What are NAMA products?
NAMA refers to all products not
covered by the Agreement on Agriculture. In other words, in practice, it
includes manufacturing products, fuels and mining products, fish and fish
products, and forestry products. They are sometimes referred to as
industrial products or manufactured goods.
Why is NAMA so important?
Over the past years, NAMA products
have accounted for almost 90% of the world merchandise exports.
What did the Uruguay Round
achieve on tariffs for NAMA products?
The Uruguay Round produced
significant improvements in market access for NAMA products in the
developed country markets, as tariff averages were reduced from 6.3% to
3.8%. In the case of developing countries, the most important contribution
was made in the form of new tariff bindings. Binding coverage for NAMA
products in developing countries increased from 21% to 73%, which has
considerably increased the predictability of trade.
What do tariff bindings mean and how do they work?
A tariff binding is a ceiling level
above which a Member cannot apply a tariff. In other words, it is the
maximum tariff that may be applied by a Member. However, such rates are
not cast in stone. They may be increased or withdrawn subject to
compensation being provided to the WTO Members affected by such action.
The applied tariff is the tariff
effectively applied. It can be lower than the bound rate and the
difference has been called “water” or the “binding overhang”.
Why are there NAMA negotiations in the DDA?
Despite the significant
improvements in market access for NAMA products that previous GATT rounds
and the Uruguay Round produced, tariffs continue to be an important
barrier to world trade, as tariff peaks, high tariffs, and tariff
escalation remain.
How were tariffs cut in the previous Rounds?
In the first GATT rounds, tariffs
were cut on a selective product-by-product basis through requests and
offers made between participants. However, subsequently contracting
parties decided to use formulas to cut tariffs across-the-board. For
example, during the Kennedy Round (linear cut formula) and in the Tokyo
Round (Swiss formula) developed countries applied formulas, but with
several exceptions. In the Uruguay Round developing and developed
participants negotiated their tariff cuts using a variety of methods to
reach a reduction average target comparable to that of the Tokyo Round
(1/3 cut).
Why has a formula approach been agreed to in the NAMA negotiations?
Following intensive discussions, participants recognized the advantages of
the formula approach. A formula approach provides transparency (every
Member will know how the other will reduce its tariffs); efficiency
(simpler process than request/offer approach), equity (tariff reduction
depends on rules rather then “bargaining power”); predictability (easy to
foresee the results of the negotiations).
How will flexibilities will be applied to developing countries and LDCs?
Flexibility provisions for
developing countries: According to the July 2004 Framework, developing
countries would enjoy longer implementation periods for their tariff
reductions; and choose between : 1) less than formula cuts for up to [10%]
of their tariff lines representing up to [10%] of their import value; or
2) not apply formula cuts, or leave unbound tariff lines, for up to [5%]
of their tariff lines representing up to [5%] of their import value.
Least Developed Countries: The least-developed country participants are
not required to apply the formula or participate in the sectorial
approach, their contribution being to substantially increase their binding
coverage at levels in accordance with their needs and development.
Other S & D treatment: developing countries with a binding coverage of
less than [35%] would be exempt from formula reductions, but instead would
contribute by binding their tariffs at an average level that does not
exceed the overall average of the post-Uruguay Round bound tariffs for all
developing countries.
Newly Acceded members: These members will also be provided with special
tariff reduction provisions.
What is a non-tariff barrier?
There is no official definition but, in general terms, it refers to any
measure other than a tariff which protects domestic industry. Many
non-tariff measures are based on a legitimate goal (such as the protection
of human health) and can be introduced in a WTO consistent manner.
Agreements such as the SPS and TBT aim at allowing governments to take due
care of these legitimate goals while minimizing the impact on trade and
avoiding the temptation to use them as disguised protectionism.
How are NTBs being addressed in the NAMA negotiations?
The negotiating group has been identifying, categorizing and examining the
various NTBs. Many NTBs are being resolved bilaterally, others are being
addressed on a sectoral basis. Some are also part of other existing
multilateral NTB Agreements. Results on NTBs are also expected from other
Negotiating Groups such as Trade Facilitation. NTB outcomes will have
multilateral effect and therefore benefit all Members.
How will the Doha NAMA result improve the market access conditions for
products of export interest to developing countries?
Important to note that developing Members have a diverse export base. As a
result of the formula, tariff peaks, high tariffs and tariff escalation
will diminish or disappear altogether. Consequently, market access
opportunities will open up both in the markets of developed Members, but
also of other developing Members. Such access will be further improved
through the sectorial initiatives which will be implemented on an MFN
basis by those Members joining such initiatives. Addressing NTBs in this
Round is also expected to improve the access into the markets of Members.
Market access for LDC products has improved and is expected to improve
both into developed as well as developing country markets. In this regard,
the Doha mandate calls on developed Members as well as others in a
position to do so to grant duty free and quota free access to LDC products
on a date to be determined. Additionally, through increased binding
coverage and reduction of the binding overhang, market access conditions
will be made more secure.
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