WORLD TRADE
ORGANIZATIONTN/MA/W/31
25 March 2003
(03-1702)
Negotiating Group on Market Access Original:  English
MARKET ACCESS FOR NON – AGRICULTURAL PRODUCTS
Communication from Egypt, India, Indonesia, Kenya, Malaysia, Mauritius,
Nigeria, Tanzania, Uganda and Zimbabwe
The following communication, dated 14 March 2003, has been received from Egypt, India,
Indonesia, Kenya, Malaysia, Mauritius, Nigeria, Tanzania, Uganda and Zimbabwe.
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At Doha, the Ministers placed the needs and interests of developing countries at the heart of
the work programme adopted by them. The Ministers stressed that positive efforts were required toensure that developing countries, and especially the least developed among them, secure a share in
world trade commensurate with the needs of their economic development. Furthermore, paragraph 16
of the Doha Declaration explicitly states that enhanced market access should be provided in particular
on products of export interest to developing countries, and that negotiations shall fully take 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 of GATT 1994.  It further states that modalities will include
appropriate studies and capacity building measures to assist least-developed countries to participate
effectively in the negotiations.
To implement the Doha mandate fully it is impe rative that these specific elements of the
Declaration are fully given effect to and built into the negotiating modalities. At this juncture in the
negotiations, the group of developing countries sponsoring this paper would like to bring particular
focus to these aspects through this written response to the questions posed by the Chairman of the
Negotiating Group in Job (03)/27 dated 12
th February 2003. The Group of developing countries would
also like to reserve their right to present additional submissions / positions as considered appropriate.
1.  Product Coverage: Comprehensive without a priori  exclusions. However as an S&D measure
there should be flexibility for developing countries in calibrating the level of reductions for certain
bound tariff lines that are considered sensitive. In respect of currently unbound tariff lines, while the
negotiations could bring about significant increase  in the binding coverage flexibility should be
provided for them to continue to keep certain domestically sensitive tariff lines as unbound.
2. Elimination of Tariffs: At Doha, Ministers agreed that the negotiations will aim to ‘reduce or
as appropriate  eliminate tariffs…’ [emphasis added]. During discussions in the NGMA, some
members referred to elimination of tariffs as a desirable objective of the negotiations.   It will be
difficult for developing countries to accept the elimination of all tariffs as the objective of thesenegotiations even in an extended time frame. The relative level of development of their domestic
industry and their infrastructural and other handicaps makes it important that tariffs as an instrument
of domestic industrial policy is available to them for several years to come. In the case of several
developing countries, revenue from customs tariffs also forms a significant share of their overall
revenue, which goes to meet their developmental expenditure. Alternative forms of taxation will take
long periods of time to become available and supplement and replace the loss of customs revenue.
Elimination of tariffs would imply significantly deeper concessions by developing countries, whichTN/MA/W/31
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would be contradictory to the principle of less than full reciprocity and negate the development
dimension of the Doha round.
3. Core modality: Discussions in the NGMA have shown that a formula approach is the
preferred one. However, it is also clear that such an approach must build in the concept of less than
full reciprocity in reduction commitments in so far as developing countries are concerned. The several
approaches proposed on the basis of a Swiss – type formula impact more heavily on tariff structures
of developing countries and hence are inappropriate. The argument for the harmonization of tariff
structures of Members is not a valid one since it is not specified in the mandate. Instead a linear
percentage reduction, in our view, would be mo re suitable for implementing the Doha mandate.
In formula approaches one way to achieve the concept of less than full reciprocity lies in the
adoption of differentiated rates of reduction for developing and developed country participants. In the
linear formula we can prescribe a higher percentage reduction for individual tariff lines in respect of
developed countries and a lower percentage average reduction set for developing countries with
minimum cuts on individual tariff lines. Developing countries may also be given some flexibility to
decide on the level of binding of individual tariff lines, on the understanding that the overallpercentage reduction as stipulated for them is achieved. For unbound tariff lines, developing country
members should have the flexibility to bind them at levels generally above the highest bound rate
prevailing for bound items in a country’s current tariff schedule or at the applied rates as of a cut off
date whichever is higher.  In exceptional cases, bindings should be permitted above these levels also.
Reduction commitments agreed upon would not apply to tariff lines so bound.
No core modality would be complete unless it specifically addressed products of particular
export interest to developing countries in developed markets where there is a prevalence of tariff
peaks. This aspect is explicitly provided for in th e mandate. This can be achieved by building into the
core modality a commitment that no presently bound tariff line after tariff reduction shall exceed threetimes the average of the reduced bound tariffs in a Member’s tariff schedule. However, developing
country members shall, in this regard, have some flexibility and undertake minimal cuts in respect of
items considered sensitive by them, which will be in accordance with the principle of less than full
reciprocity specified in the mandate.
4. Supplementary approaches: Supplementary approaches should be considered only after the
Negotiating Group has finalized the core modality for tariff reduction. In any case, the participation in
supplementary approaches shall be on a voluntary basis to achieve reductions over and above the
reductions obtained through the core modality and not instead of them.  This is because participation
of developing countries in approaches like ‘zero for zero’ or ‘harmonization of tariffs’ will not bring
commensurate benefits to them as they requir e these countries to take relatively more onerous
commitments. Furthermore, even if such approaches are undertaken on a voluntary basis but with theproviso that these could be in lieu of full compliance with the core modality by developed countries,
this would seriously disadvantage developing countri es in the overall balance of concessions as such
approaches could be sought to be pushed in sect ors of little interest to developing countries.
5. Elimination of low/nuisance duties: Elimination of low/nuisance tariffs has a negligible
impact on effective additional market access and, therefore, should not be considered as a concession
equivalent to reduction of higher tariffs.
6. Tariff peaks, tariff escalation and high tariffs: This is an integral part of the mandate. The core
modality needs to be so designed that it shall be effective in addressing these issues as pointed out at
paragraph 3 above.
7. Bindings/binding coverage: While calling for a significant increase in binding coverage
would be an appropriate objective, developing countr y members would need to retain some flexibilityTN/MA/W/31
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to continue to maintain certain unbound tariff lines, which are domestically highly sensitive or
strategically important, as unbound.
8. Binding overhang: This concept is extraneous to the mandate and to the tradition of
GATT/WTO negotiations.  Any move to address the issue would imply taking into account the
applied rate in the negotiations. This would not be appropriate since the rights and obligations
negotiated in the last round were with reference to the bound rates.
9. Base Rates: Bound rates at the end of the implementation period of the UR are the last
negotiated commitments undertaken by Members in the UR. Accordingly these are the only legitimate
starting points for further reductions as base rates. For unbound tariff lines, developing country
members should have the flexibility to bind them at levels generally above the highest bound rateprevailing for bound items in a country’s current tariff schedule or at the applied rates as of a cut off
date whichever is higher.  In exceptional cases, higher bindings should be permitted.   Such newly
bound rates would not be subject to reduction commitments agreed upon.
10. Base Year: The base year should be the one for which data is available for a majority of the
members.11. Nomenclature: HS 96 could be used in the negotiations with the understanding that the results
of the negotiations would be published in HS 2002.
12. Implementation and staging: There is a general recognition that developing countries should
have longer staging periods as an S&D measure.  To this end, a ten-year period would be appropriate
for developing countries and a five-year period for developed countries.
13. Credit for autonomous liberalisation: Credit should be given for all liberalization in tariffs
undertaken by Members since the Uruguay Round on an autonomous basis and not as a result of a
negotiating process, and which has been bound in the WTO.
14. Non ad valorem  duties: A common agreed methodology should be adopted for the calculation
of such rates.   In this respect, it would be useful if the Secretariat could prepare background
information on the possible options.  Additionally, during the negotiating process, members shall
commit to converting all their specific and mixed duties into ad valorem tariffs without exception.Developing countries should however have the flexibility to retain non- ad valorem  rates for upto 3%
of the total tariff lines in their national nomenclature.
15. Simplification of tariff structure: Tariff structures reflect the level of development of
members and their developmental priorities.  Hence the objective of proposals in this regard is not
very clear. Further, it is not a part of the mandate.
16. Export Taxes: Export taxes and export restrictions are not a part of the mandate for the
current negotiations and as such should not be dealt with in this negotiation.
17. Initial negotiating rights: This could be addressed once the modality has been agreed upon.
18. Erosion of preferential margins: MFN tariff reductions could have an adverse impact on
preferences enjoyed by developing countries in developed country markets. This impact may not be
felt equally by all developing countries. It is crucial that the Negotiating Group explore fully this issuewith a view to developing an appropriate  mechanism to respond to such situations.
19. New acceded members: The Group is examining this issue and may submit its views in due
course.TN/MA/W/31
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20. Least Developed Countries: The problems and constraints of least developed countries and
their developmental needs and concerns should be taken fully into account during the negotiations.
They should not be expected to undertake tariff reduction commitments or increase binding coverage
that are not commensurate with their level of deve lopment.   Some of the suggested solutions for
possible loss of market access for erosion of prefer ential margins including compensatory mechanism
for the export losses and easing of stringent Rules of Origin to expand the exportable products basket
shall be favorably considered.  Developed countries shall provide duty-free and quota free access for
all the products of LDCs.  Capacity building programmes envisaged in the Doha mandate shall be
tailored to their specific needs.
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