Summary of WTO Ministerial Declaration
Summary of WTO Ministerial Declaration December 18, 2005
Summary: After a week of sometimes contentious negotiations, WTO members agreed to a Declaration of the Sixth WTO Ministerial Conference in Hong Kong on December 18, 2005. Once negotiators reached a breakthrough on a deadline for eliminating agricultural export subsidies by 2013, negotiators were able to make some progress in other areas such as non-agricultural market access (NAMA), services and rules.
NAMA: Under the non-agricultural market access (NAMA) negotiations, the declaration calls for 1) a Swiss tariff cutting formula which cuts high tariffs more than low tariffs, 2) multiple coefficients in the formula (likely to be an ambitious coefficient for developed countries with a less ambitious coefficient for developing countries), and 3) sectoral negotiations. The declaration also calls for a parallel level of ambition and progress to be made on market access negotiations for both agricultural and industrial goods. This will help to ensure a high level of ambition in both market access areas and also will help developing countries which have a difficulty in agreeing to concessions in NAMA without knowing the results in agricultural market access. Other key provisions call for continued work on nontariff barriers, duty free/quota free access for 97% of all goods originating from least developed countries, and full negotiating modalities to be agreed upon by April 30, 2005.
Benefit to the Medical Device Industry: Most important to the medical device industry is the inclusion of a sectoral negotiating component in the ministerial declaration. The medical device industry achieved an agreement in the last trade round to eliminate tariffs on some medical devices, which is estimated to have saved the industry $1 billion a year globally. However, it applied only to developed countries such as the US, EU, Canada, Australia and Japan, and did not cover all medical devices. The Hong Kong declaration gives industry a mandate to continue negotiations to add additional countries, since many developing countries impose import tariffs that average 10-15%, and to expand the product coverage to include items not covered under the previous tariff agreement including bandages, gauze, first aid kits, etc.
It is critical to negotiate on a sectoral basis as a complement to the tariff cutting formula to achieve additional savings. For example, sectoral agreements can bring tariffs down to zero, while a formula cannot. It is estimated that a new agreement in the current round of trade negotiations could save the industry an additional $500 million globally each year. Moreover, by amassing the key industry stakeholders in the medical device sector, we may reach consensus on ambitious reforms for medical devices that might not be acceptable to other sectors. Thus, a sectoral agreement can help patients and manufacturers fully realize the benefits of additional trade liberalization.
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