The WTO Doha Round—JAMA welcomes the general agreement reached on
1 August 2004
Following the failure of the Cancún Ministerial meeting in September 2003, WTO Members found a general agreement for reviving the stalled talks of the Doha Development Round. The accord, reached by the World Trade Organisation’s 147 members on the night of
1 August 2004
, commits rich countries to cutting billions of dollars in trade-distorting farm subsidies and paves the way for more open markets for agricultural products, industrial goods and services worldwide. While positive, the agreement should however include more concrete measures for further liberalisation of market access for non-agricultural products (NAMA).
JAMA welcomes and supports the agreement reached on 1 August as it believes that the current negotiations on the WTO Doha Development Agenda provide a unique opportunity to increase the liberalization of trade on industrial goods, mainly through the elimination of both tariff and non-tariff barriers (NTBs). The elimination of those barriers on industrial goods would have significant economic benefits. According to the World Bank, it would result in global income gains of $500 billion, three quarters of which would be realised in developing countries, and lift more than 300 million people out of poverty by 2015.
Despite the fact that international trade in vehicle and parts accounts for 8.3% of the value of world trade, Tariff Barriers and NTBs currently represent a significant deterrent to the liberalization of trade and investment in the sector globally. Effectively addressing Tariff Barriers and NTBs affecting this trade will result in significant benefits in both developed and developing countries (e.g. growth in automotive exports and greater investment opportunities for new products, technologies, training and management expertise).
With regards to Tariff Barriers, and in order to maximise the potential international trade benefits, JAMA encourages WTO negotiators to consider all practical and effective means to achieve agreement on tariff elimination with regards to motor vehicle trade, at least on part of all developed countries (e.g. tariffs on passenger car imports). However, the text of the August Agreement is practically identical to the previous version, which was agreed at the Cancún Ministerial meeting in September 2003, and does not include any concrete measure for further liberalization of market access for non-agricultural products (NAMA).
JAMA encourages consideration of all practical and effective means to achieve agreement on tariff elimination covering as much motor vehicle trade as possible. In particular, it would support an active examination of mechanisms that would focus on the motor vehicle sector and aim at a rapid voluntary elimination of the remaining tariffs in this sector in developed countries.
In parallel with effective actions on tariffs, it is important to also tackle NTBs in the most efficient manner. In this context, JAMA welcomes the general commitment to reduce NTBs, as highlighted in the August agreement. NTBs are also a threat to international motor vehicle trade, equally as important as Tariff Barriers. In the automotive sector, NTBs cover a wide range of measures such as importing licensing and quotas, discriminatory taxes, charges and fees, and intellectual property rights. Many are intended to meet domestic policy goals, but have been implemented in ways that effectively act as NTBs. Overall, NTBs are to be considered one of the most significant barriers to the free flow of trade and investment in the automotive industry in today’s global economy.
JAMA calls on the WTO negotiators to consider both TBs and NTBs equally, without focusing only in the reduction of tariffs and the elimination of tariff peaks. Given the value of the world trade in motor vehicles/parts and the potential benefits of eliminating distortions from continuing Tariff Barriers and NTBs, it seems essential to actively consider all potential modalities to reduce and preferably eliminate them, as broadly as possible and consistent with the