Negotiations ended tonight with general agreement on a set of numbers for agriculture and industrial goods (NAMA) that had been proposed by WTO Director General Pascal Lamy earlier in the day. Not all countries agreed, but most did, and so the Green Room members have decided to put this text aside for now, and to work on the remaining issues. Tomorrow there will be a meeting on services, called a "signalling conference." On Sunday there will be another Green Room meeting on agriculture and NAMA to get agreement on the remaining issues.
So what is in the Lamy compromise?
The document may look like a set of incomprehensible figures, but there is a lot of important stuff in there. On agriculture, the U.S. is being asked to reduce its ceiling of trade-distorting support to US$14.5 billion, down from its $15 billion offer earlier in the week. Developed countries will start cutting their agricultural tariffs at 70 percent and developing countries will start cutting their tariffs at 47 percent (two-thirds of the developed countries). Developed countries are being given a flexibility of up to 6 percent of tariff lines for sensitive sectors. Developing countries are being given 12 percent of tariff lines to safeguard food and livelihood security and rural development. Developing countries will have to cut these tariff by on average 11 percent, and they will be able to shield 5 percent of these lines from any tariff cut. There are also further details for the Special Safeguard Mechanism, which is a tool available to developing countries in case of import surges.
On industrial goods or NAMA, developed countries will have to reduce their industrial tariffs to under 8 percent. Developing countries have to reduce their industrial tariffs to between 20 and 25 percent. Depending on which level they choose they will be given flexibility to exempt some tariff lines from the tariff cut. But, developing countries will not be able to exempt entire sectors from the tariff cut. So for example, they will not be allowed to exempt the entire automobile sector from a tariff cut, but they would be able to exempt some products, like the engines, the car body and the car seats. Developing countries are also strongly requested to participate in negotiations to eliminate tariffs on certain sectors. If they participate in these so-called "sectoral initiatives" they will be allowed to cut their tariffs less.
The compromises being made so far to reach this agreement are killing any chance for a successful development round. The result is a complicated mess, reflecting a narrow set of commercial interests, rather than a vision to reform the trading system. So far, this deal fails on nearly every count to reach the Doha Round's original goals.
