WORLD TRADE  
ORGANIZATION  TN/MA/W/86 
8 June 2007 
 (07-2396) 
Negotiating Group on Market Access Original:   English/ 
                 Spanish 
 
 
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS 
 
Communication from the NAMA-11 Group of Developing Countries  
 
 
 The following communication, dated 7 June 2007, 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. 
_______________ 
 
 
 This document elaborates on the elements contained in document TN/MA/W/79 and other 
papers submitted by the NAMA-11 to the Negotiating Group on Market Access. 
 
I. THE MANDATE 
1. In Paragraph 16 of the Doha Ministerial Decl aration (DMD), Ministers agreed to negotiations 
which shall aim to reduce or as appropriate, eliminat e tariffs, including the reduction or elimination of 
tariff peaks, high tariffs, and tariff escalation, as we ll as non-tariff barriers, in particular on products 
of export interest to developing countries. These nego tiations shall take fully into account the special 
needs and interests of developing and least-devel oped country participants, including through less 
than full reciprocity in reduction commitments, in accordance with the relevant provisions of 
Article XXVIII bis of GATT 1994 and the provisions c ited in paragraph 50 of the DMD1.  
 2. In addition to this, in the Hong Kong Minister ial Conference, in Paragraph 24 of the Hong 
Kong Ministerial Declaration (HKMD), Ministers instru cted the negotiators “to ensure that there is a 
comparably high level of ambition in market access for Agriculture and NAMA”. 
 
3. Thus, Paragraphs 16 of the DMD and 24 of the HKMD instruct negotiators to observe two 
conditions regarding the level of ambition of the NAMA negotiation. One is within NAMA, and it is 
enshrined in the concept of “less than full recipr ocity in reduction commitments”; the other is the 
balance between NAMA and agricultural market access,  according to which a comparable level of 
ambition has to be observed. 
 
                                                     
 
1 “The negotiations and the other aspects of the Work Pr ogramme shall take fully into  account the principle of 
special and differential treatment for developing and least- developed countries embodied in: Part IV of the GATT 1994; the 
Decision of 28 November 1979 on Differentia l and More Favourable Treatment, R eciprocity and Fuller Participation of 
Developing Countries; the Uruguay Round Decision on Measures  in Favour of Least-Developed Countries; and all other 
relevant WTO provisions”. TN/MA/W/86 
Page 2  
 
  II. NAMA: THE INTERNAL BALANCE 
A. T
HE SWISS FORMULA  
4. In the HKMD it was agreed to apply a Swiss formula with coefficients with the aim of 
reducing non-agricultural tariffs. This formul a implies that countries with higher tariffs −i.e., 
developing countries − have to make substantia lly higher tariff reductions. 
 5. The Swiss formula makes it difficult to comp are liberalisation efforts both between developed 
and developing countries in NAMA and between NA MA and Agriculture. Argentina has presented a 
proposal to ensure comparability between the leve ls of ambition in NAMA and agricultural market 
access
2. It is necessary, for equity and transparency  reasons, to determine the impact that the 
coefficients of the Swiss formula would produce on  the non-agricultural tariff structure of developed 
and developing countries (see Annex on the current ta riff structure). Only by doing this will it be 
possible to confirm that the mandate for less than full reciprocity is achieved. 
 
B. THE COEFFICIENTS  
6. Some developed countries have proposed to u se coefficients of 10 and 15 for developed and 
developing countries respectively. Table 1.a shows th at developed countries’ average tariffs will be 
reduced by 40%. In contrast, linear cuts for NAMA-11 and other developing countries will exceed 
69%, on average. 
 7. As a result, developing countries will have to  implement tariff reductions which, in linear 
terms, almost double those that will be carried out  by developed countries. Furthermore, the average 
tariff cut in percentage points for developing coun tries will be nearly 9 times higher than the cut for 
developed members. Undoubtedly, this proposal is not c onsistent with the princi ples of less than full 
reciprocity and special and differential treatment set out in Doha. 
 
Table 1 
Impact of Tariff Reductions on NAMA 
 
(a) Table 1.a Bound Tariff 
 Swiss 
formula 
coefficient Average 
initial 
tariff Average 
resulting 
tariff (a) % 
R
e
du
ct
ion (b) Reduction 
in 
percentag
e points 
Developed 
Countries 10 6.8 4.0 40.4% 2.7 
NAMA-11 
Countries 15 34.4 10.4 69.6% 23.9 
NAMA-11 
Countries 35 34.4 17.3 49.5% 17.0 
 
                                                      
2 Implementing Paragraph 24 of the Hong Kong Mini sterial Declarat ion. TN/MA/W/67. 13 March 2006.  TN/MA/W/86 
 Page 3 
 
 
  (b)  Table 1.b Applied Tariff 
 Swiss 
formula 
coefficient Average 
initial tariffAverage 
resulting 
tariff (c) % 
R
e
du
ct
io
n (d) Reduction 
in 
percentag
e points 
Developed 
Countries 10 3.4 2.6 25.5% 0.9 
NAMA-11 
Countries 15 12.2 6.7 44.9% 5.5 
NAMA-11 
Countries 35 12.2 9.1 25.9% 3.2 
Note: A mark-up of 30 p.p. was applied to unbound tariff lines. 
Source: based on WTO (2006). Simulation of tariff reductions for non-agricultural products. JOB(06)/210. 
 
 C. T
HE MINIMUM COEFFICIENT SPREAD REQUIRED FOR A BALANCED RESULT  
8. As table 1 shows, only when coefficients at least 25 points higher than those of developed 
countries are used for developing countries -as set forth in the NAMA-11 proposal3- is there a 
relatively balanced result between linear  cuts in both groups of countries. 
 9. Some developed countries argue that a coeffi cient of 35 would entail no reduction in applied 
tariffs. Besides the fact that this argument ignor es the value of bindings and the important market 
access granted unilaterally in the form of autonomous liberalization, table 1 illustrates that, with such 
a coefficient, bound tariffs would be reduced by 49. 5% on average, and applied tariffs would fall by 
25.9% on average, more than the average linear cuts  of developed countries in either bound or applied 
rates.   
10. As a result of this proposal, NAMA-11 countries new bound tariffs would face a reduction 
below the current applied level in 22% to 51% of  tariff lines, depending on the country, without 
considering flexibilities (Table 2). This reduction be low the applied level would affect between 9% 
and 37% of the value of non-agricultural imports in most of these countries.
4  
                                                      
 3 NAMA-11 Ministerial Communiqué . TN/MA/W/79. 6 July 2006. 
 4 Except for two countries where only 4%  of tariff lines would fall below th e applied level, while affecting a 
similar percentage of imports. TN/MA/W/86 
Page 4  
 
   
Table 2 
Cuts into applied tariffs in NAMA-11 countries  
Swiss formula with coefficien t of 35 and mark-up of 30 
 Without flexibilities Paragraph 8.a flexibilities Paragraph 8.b flexibilities 
(i) Country % of applied 
tariff lines 
affected  % of imports 
affected % of applied 
tariff lines 
affected % of imports 
affected % of applied 
tariff lines 
affected % of imports 
affected 
Argentina 25.1% 36.7% 25.1% 36.7% 24.8% 31.7%
Brazil 27.7% 23.4% 18.4% 20.7% 22.7% 19.3%
Egypt 31.6% 17.4% 26.1% 15.9% 26.6% 15.7%Philippines 4.0% 3.3% 2.8% 1.8% 2.7% 1.8%India 22.9% 8.9% 20.2% 8.9% 17.9% 8.7%Indonesia 4.0% 4.1% 1.5% 2.1% 1.1% 1.8%
Namibia 35.2% n/a 34.2% n/a 30.3% n/a
Pakistan 27.7% n/a 18.1% n/a 22.7% n/aSouth Africa 35.2% 14.1% 34.2% 10.5% 30.3% 13.1%Tunisia 51.2% n/a 41.2% n/a 46.3% n/aVenezuela 23.1% 27.4% 13.3% 24.4% 18.1% 15.9%
Source: based on WTO (2006). Simulation of tariff reductions for non-agricultural products . JOB(06)/210. 
 
D. BINDINGS AND FLEXIBILITIES  
11. Developed countries’ positions  do not take into account the value of developing countries 
bindings, nor of unbound tariffs wh ich will now be bound, nor of t hose already bound in previous 
rounds and which will now be bound at  a substantially lower level. This means that paragraph 2.a of 
Article XXVIII bis of GATT 1994, concerning the value that  should be attached to bindings as a 
safeguard against tariff increases, is actually bei ng disregarded by developed countries. The cuts on 
bound tariffs do have commercial value by increasing predictability thus favou ring the expansion of 
trade.  12. In addition, some developed countries also i gnore the obligation set fort h in paragraph 3b of 
Article XXVIII bis which states that “Negotiations shall be conducted on a basis which affords 
adequate opportunity to take into account the needs of  less developed countries for a more flexible use 
of tariff protection to assist their economic development and the special needs of these countries to maintain tariffs for revenue purposes”.  13. Ministers in Hong Kong reaffirmed that paragraph 8 flexibilities are an integral part of the 
modalities. However, as WTO simulations show, th e use of flexibilities and mark-up by developing 
countries has a negligible impact on tariff cut results
5. As a matter of fact, when taking into account 
the effect of the coefficients on developing country tariffs, it can be seen that, even with a coefficient 
of 35, additional flexibilities will be needed to adjust  the results in order to comply with the mandate 
of less than full reciprocity in reduction commitments. 
 
E. IN CONCLUSION  
14. To help negotiations move forward, de veloping countries have accepted an unprecedented 
agreement to undertake tariff cuts in NAMA using a Swiss formula, but this does not mean that 
developing countries will accept to apply a simple Sw iss formula coefficient that would put seriously 
in danger their possibilities of industrial developmen t. Only with a difference of at least 25 points 
                                                      
5 WTO (2006). Simulation of tariff reductions  for non-agricultural products. JOB(06)/210.  TN/MA/W/86 
 Page 5 
 
 
  between the coefficients of developed and de veloping countries and enhanced flexibilities in 
Paragraph 8 will it be possible to achieve th e results mandated by Ministers at Doha. 
 
Box: Tariff Cuts in Previous Rounds a 
 
During the first GATT multilateral trade rounds, the request-and-offer method prevailed, reaching a 
trade weighted average tariff cut of 36%. In the Kennedy Round, a 50% linear reduction of tariffs on industrial 
products was agreed. Nevertheless, the effective cut in  developed countries reached 35% due to the numerous 
exemptions. 
In the Tokyo Round, it was agreed that developed countries would apply a Swiss formula with 
coefficients 14 and 16. The av erage tariff cut in industrial products was of the order of 39%. However, the 
effective tariff reduction for imports originating from developing countries was lower (around 25%), since 
several products of special export interest to developing co untries, such as textiles, clothing, footwear and travel 
goods, were subject to exceptions and lower cuts. 
In the Uruguay Round, each developed country determined how they would achieve the 33.3% average 
linear cut target. For developing countries, the main objective was to increase tariff bindings. The Negotiating 
Group on Market Access established th at if said countries bo und the tariff schedule across the board at a level 
not over 35% ad valorem , this would enable them to meet the objective of a linear tariff cut equivalent to 2/3 of 
that of developed countries. As a result of negotiations, developed countries reduced their average tariffs by 
40% and developing countries did so  by 22%. As happened in the T okyo Round, average tariffs faced by 
developing countries to enter developed country markets showed a lower reduction (37%), due to lower cuts 
made by these countries in textiles, clothing and fishery products. 
The participation of developing countries in the fi rst rounds of negotiations was optional and only 
intended for cases in which concessions were required of them. In the Kennedy Round, it was agreed that 
developed countries were not to expect reciprocity from developing countries. No formal obligation whatsoever 
was established for developing countries to make tariff cuts. The Tokyo Round endorsed the principle of less 
than full reciprocity uphold by the Kennedy Round: developing countries were not obliged to adopt the tariff 
reduction formula agreed upon. During the Uruguay Round, developing countries had to make lower linear tariff 
cuts than developed countries, while least developed countries did not have to make any cut at all. 
 
a. This box is mostly based on Anwarul Hoda (2001). Tariff Negotiations and Renegotiations under the GATT and WTO 
Procedures and Practices . Cambridge University Press.  
 
III. NAMA AND AGRICULTURAL MARKET ACCESS  
A. THE MANDATE  
15. Ministers at Hong Kong agreed that there shall be a comparably high level of ambition in 
agricultural market access and NAMA, consistent with the principle of special and differential 
treatment. 
 B. T
HE DIFFERENCES  
16. Trade in non-agricultural products is more liberal  than in agriculture: tariffs are much lower, 
there are fewer tariff peaks, and simpler tariff structures –there are practically no quotas and specific 
tariffs, among other features. 
 17. Another important difference concerns distor ting measures: in Agricu lture, even after the 
Doha Round, significant domestic support will continue to be provided. This, in spite of its legality, is 
in contradiction with the strict disciplines on no n-agricultural products in place since the Uruguay 
Round, which contemplate the possibility of appl ying countervailing duties if trade distorting 
domestic support were verified.  18. As for tariff reduction modalities, there are important differences between Agriculture and 
NAMA:  TN/MA/W/86 
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(i) In Agriculture it was agreed to apply a tiered formula with four bands and different linear cuts 
to be applied in each of the bands, whereas in  NAMA there was agreement on the application 
of a Swiss formula with coefficients. 
(ii) In Agriculture, the possibility of imposing a maximum tariff limit or cap is still under 
discussion, whereas in NAMA, given the characteri stics of the Swiss formula, there will be a 
maximum limit matching the coefficients adopted. 
(iii) In NAMA it was agreed that all non-ad valo rem duties would be bound in ad valorem terms; 
this has not been agreed in Agriculture. 
(iv) Furthermore, in Agriculture, developed c ountries will have the possibility of exempting a 
percentage of sensitive products from the genera l tariff reduction, includi ng products in the 
lower bands, without any limit as to the value of trade involved. Meanwhile, in NAMA, paragraph 8 flexibilities for developing countries have explicit limitations to trade value. 
(v) In Agriculture, tariff-rate quotas will be ma intained. It is worth noting the significant 
difference existing between the out-of-quota bound  tariff and the in-quota applied tariff. Thus, 
for example, if the EU proposal in Agriculture were applied, the out-of-quota tariff would fall 
below the in-quota level in only 6% of tariff-ra te quota lines. As can be seen, the developed 
countries’ insistence that developing countri es applied tariffs on non-agricultural products 
should be reduced is not matched by their agri cultural proposals, which leave most in-quota 
tariffs unaffected.  
(vi) In Agriculture, the Special Safeguard (SSG ), on top of being unpredictable, represents a 
severe obstacle to market access. There is not such an instrument in NAMA. 
 19. Apart from all the foregoing differences, the imbalance between developed countries’ level of 
ambition in NAMA and Agriculture is worth noting. This imbalance is in opposition to the Doha Mandate and to paragraph 24 of the HKMD.
6  
 
IV. FINAL CONSIDERATIONS 
20. The Doha Round is in its sixth year a nd substantial differences in NAMA and between 
NAMA and Agriculture remain as yet unresolved.  21. Developed countries proposals in NAMA show a noticeable imbalance arising from 
substantially lower contribution they are offering in tariff reductions, both in linear terms and in 
percentage points, compared to the exaggera ted demands they are requiring from developing 
countries.  22. Making this imbalance wor se, developed countries do not take into account the significant 
value of bindings offered by developing countries,  either by binding currently unbound tariffs or by 
substantially reducing already bound tariffs.  23. Moreover, the differences between what de veloped countries are willing to offer in 
Agriculture and what they demand in NAMA show a position that is in clear disagreement with 
paragraph 24 of the HKMD. 
 
24. In view of the situation described, there is a need for a change in negotiating positions as well 
as for significant leadership to reverse the foregoing imbalances.   25. Since the Swiss formula makes it difficu lt to compare liberalization efforts between 
developed and developing c ountries, it is undoubtedly convenient to reconsider it as the exclusive tool 
for tariff cuts, giving instead the choice to members whet her to use it or to resort to linear cuts so as to 
                                                     
 
6 See Implementing Paragraph 24 of th e Hong Kong Ministerial Declaration.  TN/MA/W/67. 13 March 2006.  TN/MA/W/86 
 Page 7 
 
 
  reach the average cuts that will eventually be agreed upon. This was the case during the Uruguay 
Round in NAMA with proportionally higher average cu ts for developed countries, taking into account 
the principles of less than full reciprocity and special and differential treatment for developing 
countries.  
26. The NAMA-11 proposal on non-agricultural products and the G-20 proposal on Agriculture 
redress the imbalances. They are both constructiv e, ambitious and middle ground proposals. Thus, 
they constitute a solid base to fulfil the Manda te and successfully conclude the Doha Round. TN/MA/W/86 
Page 8  
 
  Annex: Tariff structure of Non-Agricultural Products 
 
1. Trade in non-agricultural products explains near 90% of world exports of goods. As time 
went on, it has acquired greater relevance driven by the greater dynamism of the demand for these 
products, on the one hand, and helped by the restric tions and distortions that  impact negatively on 
agricultural trade, on the other. 
 2. Although developing countries share less th an 25% of the value of world trade in non-
agricultural products, they eviden ce greater dynamism as regards import demand than developed 
countries, which proves their prominent role a nd positive contribution to the multilateral trading 
system. 
 3. The pattern of tariffs on non-agricultural products followed by developed countries shows 
marked differences from that followed by developi ng countries. Average bound and applied tariffs are 
6.3% and 3.4% in the former, whereas in the NAMA-11 Group
7, these amount to 32.1% and 12.2% 
respectively (Table A1.a). The lo wer average tariff in developed countries is the result of capital and 
technological knowledge accumulation, which has entailed high levels of efficiency and 
competitiveness for their industries. In developing countries, higher tariffs tend to compensate for lower efficiency. At the same time, they aim to  attract capital flows so as to boost industrial 
diversification and growth , gradually closing the competitiveness gap with developed countries. This 
point is essential to understand the dimension of deve lopment and the subsequent need for flexibility 
in the contribution of developing countries. 
 
Table A1.a 
(a) Average tariffs by region. Non-agricultural products 
Tariff 
Region 
Bound Applied 
Developed Countries 6.3 3.4 
NAMA-11 Countries 32.1 12.2 
Source: based on WTO (2006). Simulation of tariff reductions for non-
agricultural products. JOB(06)/210. 
 
4. A relevant aspect to bear in mind within NAMA negotiations is that trade weighted average 
tariffs8 imposed by developed countries on non-ag ricultural imports originating from developing 
countries are higher that those imposed on imports  from other developed countries. On average, 
developed countries levy a 2.1% weighted tariff on each other imports, while the weighted tariff 
applied on imports originating from devel oping countries is 3.9% (Table A1.b). 
 
                                                      
7 The NAMA-11 countries average tariff is very sim ilar to that of the group of developing countries. 
8 This data includes preferential tariffs.  TN/MA/W/86 
 Page 9 
 
 
  Table A1.b 
(b) Weighted average applied tariffs by region1. Non-agricultural products 
Importer 
(i) Exporter Developed 
Countries Developing 
Countries  Least Developed 
Countries 
Developed Countries 2.1 9.2 11.1 
Developing Countries 3.9 7.2 14.4 
Least Developed Countries 3.1 7.2 8.3 
Total 2.9 8.1 13.6 
1 Weighted by trade share. Including preferential tariffs. 
Source: Fernández de Córdoba, Laird and Vanzetti (2004) based on UNCTAD TRAINS data. 
 
5. This difference is even larger in the tex tile and clothing sector: developing country exporters 
face an average 8.4% tariff when exporting to de veloped countries, whereas the tariff for other 
developed countries is 3.4% (Table A1.c). 
 
Table A1.c 
(c) Weighted average applied tariffs, by sector and region1. 2001 
Importer 
Exporter Developed 
Countries Developing 
Countries  
(i) Textiles and Clothing   
Developed Countries 3.4 18.2 
Developing Countries 8.4 20.5 
Other Manufactures   
Developed Countries 1.0 9.9 
Developing Countries 1.3 9.2 
1 Weighted by trade share. Including preferential tariffs. 
Source: Hertel and Keeney (2006) based on GTAP 6. 
 
6. Although non-agricultural tariffs are relativel y moderate in developed countries, there are 
tariff peaks: on average, more than 3% of tariff lin es have applied rates over 15%, while 8.3% of lines 
have applied tariffs three times higher than the av erage tariff (Table A1.d). Most tariff peaks 
correspond to textiles, footwear, automobiles, fishery products and hides and skins. 
 TN/MA/W/86 
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  Table A1.d 
(d) Percentage of tariff lines with tariff peaks, by region 
Tariff Region % of lines with tariffs 3 
times higher than the 
average 
Developed Countries 6.3 
Bound 
NAMA-11 Countries 0.2 
Developed Countries 8.3 
Applied 
NAMA-11 Countries 2.5 
Source: based on WTO (2006). Simulation of tariff reductions for non-
agricultural products. JOB(06)/210 . 
 
7. Tariff escalation in developed countries incr eases effective protection and thus discourages 
developing countries from producing higher value added goods, hindering their productive 
diversification and industrial development.  
8. Although developing countries bound tariffs on non-agricultural products are higher than 
average bound tariffs in developed countries, th ey allow trade flows without any quantitative 
constraints. In contrast, in developed countries, agricultural imports in many cases only take place 
through the concession of tariff-rate quotas with reduced in-quota tariffs.  
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