WORLD TRADE
ORGANIZATIONTN/MA/W/18
5 December 2002
(02-6729)
Negotiating Group on Market Access Original:  English
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
Communication from the United States
The following communication, dated 3 December 2002, has been received from the
Permanent Mission of the United States.
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1. Introduction
1.  The United States is pleased to contribute to the debate on the modalities for non-agricultural
market access as envisioned by ministers at Doha.  Market access is at the core of these negotiations.
The U.S. proposal aims to ensure that market access opportunities are created for all Members and
that all Members participate in the liberalisation process.  Our approach aims to reduce and eliminatebarriers to trade in industrial goods and complements the U.S. proposals already tabled in agriculture
and services.  We look forward to working with other WTO Members to reach agreement on
modalities by the deadlines agreed.
2.  In brief, the U.S. approach envisions Members agreeing on a long-term course for non-
agricultural goods that will lead to the elimination of duties by 2015.   The parameters of the U.S.
proposal are:
• A comprehensive approach, with no exclusions
• An initial phase of tariff elimination, reduction and harmonization
• A second phase eliminating all remaining tariffs
• Participation by all WTO Members
• Addressing non-tariff barriers on a parallel track
2. Discussion:  The Situation in Global Non-Agricultural Trade
3.  The growth of international commerce, the increase in regional trade arrangements and the
expansion of the WTO’s membership since the end of the Uruguay Round have created  new
challenges and considerations for WTO Members.  The Doha Development Agenda provides
Members the opportunity to keep the WTO in the fo refront of international trade by multilateralizing
the liberalisation that is already taking place regionally and concluding the work on non-agricultural
tariffs that began in the GATT over fifty years ago.
4.  We have more work to do:    Non-agricultural (industrial) tariffs have been considered the
principal barrier to market access since the creation of the GATT in 1947, when they were the sole
subject of early trade rounds.  Nevertheless, after seven rounds Members continue to face tariffs,
some of which are outright prohibitive and mo st of which create economic inefficiencies.TN/MA/W/18
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5.  Regional Trade Agreements are significantly liberalising global trade:  During this same
period of time, more and more WTO Members have negotiated regional free trade agreements
(RTAs).  There are 200 RTAs in existence today.  Most of them have been negotiated in just the past
ten years.  The WTO Secretariat estimates that 55 percent of global trade is conducted on a duty free
basis but only six percent of trade is bound duty free within the WTO.  Members have the opportunityto build upon these RTAs by consolidating and expanding the liberalisation already undertaken.
6.   Liberalisation has led to growth:    Global trade has increased by 41 percent since
implementation of the Uruguay Round.  In the United States, the value of trade (exports and imports)
has grown by 56 percent since 1994, and U.S. imports  from developing countries have grown at a
faster rate than imports from developed country partners.  Research done by the World Bank
1
demonstrates income per capita in developing countries that globalized grew more than three times
faster than in other developing countries in the 1990s.  Further trade liberalisation by all Members,
therefore, is the most effective path to expanding development.
7.  The United States is ready to negotiate:    In July 2002, the United States Congress granted the
Administration Trade Promotion Authority (TPA), which directs the administration “to obtain more
open, equitable, and reciprocal market access” through the reduction or elimination of tariff and
non-tariff barriers.  TPA also establishes as objectives for U.S. negotiators:  broader participation in
the sectoral initiatives negotiated during the Uruguay Round; the elimination of tariffs and non-tariff
barriers on environmental technologies and goods; and, “with respect to textile and apparel articles to
obtain competitive opportunities for United States exports of textiles and apparel in foreign marketssubstantially equivalent to the competitive opportunities afforded foreign exports in the United
States...”  It is also important to note that TPA excludes no product from tariff negotiations.  This
authority gives the United States the ability to fully address all aspects of the Doha mandate for
non-agricultural market access negotiations.
3. Details of the U.S. Modalities Proposal
8.  Based on these factors, the United States is convinced that now is the time for all WTO
Members to take charge and agree to eliminate all tariffs on all non-agricultural products by 2015.  As
a first step, the United States proposes a five year period (2005 to 2010) in which Members eliminate,
or reduce and harmonize tariff levels.  The second step would lead to the elimination of all remaining
tariffs by 2015 over another five year period.  The specific methodology would be carried out as
follows:
Phase One (2005 to 2010):
– Elimination by 2010 of tariffs on all products with tariffs at or below five percent ad
valorem .
– For all other tariffs above 5 percent, application of a harmonizing Swiss Formula with
a coefficient of eight2.
                                                     
1David Dollar and Aart Kraay, “Trade, Growth and Poverty,” Development Research Group, World
Bank,  March 2001 .
2 T1=(T0*a)/(T0+a), where T1 = new tariff, T0 = current tariff, and a = 8TN/MA/W/18
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– As soon as possible but no later than 2010, elimination of tariffs in the Uruguay
Round zero-for-zero sectors3, in addition to tariffs covered by the Information
Technology Agreement (ITA) and the Agreement on Trade in Civil Aircraft (ATCA).
– As soon as possible but no later than 2010, elimination of tariffs in the following
additional sectors and others, as agreed by Members: wood products, non-ferrous
metals, bicycle parts, certain chemicals and allied products including soda ash and
photographic film, electronics, fish and fishery products, scientific equipment, and
environmental goods.
Phase Two (2010 to 2015):
–  Complete elimination of remaining tariffs by 2015 through linear cuts.
9.  The United States considers this a comprehensive approach that is based on the participation
of all WTO Members.  Reductions should be based on applied rates as of January 1, 2000 or Uruguay
Round final bound levels, whichever are lower.  Finally, Members should bind all tariff lines andshould maximize the use of ad valorem  rates.
Non-Tariff Barriers
10.  Simultaneously, as part of these negotiations, Members must work to eliminate non-tariff
barriers, in parallel with tariff commitments.  The benefits of tariff elimination should not be
undermined by existing non-tariff barriers (NTBs) or the creation of new NTBs, including market
distorting government measures that undermine tariff concessions.   The United States intends to offer
more specific details on methods to manage and address NTBs.  We welcome the comments and
suggestions of all WTO Members on how to address NTBs within the scope of the non-agricultural
market access negotiation.
11.  The GATT/WTO has a long history of recognising the importance of barriers behind the border
in market access negotiations.  Creation of the various non-tariff agreements in the Tokyo Round was
an important first step, and the results of the Uruguay Round reflected the broad interest to all
Members in the benefits of these Agreements.  Accordingly, as delegations consider our proposal, we
want to underscore that the United States envisions concurrent action on individual specific non-tariffbarriers that could undermine the value of the tariff reductions resulting from modalities.  We are
consulting carefully with our stakeholders to ensure that we can identify the specific issues and NTBs
of concern and expect that others will take similar steps.
4. Benefits to Developing Country Members
12.  The world-wide elimination of  tariffs will significantly benefit developing country Members,
particularly for non-agricultural products, which account for 89 percent of exports from developing
countries.  Quantitative estimates by the World Bank indicate the large majority of the global annual
income gain ($500 billion) from the total elimination of industrial tariffs would go to middle- and
low-income countries.  In addition, the World Bank estimates that more than 300 million people couldbe lifted out of poverty through the elimination of barriers on goods and services.  Since
approximately 70 percent of remaining tariff ba rriers are among devel oping countries, roughly
three-quarters of these gains will result from elimination of tariff barriers by low- and middle-income
countries themselves.
                                                     
3 including: agricultural equipment, construction equipment, furniture, medical equipment, paper,
pharmaceuticals, steel, and toys.  The following agriculture sectors also were negotiated: beer and distilled
spirits.TN/MA/W/18
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13.  The U.S. proposal offers developing countries a clear and simple approach to tariff
elimination, with no exclusions.  It also significantly liberalises access to developed Member markets
up front, during the first phase, by reducing all tariff peaks to levels no higher than eight percent by
2010.  This includes many products of interest to deve loping countries.  The effect of this formula will
cut U.S. tariffs by as much as 85 percent in five years.
14.  However, the United States recognises that many developing countries’ trade interests go well
beyond  traditional, labour intensive products, and that these Members are working to diversify their
industrial exports.  Around 70 percent of tariffs in developed country markets fall at or below five
percent ad valorem .  In the United States, tariffs at or below five percent account for 68 percent of the
U.S. non-agricultural tariff schedule and 84 percent of total non-agricultural imports; 76 percent of
developing country exports to the United States face a duty of five percent or less.  Therefore, theUnited States also proposes to eliminate low duties in the first phase of its tariff elimination scheme.
5. Special and Differential Treatment
15.  Effective participation of developing country Members in the negotiations and their results
will be essential to the overall success of the Doha agenda.  It is with this expectation in mind that theUnited States proposes agreement to modalities that will have a lasting impact on the trading system.
The United States also recognises the provisions in the Doha mandate regarding special and
differential treatment.  As a first step in the negotiations, Members should secure agreement on the
modalities and a common vision for the result of our negotiation.  Once achieved, WTO Members
should turn to more precise and customised approaches to ensure participation by individualdeveloping countries, particularly the least-developed country Members, consistent with their
individual development needs.
6. Conclusion
16.   Total tariff elimination will stimulate trade, create jobs and reduce costs to consumers in all
countries.  The U.S. proposal is a comprehensive and systematic approach to eliminating tariffs that
will consider individual development needs and differentiates between highly traded products and
sectors that are ripe for tariff elimination and those that will need more time.  With this proposal WTO
Members have the opportunity to conclude the industrial tariff negotiations that began in 1947 and to
make a significant contribution to the overall success of the Doha Development Agenda.
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