WORLD TRADE  
ORGANIZATION  TN/MA/W/66 
11 November 2005 
 
 (05-5304) 
Negotiating Group on Market Access Original:   English 
  
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS 
 
Treatment of Small, Vulnerable Economies in the NAMA Negotiations
 
 
Communication from Antigua and Barbuda, Barbados, Bolivia, Dominica, Dominican Republic,  
El Salvador, Fiji, Grenada, Guatem ala, Honduras, Mongolia, Nicaragua, 
 Papua New Guinea, Paraguay, St. Kitts and Nevis, St. Lucia, St. Vincent  
and the Grenadines and Trinidad and Tobago 
 
  The following communication, dated 10 November 2005 is being circulated at the request of the Delegations of Antigua a nd Barbuda, Barbados, Bolivia, Dominica, Dominican Republic, 
El Salvador, Fiji, Grenada, Guatemala, H onduras, Mongolia, Nicaragua, Papua New Guinea, 
Paraguay, St. Kitts and Nevis, St. Lucia, St. Vi ncent and the Grenadines and Trinidad and Tobago. 
 
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  1. The Chairman of the Negotiating Group on Market Access has requested Members of this 
group to engage in as concrete as possible discu ssions and to seek convergence for the adoption of 
negotiating modalities for non-agricultural market access.  To achieve this objective, the Chairman has 
also requested Members to concentrate on an inte grated approach consis ting of negotiations around 
the three core elements of NAMA modalities, namely  the formula for tariff cuts, flexibilities for 
developing countries and treatment of unbound duti es. Small economies remain fully committed to 
these objectives and wish to engage constructively in this process. 
 
2. In JOB(05)/165, small economies recalled th at the objective of the Work Programme on 
Small Economies as mandated by Paragraph 35 of the Doha Ministerial Declaration and the July 2004 
Package is to frame concrete responses to the trad e-related issues identified for the fuller integration 
of small, vulnerable economies into the multilate ral trading system. These responses are to be 
formulated both in the Committee on Trade and Development in Dedicated Session and in the 
relevant negotiating and other bodies of the WTO.  3. As stated in JOB(05)/165, small, vulne rable economies remain fully committed to the 
liberalisation process. However, the pace and level of tariff reduction must be such that small economies are able to sustain such reduction in a way that is compatible with their specific needs and 
concerns.  
 4. Tariffs serve multiple purposes in small, vulne rable economies, the most important of which 
are to ensure the viability of vulnerable domestic i ndustries, to foster the development of industrial 
capacity in new sectors and to generate fiscal resources for government revenue. 
 
5. Moreover, small economies represent an in significant share of world trade, including 
non-agricultural exports, and can therefore only exp ect limited benefits from the outcome of the 
NAMA negotiations. The Annex at the end of this communication presents the share of small economies in world merchandise exports. It reveals that this share has been consistently and TN/MA/W/66 
Page 2  
 
persistently low over the past decade. Indeed, the vulnerability of small economies stems from the 
aggregate effects of a combination of characteristics and problems, which, in addition to an insignificant participation to the multilateral syst em, includes minimal or no export diversification, 
low competitiveness, dependency on a very small number of markets, economic openness and high 
adjustment costs. 
 
6. Given the relative importance of tariffs as a po licy instrument and the lack of resilience that 
prevails in their economies, sma ll economies believe that a simple Swiss formula, as being currently 
discussed in the Negotiating Group, will place an unreasonable burden on developing countries in their situation. Therefore an alternative approach  to tariff reduction as well as access to adequate 
flexibilities are both critical to ensure a NAMA outco me which is compatible with small economies’ 
development objectives.  7. The flexibilities as currently crafted in pa ragraph 8 are of very limited scope for small 
economies since the bulk of these economies have alr eady bound one hundred per cent or close to one 
hundred per cent of their tariff lines. In addition,  the thresholds and conditionalities contained in 
paragraph 8 further limit the usefulness of that pa ragraph for most small economies. As a matter of 
fact, one single sector, which may be deemed sensitive for industrial or fiscal reasons, may already fill 
the thresholds of paragraph 8 and hence impair th e benefits of that paragraph for small economies. 
 8. Finally, small economies also have an inter est in the modalities for the treatment of unbound 
duties. Despite the very high level of tariff bi ndings of small economies, unbound tariff lines most 
often represent sectors and products of strategic im portance, either because of the sensitive nature of 
such industries or because of th eir contribution to government revenue. Small economies that have 
already made large efforts to bind all or most of their tariff lines should receive recognition for such 
efforts, and not be penalised through m odalities that affect them detrimentally. 
 
9. As their contribution to the NAMA nego tiating process, small economies propose that 
developing countries, not covered in paragraph 6 and paragraph 9 of  Annex B, and  whose average 
share in total world merchandise exports does not  exceed 0.10% over the period 1995-2004, will be 
expected to:  
(a) Make tariff reductions not ex ceeding 15%, but with minimum cuts of 10% on individual lines 
and with no more than half the cuts at the lo west level of this range. This contribution will 
ensure a significant reduction of small economi es’ tariff averages as  well as a reduction in 
individual tariff lines. 
(b) On the treatment of unbound tariffs, small ec onomies whose binding coverage is more then 
90% commit themselves to the objective of fu ll tariff binding as an outcome of the NAMA 
negotiations. However, newly bound tariff lines w ill not be subject to reductions through the 
formula during these negotiations. Small economies are open to discuss a possible target rate at which these tariffs should be bound or a maximum rate at which to bind these lines. 
 10. Small, vulnerable economies firmly believe th at only tariff reductions compatible with their 
capacity to sustain trade reforms, as spelt out in this  paper, are likely to efficiently discharge the Doha 
mandate. In this context, small economies will con tinue to have access to flexibilities such as those 
outlined in paragraph 8 of Annex B.   TN/MA/W/66
 Page 3ANNEX   
 
TABLE 1: Share of World Merchandise Exports (1995-2004) and Average 
 
 
Small Economies particip ation in Total Merchandi se Exports (1995 – 2004) 
Year 
(Percentage) Small Economy 
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Average 
World  100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 
 Antigua and Barbuda  0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 
 Barbados  0.0050 0.0050 0.0050 0.0050 0.0050 0.0040 0.0040 0.0030 0.0030 0.0020 0.0041 
 Bolivia  0.0220 0.0220 0.0220 0.0210 0.0190 0.0200 0.0210 0.0210 0.0210 0.0240 0.0213 
 Dominica  0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0000 0.0009 
 Dominican Republic  0.0750 0.0770 0.0850 0.0930 0.0920 0.0910 0.0880 0.0820 0.0750 0.0650 0.0823 
 El Salvador  0.0330 0.0340 0.0450 0.0460 0.0450 0.0470 0.0480 0.0480 0.0430 0.0370 0.0426 
 Fiji  0.0120 0.0140 0.0110 0.0100 0.0110 0.0090 0.0090 0.0090 0.0090 0.0080 0.0102 
 Grenada  0.0004 0.0004 0.0004 0.0008 0.0006 0.0012 0.0010 0.0010 0.0006 - 0.0007 
 Guatemala  0.0430 0.0390 0.0430 0.0480 0.0430 0.0430 0.0410 0.0350 0.0340 0.0330 0.0402 
 Honduras  0.0240 0.0250 0.0270 0.0290 0.0210 0.0220 0.0220 0.0210 0.0180 0.0170 0.0226 
 Mongolia  0.0090 0.0080 0.0080 0.0090 0.0080 0.0090 0.0090 0.0080 0.0080 0.0100 0.0086 
 Nicaragua  0.0090 0.0090 0.0110 0.0110 0.0100 0.0100 0.0100 0.0090 0.0080 0.0080 0.0095 
 Papua New Guinea  0.0530 0.0480 0.0400 0.0330 0.0340 0.0330 0.0300 0.0260 0.0300 0.0280 0.0355 
 Paraguay  0.0180 0.0200 0.0200 0.0190 0.0130 0.0140 0.0160 0.0150 0.0170 0.0180 0.0170 
 Saint Kitts and Nevis  0.0000 0.0000 0.0010 0.0010 0.0010 0.0010 0.0010 0.0000 0.0010 0.0010 0.0007 
 Saint Lucia  0.0020 0.0020 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0012 
 Saint Vincent and the Grenadines 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0010 0.0000 0.0009 
 Trinidad and Tobago  0.0490 0.0480 0.0470 0.0420 0.0500 0.0680 0.0710 0.0620 0.0710 0.0710 0.0579 
 
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