RESTRICTEDWORLD TRADE
ORGANIZATIONTN/MA/W/8
10 September 2002
(02-4748)
Negotiating Group on Market Access Original:  English
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
Communication from Singapore
The following communication, dated 9 September 2002, has been received from the
Permanent Mission of Singapore.
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1. Tariffs on non-agricultural products remain a ma jor barrier to international trade.  Despite
significant progress from successive trade rounds in reducing tariff levels, average tariff rates for non-
agricultural products in many countries remain prohibitively high.  Several studies have shown that
tariff peaks, tariff escalation and high tariff dispersion continue to persist in certain non-agriculturalsectors of developed countries, while in the case  of developing countries, tariffs remain bound at
relatively high levels or bound only for a limited number of tariff lines.  The WTO Secretariat has
estimated that only about 6 percent of total number of non-agricultural items are bound duty-free.
These results indicate strongly that there remains substantial work to be done on improving market
access for non-agricultural products.
2. Paragraph 16 of the Doha Declaration has stipulated an ambitious mandate for negotiations on
market access for non-agricultural products; it states that product coverage is to be comprehensive and
without a priori  exclusions.  In addition, negotiations must also aim to reduce or as appropriate
eliminate tariffs, including the reduction or elimin ation of tariff peaks, high tariffs, and tariff
escalation, as well as non-tariff barriers, in particular on products of export interest to developing
countries.
3. In this context, this paper seeks to consider the various aspects and issues concerning market
access negotiations for non-agricultural products.  We see the objective as aiming to achieve a
comprehensive but fair and balanced package comprising products of interest to all Members, in
particular, products of export interest to developing countries.
I. OBJECTIVE AND SCOPE OF NEGOTIATIONS
Tariff Bindings
4. Negotiations on market access for non-agricultural products should aim at achieving greater
predictability and improved market access through increased binding coverage.  At the same time, in
expanding the scope of bindings, WTO Members should ensure that the binding rates are meaningful
and actuate greater market access.  We note that the majority of bound tariff rates remain considerably
higher than current applied rates. In this regard, we urge members to narrow the variance between theceiling bindings and the applied rates as far as possible.TN/MA/W/8
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Tariff peaks and nuisance tariffs
5. Trade-distorting tariff peaks have been identified in a wide variety of industrial sectors in
both developed and developing member countries, particularly the textiles, apparel, footwear,
transport equipment and fish product sectors.  The prevalence of nuisance tariffs also entailsadministrative costs for businesses through the myriad of customs procedures associated with duty
collection. Non-agricultural market access negotiations should aim at rectifying trade distortions
caused by such tariffs.  To this end, we propose that nuisance tariffs be eliminated, and tariff peaks be
substantially reduced, if not eliminated. The negotiations would also need to define what constitute
nuisance tariffs and tariff peaks.
Tariff escalation
6. Studies have shown that reductions in tariffs during the Uruguay Round did not result in a
concomitant significant reduction in the levels of tariff escalation.  Like tariff peaks, the practice of
tariff escalation also distorts worldwide distribution of value-added products in certain sectors and
effectively limits the scope for trade-related industrialisation in developing countries.  To reduce tax
on industrialisation by developing countries, the issue of tariff escalation  must be seriously
examined; WTO Members should discuss extensively the methodology and definitions related to
tariff escalation in order to address the issue adequately in these negotiations.
Transparency
7. It has been noted that some WTO Members continue to employ a large share of non ad-
valorem  tariffs in their tariff schedules.  The adoption of a high proportion of non ad-valorem  tariffs
not only creates more difficulties in determining the incidence of tariff protection; it also greatly
reduces the degree of transparency of a country’s tariff profile. WTO members should try to enhance
transparency and comparability of tariff profiles at the outset of the negotiations so as to ensure acomprehensive and balanced tariff package for all countries.  Members could also consider converting
to ad valorem  tariffs and cease using complex or mixed tariffs.
8. WTO Members should also seek to increase transparency by simplifying their tariff
structures.  One method of simplifying one’s tariff structure would be to try to harmonise tariffs onsimilar products within similar HS headings/classifications.  This would lessen substantially the
complications arising from levying taxes on si milar products with varying tariff rates.
II. MODALITIES
9. To achieve the above-proposed market access improvements for non-agricultural products,
WTO Members should examine the modalities used/proposed in respect of earlier negotiation rounds,namely the “request and offer” approach, sectoral approach, “formula” cut and tariff
band/harmonisation proposal.
10. We note that the Uruguay Round tariff negotiations were conducted based on a combination
of several modalities. The synthesis of different modalities – sometimes referred to as a “cocktail”approach – was particularly effective in terms of achieving broad-based tariff reductions, greater
harmonisation of tariff rates and significant tariff cuts/elimination in areas where there was common
interest.
11. Given the complexities arising from the large WTO membership and short timeframe to
complete negotiations, Members are strongly encouraged to give priority consideration to approaches
of general application e.g. formula cut and sectoral approaches.   In this regard, we support proposals
to advance discussions based on notable sectoral initiatives accomplished in the Uruguay Round, suchTN/MA/W/8
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as the pharmaceutical zero-for-zero, ITA, and chemical harmonisation.  Discussions could cover
issues such as expanding the list of products covered by the initiatives, increasing the number of
participating Members, reducing the rates of harmonised tariffs, and introducing new sectors to be
covered by zero-for-zero initiatives.  Members could also consider applying the “Swiss formula” to
harmonise and substantially reduce tariffs for non-agricultural products.  Members could examine theeffect of using various coefficients in the “Swiss formula” in achieving tariff reductions. We would
favour using a coefficient that would result in deeper cuts to give meaningful and significant market
access for non-agricultural products.
Base year and base rates
12. To achieve meaningful market access, we would like to propose that applied rates be used as
the base rates for negotiations.  In the same vein, the year of reference for the base rates should be one
that is closer to the start of the negotiations.  We note that the EC has proposed using 2001 as the base
year, while the US has proposed using 2000 data.
Staging periods
13. It is of practical importance that there should be various staging periods for non-agricultural
tariff reductions.  By allowing for different phasing periods to be implemented, WTO Members,
especially the developing and least developed countries, would be given more flexibility and leeway
to make substantive tariff commitments. Members could also take into consideration productsensitivity when examining the staging periods.  Based on previous rounds of non-agricultural market
access negotiations, we note that the norm for staging periods has been maximum five equal annual
instalments beginning on the date of entry into force of the agreement.
III. NON-TARIFF BARRIERS (NTBs)
14. To move the discussions on NTBs forward, we would like to propose that countries first
identify the potential NTBs which they are concerned with. The Chair, aided by the Secretariat, could
also extract and compile information on NTBs from existing inventories developed by regional fora
such as OECD and APEC. Countries could then consu lt and categorise these NTBs into those that are
more issue-specific (e.g. rules, TBT, SPS, customs pr ocedures etc.) or more sector-specific (e.g. ITA,
chemicals, pharmaceuticals).  NTBs that are more issue-specific could be taken up at otherCommittee/Negotiating Groups while sector-specific NTBs could be discussed in this Negotiating
Group.
IV. ENVIRONMENTAL GOODS
15. We fully support the reduction of barriers to trade in the environmental goods called for under
paragraph 31(iii) of the Doha Declaration. Facilitating market access to environmental goods will help
improve the level of worldwide environmental protection by lowering the costs and increasing the
availability of appropriate technologies required to do so. This would constitute a positive step
towards assuaging concerns that trade liberalisatio n will lead to increased rates of environmental
degradation.
16. The difficulty lies in defining 'environmental goods'.  However, to effectively identify trade
barriers on environmental goods, it is imperative that we develop a common understanding of the
concept of 'environmental goods'.  WTO members should consult to develop a list of environmentalproducts based on work done by APEC and the OECD, specifically OECD's definition of
environmental goods, and APEC's proposed categories and coverage of environmental goods.
17. We are however cautious, and do not really see the need to pay “particular attention to goods
whose sustainable materials or production characteristics mean that increased trade in such productsTN/MA/W/8
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would also be environmentally supportive”.  We shar e the view that “production based criteria has the
potential of creating a new set of standards and/or customs classifications, and Members’ ability to
comply may differ substantially”.
CONCLUSION
18. In conclusion, Singapore reiterates the importance it attaches to an ambitious and
comprehensive outcome in these market access negotiations.  It is an area of negotiations where we
can reap real dividends for both developed and developing countries.
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