WORLD TRADE
ORGANIZATIONWT/GC/W/211
16 June 1999
(99-2445)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
Negotiations on Industrial (Non-Agricultural) Tariffs
Communication from New Zealand
The following communication, dated 15 June 1999, has been received from the Permanent
Mission of New Zealand.
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Proposal
1. New Zealand, like many other WTO Members, proposes that the third Ministerial Conference
in Seattle agree to initiate negotiations for industrial (i.e. non-agricultural) tariffs.  New Zealand
further proposes that the Ministerial Conference agree on negotiating modalities that would reflect the
following principles:
(a) All industrial tariff items should be the subject of liberalization negotiations   with the
objective of seeking reduction and, wherever possible, elimination of all tariffs on
industrial products.  At the end of the negotiations all industrial tariffs should be
bound.
(b) It would be accepted at the outset that developed and developing Members would be
negotiating towards the same end points, but that developing Members would be
allowed a longer period of time to achieve these end points.
(c) The negotiations should seek, in addition, to tackle tariff peaks and, as a matter of
priority, to deal with nuisance tariffs through the application of appropriate formulae.
(d) The negotiations should seek to build on the extensive work that has already been
undertaken on initiatives such as ATL (Accelerated Tariff Liberalization).  In theevent it were not possible to achieve critical mass on ATL in advance of Seattle,
New Zealand suggests that the conclusion of agreements on these eight sectors –
initially as plurilaterals representing a critical mass of global trade – be achieved as a
matter of priority within the post-Seattle trade negotiations.  It might be possible to
extend this approach to other sectors identified as potential zero-for-zero candidates.Members should aim to agree in 1999 that these sectors  would form the basis for an
early-harvest element of the new round.
(e) Additional to the early-harvest elements, zero-end points should also be sought for
other sectors or across the board as the negotiations proceed.WT/GC/W/211
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2. The possible shape of an outcome of negotiations conducted on the above basis is set out in
the attached annex.
Background
3. Tariff reductions on industrial products remains a central concern for all WTO Members in
seeking improved market access.  Although major progress has been made in successive GATT
Rounds in reducing tariffs on industrial products, they continue to be a significant barrier to trade in
many developed and developing Members.  In the case of access to developed Member markets, this
is particularly evident in product areas where developing Members have a general comparative
advantage over developed Members.  It is reflected in tariff escalation for processed products and
tariff peaks for “sensitive” products.
4. New Zealand is firmly of the view that agreement on commencing further negotiations on the
reduction and, wherever possible, elimination of all tariffs on industrial products should be one of the
central and priority outcomes from the third Ministerial meeting.
5. In order to facilitate that outcome and to “jump start” the negotiations, New Zealand proposes
that the negotiation encompass, from its initiation, the objective of securing zero tariffs on a balanced
range of product sectors that reflect the interests of, and offer real benefits to, the WTO membershipas a whole.  This approach could be extended to include additional zero-for-zero product areas as
negotiations progress, and could be coupled with the application of a formula approach to deal with
the residual balance of tariff lines.  Approachin g the negotiations in this way would offer the
opportunity for deeper and earlier tariff cuts and would ensure a more predictable and balanced
outcome than other approaches.
6. New Zealand has been heartened by the work on tariff liberalization undertaken by APEC in
recent years.  In 1994, APEC members committed to achieve free trade and investment by 2010 for
developed members and 2020 for developing members.  More recently on the sectors covered by the
Accelerated Tariff Liberalization (ATL) initiative, covering 44 per cent of industrial product tariff
lines, a group of developed and developed members have committed to substantial liberalizationahead of these dates, in most cases indicating a wi llingness to move to tariff elimination in these
sectors (in this regard, WT/GC/W/138 and Add.1 refer).
7. If such a large grouping of developed and developing members can agree to tariff elimination
on such a high proportion of industrial tariff lines, it suggests to New Zealand that in any forthcoming
WTO negotiations serious consideration should be given to the wider elimination of tariffs wherever
this is possible.
8. New Zealand supports suggestions that nuisance tariffs be removed as a matter of priority and
looks forward to exploring modalities for dealing with  any remaining difficulties in this area as the
negotiations progress.WT/GC/W/211
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ANNEX
Industrial Tariffs
Possible Shape of the New Round
Early harvest1. Agreement would be reached in 2000 with implementation commencing in 2001 on a
balanced package of zero-for-zero/substantial reduction initiatives.  These outcomes could be reversed
if agreement on a single undertaking was not achieved.
Other zero-for-zero arrangements
2. To be negotiated during the normal course of the round.  Implementation to begin in 2003 at
the earliest.
The remainder
3. Should a zero outcome not be possible these products would be subject to a formula cut or
request/offer approach.
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