Any negotiations on NAMA in the Doha “Development” Round, WTO must be based on the implications for jobs and development on developing countries. The mandate of the text is based on the principle of “less than full reciprocity.” This principle intends to take into account the relative development levels among different countries, and the need for developing countries to protect their industries from imports in sectors that are strategic for their development.
The current negotiations, focused on the coefficients for a Swiss formula, have served to obfuscate the real implications for tariff cuts that would be applied to sensitive sectors in our economies. Based on the range of coefficients included in the most recent July 10th text, developed countries of the EU, US, and Japan would apply a tariff cut of 28% on average (for the three countries) – while Brazil, India, and Indonesia would apply (on average for the three countries) an average tariff cut of 61%. 1
It is outrageous that the developed countries are demanding twice the level of tariff cuts from developing countries than they are offering to cut themselves. This is the absolute opposite of less than full reciprocity, and is completely unacceptable to the workers of the developing countries. This level of cuts to bound tariffs would imply severe cuts to real applied tariffs, and therefore would result in direct massive job losses for workers in developing countries. Because the commitments taken in the current Round would bind tariffs permanently, it would also foreclose development space for our governments to be able to raise tariffs in strategic or new sectors in the future, based on our
national development policies.
With regards to the new text released July 10th, and based on its implications for jobs and development, we express our strong outrage at the extreme and anti-development demands made by the developed countries, and strongly urge our governments to reject the text as completely unacceptable as the basis for negotiation. If that rejection results in developed countries threatening to stop negotiating in the Doha Round then the Round’s failure will be a result of the intransigence of the rich countries’ demands on NAMA, and the developing countries cannot and should not be blamed as they are simply insisting on their right to the mandated less than full reciprocity principle, and to preserving policy space essential for their development.
In addition, we would like to point out that decisions of this magnitude should be taken by the full membership of the 153 member countries of the WTO. In addition, we have heard that the Director General, Pascal Lamy, may come out with a “Chair’s Text” at the end of the week. We express our most vehement opposition to whatever text or agreement that might result without the full participation of all of the member states, and in addition express our vehement opposition to a possible “Chair’s Text” due to the absolute lack of democratic process in an issue as serious for workers and development as the Doha Round.
We reiterate our perspective from previous declarations in terms of demands for an increase in the percentages for the flexibilities without accepting greater tariff cuts (a lower coefficient); for the possibility to both select tariffs lines that are exempted from tariff cuts and that are subject to half the formula cuts; and to allow for flexibilities to be changed over time.
In addition, we express vehement opposition to the anti-concentration clause that would put such extensive limitations on the flexibilities as to render them nearly useless. This issue, which has been added at such a late stage in the negotiations, is yet another attack on developing country policy space, which would result in further extensive job losses.
We also reiterate our demand not to make any trade-offs between NAMA and Agriculture. Both sectors are important for the development of our economies and should not be traded-off one against the other, particularly given the extremely unequal balance in the rate of exchange being
offered regarding developed countries’ weak offers in agriculture compared to their extreme and unacceptable demands in NAMA.
Finally, we call on all our governments to maintain unity and strength of the NAMA 11 group, and express our disposition to continue our dialogue on these extremely important issues.
Secretary of International Affairs
Vice President, CUT
José Luis Hernández
Alliance of Progressive Labor
Director for Workers’ Education
Trade Union Confederation of the
1 These calculations are based on a coefficient of 8 for developed countries and a coefficient of 21 for developing. Even a coefficient of 23 would yield an average percentage reduction of 59.38% for Brazil, India, and Indonesia, and a coefficient of 30 would still yield a high average percentage tariff reduction of 52.85% for these three countries. To reach the level of percentage cut for developing countries that would approximate two-thirds of the percentage cut for these developed countries (given the 8 coefficient), the coefficient for these developing countries would have to be closer to 140. [Two thirds of the 28% cut of the 3 developed countries would be 19% cut for the three developing countries, and this corresponds to a coefficient of about 140 for these 3 developing countries].