Update from Hong Kong: Non-Agricultural Market Access (NAMA)

Background on NAMA

World exports of non-agricultural goods totaled $8.6 trillion in 2004, accounting for over 90% of total world merchandise exports. Merchandise trade is growing rapidly, up 48% since the Doha Round began in 2001. Developing countries are sharing in that growth, in fact increasing their share of world merchandise trade to 31% in 2004, the highest level since 1950.

Improving market access across agriculture, manufacturing and services is the most effective way to unleash the potential of the Doha negotiations for development. The NAMA negotiations aim to remove barriers to trade in industrial and consumer goods.

Results from Hong Kong

The NAMA text coming out of Hong Kong locks in progress since the July 2004 Framework and tops-up that progress in a few key areas. The text also reaffirms the key role of liberalizing sectoral tariffs and reducing non-tariff barriers to trade.

In Hong Kong, Members reaffirmed the goal of reducing or eliminating tariff peaks, high tariffs and tariff escalation. Members agreed that this should be achieved partly through a harmonizing (Swiss) tariff cutting formula. The exact structure and details of the formula will be worked out in tandem with market access solutions in agriculture. The United States seeks to level the playing field for U.S. businesses. Average WTO-legal U.S. industrial tariffs are 3.2% as compared with 30.8% for all WTO Members.

Work on sectoral tariff liberalization has gained momentum over the past year. WTO Members are pursuing sectoral discussions in a variety of global industries that represent key economic building blocks. The discussions have increasingly involved a mixture of developed and developing countries from every trading region. This creates a solid platform for interested Members to negotiate the specifics in 2006.

Negotiators provided a boost to the important efforts to reduce or eliminate non-tariff barriers by recognizing the work accomplished to date and calling for introduction of detailed negotiating proposals early in the new year. This sets the stage for the United States and other governments to address the variety of NTBs that impede market access for global industries such as automobiles, electronics and wood products, barriers that often are as damaging and more trade- distorting than the remaining tariffs. It also opens up the door to push for agreement on new horizontal rules to free up trade in remanufactured goods.

For reference, world exports of non-agricultural goods totaled $8.6 trillion in 2004, accounting for over 90% of total world merchandise exports. Merchandise trade is growing rapidly, up 48% since the Doha Round began in 2001. Developing countries are sharing in that growth, in fact increasing their share of world merchandise trade to 31% in 2004, the highest level since 1950.