NAMA, Services and TRIPS: Possible Outcomes and

Implications for Mediterranean Products

Tim JoslingStanford University

2

Motivation

• Put Agricultural talks in the perspective of DDA as a whole

• Indicate state of play in non-agric parts of DDA

• Suggest significance of outcomes in other areas to Med agric products

3

Non-Agricultural Agenda

• NAMA (all but HS01-24 and hides, cotton, but including fish)

• Services• TRIPS• Trade Facilitation• Rules• DSU

4

NAMA: overview

– Non-agricultural market access talks have been going slowly

– Level of ambition depends on agricultural talks (linked in HK Para 24)

– Modality of tariff cuts controversial:• EU and US suggested Swiss Formula• Brazil, Argentina and India favored “modified Swiss formula”

that maintains relative tariff levels

– Issues of unbound tariffs, preferences, sector-specific agreements and NTBs have also proved difficult

5

NAMA: Framework Agreement

– Reduce (or as appropriate eliminate) tariffs– Reduce/eliminate tariff peaks, escalation– Lower tariffs “in particular” on products of

export interest to developing countries– S&DT and “less-than-full reciprocity” required– Non-linear formula reductions on a line-by-line

basis: no a priori exclusions– Sectoral agreements OK if non-dicriminatory

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NAMA: modalities

– Draft of modalities circulated week of June 19– Tariff cuts using Swiss Formula 10/15– Reductions from bound rates (or some multiple of

MFN rates for unbound tariffs)– Credit for autonomous liberalization since base period

(2001)– Conversion to ad-valorem rates and binding those rates

(cf. agriculture)– Take into account needs of those with non-reciprocal

preferences, and those that rely on tariff revenue for public expenditure

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NAMA: modalities

– Flexibility for developing countries through • (a) smaller cuts for [10] percent of the lines, if this

does not exceed [10] percent of the value of imports• (b) Keep unbound and make no cuts for [5] percent

of lines, if less than [5] percent of the value of imports

– SVEs get extra flexibility– No tariff cuts required by LDCs but they are

encouraged to bind tariffs– Notify, categorize and negotiate reductions in

NTBs (set up NTB Resolution Mechanism?)

8

NAMA: significance for agriculture

• Necessary for political “balance”– EU, US need better access into emerging

markets– Japan also keen to get something in return for

agricultural concessions• Can exacerbate economic “balance”

– Agricultural tariffs will be more distortive– Sets future challenge for agricultural tariffs

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Services: Overview

– Negotiations mandated in UR and incorporated in DDA

– Request and Offer approach used to liberalize market access for services

– Some discussion of rule changes (e.g: adding a safeguard for service trade)

– Some reluctance on behalf of developing countries to engage in further liberalization

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Services: Framework

– Negotiations to center on “offers” of sectors to liberalize

– “High quality” offers, progressively “higher levels of liberalization”, no a priori exclusions

– Focus on services of export interest to developing countries (e.g. Mode 4)

– Conclude negotiations on rule-making in services– Offer targeted assistance to developing countries

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Services: Progress so far

– Few significant offers of service liberalization– Collective requests (e.g. legal services) tried– End-July date depends on Agriculture, NAMA

progress– Little progress on Mode 4 (labor movement)– Some progress on disciplines on domestic

service regulations

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Services: significance for agriculture

– Political balance:• EU needs improved market access for services to

offset concessions in agriculture• India and Brazil under pressure to open up service

markets – Economic impact on labor adjustment– Significance for global food service firms– Med products influenced by labor movement

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TRIPS discussions

• TRIPS Council responsible for negotiation on some mandated issues

• Public Access to Medicines• Geographical Indications (GIs)

– Negotiations ongoing (in TRIPS) on multilateral list for wines and spirits

– Discussions continuing about extension of coverage of “additional” protection beyond wines and spirits

14

TRIPS discussions

• List of GIs for wines and spirits was called for in TRIPS

• Discussions hung up on question of whether to make the list mandatory or voluntary– EU view is that it be mandatory but with chance to

“opt-out”– US view is that list should be a resource that countries

could use if they wished in setting their own IP rules • No resolution yet reached

15

TRIPS discussions

• Extension of Article 23 protection beyond wines and spirits– Disagreement as to whether it is in the mandate– Disagreement on need for extended protection– Becoming linked with biopiracy and protection of

traditional knowledge (“disclosure” of use of biological resources and agreement for benefit-sharing in patent applications)

– Possible agreement to make TRIPS Art 29 “supportive” of CBD

16

TRIPS: Significance for agriculture

• Links with agricultural talks– EU has insisted on need to get some satisfaction

on GIs– “Claw back” list of 41 items (wines, cheeses,

meats) that would revert to GIs from generics– Switzerland has indicated tradeoff for tariff cuts

(e.g: extension of Article 23 protection for cheese)

17

TRIPS discussions

• Links with Med Products?– Register would consolidate bilateral GI deals in

wines and spirits– Extension would give added protection to olive

oil and other (non-wine) products

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Trade Facilitation: Framework

• Clarify and improve articles on customs procedures

• Enhance technical assistance and support of capacity building

• Effective cooperation among customs authorities• Match implementation to capacity• Opt-out if support for infrastructure is not

forthcoming

19

Trade Facilitation: Progress

• Good progress in drafting text• Countries wanting to see evidence of progress in

other areas before signing off• Focus on technical assistance (A4T) and on

capacity building to look for “win-win” solutions• Deal could come together quickly if the need arose• Agricultural trade could benefit from improved

trade facilitation, particularly for perishables

20

Rules: Changes in Articles

• Several aspects of the WTO rules have been under discussion in RLG. Some with most application to agriculture are:– Anti-dumping– Industrial subsidies– Fish subsidies– RTAs

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Rules: Anti-dumping

• Controversial issue, sensitive in US• “Friends of Anti-Dumping Negotiations” insisted

on negotiations to:– mitigate “excessive effects” of A/D, – prevent A/D measures from becoming permanent, – reduce the cost of cases, – quickly end “unjustifiable” investigations,– Improve and clarify rules on determining dumping and

injury • Not much progress reported to date

22

Rules: Industrial Subsidies

• Attempt to prohibit inputs (e.g. fuel) from being provided to industries at less than market price

• Attempts to prohibit low-cost loans• Restoration of lapsed clause in SCM • Could have direct impact on agriculture,

absent another peace clause

23

Rules: Fishery Subsidies• “Friends of Fish” (Brazil and others) argue for

total elimination of subsidies for fishing– Developing countries could provide capacity-enhancing

subsidies if fisheries were not at risk– Artisanal fisheries could be subsidized even if not

sustainable– Small-scale fisheries would be actionable

• Japan, Korea prefer red and green subsidy boxes to classify individual subsidies (“bottom-up” approach) as in agriculture

24

Rules: RTAs

• Some efforts to clarify Article XXIV• Key Issue: definition of “substantially all

trade” – i.e. compulsory inclusion of agriculture in RTAs

• Unlikely to get any major clarification in DDA

25

Environment and DDA

• Committee on Trade and Environment (CTE-SS) discussing several issues

• Definition of environmental goods– Important for NAMA discussions where these goods

could get freer (or even duty free) access– Problem with multi-use goods– Issue is whether PPM is relevant to classification

• Relationship with MEAs• Could impact agriculture

26

DSU

• Discussion of changes in DSU rules have been progressing (in DSU-SS), such as:– Participation of third countries in consultation

stage– Rules for withdrawing sanctions in “post-

retaliation” phase• Agreement likely as part of the final

package

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Conclusion

• Non-agricultural elements of negotiations are lagging

• Several useful rule changes and some reduction of policy “water” would be lost if the DDA stalled

• Agriculture has held up the talks in other areas• Agriculture would stand to gain indirectly from

several of the changes envisaged in the non-agric talks