The Simulation Results

Original Publication Date: 
6 March, 2006
Geneva - Trade envoys from some major countries yesterday demanded the circulation of simulation exercise results based on the different tariff-reduction proposals in Doha Development Agenda market access negotiations for farm products and industrials, WTD has learned (see related report this issue).

The simulation run by the United States in nonagricultural market access on the basis of a "Swiss" formula with four coefficients for industrialized countries and six coefficients for developing countries along with the so-called Argentina/Brazil/India formulation revealed that developing countries would cut their industrial tariffs more than industrialized countries. That finding, said one source, stood the less-than-full-reciprocity principle on its head.

During a meeting of select trade envoys gathered by World Trade Organization Director General Pascal Lamy yesterday, some pressed for publishing the results so everyone can get a full picture of what members will have to do on the basis of the July 2004 framework agreement, sources added.

Senior trade officials from the United States, the EU, Brazil, India, Australia, Japan, Canada, Malaysia, Egypt, Norway and Kenya are expected to discuss the simulation results during a meeting at the US mission today.

Results were based on tariffs from 10 countries used in the simulation based on four coefficients 2, 5, 10, and 15 for industrialized countries, six coefficients 15, 20, 25, 30, 35 and 40 and on the alternative ABI framework.

The simulation exercises were agreed among the group of ten countries the United States, the EU, Brazil, India, Australia, Japan, Canada, Malaysia, Egypt and Norway last month to get a clearer picture of the resulting tariff-reductions both in Doha farm market access and market-opening for industrials.

'Friends of Ambition'

The United States, the EU, Canada, Japan and Norway who led the "Friends of Ambition" in the NAMA negotiations repeatedly maintained that the alternative ABI framework in which a coefficient is arrived at by taking an average of a country's bound tariffs * is inequitable since it effects bigger cuts for industrialized countries than the developing countries. The "Friends" argued that members must accept a simpler "Swiss" formula with two coefficients with values close to each other to bring effective market access benefits for all nations.

But the ABI Group insisted that tariff reductions for developing countries would be much higher than what was spelled out in the 2004 Framework agreement.

US trade officials refused to comment on the exercise. But one Brazilian official told WTD that the results from all the current proposals show developing countries taking deeper cuts than their industrial counterparts. The less-than-full-reciprocity principle requires industrialized countries to take higher reduction commitments in industrial products than the developing countries.