily protect their emerging industries or support for measures affecting their exports.

Conclusion

The adoption of an LDC package at Nairobi should include key aspects for them. Therefore, even if this development round is not entirely concluded during the MC10, it could already include certain developmental aspects. That said, it is essential for developing countries  particularly LDCs  that WTO members agree on the approach to take to continue discussions within the WTO. The continuation of the multilateral framework remains an important guarantee for most developing countries. These discussions could continue under the title of 'Doha Round' or under another name, as long as the dialogue and the search for mutually beneficially solutions are safeguarded.

Author: Magor Mbaye, Counsellor, Permanent Mission of Senegal to Geneva, Switzerland.

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