Industrial Goods Talks Tackle Non-Tariff Barriers

10 February 2010

With no movement on the principal sticking point in the Doha Round industrial goods talks, negotiators last week continued to inch forward on establishing new rules for addressing non-tariff barriers.

WTO members remain at an impasse over the extent to which large developing countries like China and India should participate in initiatives to cut deeply or eliminate tariffs on entire industrial sectors such as chemical products, auto parts, and electronics. The developing countries note that the negotiating mandate specifies that participation in such ‘sectorals' would be optional. The US and other industrialised nations covet unfettered access to the fast-growing emerging markets.

In recent months, therefore, officials have been focusing their energy on non-tariff barriers, or NTBs. Last week, they continued to discuss proposals for the automotive, electronics, and textile sectors. They also looked at ‘remanufactured goods' - used products that are refurbished and provided with a warranty - and a proposed ‘horizontal mechanism' for quickly adjudicating trade problems arising from NTBs.

The automotive sector is marked by a wide array of differing standards that compel auto makers to re-tool cars and trucks to meet the specifications of each target market. The EU has proposed moving towards harmonising technological regulations and standards in the sector. Despite a new revised paper from Brussels (TN/MA/W/118/Rev .1), other major auto producers remain hesitant. The US called it "unrealistic" and said it would deprive countries of the ability to follow their own standards. Japan argued that countries with different geographies, climates, and population densities need different standards.

On 5 February, Luzius Wasescha, the Swiss ambassador who chairs the negotiating group on non-agricultural market access (NAMA), noted that many WTO members did not seem to share the EU's perception that the rules in the existing WTO Agreement on Technical Barriers to Trade (TBT) were inadequate for the automotive sector.

Speaking to the negotiating group at the end of four days of consultations, he said that members were not "harmonious" on how far they wanted to go beyond the existing TBT agreement, which allows countries to deviate from international standards for "legitimate objectives" such as local circumstances. Wasescha urged countries to consult with the auto industry while exploring how to move forward.

Talks on NTBs in the electronics sector have been marked by similar disagreement. The Swiss ambassador urged countries to consult with industry and hold workshops in order to help everyone understand the issues at stake.

Several developing countries, including India and Brazil, are wary of trade in ‘remanufactured goods'. Many of them do not differentiate between ‘remanufactured' and ‘used', one trade diplomat told Bridges. They fear that such products - warranty notwithstanding - might last less long than new ones, and trade in remanufactured goods could become a pretext for dumping waste from rich nations. Japan, the US, and Switzerland have called for a ‘work programme' in the Council for Trade in Goods that would involve reviews and seminars on NTBs affecting remanufactured goods. The sceptics noted that such seminars were possible even without a formal work programme.

A substantial majority of WTO members, from the EU and Canada to the African and LDC groups, favours the creation of a ‘horizontal mechanism' for promptly addressing trade irritants arising from non-tariff barriers. The US is unconvinced; it would prefer that countries take particular problems to relevant WTO committees.  Another wrinkle comes from the fact that Japan, Korea, and Taiwan don't want such a mechanism to address trade barriers linked to sanitary and phytosanitary (SPS) measures - even though fish products are covered by the NAMA negotiations.

Wasescha said that countries needed to engage in "conceptual reflection" on what countries want this mechanism to be. "Do we want a rapid, pragmatic mechanism for dispute prevention or do we want to satisfy all the lawyers" by reflecting all the risks likely to arise "over the next three or four centuries?" he asked.  "I don't think we need to look for legal perfection."

He called for responses from members by the end of this month.

ICTSD reporting.

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