NAMA: NO PROGRESS, BUT MEMBERS ACTING FRIENDLIER

WTO Members made no breakthroughs as they resumed negotiations on non-agricultural market access (NAMA) for the first time since the December Ministerial Conference in Hong Kong. Nevertheless, one negotiator, suggesting that the main objective of the 2-3 February meetings was for delegations to 're-engage' rather than focus on substantive differences, reported an impression that Members seemed more willing to seek compromise than before.

Summing up what was his last session as chair of the NAMA talks, Ambassador Stefan Johannesson of Iceland described the tenor of the discussions as more "business-like" than in the past, but said that Members would need to be more willing to compromise in order to agree on how to address the effects of the erosion of trade preferences by multilateral tariff liberalisation.

Johannesson held very brief informal consultations with 20-odd Member delegations on issues including the tariff reduction formula, the nature and extent of the flexible treatment to be accorded to developing countries when cutting their industrial tariffs (such as exempting a small number of tariff lines from reductions), unbound tariffs, small and vulnerable economies, and preference erosion.

Some Members suggested that discussing the tariff-cutting effects that would result from specific values for formula coefficients and flexibilities would be useful. Several also said that developing a list of issues that need to be resolved -- as is being done in the agriculture negotiations -- might help push the talks forward. Some Members believe that negotiations on the treatment of small and vulnerable economies would require the elaboration of identification criteria based on indicators of the degree of vulnerability in addition to market size.

Sources indicate that Kenya and a group of countries that benefit from trade preference schemes reportedly clashed with Costa Rica and several mostly Latin American countries that do not. The latter insist that the effects of preference erosion should largely be dealt with bilaterally. The Hong Kong Declaration "recognises challenges that may be faced by non-reciprocal preference beneficiary Members," and instructs countries "to intensify work on the assessment of the scope of the problem with a view to finding possible solutions."

With regard to non-tariff barriers, Japan, a major importer of natural resources, said that it would table a legal text on export restrictions in time for the 30 April deadline for 'full modalities' set out in the Hong Kong Declaration.

A group of developing countries comprised of Argentina, Brazil, Egypt, India, Indonesia, Namibia, the Philippines, South Africa, Tunisia and Venezuela reiterated the position in the NAMA talks that most of them had laid out during the Hong Kong Ministerial Conference, stressing that the negotiations must respect development concerns, particularly with regard to the flexibilities for developing countries (see BRIDGES Daily Update, 14 December 2005). On behalf of the so-called 'NAMA group,' India emphasised that the outcome of the negotiations must not be disproportionately onerous for developing countries.

Johannesson will be replaced as NAMA chair by Ambassador Donald Stephenson of Canada. One trade diplomat suggested that Members had not expected much from the recent session of NAMA talks since the chair was leaving, and might be "saving ammunition" for the next one, scheduled to kick off on 27 February.

ICTSD reporting.