Wednesday, November 5, 2008

Developing countries warn against WTO sector deals

Reuters, 04/11/2008

A group of major developing countries has denounced efforts to promote deals eliminating tariffs in some individual industrial sectors as contrary to the spirit of the World Trade Organisation's (WTO) Doha round.

The statement from the NAMA-11 group, which includes Argentina, Brazil, India and South Africa, shows that the sectoral discussions remain a major stumbling block in the Doha talks, as sector deals are a US priority.

The NAMA-11 statement, dated October 27 and published on the WTO website, said a report by the previous chairman of the WTO industrial goods talks on July's abortive meeting of ministers had included sectoral deals in the overall package.

"This continues to negate the reality of the negotiations, that has largely shown that most of the developing countries are not interested in the sectoral negotiations," it said.

Within the Doha talks, launched seven years ago to open up world trade, countries are negotiating cuts in tariffs on industrial goods across the board.

Most developing countries would be completely exempt, while middle-income emerging countries would enjoy some waivers, to give their infant industries continuing protection.

FREE TRADE

The United States and some other rich countries, which want the talks to result in increased export opportunities for their businesses, are seeking additional, voluntary deals in a range of individual sectors -- from chemicals to car parts - that would cut tariffs to zero, freeing up more trade in those areas.

The report by the previous industry chairman, Canada's former WTO ambassador Don Stephenson, also angered the United States, as Washington felt it had watered down agreed language on sectoral deals.

The NAMA-11 countries do not object to the voluntary sectoral deals. But they say the United States is effectively trying to make them compulsory by linking participation in the 14 proposals under discussion to an overall Doha trade deal.

China - which is not part of the NAMA-11 - is incensed at proposals calling for sector deals to have "critical mass" which Beijing sees as code for Chinese participation, given the size of the Chinese market.

The NAMA-11 statement says that eliminating tariffs in a range of sectors would run counter to the Doha round's development mandate, which calls for developing countries to make smaller moves than rich nations.

And they said such deals would particularly hurt the poorest developing countries that rely on preferential access to rich-country markets for their goods.

The sectoral discussions have become so sensitive that last month the new chairman of the industrial goods talks, Switzerland's WTO ambassador Luzius Wasescha, said he would leave the main players to hammer out a deal themselves, as WTO members felt there was little scope for agreement in group negotiations on the matter.

The NAMA-11 actually comprises 10 countries. Besides Argentina, Brazil, India and South Africa, it includes Venezuela, Egypt, Indonesia, Namibia and Tunisia. It also includes the Philippines, but Manila did not sign the statement.