WORLD TRADE  
ORGANIZATION  TN/MA/W/68 
30 March 2006 
 
 (06-1471) 
Negotiating Group on Market Access Original:   English 
  
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS 
 
Striving To Achieve Fair, Balanced An d Development Friendly Modalities In NAMA
 
 
Submission by NAMA 11 Group Of Developing Countries1 
 
 The following communication, dated 24 March 2006, is being circulated at the request of the 
delegations of Argentina, Bolivaria n Republic of Venezuela, Brazil, Egypt, India, Indonesia, Namibia, 
Philippines, South Africa and Tunisia. 
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Introduction 
 
 The NAMA 11 has come together to adva nce the development content of the Doha 
development agenda (DDA) and to ensure that th e outcome of the negotiations in NAMA is fair, 
balanced and in accordance with the mandate of the round agreed in Doha.2 
 
Therefore the group fully supports the commitment of ministers, reflected in paragraph 24 of 
the Hong Kong Declaration to “advance the devel opment objectives of this round through enhanced 
market access for developing countries in both Agri culture and NAMA.  To that end we instruct our 
negotiators to ensure that ther e is a comparably high level of ambition in market access for 
Agriculture and NAMA”.  Paragraph 24 goes on to stat e that “this ambition is to be achieved in a 
balanced and proportionate manner cons istent with the principle of special and differential treatment”. 
There are seven interrelated elements of this  injunction, read together with the Doha 
Declaration, and the July 2004 WTO Framewor k Agreement, which the NAMA 11 wishes to 
underline in this submission:  
• The development objectives of the round should be at the centre of the negotiations. in 
reducing tariffs, the need for policy space to advance the industrial development of developing countries should be respected. 
• Given the low tariff averages in devel oped countries “enhanced market access” for 
developing countries can only be assured by the elimination of tariff peaks, high tariffs and 
tariff escalation in developed countries.  
• The principles of less than full reciprocity a nd special and differential treatment should be 
respected.  
• The practice in the WTO, as was also agreed in  the July 2004 Framework Agreement, is to 
reduce tariffs from bound rates and this shoul d not be undermined in this round.  
                                                     
 
1Argentina, Bolivarian Republic of Venezuela Brazil, Egypt, India, Indonesia, Namibia, Philippines, 
South Africa and Tunisia. 
2 See WT/COMTD/W/145 – which several Members of the group submitted to the Committee on 
Trade and Development for a more elaborate argument. TN/MA/W/68 
Page 2  
 
  • The flexibilities needed by developing countries to manage their adjustment process must be 
fully provided for in the modalities.  
• “(t)here should be a comparably high level of ambition in market access for Agriculture and 
NAMA”.  
• In accordance with the objectives of a deve lopment round, we should ensure that all 
developing countries gain from the Doha round. 
 1. Development should be at the centre of the negotiations 
The Ministerial Declaration that launched the DDA proclaimed that the interests of 
developing countries would be placed at the centre of the negotiations.
3  Agriculture and 
non-agricultural labour-intensive products constitute the bulk of production, employment and exports 
for the majority of developing countries, whilst th ese sectors have become relatively insignificant in 
terms of total output and employment of developed countries.  Poor market access conditions for 
these products have severely adverse effects on deve loping countries and increased import penetration 
causes painful structural adjustment for many developing country economies.  
In their recent proposals, developed countries,  have made demands on developing countries to 
make commitments in the NAMA negotiations that are totally disproportionate.  The enormous 
burdens of adjustment that developing countries would ha ve to bear in their industrial sectors bear no 
resemblance to the relatively insigni ficant adjustments that developed countries will need to make in 
this sector.  Developing countries are being called u pon to reduce their tariffs from their applied rates 
with limited space to manage the adjustments in their sensitive labour  intensive sectors.  In sharp 
contrast, some developed countries in their recent proposals, have made insignificant offers to open 
their markets in the Agriculture negotiations.  In  addition, these developed countries have called for 
additional flexibility for the bulk of their sensitive products, allowing them to close off the possibility 
of any significant new market opening for agricultural products from developing countries. Developing countries are being called upon to bear the burden of any new market opening in this 
round.  This threatens to create an imbalanced and anti-developmental outcome in the Doha round. 
2. Tariff peaks and tariff escalation in de veloped countries must be eliminated 
The DDA must provide enhanced access to i ndustrial country markets for the exports of 
goods and services of developing countries.  Para graph 16 of the Doha mandate provides a clear 
mandate in this regard.   “We agree to negotiations which sha ll aim, by modalities to be agreed, 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 particula r on products of export interest 
to developing countries ”. 
Given the low tariff average, including the large number of duty free tariff lines in developed 
country schedules, enhanced market access can onl y be achieved through the elimination of tariff 
peaks, high tariffs and protection for intermedia te or value-added goods, in developed countries 
granted through the medium of tariff escalation.  Tariff escalation prevents developing countries from 
diversifying their export base, thus keeping these count ries at the lower end of the value-added chain. 
The table below summarises the current situa tion of tariff peaks in quad countries:   
                                                      
3Paragraph 2 of the Doha Declaration states: “The majority of WTO Members are developing 
countries.  We seek to place their needs and interests at the heart of the Work Programme adopted in this 
Declaration”.    TN/MA/W/68 
 Page 3 
 
 
     
Total NAMA  tariff peaks in Canada, the EC, Japan and USA* 
 
Tariff Peaks (national)  
Country  
Tariff Avg Non-ad 
valorem 
tariffs Threshold  
3x Avg. Nr. of tariff 
lines Maximum 
tariff 
Canada 5,3% 0,4% 15,9% 403 25,0 
EC 3,9% 0,7% 11,7% 686 26,0 
Japan 2.3% 3,6% 6,9% 1285 191,2 
USA 3,2% 4,8% 9,6% 886 58,2 
*Source:  WTO World Trade Report 2005 
 
In their recent proposals, developed countries are not offering to make any significant cuts in 
their industrial sectors.  The coefficients being pr oposed by the developed countries for themselves 
will retain a large number of tariff peaks and the consequent tariff escalati on, and thus negate the 
Doha mandate. 
These peaks and escalations have their roots in the developed countries, during both the 
Tokyo and the Uruguay round, actually discriminating against developing country products as 
reflected by the effective cuts in favor of produc ts from developing countries into developed markets 
being less than their overall average cuts, i.e., only 25% rather than 33% during the Tokyo Round, 
and 37% rather than 40% during the Uruguay Round (see Annex A).  In the current development 
round, it is expected that the reverse should be th e case, wherein the overall average cut for products 
from developing countries into developed countries’  markets should be equal or higher than the 
overall cuts for products from bot h developed and developing to reflect the enhanced access for 
developing countries’ markets and r ectify this historical imbalance.  
3. Less Than Full reciprocity in reduction commitments  
The NAMA 11 group of developing countries are willing to reduce their tariffs 
proportionately on the basis of less than full reciprocity in reduction commitments so that their 
concessions are commensurate with their level of indu strial development.  We argue below that this 
approach is consistent with historical practi ce of the GATT, the Doha Mandate and the recent 
declaration by Ministers in Hong Kong. we argu e further that the principle of “less than full 
reciprocity” means that developing countries should undertake lesser percentage reductions in their 
tariffs as compared to that by the developed countries.   
What needs to be evaluated is the percentage  reduction that developed countries undertake, 
which has to be greater than the percentage reducti on that developing countries undertake.   It may be 
noted that the average percentage reductions by de veloped countries did not exceed 40% in any of the 
previous rounds of tariff negotia tions (see Annex A).  In a Development Round, where the objective 
is ‘enhanced market access for developing countries’ , developed countries have to lead the way by 
offering to undertake substantial reductions on their tariff peaks and high tariffs which they continue 
to maintain on products of inter est to developing countries.  In a Development Round there can be no 
expectation that developing countries should be making greater cuts than developed countries.  
Furthermore, less than full reciprocity in reduc tion commitments cannot be measured in terms 
of the end result of the tariffs for developed and de veloping countries.  Developed country tariffs are 
at an average lower than the average developing count ry tariff.  Therefore, whatever the co-efficient 
taken, their end tariff would always be lower as compared to developing countries.  It is also 
important to note that “what matters as far as the stimulus to exports is concerned is not the 
percentage cut in tariff per se, but rather the decl ine in the tariff-inclusive price in the importing TN/MA/W/68 
Page 4  
 
  country. This means that the absolute size of the tariff cut is important.  For example, a 50% 
reduction in a 3% tariff will, in principle, cause th e tariff inclusive price to decline by 1.5 percentage 
points, whereas a 25% cut in a 36% tariff would result  in a 6.6 percentage point reduction in the tariff 
inclusive price.”
4  Therefore the actual market opening in developing countries would be much more 
than that provided by developed countries.   
We are also concerned that developed count ries are attempting to harmonize tariffs amongst 
various Member countries; this is an impractical approach given the diversity in tariff profiles, 
different levels of developmen t and sensitivities of different countries. Harmonization is not the 
mandated objective of these negotiations; what is d esirable and achievable in this round is only a 
greater degree of harmonization within a Member’s  own schedule through a reduction/elimination of 
tariff peaks, high tariffs and tariff escalation. 
In the simulations exercise which was recently undertaken by a group of 10 countries, 
comprising 6 developed Members and 4 developing countries using a range of co-efficients both in 
the Swiss formula and the ABI formula the following results were observed: 
Percentage Reduction by Developed Countries in Bound Tariffs  
Swiss 2 Swiss 5 Swiss 10 ABI =1  Developed5 
Countries  47.50% 35.60% 25.77% 35.78% 
[No flexibilities and a mark-up of 30 for unbound tariffs where applicable] 
  
Percentage Reduction by Developing Countries in Bound Tariffs  
Swiss 30 Swiss 35 Swiss 40 ABI =1 
Developing6 
Countries 47.99% 44.54% 41.57% 49.59% 
                          [No flexibilities and a mark-up of 30 for unbound tariffs where applicable] 
  It is  clear from the above tables taken from the simulations on the tariff profiles of a sample 
set of developed and developing countries that th e co-efficients (using different Swiss formulas) for 
developed and developing countries should be substantially differentia ted to deliver on the principle 
of Less Than Full Reciprocity.   
 
4. Reduction from bound rates 
The recent assertions by some developed Members that have called for ‘effective new market 
openings’, are attempting to change the bases of the NAMA negotiations from bound to applied rates, 
which is not acceptable. There are several re asons for the reduction commitments in the NAMA 
negotiations to be based on bound rates, and not applied rates: 
(i) In the July Framework Agreement Members have agreed that the basis of tariff 
reductions shall be ‘bound rates after fu ll implementation of current concessions’ and 
for unbound lines it shall be the applied tariffs as on 14
th November 2001, with an 
appropriate non-linear mark-up.  
(ii) Measuring reductions in current applied rates is also unacceptable since it attempts to 
negate the autonomous liberalization effort s of Members, particularly developing 
                                                      
4The Results of the Uruguay Round of Multila teral Trade Negotiations, GATT Secretariat 
November 1994. 
5 Australia, EC, Canada, Japan, Norway and the US. 
6 Brazil, Egypt, India and Malaysia. 
  TN/MA/W/68 
 Page 5 
 
 
  countries. Many developing countries have  reduced their tariffs beyond Uruguay 
Round commitments. These efforts need to be recognized and rewarded by the 
multilateral trading system, and not penalized . Unilateral liberalization undertaken by 
developing countries has already provided increased market access to WTO Members 
and should not simply be “pocketed” and not recognized.  Attempt by some 
developed countries to call for reduction of  developing country tariffs from applied 
rates will have the perverse effect of dissu ading developing countries from reforming 
their economies and liberalizing unilaterally.  
(iii) Attempting to use applied rates is a purely self-serving proposal as developed 
countries, after implementation of their UR commitments, have not effected any 
significant unilateral MFN tariff reduction. Thus, for most of the developed 
economies there is no difference between thei r bound and applied tariff rates. This 
proposal provides an unfair advantage to the developed countries in using reductions in applied tariff as a test for me asuring additional market access.  
(iv) Whilst developing countries are committed to bind and reduce tariffs from bound 
levels in this round, thus creating more transparency and certainty for exporters, 
developing countries may still need to main tain some tariff overhang (space between 
bound and applied levels) so as to retain  the policy space required for industrial 
development. Tariffs have been used as an industrial policy and industrial 
development tool by developed countries in the past and developed countries should 
not now “kick the ladder behind them”, thus denying developing countries a 
legitimate policy tool. 
(v) The rules in NAMA should not be applied in a selective manner and need to be 
consistent with those being applied in  Agriculture. Developed countries have 
considerable tariff overhang (“water”) in th eir agricultural tariff structures. In many 
cases their agricultural bound tariffs are much  higher than necessary to protect the 
market for particular products and have prohi bited trade flows. In contrast high tariffs 
in developing countries for industrial pr oducts have not resulted in stopping trade 
flows. In the agriculture negotiations de veloped countries have insisted on using 
bound levels as a basis for their domestic s upport reductions. Furthermore, despite the 
mandate for “effective reductions” in domest ic support in the Hong Kong Ministerial 
Declaration, no proposal has been made by  developed countries which is likely to go 
beyond current applied levels or beyond spe nding levels after the implementation of 
domestic reforms.  
5. Flexibilities are an essential element 
Whilst many developing countries have conti nued to undertake unilateral liberalization 
beyond their WTO Uruguay Round commitments and reform  their industrial sectors, a significant part 
of their production and employment remain in sen sitive sectors, and further liberalization of these 
sensitive sectors would have to be preceded by  carefully managed adjustment policies.  
It is for these reasons that we argued in the submission
7 made to the WTO that the 
paragraph 8 flexibilities, that all WTO Members ne gotiated and agreed to in the WTO July 2004 
Framework Agreement, are an essential element of the flexibilities required by developing countries 
to manage their adjustment processes.  We retain th e right to adjust these numbers upwards to enable 
some of our economies to manage the adjustment of  sensitive sectors and prevent the social disruption 
                                                      
7 See WTO doc TN/MA/W/65 – submitted to the WT O Negotiating Group on Market Access on the 8th 
of November 2005. TN/MA/W/68 
Page 6  
 
  caused by job losses and closure of enterprises that would result from further liberalization.  In 
addition, we emphasize that paragraph 8 is a ‘s tand-alone’ provision in the agreed NAMA framework 
and its position as such must be rec ognized.  Any move to link it, or use it as a trade-off with the tariff 
reduction formula will create unnecessary difficulties in the negotiations.  The two issues are separate 
and should be treated as such. we thus welcome the decision of ministers in paragraph 14 of the Hong 
Kong to “re-affirm the importance of special and differe ntial treatment and less than full reciprocity in 
reduction commitments, including paragraph 8 of the NAMA framework, as integral parts of the 
modalities”. 
The NAMA 11 group also supports the need for paragraph 6 countries and the LDCs to be 
allowed sufficient policy space in the modalities to contribute to their economic development whilst 
ensuring that all WTO Members shall make a contri bution to the round in accordance with their level 
of development. 
6. Comparably high level of ambition in both NAMA and agriculture  
The level of ambition between NAMA and Market  Access in Agriculture will have to be 
comparably high in order to be compatible with wh at Ministers decided in Hong Kong.  There are, as 
stated in a recent submission by Argentina
8, several elements that could be used to compare that level 
of ambition.  These include: the comparison between th e levels of tariff cuts proposed, the flexibilities 
and sensitivities contemplated, the possibilities of enhanced market access for developing countries, 
and the certainty and transparency of the tariff st ructures.  These parameters can serve to assess the 
compliance of different proposals w ith the mandate of Paragraph 24. 
The recent proposals by developed countries th at require developing countries to reduce their 
NAMA tariffs by a significantly higher percentage th an the current percentage reductions offered by 
developed countries in both NAMA and Agriculture have  the singular characteristic of contradicting 
the three mandates of Paragraph 24:  they do not  provide for enhanced market access for developing 
countries, they do not provide for a comparably hi gh level of ambition in NAMA and Agriculture and 
they are not balanced, proportionate and consistent  with the principle of special and differential 
treatment. 
7. All developing countries should gain from the Doha Development Round 
The NAMA 11 recognizes that not all developing countries stand to make significant gains 
from the DDA in the short term. developing countries,  and in particular, least developed countries 
(LDCs), and other small, weak and vulnerable ec onomies often do not have the supply capacity to 
compete for the new export opportunities that will arise. others will face significant adjustment costs 
including from the erosion of preferences. to addr ess these particular concerns of developing countries 
we pledge to work with these countries to seek solutions to the following challenges: 
• In our previous submissions we have already “r ecognized the challenges that may be faced by 
non-reciprocal preference beneficiary Members as a consequence of the MFN liberalization that will result from these negotiations” as Mi nisters decided in paragraph 20 of the 
Hong Kong Declaration. We pledge to work with these Members to “intensify work on the 
assessment of the scope of the problem w ith a view to finding possible solutions”. 
• As we indicated in our previous submissions, referred to above, we fully identify with the 
concerns of “small, vulnerabl e economies” and pledge to work with these countries “ to 
establish ways to provide flexibilities for these Members without creating a sub-category of 
WTO Members” as provided for by paragraph 21 of the Hong Kong Ministerial Declaration. 
                                                     
 
8 See WTO doc TN/MA/W/67 submitted by Argentina.  TN/MA/W/68 
 Page 7 
 
 
  • In our submissions we called for the launch of an ambitious “aid for trade” package in Hong 
Kong to address the trade related capacity build ing needs of all developing countries.  We 
also stated that WTO Members should also ag ree to create a grant aid fund to assist all 
developing countries to manage the impact of  preference erosion and other adjustment 
challenges that would arise from the Doha round.  In view of the decision of ministers in 
Hong Kong for the Director-General to create a task force to provide recommendations to the 
general council on how to opera tionalize “aid for trade”, the NAMA 11 will participate 
actively in this group to achieve the above objec tives.  We believe that “aid for trade” should 
not be used in this round as a substitute for increased market access and reductions in trade 
distorting subsidies of developed countries. we also believe that, the funding for “aid for trade” should be additional to existing aid bud gets and should not be limited to capacity 
building for implementation of the Doha r ound agreements but should also contribute 
significantly to building the supply capacity of a ll developing countries to take advantage of 
new market access. 
• The NAMA 11 is also fully committed to work ing with the LDC Group to operationalize and 
make effective the provision of duty free quota free market access for all LDC products by 
2008 in accordance with Annex F of  the Hong Kong declaration.  
 
Conclusion 
 
The NAMA 11 group of developing countries re mains committed to work for a genuine 
development outcome of the round that is fair a nd balanced and that will create new opportunities for 
all Members, developed and developing, to grow  their economies and foster their development. 
 TN/MA/W/68 
Page 8  
 
  ANNEX A 
 
The History of Tariff Cuts in the GATT-WTO and the Principle of Less Than Full 
Reciprocity in Reduction Commitments 
Round Covered Developed Countries Cuts Developing Countries Cuts 
Uruguay Round  
(1986-94) No Agreement reached on Formula,  
- guideline quantitative target of 33  
1/3 % Cut  
- at least as ambitious as Tokyo Round 
Trade Weighted Cuts:  
- 40% overall 
- 37% products from 
Developing Countries 
- 25% products from Least 
Developed Countries  Concept of Less than Full 
Reciprocity, and Developed Countries 
not expected to achieve the same level,  - In Agriculture, express guideline 
of  2/3s of the 36% set for 
developed countries (that is 24%) 
- In NAMA, tacit guideline of 22% at 
2/3s of the developed,  but actual 
level of cuts were less than 22% 
Tokyo Round  (1973-79) Adoption of the Swiss Formula 
Approach, with achieved cuts at: 
– 33% weighted cut 
– 39% simple average 
– But for Developing countries’ 
products - effective cuts were only 25% 
USA – USED SWISS 14 
EC etc – Swiss 16 With flexibilities or exemptions subject to compensation Same concept of Non-Reciprocity 
as in Kennedy Round, no mandatory formula approach 
 
 
Kennedy Round  
(1964-67) Principle of “substantial linear tariff 
reductions” with 50%  “as a working 
hypothesis  for the determination of the 
general rate of linear reduction” 
 - 35% cuts achieved Non-Reciprocity Concept /Optional 
Participation for Developing Countries  
- Basic Reciprocity but “less 
than full reciprocity” to the effect that: “the developed 
countries cannot expect to receive reciprocity from the less developed countries”  
No Formal Linear cut obligation for developing countries  
First 5 Rounds  
Geneva to Dillon 
(1947-62) Weighted Percentage Cut -  36%  Optional Participation and only when 
requesting concessions 
Sources:  Anwarul Hoda, Tariff Negotiations and Rene gotiations under the GATT and WTO Procedures and 
Practices, Cambridge University Press 2001. 
 
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