May 27, 2008 / 3:39 PM / 11 years ago

WTO members tussle over industry proposals

GENEVA (Reuters) - Rich and poor countries clashed on Tuesday about whether new proposals to free up trade in industrial goods did enough to open markets or help developing countries.

A meeting of World Trade Organization (WTO) members to review the proposals showed poor countries are determined to exact a price in terms of how much they open their markets for manufactures to match the special treatment rich countries are seeking in agriculture.

U.S. and European speakers echoed concerns also raised by their business lobbies that the new proposals did not go far enough to prise open developing country markets, and could allow entire sectors to be excluded from tariff cuts.

U.S. ambassador to the WTO Peter Allgeier said the industry talks known as NAMA seemed to be about “non-additional market access”, not their official designation of “non-agricultural market access”, according to a participant in the meeting.

The industry proposals, together with a similar text for agriculture, were issued as a blueprint for a deal in the WTO’s Doha round to free up world trade, now in its seventh year of negotiations after a series of missed deadlines.

The Doha talks now face a crucial few weeks, possibly culminating in a meeting of ministers, in a drive to wrap up the outlines of an accord by the end of 2008.

DEVELOPMENT VERSUS ACCESS

Both Brazil and India stressed in Tuesday’s meeting that the Doha round had a development mandate, meaning poor countries should have to make smaller contributions than rich ones under the principle of “less than full reciprocity”.

Putting a brighter spin on the proposals — and with an eye to angry European businesses and unions — EU trade chief Peter Mandelson said in Brussels that the new industry proposals could result in an acceptable final deal.

“Within the ranges provided by the text, the EU can secure some new market access in key markets in China, Asia and Latin America,” he told a European Parliament committee.

At the heart of the proposals are revised coefficients that set the percentage ceiling for new tariffs under a formula.

Developed countries now have a range of 7-9 instead of 8-9 in the previous version, while the range for developing countries has widened to 19-26 from 19-23, depending on the extent to which they use waivers or “flexibilities” to shield some products from the full cuts.

Both the U.S. and the EU expressed concern at the wider gap between the ranges. But rich Norway said the new developed country range was a move in the right direction and Singapore called on developed countries to accept an even lower ceiling.

Developing countries say they cannot make firm offers on industrial goods until they know the outcome in agriculture, where they hope to gain access to rich food importers.

Although the outlines of an agriculture deal are emerging, WTO members still do not understand the impact of complex proposals to shield sensitive products from full tariff cuts.

“There’ll probably be some access but it will be small and they can’t calculate it with precision,” South Africa delegation head Faizel Ismail told reporters. “There’s an enormous lack of clarity in agriculture.”

Three other industry issues emerged as contentious.

Mexico and Singapore joined U.S. and EU criticism of proposed special treatment for customs unions, something pushed by Brazil as leader of the Latin American Mercosur bloc.

Both Washington and Brussels rejected any special treatment for China, with the EU saying proposals to let China phase in any tariff cuts over 15 years or more were unacceptable.

And the EU said any flexibilities for developing countries must be designed to ensure that they cannot carve out entire sectors from tariff cuts.

Talks on the new industry proposals continue until Monday. Canada’s WTO ambassador Don Stephenson, who chairs the talks, said they could settle some issues in that period not directly linked to the formula or flexibilities, which would be resolved last of all in a political decision by ministers.

Comparing himself to a sports referee, he again expressed frustration at the unwillingness of the WTO’s 152 members to negotiate on industry rather than restating positions.

“The way I see it I’m standing at centre-field with the ball and 152 guys are trying to play goalie,” he told reporters.

Editing by Catherine Evans

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