GENEVA — A plan presented at the World Trade Organization aimed at trying to bring countries closer to an agreement in the Doha Round trade talks seems to instead be driving them further apart.
This story first appeared in the May 28, 2008 issue of WWD. Subscribe Today.
Peter Allgeier, deputy U.S. trade representative, told delegates Tuesday that the Doha talks are at risk of failure unless major emerging economy countries are prepared to open their markets more for industrial goods and make deeper tariff cuts. Allgeier said without a successful outcome in the Non-Agricultural Market Access segment, aka NAMA, which includes apparel and textiles, there will be no Doha deal.
“If we are going to have a successful NAMA negotiation…we will have to make major changes in this text,” he said. “And without a successful NAMA outcome, we won’t have a Doha agreement.”
Allgeier said for the round to be salvaged, there must be a NAMA deal with a better range of tariff cuts that delivers an opening of new markets in both rich countries and developing ones. He said under the latest NAMA blueprint issued May 19 by the chairman of the talks, ambassador Don Stephenson of Canada, all U.S. applied tariffs would be cut and not a single tariff line of the U.S. would be left in excess of 10 percent.
“We are prepared to make those cuts, but not in return for nothing,” he said. “Not in return for the massive tariff-cutting avoidance by many other…countries that would be the outcome from the elements in this paper. The negotiating dynamic, sadly, has become one of negotiating for exceptions rather than for ambition.”
Major industry groups in the U.S. and European Union have been critical of the new blueprint because they feel it tilts in favor of emerging nations such as Brazil and India, as well as more recent WTO members such as China.
Alluding to China, Allgeier said, “In the case of recently acceded members who have benefited enormously from their membership in the WTO for nearly a decade, we expect significant contributions in the form of full formula tariff cuts. That is the least they owe the system.”
In a similar tone, EU director-general for trade David O’Sullivan said at a heated WTO session, “There is an increasing imbalance in the text” and with the flexibilities given emerging nations in setting their tariff rates, there will be no new market access in those countries.
But officials from major emerging nations such as India and Brazil stood firm. Brazil’s WTO ambassador Clodoaldo Hugueney said, “We also have red lines,” and that the flexibilities in NAMA “are absolutely needed.”
Ambassador Ujal Singh Bhatia of India said, “The present numbers remain too far from meeting the basic requirement of the mandate, namely less than full reciprocity.”
The so-called NAMA 11 group, which includes India, Brazil, South Africa and Argentina, wants to see at least a 25 percent spread between the maximum tariff of rich and emerging nations. The current blueprint calls for the maximum tariff for rich nations such as the U.S. and members of the EU be 7 to 9 percent and for emerging countries between 19 and 26 percent.
Argentina’s chief NAMA negotiator, ambassador Néstor Stancanelli, said, “My assessment is we are still far away from an understanding.”
Western industry groups have also been critical of the new NAMA blueprint.
“The new text is disappointing and is a step backward from the trade liberalization the world needs,” said John Engler, president of the National Association of Manufacturers.
Ernest-Antoine Sellière, president of Business Europe, in a letter to EU trade commissioner Peter Mandelson, said the latest NAMA text “will give highly competitive sectors in emerging countries an unfair advantage compared to European companies, which will have to apply much deeper reductions.”
William Lakin, director-general of the European Apparel & Textile Organization, said, “The NAMA text is unacceptable for our enterprises and their employees and workers.”
In a separate session Monday on the revised blueprint for slashing farm subsidies and tariffs, Burkina Faso, speaking for fellow African cotton producers Benin, Chad and Mali, criticized the new U.S. farm bill, as did Canada, Bolivia and Paraguay, because of its continuation of cotton subsidies.
The chairman of the WTO agricultural talks, ambassador Crawford Falconer of New Zealand, said of the impact of the farm bill on the negotiations, “It’s another factor which complicates everybody’s life, there’s no doubt about that politically.”