WORLD TRADE  
ORGANIZATION  TN/MA/W/49 
21 February 2005 
 (05-0717) 
Negotiating Group on Market Access Original:   English 
  
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
 
 
TREATMENT OF NON-RECIPROCAL  PREFERENCES FOR AFRICA 
 
  The following communication, dated 17 February 2005, is being circulated at the request of the Delegation of Rwanda on behalf of the African Group. 
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  I. INTRODUCTION 
 
1. Trade preferences play a crucial role in Africa’s development.  Paragraph 16 of Annex B 
recognizes that challenges may be faced by non-reciprocal preference receiving Member 
countries as a result of NAMA negotiations.  Th is paper points to the rationale for these 
preferences and proposes some preliminary ideas for the treatment of non-reciprocal 
preferences in these negotiations, taking into acc ount the developmental needs of some African 
economies.   
 
2. The paper also addresses those NTBs that are linked to preferences.  NTBs are an integral part 
of the NAMA negotiations as indicated in paragraph 14 of Annex B.   
 
II. BACKGROUND 
 
3. Non-reciprocal preferences under the GATT have been cemented by the principle of special 
and differential treatment, (S&D) for developi ng countries and LDCs, which has evolved over 
time, and remains an important part of the WT O legal framework.  S&D in preferential tariff 
margins, has been realised by th e principle of less than full reciprocity in Part IV of GATT, the 
Enabling Clause, exceptional circumstances which warrant a waiver of the MFN Principle of 
GATT Article 1.1, and other re levant circumstances in tariff negotiations, including fiscal, 
developmental and strategic.   
 4. Most African countries depend on non-reciprocal preferences for a large share of their exports.  
Any further liberalisation must take into acc ount this commercial reality to avoid further 
marginalization of some African countries whic h need to progressively adapt their weak 
industrial base. 
 
5. In the NAMA modalities, reductions in MFN rates will reduce the preferential margin with 
negative effects on trade flows in some Afri can countries.  These countries rely on non-
reciprocal preferences as a development tool an d they will be faced with increased competition 
in their traditional export markets.  Conseque ntly, resulting adjustment costs will disrupt the 
sequencing necessary for the growth and indus trialisation process.  Due to the loss of 
preferential tariff margins, African economies will need the support of the multi-lateral trading 
system to meet their trade and development n eeds, as encompassed in the Doha Development TN/MA/W/49 
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 Agenda.  The crux of our expectations has been  previously articulated by a group of African 
countries in the submission TN/MA/W/27.   
 
III. DOHA DEVELOPMENT AGENDA 
 
6. Development concerns form an integral part  of the Doha Work Programme and the Doha 
Ministerial Declaration.  In paragraph 2 of the Doha Declaration, Ministers placed the needs of 
developing countries and LDCs at the heart of th e Doha work programme and agreed to make 
positive efforts to ensure that these countries ‘… secure a share in the growth of world trade 
commensurate with the needs of their economic development’.   
 
7. In paragraph 16 of the Doha Declaration, Mini sters agreed that NAMA negotiations shall take 
fully into account the special needs and interests of developing countries and LDCs, including through less than full reciprocity in reduction commitments.  Furthermore, paragraph 16 of the 
Doha Declaration incorporates paragraph 50 of th e same Declaration whereby, Ministers further 
linked NAMA negotiations to Part IV of the GATT 1994 and the Enabling Clause.   
 8. In the Doha Work Programme paragraph 1 (d), under “Other Development Issues” and 
paragraphs 1 and 16 of Annex B, Members agreed to consider the issue of preferences in the 
NAMA negotiations, recognizing the challenges face d by non-reciprocal preference beneficiary 
Members.  Additionally, in paragraph 3 of A nnex B, Members further incorporated paragraph 
16 of the Doha Declaration into the NAMA framework for establishing modalities. 
 9. Negotiations on NTBs are an integral part of the NAMA negotiations as indicated in paragraph 
14 of Annex B.  In Paragraph 2(b) of the Enabling Clause, Members agreed to permit differential and more favourable treatment with  respect to the provisions of the General 
Agreement pertaining to non-tariff measures.  African countries expect that in the NTB 
negotiations, the principle of S&D treatment fo r developing countries and LDCs will fulfil the 
objective of paragraph 16 of the Doha Declaration. 
 
IV. RATIONALE FOR THIS PROPOSAL 
 
(i) DEVELOPMENT NEEDS 
 
10. In Article XXXVI:8 of GATT 1994,  it was agreed that Members from developed countries “do 
not expect reciprocity” in trade negotiations from less-developed contracting parties.  The 
interpretative note on article XXXV1:8 clarifies that “less-developed Members should not be 
expected, in the course of trade negotiations, to make contributions which are inconsistent with 
their individual  development, financial and trade n eeds, taking into account past trade 
developments”.   
 11. On industrialization, Members recognized the need for increased and fa vourable market access 
for processed and manufactured goods of particular  export interest to developing countries and 
LDCs, as indicated in article XXXVI:5 of GATT.  
 
12. On tariff reduction, GATT article XXVIII bis affirms that tariff negotiations shall accord 
adequate opportunity to take into account the concerns of individual countries and sectors and 
“….all other relevant circumstances, including fi scal, developmental, strategic and other needs 
of the contracting parties concerned”.
1 
 
                                                      
1 The interpretive note on article XXXVI:8 of GATT states that non- reciprocit y will apply in the event of action 
in article XXVIII bis, among others.   TN/MA/W/49 
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 13. The Appellate Body has interpreted the Enablin g Clause to allow for differential and more 
favourable treatment to some developing countries,  without according such treatment to others.2  
Additionally, the principle of non-reciprocity  is also reiterated in the Enabling Clause.  
 
 (ii) EXCEPTIONAL CIRCUMSTANCES 
 
14. In exceptional circumstances, a waiver from paragraph 1 of article 1 of the General Agreement 
on Tariffs and Trade has been sought to permit some developing countries and LDCs to obtain 
preferential access to markets of developed c ountries.  The ACP-EU Agreement is one such 
example.  
 V. BENEFITS OF PREFERENCES 
 
15. Preferential trade overcomes the inherent disa dvantages of some African countries, and in 
particular weak and vulnerable economies that ha ve not been effectively involved in previous 
rounds of negotiations.  The inequality of econo mic factors and levels of development means 
that these countries cannot participate in reciprocal trade without devastating their economic structures.  Many of these countries are reliant on specific industries and have economies that are sensitive to tariff fluctuations. 
 16. Non-reciprocal preferences have generally been  beneficial to preference-receiving developing 
countries and LDCs.  Preferential market access increases export earnings, promotes 
industrialization and accelerates rates of ec onomic growth.  Preferences are credible 
instruments of development that help benefi ciaries strengthen their industries, to face 
competition in the long term. 
 
17. Even though preferences are covered by a narro w range of tariff lines, they have made a 
positive impact on the countries that have expl oited them.  Under the right conditions and 
flexibilities, preferences have contributed signi ficant economic gains for weak and vulnerable 
economies.  For instance AGOA provides a number of products with duty free access to the US 
market for about 37 Sub-Saharan African count ries.  AGOA has boosted clothing and textile 
exports from Africa, by attracting invest ment, creating employment and promoting 
diversification opportunities through the establishmen t of clothing and textile industries.  This 
preferential initiative has also triggered upstrea m processing activities with enormous impact on 
poverty alleviation efforts.  Additionally, to the EU market, African countries have benefited 
from preferential exports of fish and fish pr oducts, chemicals, paper and leather products 
among other products.   
 
18. The phasing out of import quotas in the clothing an d textile sector is a concern for preference 
receiving countries.  These countries will be seri ously challenged by the intensified competition 
resulting from the post ATC environment.  Non-reciprocal preferences will enable weak and vulnerable countries to offset these competitive disadvantages in the medium term. 
 
19. Due to the devastating decline in the terms of trade for agricultural commodities, preferential 
treatment of a range of manufactured goods or iginating from developing countries and LDCs 
has been valuable.  These preference receiving goods have contributed to economic gains and 
industrial diversification.  The rapid expansion of the economies of some African countries will 
therefore be facilitated by the continued use of  preferences and the reduced dependence on the 
export of primary products. 
 
                                                     
 
2 See Appellate Body Report WT/DS246/AB/R.  TN/MA/W/49 
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 20. African economies need to develop strong industri al sectors.  To accomplish this, they need 
more industrial output, employment and markets for their exports.  Preferences can and must 
continue to spur development in Africa.  In fact, based on the analysis of Iancovicina et.al. 
(2002) , it is estimated that “(i) if 37 sub-Sahara n African countries were to receive unrestricted 
preferential access to the market s of the Quad countries (EU, US, Japan, Canada), their welfare 
would increase by about $1.7 billion; and (ii) a 25 percent MFN tariff liberalization by the 
Quad countries will erode the preference margin  received by these countries and reduce their 
welfare by about $0.5 billion or about 30 percent”.
3  
 
VI. PROPOSED TREATMENT OF PREFERENCES IN THE NEGOTIATIONS 
 
21. The treatment of non-reciprocal preferences in  the non-agricultural tariff reductions should 
create opportunities to promote the trade and ec onomic development needs of some African 
countries and not further deepen the crisis of de-industrialisation or accentuate the unemployment and poverty.  Due to the critical importance of preferen ces for these weak and 
vulnerable economies, suitable treatment of produc ts from African countries, currently enjoying 
non-reciprocal preferential access should be c onsidered in the NAMA negotiations.  The 
African group proposes the application of a correc tion co-efficient to an approach that will be 
agreed by Members, to improve the preferen ce margins for these products.  Longer staging 
periods would be required for this option.  For products which are not zero rated, preference-
giving countries would use the same rates of reduction points to ensure the non-reciprocal 
margin of preference is maintained.
4 
 22. In view of Africa's low levels of industriali sation, sectoral initiatives will hinder development of 
industrial sectors in Africa.   
 
23. NTBS in developed country markets have impa cted on the effectiveness and usefulness of 
preferences for developing countries and LDCs.  Some of the NTBs which have reduced the 
utilisation rate of preferences include rules of  origin, SPS and TBT measures.  In accordance 
with article 2(b) of the Enabling Clause, the preference giving Members should improve the 
conditions attached to the preferential schemes,  including non-trade concerns and non-tariff 
barriers.   
 
VII. CONCLUSION 
 
24. Non-reciprocal preference receiving African count ries need more time to adjust themselves and 
rectify their structural imbalances.  These pr eferences can provide the policy space needed to 
undertake gradual national industrial objectives and commitments which are consistent with 
development goals of some African countries.  Therefore, liberalization of products enjoying 
preferential market access should be given speci al treatment in the current negotiations.  
African countries are additionally concerned a bout NTBs imposed by the preference-giving 
countries and hope that in alignment with Paragr aph 16 of Doha Ministerial Declaration, these 
NTBs will be reduced or eliminated, in orde r to meet the development objectives of these 
negotiations. 
 25. This paper has addressed non-reciprocal preferences.   In accordance with paragraph 1 of Annex 
B, the African Group reserves the right to make further submissions on the specifics of preferences.  
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3 Iancovicina, Elena, Aaditya Mattoo a nd Marcelo Olarreaga 2002, “Unrestric ted Market Access for Sub-Saharan 
Africa: How much is it worth and who pays?” Jo urnal of African Economies, vol. 10, no. 4, 410-432  
4 See definition in supplemen tary notes to Article 1 paragraph 4 of GATT 1994.