WORLD TRADE  
ORGANIZATION  TN/C/14 
21 April 2011 
 
 (11-2084) 
Trade Negotiation Committee  
  
 
REPORT BY THE DIRECTOR-GENERAL ON HIS CONSULTATIONS ON  
NAMA SECTORAL NEGOTIATIONS 
 
 1. At the TNC meeting on 29 March I indicated that  I would be undertaking consultations with a 
number of Members with a view to understanding the size of the gaps in market access in the NAMA 
sectoral negotiations.  I also indicated that once I had completed these consultations, I intended to 
report on the results to the entire membership, in th e interest of full transparency and inclusiveness. 
2. The present report provides a factual overview of  the consultations that  I held individually 
with seven Members, namely Australia, Brazil, Chin a, the European Union, India, Japan and the US. 
1. Factual overview 
3. According to the Hong Kong Declaration NAMA sectoral negotiations are being pursued to 
achieve the overall objective of reducing or eliminati ng tariffs, as appropriate, with participation being 
non-mandatory.  These essentially concerns around thirty WTO Members applying the formula. 
4. I carried out these consultations by posing each participant a series of questions relating to 
their sectoral priorities, specific views on the product basket approach and or other possible 
approaches, details on the products requested and offe red, the respective contribution of formula cuts 
and sectorals to the overall NAMA level of ambition,  as well as possible trade-offs within NAMA and 
across other areas of the negotiation.  
5. Some of these Members held a handful of bilate ral meetings at ambassadorial level over the 
last months.  For some others these bilateral cont acts took place in 2010. All of them have engaged in 
a number of bilateral and plurilatera l meetings at technical level, including with other WTO Members. 
6. None of the seven Members totally exclude the po ssibility of sectoral participation.  All of 
them indicated to me that they were ready to pa rticipate in one or more sectorals, depending on the 
specifics of the treatment and how sensitivities on specific tariff lines would be accommodated. 
7. Those Members seeking additional market acce ss through sectorals indicated that the 
following sectors were of priority to them: chemic als, industrial machinery, electronics & electrical 
products, enhanced health care, forest products, ra w materials and gems and jewellery.  The emphasis 
placed on each of these sectors varied across these Me mbers, with some also indicating sensitivities 
over some of these sectors too. 
8. China, India and Brazil indicated they we re not seeking further market access through 
sectorals.  Each of them indicated specific sens itivities over these sectors, with chemicals being of 
particular difficulty and electric and electronics to  a lesser extent.  These Members also indicated a 
number of sectors where they could envisage pa rticipation, depending on the specifics of the 
treatment. TN/C/14 
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  9. Members have discussed the "product basket a pproach" as a possible architecture for sectoral 
tariff cuts.  These discussions have been general in nature and show different views on the number of 
baskets to be used, on how products should be assigned to each basket as well as on the treatment to 
be accorded to products within each basket.  It w ould be fair to say that each one of these Members 
has its own vision on a product basket approach.  
10. The level of detail of the sectoral product covera ge also varied among participants.  Some of 
the participants extended requests to the other side , indicating products on which they would expect 
additional tariff cuts.  In the case of chemicals, this was done by means of an illustrative list of 
product chapters.  However, I was not inform ed of any discussion which entered specific 
products/tariff lines or specific trade-offs. No real back and forth negotiation took place. 
11. Regarding treatment, views also varied.  On one side of the spectrum, I heard the need for the 
bulk of the products within the chosen sectors –in particular on chemicals – to move to zero.  Other Members were of the view that the purpose of the exercise was to achieve cuts beyond the formula in 
a balanced and realistic manner, without excluding l ess than to zero cuts.  Different technical means 
were explained as to how this could be achieved.  On the other end of the spectrum, there were 
members for whom reducing the bulk of the tariffs to  zero is not feasible.  According to calculations 
provided during the consultations, e liminating tariffs on chemicals, industrial machinery and electric 
and electronic products would be somewhere close to  applying a Swiss formula 4 coefficient by the 
developed countries in the consultations (inst ead of the 8 coefficien t in the NAMA modalities 
currently on the table) and around Swiss formula 8 coefficient by the developing ones (instead of the 20-22 coefficient). 
12. But where the gap was largest was on the role of  sectoral negotiations in achieving the overall 
level of ambition in the NAMA negotiations.  On one end of the spectrum, I heard the need for 
sectorals to complement the outcome of the formula tariff reductions by delivering significant additional market access.  The objective of sectoral s would be to rebalance the disparity in the 
contribution between developed and emerging countries and to ach ieve, if not equalisation, a 
harmonization of their tariffs. In other words, the goa l of sectoral negotiations would be for emerging 
countries to “catch up” with developed members re garding the level of market opening.  Other 
Members indicated that the Swiss formula should be  the main determinant of the overall level of 
ambition of the NAMA negotiations.  Sectorals should be seen as a supplement to the tariff cuts achieved through the formula. In this respect, some of them reiterated the non-mandatory nature of the 
sectoral participation as well as the links between  the level of ambition in NAMA and that in 
Agriculture. 
2. Assessment
 
13. As one can see from the above, there is a fundament al gap in expectations in sectorals.  This 
gap is not a technical one that one could bridge through adjustments in the architecture of sectorals.  One side considers tariff cuts achieved throug h the formula as being insufficient to meets its 
expectations for the level of ambition of the Doha  Round on industrial tariffs.  They argue that the 
formula only provides for limited cuts in applied tari ffs in emerging countries.  They also  argue that 
given the already low level of developed country indu strial tariffs, and the application of the formula 
reductions with no exceptions, they would lose all leve rage to obtain future industrial tariff reductions 
from emerging economies.  Therefore, they saw the Doha Round as the last opportunity towards a harmonisation of tariffs with emer ging economies.  For that, the essence of tariffs on chemicals, 
industrial machinery and electric and electronic pr oducts should be eliminated.  The other side 
considers that the formula delivers a significant level of ambition.  These Members point at the 
unilateral tariff reductions that many developing countries have undertaken since the Uruguay Round 
and point at the value in binding them in the Doha Round.  They also indicate that, for the first time in 
the history of the multilateral trading system, developing countries are systematically cutting their  TN/C/14 
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  tariffs, including some of their applied tariffs.  As to sectorals, these Members see them as a means to 
improve the level of ambition, but according to them, such negotiations must be faithful to the 
mandate of the Doha Round, be bala nced and proportionate.  On this last point, some Members point 
at the disproportionate efforts that emerging countri es would be undertaking when eliminating tariffs 
on chemicals, industrial machinery and electric and electronic products, considering the current very 
low level of tariffs applied by developed countries. 
14. In sum, there are fundamentally different views on the ambition provided by the Swiss 
formula as it currently stands, on whether the c ontributions between the different members are 
proportionate and balanced as well as  on what is the contribution of sectorals.  I believe we are 
confronted with a clear political gap which, as things stand, under the NAMA framework currently on 
the table, and from what I have heard in my  consultations, is not bridgeable today. 
 
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