The NAMA negotiations cover mainly:

• Coefficient for tariff reductions;

• Flexibilities to be accorded to developing Members in undertaking tariff reductions;

• Treatment of unbound tariffs;

• Non-tariff barriers; and

• Sectoral initiatives.

1. COEFFICIENT FOR TARIFF REDUCTIONS

• Agreement needs to be reached on the degree of tariff reduction s to be undertaken by developed and developing countries. A lower coefficient will result in steeper tariff reductions; while a higher coefficient will result in lower tariff reductions.

PROPOSED MODALITIES UNDER DECEMBER PACKAGE 2008

• Developed countries: 8; and

• Developing countries can choose one of the following coefficients which are linked to specific flexibilities on exemptions from tariff cuts:

  • 20;

  • 22; or

  • 25.

2. FLEXIBILITIES TO BE ACCORDED TO DEVELOPING MEMBERS IN UNDERTAKING TARIFF REDUCTION

Agreement needs to be reached on the degree of flexibility to be accorded to developing countries in implementing their tariff reduction.

PROPOSED MODALITIES UNDER DECEMBER PACKAGE 2008

• The proposed flexibilities depending on the coefficients selected are:

Coefficient	Flexibilities Options
20 (x)	Either lesser cut on 14% of tariff lines, subject to an import value cap of 16%; or	Exempt 6.5% tariff lines from cut, subject to an import value cap of 7.5%.
22 (y)	Either lesser cut on 10% of tariff lines, subject to an import value cap of 10%; or	Exempt 5% tariff lines from duties reduction, subject to an import value cap of 5%.
25 (z)	No recourse to flexibilities

 

• However, these flexibilities cannot be used to exclude an entire HS Chapter (anti-concentration provision). Full formula tariff reductions must apply to a minimum of either:

  • 20% of national tariff lines; or

  • 9% of the value of imports in each HS Chapter.

3. TREATMENT OF UNBOUND TARIFFS

• Agreement needs to be reached on the quantum of mark-up to be applied to unbound tariffs to establish the base rate before undertaking tariff reduction.

PROPOSED MODALITIES UNDER DECEMBER PACKAGE 2008

• A mark-up of 25 points was proposed to establish the base rate prior to tariff reductions.

4. NON-TARIFF BARRIERS

• Agreement needs to be reached on the definition, scope and approach
  on reducing/eliminating NTBs.

PROPOSED MODALITIES UNDER DECEMBER PACKAGE 2008

• Two methods have been identified in addressing NTBs:

- Horizontal Approach : to address NTBs in general across sectors;and

- Vertical Approach : to address specific type of NTBs in specific sectoral industri es:

• There is emerging consensus among Members that the work on NTBs to focus on seven (7) prioritised NTBs proposals as agreed in the December 2008 modalities, which include:

i. Ministerial Decision on Procedures for the Facilitation of Solutions to NTBs, proposed by African Group, Canada, European Union, LDC Group, NAMA11, Group of developing countries, New Zealand, Norway, Pakistan and Switzerland;

-- Procedures for members to seek recourse on NTBs.

ii. Ministerial Decision on Trade in Remanufactured Goods proposed by Japan, Switzerland and the United States.

-- Ensure that measures introduced should not prohibit trade in remanufactured goods.

iii. Negotiating Proposal on Non-Tariff Barriers in the Chemical Products and Substances Sector, proposed by Argentina and Brazil;

 

-- Address distortions in international trade in chemical products

iv. Understanding on the Interpretation of the Agreement on Technical Barriers to Trade as Applied to Trade in Electronics, proposed by European Union and Switzerland;

-- Reduction and elimination of obstacles to trade in electronics.

v. Agreement on Non-Tariff Barriers Pertaining to the Electrical Safety and Electromagnetic Compatibility (EMC) of Electronic Goods, proposed by the United States;

-- Ensuring technical regulations, standards and conformity assessment do not create obstacles to trade in electronic goods.

vi. Understanding on the Interpretation of the Agreement on Technical Barriers to Trade with Respect to the Labeling of Textiles, Clothing, Footwear, and Travel Goods, proposed by EC, Sri Lanka and United States; and

-- Promote effective approaches to address obstacles to trade and enhance trade in textiles, clothing, footwear, and travel goods ; and

vii Agreement on Non-Tariff Barriers pertaining to Standards, Technical Regulations and Conformity Assessment Procedures for Automotive Products, proposed by United States

-- Ensuring technical regulations, standards and conformity assessment do not create obstacles to trade in electronic goods.

 

5. SECTORAL INITIATIVES

Agreement needs to be reached on the quantum of tariff reduction/elimination to be undertaken on non-mandatory basis for selected sectors.

PROPOSED MODALITIES UNDER DECEMBER PACKAGE 2008

• Sectoral initiatives are voluntary and open to both developed and developing countries;

• Treated as an additional commitment to the full tariff reduction;

• Flexibilities provided to developing Members:

- partial product coverage;

- longer implementation period;

- undertake lesser cuts; and

- greater flexibilities under the overall tariff reductions.

• For a sector to be considered under a sectoral initiative, participating Members must collectively contribute up to 90% of its world trade. Remaining non-participants to this initiative will also enjoy the benefits (free riders).

• Fourteen (14) sectoral initiatives have been identified:

- Automotives and related parts;

- Bicycles and related parts;

- Chemicals;

- Electrical and electronics products;

- Fish and fish products;

- Forest products;

- Gems and jewelry;

- Hand tools;

- Industrial machinery;

- Healthcare;

- Raw materials;

- Sports equipment;

- Toys; and

- Textiles, clothing and footwear.