NAMA Talks Make Progress on NTBs

16 December 2009

WTO members took an "important step" forward in talks on preventing non-tariff measures such as health and safety standards from unduly restricting trade in manufactured goods, the chair of the Doha Round negotiating committee on industrial products said last week.

Luzius Wasescha, the Swiss ambassador to the WTO who chairs the negotiating group on non-agricultural market access (NAMA), praised delegations on 10 December for preparing well and engaging constructively during the four days of fairly technical discussions.

Over the course of the negotiations on ‘non-tariff barriers' (NTBs, in negotiators' parlance), countries have submitted a range of proposals pertaining to individual industrial sectors such as textiles, footwear, and electronics. The proposals aim to establish rules to ensure that government policies like technical regulations, health and safety standards, product certification procedures, and labelling requirements do not restrict trade more than necessary.

Other proposals have been more general, such as one for a ‘horizontal mechanism' for quickly mediating trade irritants arising from non-tariff measures without going through the WTO's time-consuming and expensive formal dispute settlement process.

Last week's talks focused primarily on NTB issues in the automotive and electronics sectors.

Both the EU and the US have tabled proposals setting out potential rules for standards, technical regulations, and conformity assessment procedures for the two sectors.

The principal difference between the two commercial giants is the role given to international standards. The EU wants WTO members to harmonise their national regulations with international standards. The US proposal focuses more narrowly on "non-tariff barriers pertaining to the electrical safety and electromagnetic compatibility (EMC) of electronic goods," and favours an approach based on transparency about the way regulations are developed and made public.

The difference is similar with regard to the automotive sector. The EU proposal (TN/MA/W/118) references the World Forum for the Harmonisation of Vehicle Regulations, a body that exists within the framework of the United Nations Economic Commission for Europe, calling for it to be recognised as the "main relevant international standard-setting body" for a list of vehicles and auto parts. Brussels wants ‘regulatory convergence and harmonisation', calling for "harmonising technical regulations and conformity assessment procedures on as wide a basis as possible." The US proposal (TN/MA/W/120) would recognise as an "appropriate international standardising body" any organisation that agreed to abide by a set of regulatory-related decisions already adopted by WTO members. While Washington urges countries to participate in international standard-setting, and to consider using each other's regulations, it places more emphasis on ‘good regulatory practice', particularly transparency.

However arcane the discussions on non-tariff barriers, they are one of the principal obstacles keeping goods out of potential export markets, especially with industrial tariff levels relatively low in most major economies.

Wasescha said that participants in small-group consultations on the proposals eschewed a divisive either-or attitude to the proposals in favour of a more constructive approach, focusing on the many similarities - "where the differences were largely of drafting." The EU and the US both pointed to the raised costs for industry arising from unnecessary confusion over standards. The two major economies called for transparency procedures such as consulting with interested parties before introducing new regulations that differ from global benchmarks, and considering the costs of compliance with proposed regulatory changes.

The chair of the negotiating group said that there was little divergence in members' views on transparency, with the debate centring principally on whether sector-specific rules are necessary, or whether a common set of principles (with sector-specific comments) might suffice.

Wasescha also said that members had also been pragmatic about a separate issue: whether a declaration by a supplier that a product meets a specified standard or technical regulation or other specification (based on a conformity assessment evaluation) should suffice, or whether certification by an outside organisation should be necessary. He said that most countries, irrespective of the school of thought to which they subscribed, permitted ‘self-declaration of conformity' for some products while requiring third-party certification for others. In the name of transparency, he urged them to develop lists of which products were subject to which certification requirements.

He spoke favourably of the ‘horizontal mechanism' for the mediation of NTB-related trade blockages favoured by a wide range of countries including the EU, India, South Africa, and his own Switzerland, calling it a mechanism for "dispute prevention." He suggested that fears about the mechanism's effects on regular WTO dispute settlement were overblown, since the mediation would be optional.

In a press conference following the committee meetings, Wasescha said he was pleased with delegations' engagement, saying that they had showed readiness to accept proposals that they had resisted only weeks before. He expressed hope that countries would soon be able to move to an NTB negotiation that is based on draft legal language for a future agreement (as opposed to a debate on underlying principles).

But trade diplomats report that no signs of movement are visible on what is now main stumbling block in the NAMA negotiations: whether large developing markets like China, Brazil, and India choose to participate in voluntary initiatives to cut deeply or even eliminate tariffs across entire industrial sectors, as the US and the EU demand.

Sources say that earlier in the week, Wasescha said that negotiators would need to "work, work, work" if they were to have a chance of concluding the Doha Round by the end of 2010, a goal widely shared during the WTO's recent ministerial conference.

The next NAMA week is tentatively scheduled for early February 2010.

ICTSD reporting.

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