RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/MA/M/9 
19 December 2003 
 (03-6670) 
Negotiating Group on Market Access  
   
MINUTES OF THE MEETING 
 
Held in the Centre William Rappard on 9 – 11 July 2003
 
 
Chairman: Ambassador P-L. Girard (Switzerland) 
 
 
Subjects discussed                      Page  
 
I. CONSIDERATION OF POSSIBLE MODALITIES FOR NEGOTIATIONS ON 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS .....................................2  
A. CHAIRMAN 'S PAPER ON DRAFT ELEMENTS OF MODALITIES FOR NEGOTIATIONS ON 
NON-AGRICULTURAL PRODUCTS (TN/MA/W/35  + CORR.1)......................................................2  
B. NON-TARIFF BARRIERS (NTBS) ..................................................................................................2  
- Non-tariff barrier notifications – Addendum (TN/MA/W/25/Add.2) and 
Non-tariff barrier notifications: Secre tariat Compilation of the Various 
Barriers Notified by the Participants  (Job (03)/128) .....................................................2  
C. CONSIDERATION OF DOCUMENTS SUBMITTED  BY PARTICIPANTS AT OR SINCE THE 
GROUP 'S LAST MEETING ..............................................................................................................2  
D. OTHER MATTERS .......................................................................................................................11  
II. OTHER BUSINESS................................................................................................................1 1 
 
______________ 
 
 
 The Chairman  stated that the agenda for the meeting was contained in document 
WTO/AIR/2134 dated 26 June 2003 and its  corrigendum, dated 30 June 2003. An  annotated agenda 
had been circulated as Job(03)/131. In addition, a fax had been sent to participants on 2 July 2003 
containing an informal room document titled "Guide to TN/MA/W/35". 
 
 He pointed out that since the issuance of the Airgram, three add itional papers had been 
circulated, submissions from Papua New Guinea (TN/MA/W/39), Chinese Taipei (TN/MA/W/19/Add.2) and the United States (TN/MA/W/18/Add.5).     The Negotiating Group adopted
 the agenda as circulated in WTO/AIR/2134 and its 
corrigendum. 
 TN/MA/M/9 
Page 2  
 
I. CONSIDERATION OF POSSIBLE MODALITIES FOR NEGOTIATIONS ON 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS 
A. C
HAIRMAN 'S PAPER ON DRAFT ELEMENTS OF MODALITIES FOR NEGOTIATIONS ON NON-
AGRICULTURAL PRODUCTS (TN/MA/W/35  + CORR.11) 
1.1 The Negotiating Group went into informal mode to discuss the Chairman's paper on Draft 
Elements of Modalities for Negotiations on Non-agricultural Products (TN/MA/W/35). 
 B. 
NON-TARIFF BARRIERS (NTBS) 
- Non-tariff barrier notifications – Addendum (TN/MA/W/25/Add.2) and 
Non-tariff barrier notifications: Secretari at Compilation of the Various Barriers 
Notified by the Participants  (Job (03)/128)  
 
1.2 The Negotiating Group went into informal mode to discuss Non-tariff barrier notifications –
Addendum (TN/MA/W/25/Add.2) and Non-tariff barrier  notifications: Secretariat compilation of the 
various barriers notified by the participants  (Job (03)/128).  During the discussion Members 
reaffirmed their commitment to progress work on NT Bs and agreed to submit NTB notifications to 
the Secretariat by 31 October 2003.¨  C. 
CONSIDERATION OF DOCUMENTS SUBMITTED BY PARTICIPANTS AT OR SINCE THE GROUP 'S 
LAST MEETING    
1.3 The representative of the United States  stated that they had tabled two parallel papers on a 
related subject. There had been some confusi on in the Group about how previous lists of 
environmental goods had been put together and they considered that it could be helpful to the NGMA 
to have more clarity on exactly how the OECD  list and the APEC list had been compiled.  
TN/MA/W/18/Add.5 was an attempt to introduce their idea on a modality which was separate and 
distinct from the background that was provided in  TN/MA/W/18/Add.4, which had outlined four 
specific considerations that influenced the deve lopment of the APEC list. First, the practical 
implementation of product distinctions by customs officials precluded the use of goods described as 
environmental on the basis of their product pro cess and production methods (PPMs). Second, many 
harmonised tariff headings contained more than ju st environmental goods. Third, national harmonised 
tariff lines were not uniform below the six digit leve l, and fourth, there were questions about what 
could be done about dual use issues.  The sec ond paper (TN/MA/W/18/Add.5) outlined a possible 
approach that could contribute to  moving negotiations forward and, in particular, address developing 
country export interests in a way that could begin to accommodate a wide variety of views and interests.  The paper proposed the development of tw o lists of goods, a core list and a complementary 
list.  The core list would consist of those products on which there was defin itive consensus that they 
constituted environmental goods.  Me mbers would be expected to eliminate tariffs on these items 
within a certain period of time.  The complementar y list could be developed to cover products on 
which there was not full consensus but which indi vidual Members could nominate for inclusion. If 
such an approach was pursued, procedures and related criteria would be necessary for nominating 
products. Members should be required to eliminate tariffs only on a percentage of the tariff lines on 
the complementary list within the same period of tim e designated for elimination of tariffs on the core 
list. To reflect less than full reciprocity, developi ng countries could be required to eliminate tariffs on 
a lesser percentage of products on the complement ary list than developed countries. Overall, the 
proposed approach was to allow fo r some flexibility in the designation of particular products. They 
encouraged other delegations to develop their ideas on how to incorporate an approach for an 
environmental goods component into the broader modality to be agreed in these negotiations.  
                                                     
 
1 French and Spanish only.  TN/MA/M/9 
 Page 3 
 
 
1.4 The representative of Mauritius  stated that his delegation had submitted its paper in light of 
the Chairman's request to come up with proposals on the vital issue of erosion of preferences,  a 
subject of serious concern to some of the most vulnerable Members of the WTO. From the perspective of the exporting country, erosion of pr eferences would be particularly serious where 
exports were concentrated on a limited number of products and very few export markets.  While 
preference schemes in principle could cover most, if not all, HS chapters and tariff lines, in practice, 
exports were limited to a very few products and to a limited number of tariff lines.  The sectorial 
approach proposed in the Chairman's paper Draft Elements of Modalities for Negotiations 
(TN/MA/W/35) affected in essence those very products  which were of specific interest to preference-
beneficiary countries, in particular textiles and clot hing, leather products, foot wear and fish and fish 
products.  However, as already indicated, only a limited number of specific tariff lines was in the 
broad product categories of direct concern to those countries.  Those tariff lines should be identified by the countries concerned and a list compiled by the WTO Secretariat.  Such tariff lines should either 
be excluded from tariff reductions or at a maximum,  should be subject to tariff reductions of 10 per 
cent on each tariff line so identified, to be st aggered over 10 annual inst alments in developed 
countries markets.  With regard to the application of any agreed harmonisation formula, the exclusion 
principle of certain identified tariff lines should appl y. Alternatively, consider ation could be given to 
the proposed formula provided that a much higher B co-efficient was applied to identified tariff lines 
and the staging period was expanded over a longer timeframe.  Consider ation could also be given to 
amend the "t
a" of the preference-granting countries in order to mitigate the erosion of preferences.  
They reiterated their proposal for setting up a comp etitiveness fund in the context of global coherence 
policymaking by international financial institutions in order to assist industrial restructuring and 
adjustment of countries most affected by reductions or phasing out of tariffs. 
 
1.5 The representative of New Zealand  stated that his delegation shared the view that using 
preferences as an excuse to reduce or delay liberali sation was not consistent with the letter and spirit 
of the WTO.  Other participants had outlined thei r arguments why the Enabli ng Clause explicitly set 
out that preferences should not forestall multilatera l trade liberalisation, and the preamble to the 
Marrakesh Agreement establishing the WTO highlight ed the purpose and objective of maintaining the 
integrity of the WTO system.  For that reason, New Zealand supported the view that erosion of preferences should not be dealt with in the form  of modalities on non-agricultural market access.  
However, certain preference-receiving countries c ould be acutely affected from the erosion of 
preferential access for certain products to certa in markets. New Zealand could consider positive 
measures to help mitigate the effects of the er osion of preferences on a case by case basis, using a 
formulation first presented by Barbados, Jamaica and Trinidad and Tobago, so long as the products 
were targeted at markets that could be demonstrated to be of acute concern to preference-receiving countries.  This would require a creative appro ach as different countries could require different 
solutions. However, such positive measures should be transitional in nature with the objective being 
to help preference-receiving countries adjust to the er osion of preferences, not to provide a scope for 
permanent carve-outs.  Any assistance provided shoul d be integrated into the broader context of 
overall aid delivery.  International financial in stitutions, UNCTAD, the Commonwealth and bilateral 
donors already funded a variety of activities th at would complement any positive measures to 
facilitate the necessary transition if preferences we re eroded.  Preference-receiving countries should 
factor the effects of preference erosion into thei r national development plans now, discuss them with 
donors and work out relative priorities for assistance . An ambitious outcome from the current round 
of negotiations which reduced agricultural subsidies and improved access into major, protected 
markets would benefit developing countries much more than holding on to existing preferences.  A recent World Bank Study had shown that preferen ces did not provide a sound basis for economic 
development and were a poor way of helping developing countries to integrate into the world 
economy.  There were not bound in the WTO and thus were able to be withdrawn or made conditional 
at any time. They often excluded sensitive produc ts for the preference-ex tending market and the 
country extending the preference could impose its requirements that the developing country must fulfil or agree to in order to qualify for the preferen ce.  Preferences were not designed to be permanent 
carve-outs from MFN tariff rates. Even without the current multilateral round of trade negotiations, TN/MA/M/9 
Page 4  
 
preferences would still be continuing to erode due to the proliferation of RTAs. Preference-receiving 
countries should recognise that preferences would erode and put in place appropriate plans to ease adjustment.  New Zealand was ready to help them in that process. 
 1.6 The representative of Senegal
 stated that they supported Mauritius' very interesting proposal 
on erosion of preferences, an issue which wa s a major problem for some countries in these 
negotiations. A considerable number of WTO Member s were encountering difficulties in this process 
of trade liberalisation and the system should take  into account the interest and concerns of all 
Members and explore all possibilities to ensure a sm ooth transition in preparation of the forthcoming 
major changes. The question of the erosion of prefer ences should be included as an integral part of the 
modalities to be defined and not dealt with on ce agreement had been reached on all the other 
elements. The issue of erosion of preferences ha d been included in the modalities for agricultural  
negotiations and it should also be included in the non-agricultural market access modalities.  The 
Group should also take into account the need for t echnical assistance that would allow beneficiary 
countries to address this issue. There were two funda mental elements to the Mauritius proposal; to try 
and identify the products affected by erosion of preferences for developing countries and LDCs, and 
this question of technical assistance which had b een specifically envisaged in these negotiations. The 
Secretariat should identify the relevant products and this would help preference-beneficiary countries 
show participants that the trade involved did not constitute a major volume in international trade. 
Senegal also supported the establishment of a fina ncial mechanism to support preference-beneficiary 
countries.   
1.7 The representative of the Philippines
 stated that they welcomed the statement by Mauritius on 
the issue of erosion of preferences. They recogni sed that there could be some real difficulties for 
certain countries described by Mauritius as being extremely dependent on very few products and on 
very specific markets. The Philippines welcomed the fact that Mauritius was attempting to look at the 
issue in a more focused and holistic manner, in cluding a possible financial mechanism with the 
participation of IMF, the World Bank and probab ly the regional development banks, because it was 
not purely a trade problem alone. Holding onto pref erences without such restructuring and the so-
called development of the supply side capability woul d be more difficult in the long term for countries 
under this category. With the proposal from Maur itius and the support from other possibly affected 
countries, the NGMA might be able to look closely at the very specific products and very specific 
country issues underlying the erosion of preference issue.  
 1.8 With regard to the United States' presentati on, he believed that the attempt by APEC from 
1996 to come up with a product list could be a useful  starting-point for those participants who might 
want to negotiate on the environmental product issues.  In 1998, the so-called Early Voluntary Sectoral 
Liberalisation Programme (EVSLP) of APEC iden tified 16 sectors including an environment sector 
for accelerated voluntary liberalisation. APEC was proud of the fact that they had reached some 
possible consensus on the industrial part of environmental products.  However, following the 1998 Asian financial crisis, some resistance to further ta riff reduction developed in most of the participating 
countries. Even so, the ministers declared that  those who were willing to undertake autonomous 
liberalisation were free to do so. However, conditi ons had since changed considerably and in the 
context of the DDA there was a ministerial pronou ncement to look at environmental products for 
possible liberalisation. In general, the issue of envi ronmental products had to be  looked at in a broader 
context and in a manner that would lead to a balan ced outcome.  With regard to the United States' 
submission, the Philippines would prefer it to be  a voluntary undertaking that would not oblige any 
APEC member country to join. Its members woul d be free to look at this proposal as a sectorial 
candidate. Those who wanted to join the sector ial initiative could use the APEC list as a starting-
point. With regard to the second question of th e United States' proposal, which was really a 
suggestion for negotiations based on a specific modality for a complementary list, the APEC list was mainly on the industrial side, there was nothing on the agricultural side and as a result it was 
unbalanced. It did not consider some of the e nvironment-related issues like organic products and 
products based on traditional knowledge which had very important implications for developing  TN/MA/M/9 
 Page 5 
 
 
countries. The global context in which participants were operating had to be taken into account and in 
that context the United States' proposal was unbalanced  in terms of the product coverage of the list. 
 
1.9 The representative of Kenya  stated that with regard to  environmental goods, although the 
OECD and the APEC lists could be considered good starting-points, they contained a limited number 
of products of export interest to Kenya. Kenya was currently in the process of preparing an 
environmental products list that it hoped to submit to the NGMA and also to  the CTE in Special 
Session. Kenya hoped that it would find its way into the overall list that would be considered as environmental goods both here and in the CTE in  Special Session. Such products would include 
coffee by-products, water hyacinth products, natural p est control  products and many others. Some of 
those products were not included in the APEC an d OECD lists and Kenya wished them to be 
considered as environmental goods. This would be in line with both paragraph 31.3 a nd paragraph 16 
of the Doha Declaration which referred to goods of export interest to developing countries being 
given some preference. Kenya wished to know how the NGMA was going to handle some of the products which could be qualified as environmental goods but were excl uded from the Chairman's list 
of sectors to be included under sectorial elimination.  In  particular, footnote 1 of TN/MA/W/35 stated 
that only products which were not covered by th e WTO Agreement on Agriculture would be included 
in sectorial elimination, so he wanted clarificati on on how some of the goods that could qualify as 
environmental goods but might not fall within the Chairman's definition would be dealt with in the 
Group. With regard to the erosion of preferences, preference-beneficiary countries were aware that 
preferences were not permanent and for this reas on Mauritius' submission was very good; it was only 
seeking measures to mitigate the negative effects of such erosion on beneficiary countries. The 
erosion of preferences was a WTO issue and Kenya wished to see a solution come from the WTO. He 
requested the circulation of his statement made on 9 July on behalf of 11 countries as  a WTO document.   
1.10 The representative of Pakistan
 stated that his delegation unde rstood the problems being faced 
by Mauritius and Kenya  because they also received pr eferential treatment.  However, Pakistan agreed 
with New Zealand that such preferential agreements were not permanent arrangements. It was because of such preferential arrangements that count ries were anxious to participate in FTAs, which 
negated MFN principles. The kind of  products which had been listed as  being subject to preferences; 
textiles, clothing and leather products, footwear, fish and fish products, were products of interest to 
developing countries. If tariffs were not reduced on them, then there would be no trade liberalisation 
for developing countries, and tariff escalation and ta riff peaks would continue. Something had to be 
done about the situation, and perhaps assistance from financial instituti ons could smoothen the 
transition. Regarding the United States' proposal on environmental goods, Pakistan had no objection 
to having a core list and a complementary list. What  it had seen of the APEC list so far was not very 
satisfactory and more work would have  to be done on developing it.  
 1.11 The representative of Côte d'Ivoire
 stated that his delegation supported the paper from 
Mauritius and thanked them for putting this problem  on the table. World trade was governed by a 
number of bilateral and plurila teral agreements and as long as those agreements existed any 
multilateral measure to be applied would have to ta ke account of them. Côte d'Ivoire currently had a 
preferential arrangement with the EC but this situa tion could change. They understood that they might 
have to find other measures to replace preferential arrangements.  However, currently a lot of countries depended on one, two or three products a nd if preferences were taken away abruptly it 
would be catastrophic for those countries.  For that  reason, the NGMA had to bear in mind that a 
number of countries' survival depended on the curre nt preferential structure.  As a result, some 
solution had to be developed to assist affected countries. 
 1.12 The representative of Hong Kong, China
 stated that his delegation welcomed the United 
States' submission which outlined a possible appr oach to modalities for environmental goods. The 
idea to draw up a core list and a complementary list of environmental goods would probably help 
avoid a lengthy debate on controversial items in terms of product coverage. The United States' TN/MA/M/9 
Page 6  
 
proposal could form a useful reference for Member s' future discussion. The United States' proposed 
timeframe for the elimination of tariffs on e nvironmental goods was quite different from the 
Chairman's proposed time-frame for sectorial tariff el imination. Under the United States' proposal all 
developed and developing country  Members alike would have to eliminate their tariffs on 
environmental goods by no later than 2010. Unde r the Chairman's proposal developing country 
Members would have a longer adjustment period. This was an aspect that would require further 
consideration. With regard to the criteria for de termining both the core and the complementary list, 
while this approach allowed some flexibility in discussing product coverage, there should be a 
common understanding at the outset that no PPM-related criteria would be used in determining either 
list. Hong Kong, China welcomed the initiative taken by Kenya to prepare its own list of 
environmental goods. 
 1.13 The representative of Switzerland
 stated that her delegation considered the United States' 
paper to be very helpful in advancing the discussi on on the environmental goods issue.  The lack of 
proposals on environmental goods may have made it difficult to include modalities on environmental 
goods in the Chairman's draft paper. It was an impor tant issue and at some point it would have to be 
included in the draft modalities. The background on the APEC list was very useful since that list 
together with the OECD list should form a basis for the Group's discussion. The second United States' 
paper (TN/MA/W/18/Add.5) was very interesting as regarded the Group's future work on modalities,  
with its proposal of a core list and complementary lis t. It had the merit of being very flexible while 
still ensuring that some percentage coverage of ta riff lines on a complementary list together with the 
core list would be required from every Member. It was important that a list of environmental goods 
actually included products of interest to deve loping countries and other Members should follow the 
very good example of Kenya in preparing its own list.   1.14 The representative of Australia
 stated that the United States' paper on the elimination of tariffs 
on environmental goods based on the core list and a complementary list drew on APEC experience to 
which Australia had contributed. They particularly supported the statement made by the United States 
on PPMs in paragraph 1 of their paper. The liber alisation of environmental goods in services was 
refered to specifically in paragraph 31 of the Doha  declaration and the proposed elimination of tariffs 
on a core list and a certain percentage of lines on a complementary list would be one means of 
achieving this element of the Doha mandate. Howeve r Australia would need to reflect further on the 
paper including in consultation w ith its industry stakeholders.  
 1.15 The representative of the United States
 stated that they appreciated Mauritius taking the time 
to respond to the request of the Group to provide  more information on what exactly were their 
concerns regarding the erosion of preferences. Li ke Pakistan, the United States remained concerned 
that some of the products that countries were getti ng preferences on were the very products on which 
other countries were seeking a reduction in tariffs .  That presented a serious dilemma for the NGMA 
as the goal was to try to reduce or eliminate tariffs . Like New Zealand, the United States believed that 
coherence and bilateral aid programmes were the best  answers. They had had a number of discussions 
recently with the World Bank and the IMF on the subj ect and would be  intensifying their work with 
them. The World Bank saw a role for itself through Countries Assistance Strategies, but one of the 
most critical elements in that regard was that the countries themselves had to approach the World 
Bank to begin the process of offsetting adjustment co sts and to encourage diversification. The United 
States would continue to work with the World Bank and the IMF on this issue as they considered that 
to be the appropriate focus. While understanding th e concerns of beneficiary countries, the Group had 
to keep focusing on this issue as a discrete problem rather than an over-arching one.  
 
1.16 With regard to the environmental paper, th e United States had separa ted the two papers in 
order for Members to understand what was behi nd the OECD and APEC lists. The proposal on 
modalities was an attempt to address  the fact that there were diffe rences among the Group about what 
the modality might represent and what might u ltimately be included. They welcomed Kenya's 
thoughts on which products might be included in that list.  The United States had proposed the idea of  TN/MA/M/9 
 Page 7 
 
 
a complementary component to allow Members to nominate issues and lists of products that they 
thought might be appropriate.   1.17 The representative of Costa Rica
 stated that with regard to Mauritius's proposal, the last 
sentence of paragraph 6 of their paper "It is furthe r proposed that such tariff lines be either excluded 
from tariff reduction or that a maximum tariff reduc tion of 10% on each tariff line so identified be 
staggered over 10 annual instalments on developed country markets." indicated that they were seeking 
tariff lines to be permanently excluded from reducti on commitments.  They would agree, like New 
Zealand and Pakistan, to mechanisms to assist those countries that might be seriously affected by this 
problem. Nonetheless, financial cooperation through the World Bank, the IMF and other existing 
structures was the best solution for this problem and it would not be appropriate to reflect this 
particular issue in the negotiating modalities. With re gard to the paper submitted by the United States  
on environmental goods, the issue had been under review in UNCTAD and Costa Rica would be 
happy to participate constructively in the discussions in future. Costa Rica preferred that the selection 
of environmental products be dist anced from the methods of production. 
 
1.18 The representative of Egypt  stated that Mauritius had provided  interesting ideas to deal with 
the problem of erosion of preferences. Egypt was ready to engage in a constructive discussion together with Mauritius and other delegations.   1.19 The representative of the European Communities
 stated that the paper by Mauritius contained 
some very pragmatic suggestions along with some possible solutions to the erosion of preferences 
issue. The United States' paper helped to a dvance the discussion on environmental goods. The EC 
delegate welcomed Kenya's information that they  were drawing up a list of environmental goods and 
suggested that all participants should be contributin g to drafting this list by including products that 
were of interest to themselves and to developi ng countries. The United States' modalities paper was 
interesting, although some clarification was needed on the two lists. It would be necessary to see it in 
the context of the overall modalities and to ascertain  the possibility of going fo r such a differentiated 
approach between lists. She agreed with Switzerland that this was a very important issue that should 
be reflected in the modalities. It might have been the lack of submissions that had prevented it from 
being included in the Chairman's draft paper on possible elements of modalities. 
 
1.20 The representative of Brazil  stated that they had a concern of a systemic nature. When 
discussing NTBs the need to avoid duplication had been  expressed in the Group, yet with regard to  
environmental goods, there seemed to be a very seri ous problem with duplication in that both the 
NGMA and the CTE were addressing the issue without any clear idea of a division of responsibility and/or competence. It seemed that both were simu ltaneously engaged in trying to define a list of 
environmental goods. Brazil, from the outset, had mainta ined that the best way to proceed would be to 
entrust the CTE with the definition of an e nvironmental good, following which the NGMA would 
take up modalities for addressing tariffs and NTBs on those goods. Another systemic issue that would 
have to be resolved was the question of the limit of the competence in this area. Last year, the CTE 
sent the mandate for environmental services to th e Council for Services in Special Session and the 
mandate for environmental goods to the NGMA. However, it was unclear whether this referral 
included agricultural goods or not and if did not, th en clarification was required as to which body was 
going to deal with the agricultural goods. The mandate  from ministers did not specify non-agricultural 
goods and services. There had to be a decision and clarity for Members on this issue.   1.21 The Chairman
 stated that the Group should reflect on Brazil's suggestion and that it take a 
two-step approach to environmenta l goods.  The first step would be to  clarify the situation with the 
CTE and possibly ask them to give a view on so-c alled environmental goods. This should not prevent 
the Group if it wanted to from treating these goods e ither through the formula approach, the sectoral, 
the voluntary or any other approach. While the NGMA was supposed to define environmental goods, 
according to the report from the CTE, the CTE intende d to be very active in defining environmental 
goods. There was a dichotomy on the part of the CTE on this matter. With respect to agricultural TN/MA/M/9 
Page 8  
 
products, the proper approach would be for Members to raise this question and possibly go through 
the CTE or communicate directly with the Chair of  the Agricultural Committee in Special Session.  
 
1.22 The representative of Jamaica
 stated that the members of CARICOM supported the paper 
submitted by Mauritius and welcomed  the recogniti on by the Philippines, New Zealand, Costa Rica 
and others, of the real concern that had been iden tified by some Members in respect of erosion of 
preferences and their recognition that the issue ne eded to be addressed within the negotiations.  
Jamaica differed in the approach being suggested by  New Zealand and Costa Rica, in that, whilst they 
had stated in their paper (TN/MA/W/30) that `positi ve measures must be found to mitigate against the 
negative impact of the loss of preferential market access’, options other than on a `case-by-case’ basis 
could be explored to provide an appropriate answer  to the issue. In addition, financial aid and co-
operation were not the  exclusive m eans of addressing this situation. 
 1.23 The representative of Uganda
 stated that they were considering the United States' paper on 
environmental goods along with what had been stated by Brazil. They also supported and shared a lot 
of what was contained in Mauritius' paper. The spir it and letter of this submission was similar to the 
understanding expressed by New Zealand that pref erences should not stand in the way of trade 
liberalisation. The submission by Mauritius did not su ggest in any way that lib eralisation should stop, 
it simply called for addressing the negative eff ects that would impact on those countries which 
enjoyed preferences, specially the small and vul nerable countries. At the same time, however, 
liberalisation should lead to fair trade and develo pment for all. Looking at what was happening in 
other negotiations, agriculture for example, so me Members were holding onto trade distorting 
domestic support measures and other Members were  holding onto export subsidies for the similar 
reasons that they wanted to retain levels of develo pment. Yet in the NGMA, when participants tried to 
do something similar they were told that they were  being an obstacle to liberalisation. This did not 
show much coherence within the WTO. As Keny a had said, preferences were a WTO issue because 
they were a trade issue. Uganda believed, like Ma uritius, that the erosion of preferences should be 
dealt with in the modalities and that the Chairman should provide some suggestions.  The World Bank 
as an international organisation had some role to play in it, but it should be a supplementary one. 
Uganda would approach the World Bank itself, but the point was that since the NGMA was  
negotiating modalities for liberalisation in non-agricultu ral market access, the erosion of preferences 
issue should be addressed in the Group. It did not make  sense that this issue should be resolved in the 
World Bank while all the other issues were being resolved in the WTO.  
 1.24 With regard to the New Zealand submission,  one of the conclusions of the World Bank paper 
to which New Zealand did not refer was that a numb er of countries would face devastating effects in 
the short term. This was exactly what Mauritius w as trying to address in its paper. The representative 
of Pakistan had stated that Pakistan would be r eady to give up preferences without any compensatory 
measure. While this was a positive move, it was ma de possible because of Pakistan's level of 
development and not all Members were capable of doing the same thing. With regard to New 
Zealand's point that preferences had not led to de velopment in the benefici ary countries, the World 
Bank paper further said that the issue was the utility  of preferences by those countries. The paper 
concluded that the countries receiving preferences coul d have done better if rules of origin were 
improved and if NTBs had been addressed. Additio nally, it advised beneficiary countries to address 
supply-side constraints. It would be helpful if New Zealand could provide information as to the extent 
to which their trade had been affected by preference s. In this way, Uganda would be able to compare 
the effect of preferences on New Zealand's trade comp ared to the effect the erosion of preferences and 
resulting abrupt reform would have on beneficiary c ountries, and as a result, se e who was in a better 
position to pursue development goals. 
 1.25 The representative of Ecuador
 stated that Brazil had raised the same systemic concerns that 
Ecuador had. There was no defin ition on matters to be discussed in the CTE and the matters that 
should be coordinated with the NGMA. Therefore, the Brazilian suggestion was the most useful one 
to clarify the competent areas and the possible inter-relation between each committee. While the  TN/MA/M/9 
 Page 9 
 
 
United States' document was interesting, Ecuador cons idered it premature to talk about a core list and 
a complementary list to classify environmental goods when there had not yet been clarification on the 
definition of such goods. On the other hand, in Ec uador and some other developing countries, there 
was little knowledge about the topic of environmenta l goods and services. It was a new concept and 
some countries were yet not able to differentiate  such goods and see the potential benefits to be 
derived from their inclusion.  
 1.26 The representative of Chile
 stated that the two United St ates' documents reflected their 
genuine concern to advance this pa rt of the negotation. Nevertheless, the United States' proposal was 
essentially a compulsory zero-for-zero agreement fo r the so-called environmental goods and Chile 
was not in favour of this type of agreement. Ch ile appreciated the important role that some goods, 
considered as environmental goods, had on ensuring a clean,  more sustainable environment for scarce 
resources but environmental goods were not the only ones that had a social value greater than their 
commercial value; there were also drugs, medicin es, books, medical instruments, textiles and clothing 
and food. However, this was not a good reason to ne gotiate a zero-for-zero agreement in other sectors. 
On the contrary, an ambitious structure with no product exclusion implemented in a horizontal, non-
discriminatory fashion was a better way to liberali se trade, not only in environmental goods but in 
other areas as well. In that way, practical probl ems of defining the concept and coverage of 
environmental goods could be avoi ded. The Doha declaration did not contain a special mandate or a 
more ambitious one for the so-called envir onmental goods, paragraph 31 of the Ministerial 
Declaration merely reproduced paragraph 16 wh ich was the general mandate for the Group. 
 
1.27 The representative of Colombia  stated that they were in favour of defining environmental 
goods by the final use rather than the methods and production processes. They were grateful to Brazil 
for their proposal concerning the need to define th e competence of the Special Session of the CTE, the 
NGMA and the Agricultural Negotiating Group as rega rded environmental goods. With regard to 
Mauritius' document, Colombia shared the same  concerns already expressed by New Zealand, 
Pakistan, the United States and Costa Rica. Erosion of preferences should not be part of the negotiating modalities because it was an issue that had specific character istics. In addition, solutions 
to the problem were being sought in other fo ra in the WTO as well as in other international 
organisations.  
1.28 The representative of India
 stated that the submission by Mauritius underscored the need to 
identify appropriate ways and mean s to address their concerns and this would require some creative 
thinking. Turning to environmental goods, India had noted the contents of the United States' submission and endorsed the comments made by Braz il. His delegation believed that it was essentially 
for the CTE to consider what constituted an e nvironmental good and that the NGMA should confine 
itself to looking at the kind of tariff treatment and the non-tariff issues that may arise thereafter. 
 1.29 The representative of New Zealand
 stated that they had offered some initials views at the last 
meeting on the first United States' paper on the envi ronment issue. They were still attracted to the 
pragmatism of the approach set out in that paper an d to the way that it built on an approach that had 
been track-tested  in an APEC context. The other aspect that appealed to th em was the way it offered 
some comfort to those who might not be comfortabl e with a list that had been developed in another 
region and so it seemed quite effective in the wa y it multilateralized the earlier APEC initiative. 
Turning to the second United States' paper, the idea of a hybrid approach with a core list and a 
complementary list had some attractions. It was driv en by the aim of maximising the flexibility that 
was available to participate in the negotiation on environmental goods and that was the approach to 
take. New Zealand flagged the need for care, if this approach was adopted, as the criteria for the 
complementary list and some of the caveats set out in  paragraph 5 of the second United States' paper were extremely important. With regard to the issue of preferences, Uganda had raised some very good 
questions, not least of which was whether New Zeala nd was guilt-free in this area. It was true that 
New Zealand traded extensively under preferential ar rangements for much of its agricultural trade and 
manufactured exports. More than half of their manuf actures went into the Australian market and the TN/MA/M/9 
Page 10  
 
results they were seeking from this Round would basica lly kill their preferential margins in Australia.  
In that sense, they were not naïve about the impact of  substantial tariff cuts on benefits that were very 
important at a company level.  Ne ither were they naïve about the em ployment and other consequences 
that flowed from that. They did not have an ideo logical position against preferential arrangements. In 
the last couple of years they had eliminated tari ffs for all imports from LDCs. New Zealand had long-
standing preferential arrangements for specific is land countries and they were actively pursuing 
further FTAs. The main differences between thei r approach and the approaches that were being 
proposed by some preference-benefi ciary countries was that New Zealand still believed firmly that the 
big gains came from multilateral liberalisation.   
1.30 The representative of Korea
 stated that they supported gr eater trade liberalization in the 
environment sector. In accordance with that, they  appreciated the United States' submission on 
environmental goods. As the United States had pointed out  in its first submission, consideration of the 
PPM as a definition element for environmental goods could lead to extending the product coverage 
beyond the capacity of many Members, particularly  developing countries. It could also prolong the 
negotiation process and thereby prevent the Group from  completing the negotiations within the agreed 
time-frame. Therefore, the PPM criteria should not be taken into account in defining the scope of 
environmental goods. In its first submission the Unite d States had suggested that the APEC list could 
be a good basis for discussion. However, limiting the sc ope of product coverage to a manageable level 
would not only be desirable, it would also be necessa ry in order to ensure participation of developing 
countries. Over half of the items on the APEC list were regarded as dual use goods. Whether to 
include those dual use goods in the category of environment goods was an issue for further study and 
discussion, in particular, how to implement the cu stoms clearance of a mu lti-use environmental good. 
As indicated in its submission, Korea preferre d end-use based criteria for the definition of 
environmental goods. Members should develop lists through a process of  consultations with domestic 
stakeholders and subsequent  negotiations among Members. 
 
1.31 The representative of Canada  stated that, while one agreed lis t would be the best solution, the 
concept of using a separate core list and a comple mentary list was a creative one and could certainly 
be considered. However, in relation to looking at pr oposed additions to the various lists that were on 
the table, Canada would urge Members to submit, for any products that they wanted to propose for the 
environmental goods list, the relevant  HS code and an HS description. In the ITA context, there had 
been a messy  and drawn-out exercise with regard to the B list of products which had been done with 
old HS codes and descriptions. Work was still continui ng to sort out the fact that Members had placed 
a good number of those products in the ITA B list into different categories in the HS. If Members could submit HS descriptions and codes this could avoid some of the difficulties experienced in the 
ITA context. 
 
1.32 The representative of Mauritius
 stated that their problem with erosion of preferences was a 
trade problem and that it should find a solution in  the WTO. They also hoped that their proposal 
would be taken into considerati on in the Chairman's modalities. 
 1.33 The representative of Nigeria
 stated that the problem of preferences was an ongoing one. His 
delegation thanked all the Members who had seri ously appreciated the major concern of the 
preference-beneficiary countries. Nigeria understood that this was a very contentious issue for all 
Members, it had to be jointly addressed and a comm on acceptable solution had to be found as part of 
the package of these negotiations. Arguments had been put forward about the importance of open 
trade whether it went by the name of improved mark et access or further liberalisation. There had also 
been the WTO talk of further integrating into th e system those Members who had been marginalized 
in the process. The question was how the WTO hoped to do this because it appeared that these 
countries would be denied the access they already ha d. Trade preferences were about market access, 
not about aid and preference-beneficiary countries want ed to be part of the trading world. Mauritius 
had presented a proposal on the issue and Members should take the time to consider its feasibility. 
While Nigeria welcomed suggestions about seeking solutions for the preference problem in other  TN/MA/M/9 
 Page 11 
 
 
bodies such as the World Bank and the IMF, it did not agree that a solution could be found through arrangements with those bodies. It was a market  access issue for which the WTO had the overriding 
competence rather than referring the issue to othe r organisations which had their own mandates and 
objectives.   
D. 
OTHER MATTERS  
1.34 There was no discussion under this item. 
 
II. OTHER BUSINESS 
2.1 A fax sent to participants on 20 June 2003 indi cated a change in the date of the next meeting 
of the NGMA.  It would now take place from 13-15 A ugust 2003.  There were two more meetings of 
the NGMA after Cancún and they were scheduled for 23-24 October 2003 and 8-10 December 2003.  
 2.2 The Chairman
 stated that the Group had had an excelle nt meeting. Basic concerns had been 
expressed openly and clearly and innovative ideas had been presented. The Group had moved forward 
with its work although a huge amount of work remain ed to be done. He was confident that if the 
Group continued on the same track and with the sam e spirit, further progress could be achieved. He 
shared his preliminary personal assessment of the discussions on the various issues dealt with during 
the meeting.   2.3 Beginning with the formula
, he sensed a general agreement that a formula represented a 
proper way to deal with the tariff reductions. The type of formula suggested in TN/MA/W/35, while 
being subject to qualifications, had been found to be creative and could constitute a proper instrument 
to work on with a view to correcting imbalances and deficiencies it contained. Nevertheless, there 
were clear divergences among participants on some ge neral issues regarding the formula. With regard 
to its effect in practice, on one hand some particip ants were of the view that it was constructed in too 
soft a manner and that as a consequence, it was weak  in terms of genuine liberalisation including the 
reduction of high tariffs as well as the treatment of tariff peaks and tariff escalation. On the other 
hand, some participants defended the position that th e reductions implied by the formula would be too 
ambitious given their economic situation, and that a further softening of various elements of the 
formula would be warranted.  In addition, the pr oblem faced by developing countries which had both 
low levels of bound and applied duties had been me ntioned as needing to be addressed. Clearly there 
was a need to pursue this discussion. The second gene ral issue which had been the subject of many 
comments was the one regarding the appropriate leve l of binding once the tariff reductions had been 
made. Here too, serious divergences existed. Neve rtheless, some interesting ideas had been presented 
which could be worth exploring further. He did not go into the more specific comments which had 
been made on individual elements of the formula such as the "Ta", the "B" coefficient, and the base 
rate, elements on which all Members of the Group needed to reflect seriously. 
 2.4 On the question of possible sectorials
, the views of the participants were still clearly far apart. 
Leaving aside the question of sectors to be retained, some participants were of the view that this 
question should only be addressed once a better consensus had been reached on the formula and they 
furthermore envisaged sectorials to be of a s upplementary and voluntary character.  On the other 
hand, other participants argued that sectorials were of a mandatory nature and had value in 
themselves.  They also considered them an integral part of the modalities which could, in particular, 
balance a possible weakness of the formula.  Th is was another issue on which further discussions 
would be needed as the Group progressed on the other elements of the modalities.  
2.5 The Chairman believed that the suggestions made on the issue of additional provisions for 
developing and LDCs , apart from the question of flexibility in binding coverage, had been rather well 
received and that there was a good basis for furthe r discussions. There had been some interesting 
ideas on the question of bindings on which the Group might do some further work. TN/MA/M/9 
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2.6 On the question of treatment of Newly Acceded Members,
 there was a basic agreement that 
their special situation should be taken into account.  The views diverged on how to do it and in this 
aspect a number of participants were of the view  that the suggestion made in TN/MA/W/35 might not 
be the best way to follow.  Here, also, inter esting suggestions had been made which would be 
explored further. 
 
2.7 With respect to supplementary modalities , he sensed a general agreement to have them as part 
of the modalities and to keep open the possibilit y of having recourse to all the supplementary 
modalities listed in paragraph 11, and to come back  to this issue once progress had been made on 
other more fundamental issues. 
 
2.8 The question of elimination of low duties  had been confirmed as a controversial issue and 
furthermore closely linked in the mind of a number of participants to the results achieved with respect 
to the formula and the sectorial approach.  
2.9 In light of his earlier comments on NTBs
 it was not necessary to say anything further on the 
issue.   2.10 With regard to the way forward and the pr eparations for the August meeting, participants 
needed to explore the many ideas put on the table,  to screen them and put them through some simple 
basic tests but to take them all seriously.  He w ould try to develop more options, where needed, with 
respect to various elements of the text, for discussion at the next meeting.  It was not his intention to 
produce a revision of TN/MA/W/35 for the next meeting but rather to try to put on paper possible options for some elements that would help the Group to converge on some points on which participants were still far apart.  As a result of th e discussions at the next meeting, the Chairman might 
possibly revise document TN/MA/W/35.  He remained  available for consultations, and would take the 
initiative himself when he felt it was warranted.   
 2.11 The Negotiating Group
 took note of the statements made. 
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