WORLD TRADE
ORGANIZATIONTN/MA/W/17
2 December 2002
(02-6612)
Negotiating Group on Market Access Original:  Spanish
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
The Views of Chile
The following communication, dated 29 November 2002, has been received from the
Permanent Mission of Chile.
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Introduction
1. On the basis of the documents presented and the positions expressed in this Negotiating
Group by various Members, the present document is intended to set out Chile's views on this processand contribute to the discussion of some specific points of the negotiations.
2. The first point to be noted is that these specific negotiations are taking place within the setting
of the Doha Development Round (DDR).  In the co ntext of the single undertaking under which the
DDR negotiations are being conducted, progress in this Negotiating Group will necessarily be linked
to that achieved in other areas, such as agriculture.  Similarly, there must be coherence with the results
achieved in other areas of negotiation that affect market access, such as the anti-dumping measures
discussed in the Negotiating Group on Rules.
Setting of the negotiations:  regional initiatives
3. These negotiations on market access for non-agricultural products in the WTO are not taking
place in a vacuum.  They are being held at the same time as a number of processes of integration of
very extensive scope at both the regional and bilateral levels, whose central feature is the eliminationof tariffs and non-tariff barriers.  Some of the more ambitious initiatives include:
• Asia Pacific:  The 21 economies that make up the APEC have undertaken to achieve
free trade in the Asia-Pacific region by the year 2010 (2020 for the developing
economies).
• The Americas:  Negotiations are under-way to establish the Free-Trade Area of the
Americas as from 1 January 2005, i.e. the same time-scale that the Ministers have
established for us to complete the Doha Round.
• Europe:  The EU is preparing to incorporate the ten countries of Central and Eastern
Europe into its Single Market as from 2004.
4. In addition to these major regional or trans-regional initiatives there are countless bilateral or
multilateral initiatives with similar aims.  Thus, by way of an example, Chile has signed free tradeTN/MA/W/17
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agreements with practically all the countries of th e Americas, so that only the negotiations with the
United States, Bolivia and Panama remain to be completed.  Outside the region we have concluded
free trade agreements with the European Union and the Republic of Korea;  we are negotiating with
EFTA, and have just agreed at the recent APEC su mmit in Los Cabos to initiate trilateral negotiations
with Singapore and New Zealand.
5. For many countries, both developed and developing, trade liberalization is a fact and there
can be no going back on it.  Therefore, Members must decide whether such liberalization is to take
place inside or outside the WTO.  Chile firmly believes that the former – when it is available – is the
better option.  There now exists a clear mandate fro m the Ministers to advance resolutely in the WTO
towards liberalization of the trade in goods on a non-discriminatory basis.  Furthermore, the high level
of ambition already shown by various Members of the WTO in regional initiatives, such as those
mentioned above, should help to set a high level of ambition in the current multilateral negotiations.
Level of ambition and time-frames
6. Chile has high ambitions in these negotiations.  We believe that the positions set out by Hong
Kong, China, New Zealand and, more recently, the United States on the objective to be reached in
these negotiations point in the right direction.
7. However, it needs to be recognized that all the Members have problems or sensitivities in
specific sectors.  In trade negotiations it is normal to introduce some tariff reductions gradually so as
to soften their impact on the more sensitive sectors.  In particular, it has been customary to provide for
the results of the tariff negotiations in the GATT/WTO to be implemented over a period of five or six
years.  However, there is a direct relationship between the level of ambition of these negotiations andthe time-frames to be established to implement their results:  the shorter these time-frames are, the
greater will be the problems of adjustment to the new conditions of competition and therefore the
smaller will be the depths of the tariff cuts that may be agreed.
8. In view of the above-mentioned factors Chile proposes the establishment of longer
implementation periods.  That will, as a consequence, enable higher levels of ambition to be set, since
there will be more time and room for the adjustment.  These time-frames can be differentiated for the
developing countries and, in particular, for the least developed and for those whose customs receipts
represent a large part of their tax revenue.
9. In fact, the best way of solving the problem of the sensitive sectors is not to exclude them nor
to reduce the general level of ambition, but rather to establish periods of implementation that are
sufficiently long to allow the Members to make the internal adjustments that are necessary.
Modalities of tariff reduction
10. The bound tariffs must be the basis for these negotiations.  In the case of the groups whose
tariffs have not been bound, under no circumstances should a tariff higher than that applied at the date
of launching the DDR be used as the basis.  Good s whose tariff is not bound have, by definition, the
level of protection – through the applied tariff – which the Members believe to be necessary:  ifadditional protection were required, the level of the tariff applied would obviously be higher.
Therefore, there is no justification for attempting to use as the basis higher tariffs than those applied at
the beginning of the negotiations.
11. For the reduction or elimination of tariffs, Chile is in favour of an approach centered on an
ambitious formula, such as the Swiss one, although for the moment we are not proposing any specificformula.  However, some of the formulas proposed by the Members are a cause for concern, in
particular those that envisage reductions in average tariff levels.  Such formulas make it possible forTN/MA/W/17
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minimal or non-existent tariff reductions to be granted for the sensitive (and therefore more protected)
goods while the concessions are concentrated in the non-sensitive sectors.  That would certainly be a
poor outcome in terms of the objectives of these negotiations, such as the attack on high tariffs, tariff
peaks and tariff escalation.  Therefore, the formula(s) to be used should be applied directly to all tariff
headings without exception.  In addition, the mechan ism of a "tariff ceiling" proposed by Norway in
document TN/MA/W/7 appears to be a good way of dealing with goods which, even after the formula
has been applied, still maintain high tariffs.
Request-offer and sectoral approaches
12. To negotiate on the basis of a request-offer approach has at least two disadvantages.  One is
that in this approach, by its very nature, negotiat ions tend to remain confined to the main exporters
and importers of the product in question.  That leads to virtually sidelining the developing countries,who tend to be principal exporters of few products and whose import markets are generally small.
The second disadvantage, common to all the sectoral approaches, is the natural tendency of countries
to reduce or eliminate their tariffs only in their non-sensitive sectors, leaving the sensitive products
subject to smaller reductions or directly excluding them.  The adoption of a sectoral approach,
including the "zero-for-zero" variant, leads to a situation in which the sensitive products will onceagain be left out, since the necessary trade-offs will  not take place.  Such a situation would be going
against the Doha Mandate and would leave the developing countries worse off.
13. Consequently, the request-offer or sectoral approaches which are favoured by some Members
should only be used to complement the formula approach, when the reductions obtained through the
chosen formula are insufficient.
High tariffs, tariff escalation and tariff peaks
14. The terms "tariff escalation", "tariff peak" and "high tariff" have not been formally defined.
Any attempt to define them would involve a time-consuming discussion of doubtful practical utility.
In fact, all the proposals presented so far by the Members deal with these problems in one way oranother, without any need to have defined them beforehand.  Therefore, it seems more reasonable to
concentrate first of all on the form or modality of the negotiations and then later on examine whether
greater precision on these kinds of tariff instruments is necessary.
Environmental goods
15. Similarly, there is no need to attempt to reach agreement on definitions of environmental
goods.  Insofar as the negotiations will exclude nothing, by definition all good - including the so-called "environmental" goods - will be included in the reduction or elimination of the tariffs and non-
tariff barriers being negotiated.
16. However, some Members have indicated a special interest in specific products, which they
regard as "environmental".  Recognizing the legitimacy of such an interest, we believe that, first of all,
the general formula(s) of tariff reduction have to be agreed.  If the results achieved were stillconsidered to be unsatisfactory, they could be complemented by other modalities of negotiation (see
paragraph 13).  Obviously, any additional liberalization to that envisaged by the formula for
"environmental" goods should be offset by equivalent concessions by those Members that have a
particular interest in liberalizing the trade in such goods.
17. In any event, there is no place in the GATT framework - nor is it acceptable - for any possible
definition of environmental goods to include the concept of production processes and methods.  That
would mean agreeing to grant different treatment to like products, as well as interference in theTN/MA/W/17
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sovereign right of each WTO Member to produce goods by means of processes that reflect its level of
economic, social and technological development.
18. Likewise, the illustrative list of environmental goods recently circulated by one Member –
without entering into the question of whether or not the products included therein may be considered
"environmental" – presents concrete problems for the negotiations.  For example, the tariffnomenclature of many Members – including Chile – makes no distinction between a "standard"
automatic washing machine and an automatic wa shing machine that economizes on detergent or
water.
Non-tariff measures (NTMs)
19. The document submitted by New Zealand (TN/MA/W/4) provides a good foundation for
initiating discussion on this subject.  As is clear in that document, there are many NTMs which arecovered by the various WTO Agreements.  Furthermore, many of them are allowed.
20. Thus, the more probable result of the compilation of NTMs that each Member must present
by 31 January next year at the latest is that that list will include, almost entirely, measures that are
already covered by the WTO Agreements.
21. Therefore, one of the first decisions to be adopted by this Negotiating Group concerns the
treatment of non-tariff measures covered by other agreements.  For example, is it necessary to notify
all the measures that affect our exports and which have been notified under the WTO Agreement?
22. Chile's position is that if a NTM is covered by a WTO Agreement it is necessary to ascertain
whether the respective agreement is included in the single undertaking.  If so, the corresponding
negotiating group must deal with that measure.  If the agreement is not included in the Doha Mandate,there are two alternatives.  If the measure is consid ered to be illegal, it may be challenged under the
Dispute Settlement Understanding.  If, on the other hand, it is legal, an attempt could be made to
eliminate it through a request-offer approach, given the very limited applicability of a formula
approach to dealing with the great diversity of existing non-tariff barriers.  Finally, if a non-tariff
measure is not regulated by any WTO Agreement, consideration might be given to the negotiation ofnew disciplines, which would mean obtaining a separate mandate at the Cancún Ministerial
Conference.  However, the initiation of such negotiations would depend on the consensus of the
Members.
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