RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/MA/M/20 
4 January 2006 
 (06-0016) 
Negotiating Group on Market Access  
  
 
 
MINUTES OF THE MEETING 
 
Held in the Centre William Rappard on 6-10 June 2005
 
 
Chairman:  Ambassador Jóhannesson (Iceland) 
 
 1.1 The Negotiating Group adopted
 the agenda for the meeting as contained in WTO/AIR/2580.  
The meeting took place in informal mode.  At the re quest of some delegations, their statements have 
been reproduced below.  
 1.2 The representative of Moldova
 stated that a formal proposal  on behalf of the low-income 
countries in transition was under preparation and would be submitted shor tly to the Negotiating 
Group.  At this meeting, she wished to stress the following.  The low-income economies in transition, 
which had recently acceded to the WTO, faced huge  difficulties in their efforts to implement 
economic and trade policy reforms.   In recognition of their problems,  paragraph 11 of Annex B of the 
General Council Decision of 1 August 2004 called fo r "special provisions for tariff reductions" in 
order to take into account the extensive market access commitments undertak en as part of accession 
of the newly acceded Members.    
1.3 The Republic of Moldova was one of the above-mentioned low-income countries in 
transition, which had undertaken an extremely hi gh level of liberalization commitments in its  
accession.  For instance, the non-agricultural tariffs  in Moldova were bound on average at 6 per cent, 
which was considerably lower than the average ta riff bindings undertaken by developing country 
Members, which was a simple binding average of 29.4 per cent in developing countries, 45.2 per cent 
in LDCs.  At the same time, Moldova had bound 1 00 per cent  of its tariff lines on non-agricultural 
products and had also expressed them in ad valorem  duties.  The rapid liberalization process, resulting 
from Moldova's accession to the WTO, had also created  additional structural and social difficulties to 
Moldova's industries.   1.4 As a small country in transition, th e Moldovan economy was highly dependent on 
international trade. Due to a limited domestic market, Moldovan compani es vitally needed to 
participate in international markets.  That was why, Moldova supported paragraph 2 of Annex B of 
the General Council Decision of 1 August 2004, which stipulated th at negotiations on market access 
for non-agricultural products "shall aim to reduce or as appropriate eliminate tariffs, including the 
reduction or elimination of tariff peaks, high tariffs , and tariff escalation, as well as non tariff barriers, 
in particular on products of export interest to deve loping countries."   At the same time, the level of 
development in Moldova was comparable to that  of low-income developing countries and LDCs.  
Various economic indicators could prove this.  For example, the average GDP per capita in 
developing countries (2003) was about 1,200 US$  (W orld Bank data), in the Republic of Moldova it 
was US$ 542, putting Moldova into the category of 61 lowest-income economies.    
1.5 According to WTO statistics, Moldova's par ticipation in world trade was insignificant. The 
share in total world exports was 0.008 per cent over the last years. Since Moldova's economy was TN/MA/M/20 
Page 2  
 
 mostly agriculture-oriented, the share of its non-ag ricultural exports in total world exports was even 
much lower.  Unfortunately, over the last few year s, the situation of the Moldova's foreign trade had 
become critical. The trade balance deficit had cons iderably increased and at the end of 2004, it had 
reached the level of US$ 788 million, which was th e highest level registered since 1991, when the 
Republic of Moldova became an i ndependent country. This deficit w as 2.6 times higher than in 2000, 
the year before the accession of Moldova to the WTO. 
 1.6 Simulation of the currently discussed formul as such as the Swiss formula and the so-called 
"Girard" formula showed that Moldova and other low-income countries in transition would have to 
make substantial additional tariff cuts with much lower final bound rates than the vast majority of 
developing country Members and would cause even more  serious adjustment costs to their vulnerable 
economies, since, in most cases, Moldova's applied ta riffs were equal to the bound rates. Thus, in the 
medium-term, these economies clearly needed some reasonable and temporary flexibilities to improve 
the quality of integration into the multilateral tradi ng system and enhance the diversification of their 
production and export bases.  
 
1.7 That was why the Republic of Moldova wh ich was one of the low income countries and 
which had recently acceded to WTO, wished to requ est special flexibilities in order to facilitate its 
ongoing economic reform programmes.  This a pproach corresponded to the provisions of 
Article XXVIII bis of the GATT 1994, paragraph 3 (a), which stipulated that “the negotiations shall 
be concluded on a basis which affords adequate opportunity to take into account the needs of 
individual contracting parties and individual in dustries…”  She hoped that this rule and the 
recognition in the Framework of Moldova's ex tensive market access commitments would be 
translated into meaningful provisions in the first approximation of the modalities.  Finally,  she mentioned that Moldova was ready to contribut e to the ongoing round of trade liberalization. 
However, Moldova was concerned that the results of this round could deepen existing inequalities in 
the tariff structure of the Members and other inequalities. 
 1.8 The representative of El Salvador, speaking on behalf of the delegati ons of El Salvador, 
Honduras and Guatemala , thanked those delegations which yesterday and today had submitted 
coefficient and outcome scenarios based on some of the proposed formulas. After seeing those submissions, she wished to point out that none of th e coefficients used in th e different scenarios, and 
particularly in the undiluted Swiss formula, met th eir needs and concerns, making it very difficult for 
their countries to adopt coefficients that aggressively reduced tariffs.  1.9 Their small developing economies would have  to deal with major challenges in this 
negotiating round were they to adopt new tariff re duction commitments.   It was important for 
Members to recognize that their fledgling industries would have to cope with aggressive inroads into 
their markets by industrialized countries which a pplied economies of scale and had a major share of 
the international market.  Accordingly, they consid ered that any kind of formula had to take into 
account the differences between tariff structures, less than full reciprocity and special and differential 
treatment, as stipulated in paragraphs 2 and 8 of Annex B.  However, they regarded these as minimum 
flexibilities, and additional flexibilities should not be discounted. 
 
1.10 At the same time, she expressed concern that  some delegations, in the tariff reduction process, 
were seeking to ensure that th e bound tariffs resulting from the formula to be adopted affected the 
levels of applied tariffs, as unde r the undiluted Swiss formula. They likewise considered, as other 
delegations had stated, that this negotiating pr ocess should not penalize developing countries for 
having unilaterally opened up their markets.  Their countries had made every effort to adopt and 
implement the Uruguay Round commitments, binding 100 per cent of their tariffs and applying 
straightforward and transparent tariffs.  They r ecognized that other devel oping countries had similarly 
contributed to this enterprise, but their productive and development structures limited their ability to  TN/MA/M/20 
 Page 3 
 
 
 undertake aggressive tariff reduction commitments that went beyond their own realities and 
capabilities.  1.11 Accordingly and in conclusion, it was their wish that the outcome of these negotiations be fair 
and balanced, taking into account the concerns they had expressed. 
 
1.12 The representative of the Philippines
 stated that as a member of APEC, the Philippines wish 
to reaffirm the statement made by APEC Ministers in Jeju, Korea and the Philippines would continue 
to contribute constructively to deliver on what the APEC Ministers had directed  to accomplish here in Geneva by July 2005 bearing in mind the APEC Ministers mandate that the level of ambition in 
NAMA will be based on and commensurate with the level of ambition in Agriculture. 
 1.13 She noted that with regard to the issue of  unbound tariff lines, there seemed to be a genuine 
effort on the part of all Members to find a pragmatic solution to this important issue.  Her delegation  
welcomed the Mexico proposal and urged Mexico to take account of the comments that had been 
made by Members on how to establish a reasonabl e mark-up base rate for the unbound tariff lines, 
especially for the low applied unbound. He drew atte ntion to paragraph 6 of the July package which 
allowed Members with less than 35% binding c overage, -- that is countries with lesser bound 
coverage than that of the Philippines -- to bind wi thout further reducing their unbound tariffs. In the 
interests of equity and not penalizing countri es with low unbound tariffs and which have been 
providing substantial market access on these unbound lines (some USD 9 Billion in the case of the 
Philippines), the Philippines expect ed that a reasonable methodology would be reached for the right 
base rates that were equitable and fair to countri es such as the Philippines.  What was important for 
the Philippines was the end result of this exercise  for its unbound lines post the formula reductions.   
 1.14 With regard to the formula for tariff reducti on, the Philippines hoped that after July, the focus 
of the membership would be on arriving at an appropriate formula that was fair and acceptable to the 
membership.  As regarded the coefficients to be negotiated relating to that formula, the Philippines 
reiterated that pursuant to the principles of spec ial and differential treatment and less than full 
reciprocity the coefficients that should be reached  should either be substa ntially or adequately 
differentiated, to borrow the terms used by th e Ambassadors of China and Pakistan, so as to 
operationalize these two core elements of the manda te, along with the added flexibilities provided in 
paragraphs 6, 8 and 9 already agreed to  and embodied in the July framework. 
 
__________