Reclaim development in WTO-NAMA, FTA said

THE multisectoral Fair Trade Alliance (FTA) urges government to reclaim development in the ongoing World Trade Organization (WTO) – Non Agricultural Market Access (NAMA) negotiations.

FTA felt distressed that the ‘briefings’ conducted by the Department of Trade and Industry (DTI) for business and civil society representatives on the NAMA trade talks covered only two items namely: the identification of the tariff items from the five vulnerable sectors (fishery, footwear, petrochemicals, iron and steel, and automotive parts) that should go into the list of the 253 sensitive products, which shall make up the 5 per cent of the unbound items as provided for under Paragraph 8 of the July 2004 Framework Agreement (should such 5% be the final figure for the percentage exceptions allowed), and the likely NAMA modalities – a 25 per cent coefficient for the Swiss tariff reduction formula to be applied on all bound items, and a 25 per cent mark-up for the 1,000 or so items still to be bound.

FTA pointed out that there are items that have not been taken up like the demand of the Philippines and other developing countries to be credited for undertaking autonomous liberalization by being granted a higher Swiss coefficient. Also not discussed were efforts of the Philippine Mission, in league with other members of the NAMA 11, to push for a much higher coefficient, of at least 35 per cent, for developing countries and a much lower coefficient, of around 5 per cent, for the developed countries.

According to FTA, 40 per cent coefficient would drastically reduce tariffs of developing countries, with their high tariff averages, by almost the same percentage; in contrast, a 10 per cent coefficient would reduce those of developed countries, with their low average tariffs, by only a little over 20 per cent.

Based in the estimation by FTA, the Philippines needs a much higher coefficient of around 90 per cent and a mark-up for the unbound items by almost the same percentage to be able to have some tariff policy space equal or similar to those of other developing countries with high tariff averages.

A 90 per cent mark-up for the unbound items shall give the Philippines a tariff binding rate of roughly 23.4 per cent should the assumed coefficient be 30, while a 90 per cent coefficient shall reduce the bound tariffs to 18.50 per cent, which still represents a 20 per cent reduction. Otherwise, at 25 per cent or lower coefficient, the Philippines shall oddly find itself in the company of the developed countries which have both very low tariffs and very competitive industries.

Moreover, according to FTA, a clear and strategic vision of agro-industrial development is what has been missing.

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