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Europaudvalget 2005-06
EUU Alm.del Bilag 314
Offentligt

JOB(06)/200

Negotiating Group on Market Access

22 June 2006

TOWARDS NAMA MODALITIES

Introduction

I present this document for submission to the Trade Negotiations Committee in response to

the request of Members for proposed language of full modalities for the Non-Agricultural Market

Access (NAMA) negotiations. I regret that I am unable to fulfil that mandate, as a result of the failure

of the Negotiating Group to find consensus on many important issues, and that the present report is, at

best, a step in the direction of full modalities. This explains the title of my document.

This also explains why I decided to preserve the structure of my April 28, 2006 report to the

TNC for this document. I believe that this format remains an effective mechanism to display the

mandate of the negotiations, the results of the negotiations thus far and the principal issues and

options on questions that remain unresolved. To recall this format:

the first column contains Annex B of the General Council decision of 1 August 2004

(commonly referred to as the "NAMA Framework"), as amended or supplemented by the

relevant paragraphs of the Hong Kong Ministerial Declaration. The additions from the

Ministerial Declaration have been indicated in bold;

the second column shows possible modalities language. In some cases the issue has

matured and the language is agreed. In other cases it was a simple transposition of the

language in the July Framework. In yet other instances, it is language that I felt I could

risk proposing on my own responsibility. Rest assured, those instances are a few: I took

such initiative only in those cases where I felt that the points of divergence were not that

entrenched and could be bridged at this time; and

the third column is the Chair’s commentary on the issues. I have not given an exhaustive

narrative of the position of Members. Instead, I have briefly presented the issues and, in

some instances, taken the liberty of providing some guidance for future discussions. In

others instances, I felt I could not provide guidance because Members were unable to

create that opportunity for me.

Where this document diverges from my April report is in the inclusion of an Annex. In this

Annex, I have reproduced the various textual proposals submitted to the Negotiating Group on issues

on which we do not yet have consensus and where the divergence is too great for me to bridge at this

time. While this will certainly give Members a comprehensive picture of where we stand on all

NAMA issues, it will not make their lives any easier. On some issues, as you will discover, the

Annex represents a complex menu of options which Members will not have an easy time navigating.

There is another important dimension to the NAMA negotiations and to the interpretation of

both the agreed modalities and the possible options for resolving outstanding issues presented in this

document. This is what I have referred to as the “brackets” on the entire NAMA negotiations – that

is, the agriculture negotiations. The simple fact is that progress in the NAMA negotiations have, at all

times, been both constrained by and conditional upon progress in the agriculture negotiations. This is

true both in respect of the overall negotiations and in respect of specific issues, including the level of

ambition in the formula, the overall degree of flexibilities, and the treatment of preference erosion,

small, vulnerable economies and recently acceded Members.

06-2992

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JOB(06)/200

Page 2

Over the past few weeks, I have been trying to obtain agreement on the “architecture” for

resolving each of the issues. My intent was to prepare a final stage in the negotiations which would

be concentrated only on the numbers – the level of ambition. I cannot claim much success. We were

able to confirm the architecture of the treatment of paragraph 6 countries and to agree on the

substance of the issues related to least-developed countries. On other issues, I can claim only partial

success. In respect of small, vulnerable economies and recently acceded Members, we have

tentatively agreed only partial elements of the final solution. On the remaining issues, I can offer no

more than possible approaches to finding an eventual solution.

I have faithfully adhered to the principle of the bottom-up approach, and this document is a

reflection of the degree of convergence between Members on the issues.

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

Preamble

1. This Framework contains the initial elements for

future work on modalities by the Negotiating Group

on Market Access.

Additional negotiations are

required to reach agreement on the specifics of some

of these elements. These relate to the formula, the

issues concerning the treatment of unbound tariffs in

indent two of paragraph 5, the flexibilities for

developing-country participants, the issue of

participation in the sectorial tariff component and the

preferences. In order to finalize the modalities, the

Negotiating Group is instructed to address these issues

expeditiously in a manner consistent with the mandate

of paragraph 16 of the Doha Ministerial Declaration

and the overall balance therein.

2. We reaffirm that negotiations on market access for

non-agricultural products shall aim to reduce or as

appropriate eliminate tariffs, including the reduction

or elimination of tariff peaks, high tariffs, and tariff

escalation, as well as non-tariff barriers, in particular

on products of export interest to developing countries.

We also reaffirm the importance of special and

differential treatment and less than full reciprocity in

reduction commitments as integral parts of the

modalities.

We acknowledge the substantial work

undertaken by the Negotiating Group on Market

Access and the progress towards achieving an

agreement on negotiating modalities. We take note of

the constructive dialogue on the Chair's Draft

Elements of Modalities (TN/MA/W/35/Rev.1) and

confirm our intention to use this document as a

reference for the future work of the Negotiating

Group. We instruct the Negotiating Group to continue

We recall paragraph 16 of the Doha Ministerial

Declaration in which we agreed "to negotiations

which shall aim, by modalities to be agreed, to reduce

or as appropriate eliminate tariffs, including the

reduction or elimination of tariff peaks, high tariffs,

and tariff escalation, as well as non-tariff barriers, in

particular on products of export interest to developing

countries. Product coverage shall be comprehensive

and without

a priori

exclusions. The negotiations

shall take fully into account the special needs and

interests of developing and least-developed country

participants, including through less than full

reciprocity in reduction commitments, in accordance

with the relevant provisions of Article XXVIII

bis

GATT 1994 and the provisions cited in paragraph 50

below. To this end, the modalities to be agreed will

include appropriate studies and capacity-building

measures to assist least-developed countries to

participate effectively in the negotiations."

Further to the Doha mandate, and building on the

results reached in Annex B of the General Council

Decision of 1 August 2004 (NAMA Framework) and

paragraphs 13 to 24 of the Hong Kong Ministerial

Declaration, we establish the modalities for the

NAMA negotiations as set out below.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

its work, as mandated by paragraph 16 of the Doha

Ministerial Declaration with its corresponding

references

the

relevant

provisions

Article XXVIII

bis

of GATT 1994 and to the

provisions cited in paragraph 50 of the Doha

Ministerial Declaration, on the basis set out below.

Modalities

Chairman's remarks

JOB(06)/200

Page 4

Formula

We recognize that a formula approach is key to

reducing tariffs, and reducing or eliminating tariff

peaks, high tariffs, and tariff escalation. We agree that

the Negotiating Group should continue its work on a

non-linear formula applied on a line-by-line basis

which shall take fully into account the special needs

and interests of developing and least-developed

country participants, including through less than full

reciprocity in reduction commitments.

14. We adopt a Swiss Formula with coefficients at

levels which shall

inter alia:



Reduce or as appropriate eliminate tariffs,

including the reduction or elimination of tariff

peaks, high tariffs and tariff escalation, in

particular on products of export interest to

developing countries; and

Take fully into account the special needs and

interests of developing countries, including

through less than full reciprocity in reduction

commitments.

Architecture of the formula

We agree that the following Swiss Formula shall apply on

on a line-by-line basis:

There is no consensus on the structure of the formula.

There continue to be two Swiss formula options on the

table - one is the simple Swiss formula with two

coefficients (one for developed and one for developing

country Members) and the other is the so-called ABI

formula.

On the basis of the discussions of the Negotiating

Group and my consultations with Members, I believe

that there is broader and stronger support for the

simple Swiss formula with two coefficients and that the

discussions should focus on this structure as the more

likely to attract a consensus. It should be noted,

however, that this support depends on the level of the

coefficients and whether they will deliver on Members'

interpretations of the Doha mandate and/or

paragraph 24 of the Hong Kong Ministerial

Declaration. Putting this in different terms, the key

questions are: (1) the interpretation of “less than full

reciprocity in reduction commitments”; (2) the extent

to which “real market access” must also be achieved;

and (3) the comparability of any outcome in NAMA to

the ambition achieved in Agriculture.



15. We reaffirm the importance of special and

differential treatment and less than full reciprocity

in reduction commitments, including paragraph 8

of the NAMA Framework, as integral parts of the

modalities. We instruct the Negotiating Group to

finalize its details as soon as possible.

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

Formula coefficients

There is no consensus on the coefficients for the tariff-

reduction formula.

I do not believe that the

discussions in the Negotiating Group provide a basis

on which to establish the coefficients, or even to

propose a range of numbers within which to focus the

discussion

Elements regarding the formula

5. We further agree on the following elements

regarding the formula:



We further agree on the following elements regarding

the formula:

Elements regarding the formula

Product coverage shall be comprehensive without

a priori

exclusions.

(a) Product coverage shall be comprehensive

without

a priori

exclusions as reflected in

document [...].

Product Coverage

There is no consensus on product coverage. There is

a wide view that the ideal outcome would be an

agreed list with no deviations. However, in light of

the impasse in the Negotiating Group, I tabled a

proposal for an agreed list (JOB(06)/126/Rev.1) that

would include a footnote recording the deviation of

two Members without altering the rights of other

Members.

Most Members are in favour of an agreed list and

were uncomfortable with the proposed footnote.

Notwithstanding their reluctance, some Members have

expressed a willingness to accept my proposal.

Others have insisted on an agreed list with no

footnotes or have indicated that they would add their

own deviations to the footnote, exacerbating the

problem.

It would be unfortunate if we were not able to achieve

full agreement on the products covered in the NAMA

negotiations. This is essential for the tabling of

18. We take note of the level of common

understanding reached on the issue of product

coverage and direct the Negotiating Group to

resolve differences on the limited issues that

remain as quickly as possible.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

JOB(06)/200

Page 6

schedules and also enhances transparency for traders.

It may also avoid disputes in the area of classification

and resolve the ambiguities from the Uruguay Round.

In short, my first best solution is to have an agreed list

with no deviations. My second-best solution is to have

an agreed list with full transparency of any deviation

Unbound Tariffs



tariff reductions or elimination shall commence

from the bound rates after full implementation of

current concessions; however, for unbound tariff

lines,

we adopt a non-linear mark-up approach

to establish base rates for commencing tariff

reductions.

(b) Tariff reductions or elimination shall commence

from the bound rates after full implementation of

current concessions; however, for unbound tariff

lines, we adopt a constant non-linear mark-up of

[…] percentage points to the MFN applied rate in

the base year to establish base rates for

commencing tariff reductions.

Treatment

There is consensus on the architecture of the treatment

of unbound tariffs, which is a constant, non-linear

mark-up.

Mark-up

There is no consensus on the level of the mark-up, but

it is clear that the range is between 5 and 30

percentage points.

While Members have their

preferences, and there continue to be sensitivities over

low and high unbound rates, a great deal of flexibility

has been signalled. This flexibility was even more

apparent after the simulations of the effects of various

formula approaches were issued, as these

demonstrated that the effect of the mark- up is

relatively small once the formula is applied.

Base year



the base year for MFN applied tariff rates shall be

2001 (applicable rates on 14 November);

There is consensus on this issue.

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

Credit for bound autonomous liberalization by

developing countries



credit shall be given for autonomous liberalization

by developing Members provided that the tariff

lines were bound on an MFN basis in the WTO

since the conclusion of the Uruguay Round;

(d)

There is no consensus on this issue. Few developing

Members have bound autonomous tariff reductions

since the Uruguay Round. While some Members have

noted the importance of this issue, they have also

acknowledged that it is a difficult concept to

operationalize. Perhaps as a result, until very

recently, no proposal had been tabled and no

discussion had been held on this subject. However, a

proposal was tabled just before the preparation of this

document. The proposal suggests that an unspecified

number of additional points should be added to the

coefficient in the formula for those lines which were

bound autonomously. There has been no discussion of

this proposal, which does not provide specifics on how

to assess the value of the liberalization for the purpose

of adjusting the coefficient.

Ad valorem equivalents



all non-ad

valorem

duties shall be converted to

valorem

equivalents on the basis of

the

methodology

outlined

document

JOB(05)166/Rev.1

and bound in

ad valorem

terms;

(e) all non-ad

valorem

duties shall be converted to

ad valorem

equivalents on the basis of the

methodology

outlined

document

JOB(05)/166/Rev.1 and bound in

ad valorem

terms;

A useful multilateral verification process of AVE

submissions is ongoing and will need to be concluded

soon after the establishment of modalities.

Nomenclature



negotiations shall commence on the basis of the

HS96 or HS2002 nomenclature, with the results of

the negotiations to be finalized in HS2002

nomenclature;

(f) negotiations shall commence on the basis of the

HS96 or HS2002 nomenclature, with the results of

the negotiations to be finalized in HS2002

nomenclature to the extent possible.

Members have the option of submitting schedules in

HS96 or HS2002. However, in the former case, the

question of finalizing the results in HS2002 will

present a challenge to Members and/or the Secretariat

due to time constraints. My proposal would be to

make the finalization of results in HS2002 a “best

efforts” provision.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

JOB(06)/200

Page 8

Reference period

- the reference period for import data shall be 1999-

2001.

(g) the reference period for import data shall be

1999-2001

There is consensus on this issue.

Implementation period

(h) the implementation period for tariff reductions for

developed-country Members shall be [..] years and

for developing country Members [...] years, to be

implemented [...].

I suggest that the question of implementation periods

be addressed in a new paragraph which would include

both the longer implementation periods for developing

Members subject to formula cuts (currently addressed

in paragraph 8), but also the implementation period

for developed countries. Regarding the number of

years proposed for implementation, Members’

positions are not yet certain enough for me to propose

numbers at this stage. My language also leaves open

the question of how the tariff reductions will be

implemented (e.g. staging etc.), as this has not yet

been agreed by Members.

Flexibilities for developing Members with low

binding coverage

6. We furthermore agree that, as an exception,

participants with a binding coverage of non-

agricultural tariff lines of less than [35] percent would

be exempt from making tariff reductions through the

formula. Instead, we expect them to bind [100]

percent of non-agricultural tariff lines at an average

level that does not exceed the overall average of

bound tariffs for all developing countries after full

implementation of current concessions.

We furthermore agree that, as an exception,

participants with a binding coverage of non-

agricultural tariff lines of less than 35 percent would

be exempt from making tariff reductions through the

formula. Instead, we expect them to bind [70-100]

percent of non-agricultural tariff lines at an average

level that does not exceed the overall average of

bound tariffs for all developing countries after full

implementation of current concessions which is at

28.5%.

Flexibilities for developing Members with low

binding coverage

There is consensus on the architecture of this

exception. The negotiation is now focussed on the

binding that such Members would be expected to

make. I would note that the proponents of this

paragraph have indicated that their acceptance of the

28.5% average binding level was conditional upon an

acceptable level of binding coverage. While most

other Members are willing to show some flexibility on

the binding coverage, they have generally indicated

that 70% is unacceptably low. They recognize that

other developing Members availing of paragraph 8

flexibilities will have the possibility to maintain 5% of

Developing Members concerned are: Cameroon; Congo, Côte d'Ivoire; Cuba; Ghana; Kenya; Macao, China; Mauritius; Nigeria; Sri Lanka; Suriname; and Zimbabwe.

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July Framework, modified or supplemented by the

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as appropriate

Modalities

Chairman's remarks

tariff lines unbound and, as a result, they are willing

to consider a 95% percentage binding coverage for

these Members. Others have shown greater flexibility.

Some have suggested that, as the target tariff average

was fixed on the basis of the "overall average of

bound tariff for all developing countries after full

implementation of current concessions", the same

rationale could be used to determine their binding

coverage (i.e. 81% if all developing countries except

LDCs are included; 93% if the paragraph 6 countries

are removed.).

Sectoral negotiations

7. We recognize that a sectorial tariff component,

aiming at elimination or harmonization is another key

element to achieving the objectives of paragraph 16 of

the Doha Ministerial Declaration with regard to the

reduction or elimination of tariffs, in particular on

products of export interest to developing countries.

We recognize that participation by all participants will

be important to that effect. We therefore instruct the

Negotiating Group to pursue its discussions on such a

component, with a view to defining product coverage,

participation, and adequate provisions of flexibility for

developing-country participants.

1. We reaffirm that the sectoral tariff reduction

component is another key element to achieving the

objectives of Paragraph 16 of the Doha Ministerial

Declaration. Participation in sectoral initiatives is on a

non-mandatory basis. Such initiatives shall aim to

reduce, harmonize or as appropriate eliminate tariffs,

including the reduction or elimination of tariff peaks,

high tariffs and tariff escalation, over and above that

which would be achieved by the formula modality, in

particular on products of export interest to developing

countries.

2. We recognise the progress made in a variety of

sectors, where discussions among participants in the

sectorals have focused on: defining the critical mass

which may include the share of world trade and level

of participation of competitive producers; the scope of

product coverage; the implementation schedule; and

special and differential treatment for developing-

country participants.

3. At the Hong Kong Ministerial Conference,

Ministers instructed members to identify sectors which

could garner sufficient participation. Members have

Sectoral negotiations

As there is wide agreement on the core issues, I have

taken the initiative of proposing compromise language

on sectoral negotiations. I believe that, at the Hong

Kong Ministerial, Ministers resolved the most

contentious issue on sectoral negotiations – the non-

mandatory nature of participation in such initiatives.

I believe that the other concerns which have been

voiced concerning language proposed by ten Members

and circulated as JOB(06)/125 can be bridged. I have

used this document as the basis for my proposed text.

I would note that a concern was raised that, given the

lack of clarity on matters such as critical mass and the

potential impact that sectorals could have on products

of export interest to least-developed countries,

sectorals should not be part of the modalities

language. However, it is difficult for me to ignore the

fact that Ministers have agreed that sectorals are a

"key element" in the NAMA negotiations. I believe

that such concerns could be accommodated through

dialogue between concerned Members and the

proponents of sectoral initiatives, especially in the

area of product coverage, implementation periods and

special and differential measures.

16. In furtherance of paragraph 7 of the NAMA

Framework, we recognize that Members are

pursuing sectoral initiatives. To this end, we

instruct the Negotiating Group to review proposals

with a view to identifying those which could garner

sufficient

participation

realized.

Participation should be on a non-mandatory basis.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

started submitting specific textual proposals on the

following sectors: Autos and related parts, Bicycles

and related parts, Chemicals, Electronics/Electrical

products, Fish and fish products, Forest products,

Pharmaceuticals and medical devices, Gems and

Jewelry, Raw materials, Sports equipment, Hand

Tools and Textiles, Clothing and Footwear.

4. We instruct Members participating in the sectoral

initiatives to intensify their work and finalise the

details of each sector in order to be in a position to

incorporate any outcomes of such negotiations on a

conditional basis in the draft comprehensive schedules

of participating members at the time of their

submission. Work could continue thereafter, if

necessary, to encourage broader participation in the

sectoral initiatives referred to under paragraph 3

above or in any additional sectoral initiatives aiming

at greater-than-formula reduction or elimination of

tariffs in particular on products of export interest to

developing countries.

Chairman's remarks

JOB(06)/200

Page 10

Harmonization proposal on the Textiles and Clothing

Sector

A sectoral proposal on tariff harmonization in the

textile and clothing sector has been submitted by

Turkey. Many Members, including the proponent,

have acknowledged that it is a sectoral initiative

which is different in nature from the other sectoral

initiatives on which work is currently ongoing. It

proposes mandatory participation and leaves open the

possibility of an outcome that is not over and above

that which would be achieved by the formula. While

this proposal enjoys the support of some Members, it

is also firmly opposed by many others, who argue that

it does not satisfy the requirements of the mandate

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

from Ministers. It is clear that the proponents will be

challenged to garner sufficient support for this

proposal.

Flexibilities for developing Members subject to the

formula

agree

that

developing-country

participants shall have longer implementation periods

for tariff reductions.

Flexibilities for developing Members subject to the

formula

Implementation Period

(See section on implementation period above.)

In addition, they shall be given the following

flexibility:

Developing-country participants shall be given the

following flexibility:

Architecture

There is consensus on the architecture of paragraph 8

flexibilities.

(a)

applying less than formula cuts to up to [10]

percent of the tariff lines provided that the cuts

are no less than half the formula cuts and that

these tariff lines do not exceed [10] percent of

the total value of a Member's imports; or

(a)

applying less than formula cuts to up to [10]

percent of the national tariff lines provided that

the cuts are no less than half the formula cuts and

that these tariff lines do not exceed [10] percent

of the total value of a Member's non-agricultural

imports; or

Numbers

There is no consensus on the percentage of tariff lines

that will be covered by these flexibilities. However,

while some Members continue to believe that the

current numbers in 8(a) and 8(b) are the minimum or

maximum of what should be offered, my sense is that

Members could agree to the numbers already in the

brackets provided the coefficients in the formula are

satisfactory. My advice, therefore, would be to treat

these numbers as a working hypothesis and focus

discussions on the coefficients in the formula.

Alternative to the use of paragraph 8 flexibilities

There is no consensus on the proposal submitted by

Mexico which suggested adding 5 points to the

coefficient for any developing Member that did not

exercise its right to use paragraph 8 flexibilities.

Some Members have supported this proposal but

(b) keeping, as an exception, tariff lines unbound, or

not applying formula cuts for up to [5] percent of

tariff lines provided they do not exceed [5]

percent of the total value of a Member's imports.

(b) keeping, as an exception, tariff lines unbound, or

not applying formula cuts for up to [5] percent of

national tariff lines provided they do not exceed

[5] percent of the total value of a Member's non-

agricultural imports.

We furthermore agree that this flexibility could not be

used to exclude entire HS Chapters.

We furthermore agree that this flexibility could not be

used to exclude entire HS Chapters.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

JOB(06)/200

Page 12

indicated reservations about the number of additional

points to be added to the coefficient. Others have

expressed opposition to the proposal, arguing that it

would establish a precedent for an “a-la-carte”

application of the formula.

Small, Vulnerable Economies

21. We note the concerns raised by small,

vulnerable economies, and instruct the Negotiating

Group to establish ways to provide flexibilities for

these Members without creating a sub-category of

WTO Members.

The criteria

With the exception of developed countries, Members

having a share of NAMA trade (exports and imports)

of less than [0.1%] of world trade for a reference

period of 1999 to 2001, or best available data, as

contained in document TN/MA/S/18 may use the

following modality for tariff reduction:

The criteria

There is consensus on the use of this criterion to

determine eligibility for additional flexibilities as a

small, vulnerable economy.

While recognizing that this benchmark establishes

only that an economy is small, in terms of its NAMA

trade, Members have acknowledged the difficulties of

articulating additional criteria to establish that

economies are also vulnerable and can accept the

single criterion.

The proponents have proposed additional criteria

related to agricultural trade and total goods (both

NAMA and agriculture) trade. Many Members oppose

the use of such criteria, arguing that this would create

a new sub-category of Members. I would note, in this

regard, that it is important for many Members that the

treatment of small, vulnerable economies in these

negotiations does not create a precedent for future

negotiations.

Finally, it was noted that this criterion should be

understood as only a “trigger” for eligibility – that is,

the criterion alone should not define the group of

countries that will have access to these flexibilities.

Members will recall that the proponents do not

include all countries with trade below this threshold.

Small, Vulnerable Economies

It is understood that this does not create a sub-

category of WTO Members.

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

The treatment

Modalities

Chairman's remarks

The treatment

There is no consensus on the treatment of small,

vulnerable economies.

There are two basic options on the table: a paragraph

6-type solution or a paragraph 8-type solution. The

first option has two variations, one put forward by the

SVEs proponents and the second by Norway. The SVE

proponents have suggested a banded approach while

Norway's proposal is more similar in structure to

paragraph 6, with a single target tariff average. The

second option is to use a paragraph 8-type solution,

which would envisage increasing the flexibilities in

paragraph 8. There are different permutations of this

option including adding percentage points to the

existing numbers in paragraph 8; removing the trade

limitation, combining sub-paragraph (a) and (b), and

by extending the implementation period.

Unfortunately, I am unable to provide much guidance

on this issue. I would note that one factor which has

made this discussion difficult is the diverse tariff

profiles of the SVE proponents. Beyond this, I can only

repeat my view that a satisfactory contribution from

these Members can be achieved using either the

paragraph 8 or paragraph 6 approach. The central

question, therefore, is how great a contribution is

required of these Members.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

JOB(06)/200

Page 14

Least-Developed Countries (LDCs)

Flexibilities for LDCs

We agree that least-developed country

participants shall not be required to apply the formula

nor participate in the sectorial approach, however, as

part of their contribution to this round of negotiations,

they are expected to substantially increase their level

of binding commitments.

We recall the decision of July 2004 General Council

to exempt LDCs from participating in the formula for

tariff reduction and the sectoral approach. However,

as part of their contribution to this Round of

negotiations, LDCs are expected to substantially

increase their level of tariff binding commitments.

We therefore reaffirm that individual LDCs will

determine the extent and level of tariff binding

commitments in accordance with their individual

development objectives.

Market Access for LDCs

10.

Furthermore, in recognition of the need to

enhance the integration of least-developed countries

into the multilateral trading system and support the

diversification of their production and export base, we

call upon developed-country participants and other

participants who so decide, to grant on an autonomous

basis duty-free and quota-free market access for non-

agricultural products originating from least-developed

countries by the year […].

We reaffirm the need to help LDCs secure beneficial

and meaningful integration into the multilateral

trading system. In this regard, we recall the

Decision

on Measures in Favour of Least-Developed Countries

contained in decision 36 of Annex F of the Hong

Kong Ministerial Declaration (the "Decision"), and

reaffirm our commitment to fully implement the

Decision as agreed.

We reaffirm our commitment to ensuring that

preferential rules of origin applicable to imports from

LDCs will be transparent, simple and contribute to

facilitating market access in respect of non-

agricultural products.

We also reaffirm our commitment to progressively

achieve compliance with the Decision referred to

above, taking into account the impact on other

developing countries at similar levels of development.

Least-Developed Countries (LDCs)

Flexibilities for LDCs

There is consensus on this language.

Market Access for LDCs

There is consensus on this language, subject to

confirmation from capitals by some Members.

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

We reaffirm that developing country Members shall

be permitted to phase in their commitments and enjoy

appropriate flexibility in coverage.

Accordingly, by the time Members submit their

comprehensive draft schedules of concessions,

developed-country Members shall, and developing-

country Members declaring themselves in a position to

do so should:

inform the WTO of the products that are currently

covered under duty free and quota free market

access for LDCs;

notify the internal procedures by which they will

implement the Decision; and

provide an indication of the possible time frame

within which they intend to fully implement the

Decision as agreed.

Chairman's remarks

Recently Acceded Members (RAMs)

11.

We recognize that newly acceded Members

shall have recourse to special provisions for tariff

reductions in order to take into account their extensive

market access commitments undertaken as part of

their accession and that staged tariff reductions are

still being implemented in many cases. We instruct

the Negotiating Group to further elaborate on such

provisions.

In recognition of their extensive market access

commitments undertaken as part of their accession

and that staged tariff reductions are still being

implemented in many cases, the Recently Acceded

Members shall have an additional implementation

period of [ ] years in respect of [ ].

Recently Acceded Members (RAMs)

Who is a RAM?

An informal understanding was reached that for the

purposes of complying with paragraph 58 of the Hong

Kong Declaration concerning RAMs, the relevant

negotiating bodies should consider the situation of all

those Members who have acceded to the WTO since

its establishment, with the exception of those who have

since become members of the European Union and

those who are LDCs. In addition, any further

countries which acceded before the conclusion of the

negotiations under the DDA should also be

considered. It is also understood that if Bulgaria

becomes a member of the European Union before the

In recognition of their extensive market access

commitments undertaken as part of their accession

and their current economic circumstances, Armenia,

Kyrgyz Republic and Moldova shall not be required

to undertake tariff reductions.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

JOB(06)/200

Page 16

conclusion of the Round, it would not be considered a

RAM for the purposes of paragraph 58 of the Hong

Kong Declaration.

On that basis, the potential list of RAMs for the

purposes of paragraph 58 of the Hong Kong

Declaration would be as follows: Ecuador, Bulgaria,

Mongolia, Panama, Kyrgyz Republic, Jordan,

Georgia, Albania, Oman, Croatia, Moldova, China,

Chinese Taipei, Armenia, Former Yugoslav Republic

of Macedonia and Saudi Arabia.

Treatment of RAMs

There is consensus that additional flexibility in the

form of longer implementation periods should be

extended to all recently acceded Members. However,

Members have differing views on how such longer

implementation periods should apply. Some have

argued that the extension should apply to all tariff

lines while others would restrict the extension to tariff

lines on which accession commitments have not yet

been fully implemented.

There is also consensus that the small, low-income

economies in transition (Armenia, Moldova and

Kyrgyz Republic) should be given special

consideration.

There is a widely held view among Members that, in

addition to these flexibilities, RAMs should also make

use of other flexibilities for which they are eligible (for

example, there may be a number of RAMs who may be

eligible to use the flexibilities for developing countries

that apply the formula, or for small, vulnerable

economies).

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

A proposal was submitted by China providing options

for additional flexibilities that might be accorded to

RAMs, including a higher coefficient, greater

paragraph 8 flexibilities and grace periods for the

implementation of the formula. In addition to these

flexibilities, Croatia proposed that the grace period

and implementation period be increased. Little

support was expressed for these proposals.

Supplementary Modalities

12.

We agree that pending agreement on core

modalities for tariffs, the possibilities of

supplementary modalities such as zero-for-zero sector

elimination, sectorial harmonization, and request &

offer, should be kept open.

We agree that Members may use the request & offer

approach as a supplementary modality following

agreement on the core modalities.

Supplementary Modalities

Supplementary modalities will be used once the

formula has been agreed to. In my view, the only

supplementary modality which is feasible from a

practical point of view, once the core modality is

agreed to, is the request & offer modality. I would

note that sectoral negotiations provide a vehicle for

zero-for-zero

tariff

elimination

and

tariff

harmonization, and that the doors remain open to new

proposals on sectoral agreements. I do not know what

other type of supplementary negotiation is available,

so am not sure of the relevance of the term "such as"

in the July Framework language. In other words, the

language in the July Framework strikes me as being

outdated. I have proposed some new language in the

middle column to take account of the evolution of the

negotiations

Elimination of low duties

13. In addition, we ask developed-country participants

and other participants who so decide to consider the

elimination of low duties.

In addition, we ask developed-country participants

and other participants who so decide to consider the

elimination of low duties.

Elimination of low duties

Presumably, the question of elimination of low duties

will be taken up after agreement on the formula and at

the discretion of Members. Therefore, I believe that

the language can be transferred from the July

Framework to the middle column.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

JOB(06)/200

Page 18

Non-tariff barriers (NTBs)

14. We recognize that NTBs are an integral and

equally important part of these negotiations and

instruct participants to intensify their work on NTBs.

In particular, we encourage all participants to make

notifications on NTBs by 31 October 2004 and to

proceed

with

identification,

examination,

categorization, and ultimately negotiations on NTBs.

We take note that the modalities for addressing NTBs

in these negotiations could include request/offer,

horizontal, or vertical approaches; and should fully

take into account the principle of special and

differential treatment for developing and least-

developed country participants.

We reaffirm that negotiations on NTBs are an integral

and equally important element to achieving the

objectives of paragraph 16 of the Doha Ministerial

Declaration. The NTB initiatives shall aim to reduce

or eliminate, as appropriate, non-tariff barriers, in

particular on products of export interest to developing

countries and to enhance market access opportunities

achieved through the tariff formula modality and

sectoral initiatives.

Progress has been made in the identification,

examination and categorization of non-tariff barriers.

Discussions have focused on defining the nature of

the barrier, the scope of products affected and

potential solutions. Some Members have also already

submitted specific requests and specific negotiating

proposals, including on horizontal issues such as

export taxes, export restrictions, remanufactured

goods and a future mechanism for resolving NTBs, as

well as on vertical initiatives on automobiles,

electronic products, textiles, clothing and footwear

and wood products.

Members have expressed different views regarding

these proposals and negotiations are now required to

obtain results in line with the mandate.

Members are instructed to finalize their NTB work in

2006 before the conclusion of the tariff negotiations in

order to multilateralize the outcomes through

inter

alia

incorporating them where appropriate into Part

III of schedules. We recall that these non-tariff

barrier negotiations can include request/offer,

horizontal and vertical approaches and they should

also take fully into account the principle of special

Non-tariff barriers (NTBs)

As there is wide agreement on the core issues, I have

taken the initiative of proposing compromise language

on NTBs. This text merges two textual proposals on

the table - one from the US/EC and the other from the

NAMA-11 group of developing Members, which based

itself on the US/EC text.

Important details remain to be sorted out in respect of

all the proposals, but in respect of some proposals the

unresolved issues are more fundamental than for

others. In particular, many Members oppose the

proposals to negotiate disciplines in respect of export

taxes or export restrictions, arguing that these issues

fall outside the explicit mandate and the balance of

issues struck in Doha. Others note that there is no

agreed definition of a non-tariff barrier to guide the

discussions. While no decisions on specific NTB

proposals are required at this time, I make these

points only to underline that, while we may be able to

agree on modalities language on the process, a

consensus on the substance of some NTB proposals

remains, at best, uncertain.

22. We note that the Negotiating Group has made

progress in the identification, categorization and

examination of notified NTBs. We also take note

that Members are developing bilateral, vertical and

horizontal approaches to the NTB negotiations,

and that some of the NTBs are being addressed in

other fora including other Negotiating Groups. We

recognize the need for specific negotiating

proposals and encourage participants to make such

submissions as quickly as possible.

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

and differential treatment for developing and least-

developed country participants.

Chairman's remarks

Appropriate

Measures

15.

We recognize that appropriate studies and

capacity building measures shall be an integral part of

the modalities to be agreed. We also recognize the

work that has already been undertaken in these areas

and ask participants to continue to identify such issues

to improve participation in the negotiations.

Studies

and

Capacity

Building

Appropriate

Measures

Studies

and

Capacity

Building

We commit ourselves to exploring and enhancing

effective delivery mechanisms to assist LDCs, and

Members in the early stages of development, through

trade capacity-building measures to assist them in

addressing challenges that may arise from increased

competition as a result of MFN tariff reduction and

inherent supply side capacity constraints. These

mechanisms shall be designed to enable LDCs, and

Members in the early stages of development, to take

advantage of increased market access opportunities

and shall assist them to meet technical

standards/requirements and to address product and

market diversification as well as to overcome other

non-tariff measures.

This language has very wide support. Some Members

expressed concerns about the fact that the scope of the

paragraph may have been expanded through the

inclusion of the phrase "Members in the early stages

of development". In their view this paragraph was

only meant for LDCs. However, others noted that the

language in the July Framework did not specify that

such measures were for LDCs uniquely. In any event,

no Member disputes that such assistance should be

provided to LDCs, nor that the broader Aid-for-Trade

initiative should include similar assistance for other

developing Members.

Non-reciprocal preferences

16.

We recognize the challenges that may be

faced by non-reciprocal preference beneficiary

Members and those Members that are at present highly

dependent on tariff revenue as a result of these

negotiations on non-agricultural products. We instruct

the Negotiating Group to take into consideration, in

the course of its work, the particular needs that may

arise for the Members concerned.

20.

As a supplement to paragraph 16 of the

NAMA Framework, we recognize the challenges

that may be faced by non-reciprocal preference

beneficiary Members as a consequence of the MFN

Non-reciprocal preferences

Assessment of the scope of the problem

Pursuant to Ministers’ instructions at Hong Kong, the

Negotiating Group continues to assess the scope of the

preference erosion problem. This assessment was

greatly assisted by a Secretariat analysis of the key

products, key countries and key markets concerned.

While no final conclusions have been reached,

Members agreed that this was a useful analysis, which

should be pursued and which could provide the basis

for a discussion of possible solutions.

JOB(06)/200

Page 19

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

liberalization that will result from these

negotiations. We instruct the Negotiating Group to

intensify work on the assessment of the scope of the

problem with a view to finding possible solutions.

Modalities

Chairman's remarks

JOB(06)/200

Page 20

Possible solutions

There is no consensus on possible solutions. The

Negotiating Group will need to turn to this question

after Members are satisfied that the scope of the

problem has been sufficiently defined. Having said

this, Members have expressed views – indeed, strong

views – on possible solutions.

All Members support targeted Aid-for-Trade to

address the underlying challenges faced by preference

receiving countries – the diversification of their

exports and strengthening of their competitiveness.

Many Members are at least open to a discussion of a.

trade solution, in addition to Aid-for-Trade, but only

in respect of longer implementation periods. There is

little support for a correction coefficient, the other

measure suggested by the proponents of this issue.

However, some Members are opposed to any trade

measures to respond to the preference problem, as this

would be at the expense of their own access to major

markets.

There has also been some discussion of whether

special consideration should be given to Members

who are not beneficiaries of preferences and who may

be most affected as a result of a trade solution, such as

a longer implementation period for tariff reduction on

the key products. A proposal was presented by Sri

Lanka suggesting immediate access to preferential

regimes for such affected Members. Support for this

proposal was mixed but some Members have signalled

their possible support for special consideration for

these countries through shorter implementation

periods.

I would also underline that the resolution of this issue

is, even more than others, intimately linked to a

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

satisfactory approach being taken in the agricultural

negotiations on the same questions.

Tariff Revenue Dependency

No textual proposal has been submitted on the issue of

tariff revenue dependency. It is my sense, therefore,

that the proponents are satisfied that this issue is

being resolved through other parts of the modalities.

Non-agricultural environmental goods

17.

We furthermore encourage the Negotiating

Group to work closely with the Committee on Trade

and Environment in Special Session with a view to

addressing the issue of non-agricultural environmental

goods covered in paragraph 31 (iii) of the Doha

Ministerial Declaration.

Non-agricultural environmental goods

There is no consensus on this subject, beyond the

existing mandate.

A proposal was put forward by a group of Members

concerning the treatment of environmental goods in

the context of the NAMA negotiations.

These

Members proposed tariff elimination on those

products, to be defined by the CTESS. However, this

proposal was met with opposition. An alternative

textual proposal was submitted by another group of

countries proposing that the work of the CTESS to

define the approach and a possible list of

environmental goods must be completed before any

discussion of the treatment of such goods can be taken

up in the NAMA negotiations.

Many Members also believe that participation in any

initiative in respect of environmental goods should be

non-mandatory, while others feel that there is a

mandate in 31 (iii) to do something more on these

products than on those treated under the formula or

the sectoral negotiations.

As there is no progress on this issue to record at this

time, my suggestion would be to transfer the July

Framework language to the modalities paper.

JOB(06)/200

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July Framework, modified or supplemented by the

Hong Kong Ministerial Declaration (in bold),

as appropriate

Modalities

Chairman's remarks

JOB(06)/200

Page 22

Paragraph 24

24.

We recognize that it is important to

advance the development objectives of this Round

through enhanced market access for developing

countries in both Agriculture and NAMA. To that

end, we instruct our negotiators to ensure that

there is a comparably high level of ambition in

market access for Agriculture and NAMA. This

ambition is to be achieved in a balanced and

proportionate manner consistent with the principle

of special and differential treatment.

Paragraph 24

A proposal (TN/MA/W/67) has been made in respect

of operationalizing this paragraph. While there was

some support for this proposal, and most Members

thought it a useful contribution to the negotiations,

many of the Members who have taken the floor during

discussions on this issue were of the view that

individual Members will judge for themselves whether

the requirements of this paragraph have been met.

_______________

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ANNEX:

Specific textual proposals on issues in which broad divergences remain

FORMULA

RCHITECTURE

Option 1: A Simple Swiss formula with two coefficients, one for developing and the other

for developed Members:

�½

(a or b)



(a or b)



where,

Final bound tariff

Base rate

Coefficient for developed Members

Coefficient for developing Members subject to the formula.

Option 2: ABI formula

�½





where,

is the final rate, to be bound in

ad valorem

terms

is the bound base rate

is the average of the current bound rates

is a coefficient, its value(s) to be determined by the participants

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OEFFICIENTS

Option 1: Proposal by Pakistan

(TN/MA/W/60)

These coefficients should be based on an objective criterion; taking the overall average of the bound tariff

lines for developed and developing countries as their respective coefficients. These averages have been

worked out to be 5.48% for developed countries, and 29.12% for developing countries

. For the sake of

simplicity these could be taken as 6 and 30.

Option 2: Proposal by Canada; Hong Kong, China; New Zealand, Switzerland,

Chinese Taipei and the United States

(Room document of 8 June 2006)

The coefficient for developed countries (A) shall be at most five less than the developing country coefficient

(B). For example, the developed country coefficient (A) would be [10 or less] provided that the coefficient

for the developing countries applying the formula is within five points of the developed country coefficient.

The calculation was based on the data taken from document TN/MA/S/4/Rev.1/Corr.1. The

developed countries mean, Australia, Canada, EC, Iceland, Japan, New Zealand, Norway, Switzerland, and the

US, and those developing countries that will apply the formula (i.e. excluding countries under Paragraph 6 & 9).

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II.

ELEMENTS REGARDING THE FORMULA

REDIT FOR BOUND AUTONOMOUS LIBERALIZATION MEASURES BY

EVELOPING COUNTRIES

- Proposal by the NAMA-11

(Room document of 16 June 2006)

(d) Noting that some developing countries have bound

their tariffs on an MFN basis in the WTO since the

conclusion of Uruguay Round, credit shall be given for such autonomous liberalization provided that the

tariff lines were bound before commencement of the Doha Round. Credit will be effected by allowing the

relevant developing country Member to use a coefficient [ ] points higher than the applicable coefficient to

that Member in the agreed formula, for undertaking further reduction of these autonomously bound tariff

lines.

III.

SECTORALS

ARMONIZATION PROPOSAL ON THE

EXTILES AND

LOTHING

ECTOR

- Proposal by Turkey

(Presentation of 14 June 2006)

Methodology:

Parallelism with certain aspects of the formula:



The same coefficients will be utilized.



Different average rates of harmonization for developed and developing countries.



Maximum tariff rate for a Chapter will be the Swiss Formula coefficient.



Harmonization will be at the average rates derived through the application of the Swiss Formula

with "to be agreed" coefficients in each Chapter.

Reduction in each tariff line with no exception.

IV.

PARAGRAPH 8 FLEXIBILITIES

LTERNATIVE TO THE USE OF PARAGRAPH

FLEXIBILITIES

- Proposal by Mexico

(Room document of 21 April 2006)

Developing country Members that do not use the flexibilities provided for in paragraph 8 of Annex B of the

July framework, will be allowed 5 additional points in the coefficient in the application of the tariff reduction

formula.

India (WT/Let/374), Korea (WT/Let/302), Pakistan (WT/Let/424), Sri Lanka (WT/Let/398)

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SMALL, VULNERABLE ECONOMIES

ARAGRAPH

TYPE SOLUTION

Option 1: Proposal by the SVE group

(Room document of 15 June 2006)

The treatment proposed for small, vulnerable economies would be that these countries would not be subject

to formula cuts, but would bind 100% of their non-agricultural tariff lines at average levels reflected in the

following bands:

Current Bound

Average %

≤ 37

38 – 47

48 – 57

≥ 58

Average % Cut

[….]

Expected Final Bound

Average %

[….]

Tariff reduction for

SVEs shall be on the basis of lower tariff cuts for those in the lower bands and

higher cuts for those in the higher bands

In meeting this requirement, beneficiaries would make minimum reductions of [ ] percent on a

maximum of [ ] percent of individual tariff lines

In the specific case of Fiji with less than 50% binding coverage, Fiji shall be allowed to keep [5%]

of their lines unbound while binding the remaining [95%] at an average of [ ].

The implementation of the tariff reduction commitments should be staged over a longer period than

other developing countries in order to ensure a smooth liberalisation process and not jeopardise the

industrial and social development prospects of the small, vulnerable economies.

Option 2: Proposal by Norway

(Room document of 6 June 2006)

Such Members will bind [100%] of their non-agricultural tariffs. The average bound tariff level of such a

Member will not exceed [X] percent after the implementation period. In meeting this requirement,

beneficiaries would make minimum reductions of [Y] percent on individual tariff lines.

ARAGRAPH

TYPE SOLUTION

Option 3: Proposal by Costa Rica and Uruguay

(Room document of 30 May 2006)

Developing countries that have been identified by the above mentioned criteria to be small and vulnerable

economies will benefit from a unique [X] additional percentage points to the figure currently in brackets in

Paragraph 8(a) or Paragraph 8(b)

Option 4: Proposal by the NAMA-11

(Room document of 6 June 2006)

Once the number in brackets of paragraph 8 (a) and (b) has been agreed for developing countries,

additional flexibility beyond that shall be identified for SVEs; further relaxation of the trade limitation, in

particular, is an avenue worth exploring, considering the economic situation of SVEs, with a longer

implementation period; or

ii. The SVEs could be permitted access to paragraphs 8 (a) and (b) cumulatively, with a longer

implementation period.

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VI.

RECENTLY ACCEDED MEMBERS

Option 1: Proposal by China

(Room document of 12 June 2006)

Croatia proposed some changes which have been incorporated below

1. The coefficient for the Swiss formula applicable to Recently Acceded Members shall be 1.5 times of that

for developing-country participants.

2. In addition, the Recently Acceded Members shall be given the flexibility of applying less than formula

cuts to up to 15 percent of tariff lines provided that the cuts are no less than half the formula cuts; or

the Recently Acceded Members may choose exemption from formula cuts for up to 10 percent of tariff lines.

3. The Recently Acceded Members shall have an implementation period [3-5] years longer than that for

developing-country participants.

4. The Recently Acceded Members shall have a grace period for [3-5] years before the start of

implementation of DDA commitments.

Option 2: Proposal by the NAMA-11

(JOB(06)/194)

NAMA 11 recognises the diversity in the tariff profiles of the RAMs as well as their specific situations.

Accordingly, it would be appropriate that RAMs that declare themselves to be akin to developed countries

should adopt the modalities applicable to developed countries. Other RAMs should adopt the modalities

applicable to developing countries or LDCs, as the case may be, with all the attendant flexibilities and special

and differential provisions. The NAMA 11 also proposes that the RAMs be allowed a longer implementation

period.

The particular situation of some recently-acceded low income economies in transition shall be considered

separately, to allow them adequate and appropriate flexibilities.

The additional [X] percentage points will depend on the share of NAMA trade to be agreed in the

selection criteria. These [X] percentage points would be higher if the threshold of NAMA trade is lower, and

vice versa.

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VII.

NON-RECIPROCAL PREFERENCES

OSSIBLE SOLUTIONS

- Proposal by the NAMA-11

(JOB(06)/194)

In this regard, the NAMA 11 proposes a two-pronged solution:

i) A longer implementation period for the reductions affecting such tariff lines.

This implementation period

for those developed country Members who provide preferences shall not be longer than the implementation

period set for developing country Members.

ii) Additional technical and financial assistance, including through the Aid for Trade initiative,

to help

address supply constraints, promote diversification of markets, export basket and sources of imports and

mitigate the costs of adjustment and restructuring.

Developed countries who have been granting long standing preferences shall explore ways to achieve the

fuller utilization of existing schemes, including, for example through the simplification of rules of origin.

The developed countries shall ensure that adequate steps will be taken to remedy the disproportionate adverse

effects on non-beneficiaries by any measures agreed in this regard.

REATMENT OF

EMBERS MOSTLY AFFECTED BY A TRADE SOLUTION

- Proposal by Sri Lanka

(Room document of 16 June 2006)

As it has proposed by some Members

, a longer implementation period for the reductions, affecting tariff

lines sensitive to preference erosion, becomes a part of modalities; steps should be taken to remedy its

adverse effects, at a disproportionate level, on some non-beneficiaries of preferences. The Secretariat paper

identifies, in the case of the United States, small group f countries with such disproportionate impact

To minimize the adverse impact on non-beneficiaries whose exports under “tariff lines sensitive to the

preference erosion”, to the particular developed country market, cover Y% of total exports should be

provided preferential access

to that market, from the beginning of the implementation period.

ACP and NAMA-11.

These include Bangladesh, Cambodia and Sri Lanka. The share of exports of the 22 most sensitive

products form the ACP list to the United States consists of over 48.2% for Sri Lanka, 52.9% for Bangladesh and

59.4% for Cambodia.

Most favourable non-reciprocal preference extended to ACP member with similar rules of origin.

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Page 29

VIII.

NON-AGRICULTURAL ENVIRONMENTAL GOODS

Option 1: Proposal by Canada, the EC, New Zealand, Singapore, Switzerland and the

United States

(Room document of 14 June 2006)

Further to paragraph 31(iii) of the Doha Ministerial Declaration we agree to eliminate tariffs on

environmental goods as soon as possible, but no later than 2008 for developed countries and those developing

countries declaring themselves in a position to do so. For other developing countries, tariffs should be

eliminated by X years thereafter. Further flexibilities for developing countries may include exclusions for a

limited number of products (e.g., similar to a “complementary” or “development” list). "

Option 2: Proposal by the NAMA-11

(Room document of 16 June 2006)

The Committee on Trade and Environment in Special Session (CTE-SS) is addressing the mandate contained

in paragraph 31 of the Doha Declaration with a view to enhancing the mutual supportiveness of trade and

environment. Without prejudging the outcome of the negotiations, this could be achieved by means, inter

alia, of the CTE-SS agreeing on approaches to the reduction or, as appropriate, elimination of tariffs and no-

tariff barriers to consensually defined environmental goods and services.

While encouraging the Negotiating Group on NAMA to work closely with the CTE-SS on relevant issues,

Ministers note that treating environmental goods in the NGMA before the CTE-SS has fulfilled its mandate

would amount to prejudging the outcome of negotiations under paragraph 31 iii.

__________