Poor nations set high bar at World Trade Organisation

GENEVA – A group of big developing countries said on Thursday they would only cut their tariffs for industrial imports by a lot less than reductions sought by the European Union and the United States.

The move underlined how deep differences remained between leading players at the World Trade Organisation who met in Geneva last week in an attempt to save the WTO’s Doha round. The 11 big developing countries – including Brazil, India, Indonesia, Egypt and South Africa – said in a statement they were being asked to make cuts of 60-70 per cent to their industrial goods tariffs, far more than rich countries whose tariffs are already generally low.Countries such as Brazil fear that big cuts to such tariffs would threaten entire sectors of their economies, such as local car manufacturing or chemicals.But the US and the EU want to see those kinds of markets opened up in return for scaling back some of their barriers to trade and subsidies in agriculture, a key export sector for many developing countries.Subsidies were declared illegal in manufacturing trade years ago.In their statement on Thursday, the developing countries said the coefficient used for cutting their industrial tariffs should be at least 25 points higher than that used for developed countries.The EU and the US, backed by other developed states such as Japan and Switzerland, have been pushing for a differential of just five points.Under an agreement already reached at the WTO, industrial tariffs will be cut according to a so-called ‘Swiss’ formula under which the number of the coefficient acts as both the ceiling for future duties and determines the depth of cuts.The US and the EU want a coefficient of 15 for developing countries and 10 for developed countries, saying numbers above 15 would deny new access for their exporters to some of the world’s fastest-growing markets.On Wednesday, the WTO’s Director-General Pascal Lamy suggested a coefficient of 20 could be part of a possible solution to unblock the negotiations.-Nampa-ReutersThe 11 big developing countries – including Brazil, India, Indonesia, Egypt and South Africa – said in a statement they were being asked to make cuts of 60-70 per cent to their industrial goods tariffs, far more than rich countries whose tariffs are already generally low.Countries such as Brazil fear that big cuts to such tariffs would threaten entire sectors of their economies, such as local car manufacturing or chemicals.But the US and the EU want to see those kinds of markets opened up in return for scaling back some of their barriers to trade and subsidies in agriculture, a key export sector for many developing countries.Subsidies were declared illegal in manufacturing trade years ago.In their statement on Thursday, the developing countries said the coefficient used for cutting their industrial tariffs should be at least 25 points higher than that used for developed countries.The EU and the US, backed by other developed states such as Japan and Switzerland, have been pushing for a differential of just five points.Under an agreement already reached at the WTO, industrial tariffs will be cut according to a so-called ‘Swiss’ formula under which the number of the coefficient acts as both the ceiling for future duties and determines the depth of cuts.The US and the EU want a coefficient of 15 for developing countries and 10 for developed countries, saying numbers above 15 would deny new access for their exporters to some of the world’s fastest-growing markets.On Wednesday, the WTO’s Director-General Pascal Lamy suggested a coefficient of 20 could be part of a possible solution to unblock the negotiations.-Nampa-Reuters