The National Association of Manufacturers (NAM), commenting from Geneva, Switzerland, said that World Trade Organization (WTO) Director-General Pascal Lamy’s suggestions on industrial trade wouldn’t produce enough market access gains to be worthwhile for U.S. manufacturers.
“Lamy’s suggested approach would have U.S. manufacturers paying a lot and getting very little,” said NAM Vice President for International Economic Affairs Frank Vargo. “A developing nation tariff-cutting formula with a coefficient of 20 just isn’t in the ‘landing zone,’” he said. Vargo called on U.S. negotiators to make that point clearly.
Vargo, in Geneva to provide close-in NAM work with U.S. government negotiators during the current WTO meetings of ministers, said, “The NAM places a very high priority on successful Doha negotiations – but ‘successful’ means getting market access gains for everyone. It does not mean a deal at any price.”
“When people talk about a ‘reduced ambition’ or ‘realistic’ deal in industrial trade, what they are saying is that advanced developing countries can keep their high tariffs while we slash ours,” said Vargo. “That’s not a deal we can accept, and we are not alone in that.” He pointed to the joint statements that the NAM and the Confederation of European Industry (UNICE) have made in recent weeks.
“We are only talking about 20 or fewer countries here,” said Vargo. “Countries like Brazil, China, and India are big players in manufactured goods trade and have high tariffs.” Vargo stressed that everyone has agreed the poorest countries don’t have to do anything if they choose not to. “It is the advanced developing countries that have to agree.”
“Let me be very candid,” Vargo said. “NAM’s calculations show that for balance, we have to see a tariff cutting coefficient of 15 or its equivalent for the advanced developing nations.” He went on to say that, “By ‘equivalent,’ we mean any coefficient larger than 15 would have to be accompanied by robust sectoral negotiations that provided a lot of market access – the higher the coefficient, the more of the lifting that will have to be done by sectorals. But, even so, a coefficient of 20 just is not going to work – there is no landing zone there.”
“While a successful Doha deal is not possible without a good conclusion in agriculture, it also isn’t possible without a good deal in industrial goods,” said Vargo. “Manufactured goods are more than 75% of world trade – we aren’t the tail on the dog.”