wto nama negotiations: illustration on selected issues saad belghazi, economist, consultant beirut,...
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WTO NAMA NEGOTIATIONS: ILLUSTRATION ON SELECTED ISSUES
Saad Belghazi,Economist, consultant
Beirut, November, 11, 2009
Email: [email protected]
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PLAN
1. Building on Uruguay Round results2. NAMA negotiations process: present situation
Negotiation Agenda Formula
3. Some comments from the Arab countries and Morocco point of view
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I – BUILDING ON URUGUAY ROUND RESULTS
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REMINDING THE GATT AIMS AND MECHANISMS Aims
raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand,
expanding the production of and trade in goods and services,
allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development
Mechanisms Trade as a way to enhance domestic competition,
improve commodities supply and reduce monopoly inefficiencies
Non discriminatory market access 4
RESULTS OF THE URUGUAY ROUND 1/2
The countries commitments Elimination of Non Tariff Protection (alleviation of
subsidies; adoption of value rules) Tariffs bound between negotiating partners Tariffs reduction
Adaptations for developing countries Tariff reduction: 24% during 10 years (versus 36%
during 6 years for developed countries) Delaying the custom value rule implementation (5
years – plus 3 years)
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RESULTS OF THE URUGUAY ROUND 2/2
The NAMA products importance 90 % of the World exports.
Negotiations impacts Developed countries: average tariffs decrease
from 6,3% to 3,8 %. Developing Countries : rise of average bound
lines from 21% to 73 % ; better trade predictability
Improvements resulting from the Uruguay Round appear insufficient Tariffs too high Persistence of tariffs peaks Tariffs escalation
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II - NAMA NEGOTIATIONS PROCESS: PRESENT SITUATION
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NAMA DOHA AGENDANAMA negotiation aim
Following the paragraph 16 of the Doha Ministerial Declaration,
“To reduce or as appropriate eliminate tariffs, including the reduction or elimination of high tariffs, tariff peaks and tariff escalation as well as Non-Tariff Barriers, in particular on products of export interest to developing countries”
“The negotiations shall take fully into account the special needs and interests of developing and least-developed Members, including through less than full reciprocity in reduction commitments”
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THREE CRUCIAL ELEMENTS IN THE NEGOTIATION To cut tariffs according to general formula
based on a coefficient. Overall around 40 countries, which include the world's largest traders, will apply the formula. All the others have different specific provisions.
Flexibilities for developing countries (that would allow these countries to shelter limited percentages of their most sensitive sectors from the full impact of a reduction in tariffs).
Special treatment for small, vulnerable economies (31); least-developed countries (LDCs) (32); recently acceded members (RAMs) (13); members with low binding coverage (12); and others
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ADVANTAGES OF THE FORMULA APPROACH
Transparency Each member will be enabled to know how the
other decrease their tariffs Efficiency
Formula approach is more simple than the bargaining process
Equity The tariffs decreases result from rules and are
independent from bargaining power Predictability
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FORMULA ADOPTED AFTER THE FOURTH REVISION – REPORT BY DECEMBER, 6, 2008
The following formula shall apply on a line-by-line basis: {a or (x or y or z)} x t0
t1 =
{a or (x or y or z)} + t0
where, t1 = Final bound rate of duty
t0 = Base rate of duty Coefficients
Developed Members: a = 8 Developing Members: x = 20, y = 22, z = 25
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ELEMENTS REGARDING THE FORMULA
All HS chapters are included Minimum 20% of bounded tariff lines et 9% of 1999-2001
imports Tariffs Reduction base
Bound rates in 2001, after full implementation of current concessions
Calculus of non bound tariffNon bound rates: applied rates plus 25 %
Non-ad valorem duties All shall be converted to ad valorem equivalents and bound
in ad valorem terms. Implementation tariffs reduction calendar
All the first of January, after the entry in force of DDA Developed Members : 6 reductions, in equal rates in 5 yearsDeveloping Members : 11 reductions, in equal rates in 10
years12
FLEXIBILITIES ON THE FORMULA FOR DEVELOPING COUNTRIES
Depending on the chosen coefficient
X= 20 Y=22 Z=25
And on the preference on tariff lines binding
total bound
partial bound
total bound
partial bound
total bound
partial bound
A decrease lower than the formula result is allowed
For a percent of tariff lines lower than 14% 6,5% 10% 5% 0% 0%
Which corresponds to a percent of total imports in the
period1999-2001 lower than 16% 7,5% 10% 5% 0% 0%
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III - COMMENTS FROM THE ARAB COUNTRIES AND MOROCCO POINT OF VIEW
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IMPACTS ON ARAB COUNTRIES
Tariff binding situation On 10 Arab Countries, members of WTO, participating to
NAMA negotiations, 5 have bound 100 % of their tariff lines (Morocco, Djibouti, Oman, Qatar, UAE) and 3 near 100% (Kuwait, Jordan and Egypt)
Tunisia and Bahrain have bound respectively 51,1% and 71 %
Tariffs level 4 countries have average bound tariffs level lower than
30% (Oman, United Arab Emirates, Qatar, Jordan), 1 country has a tariff close to 30 % (Egypt) 4 countries have average bound tariffs higher than 35%
(Morocco, Djibouti, Tunisia and Kuwait)15
BOUND DUTIES FOR NON-AGRICULTURAL PRODUCTS OF ARAB COUNTRIES
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ImportMarket
Binding coverage (percent)
Simple average
Standard deviation
Maxi-mum
Last year of implemen-
tation
Duty free
(percent)
Others duties and charges (ODC)
Simple average
Maxi-mum
Bahrain 71 35,1 2 100 1995 0 0 0
Djibouti 100 40 1,6 230 1995 0 100 100
Egypt 98,7 28,3 17,7 160 2004 0 0 0
UAE 100 13,1 3,6 15 2009 1,1 0 0
Jordan 99,9 15,2 9,8 30 2010 6,3 0 0
Kuwait 99,9 100 0 100 1995 0 15 15
Morocco 100 39,2 3,9 45 2004 0 15 15
Oman 100 11,6 5 20 2009 4,1 0 0
Qatar 100 14,5 4,9 30 2009 1,1 3 3
Tunisia 51,1 40,6 15,4 180 2005 0 0,9 30
RESULTS OF THE FORMULA IMPLEMENTATION FOR ARAB COUNTRIES
Reduction of overall bound tariffs the highest tariff is 20% (Kuwait) and the lowest
is 7,92% (United Arab Emirates) For each country, the results for the formula
coefficients (20, 22 and 25) are very close the tariff peaks disappeared
Using flexibilities Only Bahrain and Tunisia may use the flexibility
allowed by the choice of the coefficient x or y The other countries would choose the z
coefficient because they had already bound all or almost all their tariff lines.
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SIMULATION
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Arab countries
Average bound tariffs
Swiss formula – calculus based on average bound
tariffs
x=20 y=22 z=25
Bahrain 35,1 12,74
13,52
14,60
Egypt 28,3 11,72
12,38
13,27
United Arab Emirates 13,1 7,92
8,21
8,60
Jordan 15,2 8,64
8,99
9,45
Kuwait 100 16,67
18,03
20,00
Morocco 39,2 13,24
14,09
15,26
Oman 11,6 7,34
7,60
7,92
Qatar 14,5 8,41
8,74
9,18
Tunisia 40,6 13,40
14,27
15,47
PREFERENCES: ENHANCED EROSION
The Turkey and Quad partners did not introduce in the NAMA negotiation a list of products exception.
The results of the DDA on the NAMA negotiations would substantially reduce the preferential margins on these FTA partners markets.
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POLICY ISSUES
Industrialization objectives: globalized value chains and local value chains
Informal economy, inclusion and macroeconomic policy package
For a new and consistent policy package: fiscal policy and incentives to local development and new status to VSE in development policy