Call for early trade deals in key sectors

Date: 23/09/1999

By Renée Cordes

EUROPEAN manufacturers are stepping up pressure on negotiators to conclude early agreements eliminating tariffs in eight key industrial sectors during the forthcoming world trade talks.

Toy makers, in particular, are worried that if negotiators do not adopt a sector-specific approach - known as Accelerated Tariff Liberalisation (ATL) - to the talks, they will continue to face high duties in some of their largest export markets for several more years.

"The next round will likely take some years to conclude, during which time industry will have to wait. We do not want these sectors to be held hostage to the whole round," said Maurits Bruggink of the Toy Industries of Europe (TIE), who pointed out that it took eight years to conclude the Uruguay trade round. "The world trade climate is not very favourable at the moment. Why not start a round with some good news?"

Europe's toy lobby argues that although tariffs on their products are relatively low in some export markets, most countries still impose high duties. For example, Argentina imposes levies as high as 27% on toys and India 35%.

Lobby groups representing the chemicals, energy, environment, fish, medical equipment, gems and forestry sectors are also pressing for early sector-specific tariff agreements.

But industry faces an uphill battle to convince the European Commission to endorse the ATL approach in Seattle. In its communication outlining its objectives for the upcoming trade round, the EU executive emphasises that the results "should be adopted in their entirety and apply to all WTO members," signalling its opposition to clinching early deals in some areas. "This principle of a single undertaking constitutes the only guarantee of benefits of a round to all members and the best means to ensure an end result acceptable to all."

A Commission official said it would be more effective to focus on sectors with the highest tariffs rather than the campaigning for early deals. "If you take out the eight sectors, they are sectors in which the US and other countries are very competitive," he said. "But you may lose sight of other sectors where tariffs are very high and this could lead to a less sensible tariffs structure."

But Europe's toy makers are hopeful the new Commission will be open to the idea of concluding early agreements in some areas given that in the last round, negotiators signed separate deals on the information and financial services sectors.

They also argue that sector-specific accords could be linked to the final outcome of the trade talks, thereby supporting the Commission's overall objectives for the entire round. In addition, they point out that members of the Asia-Pacific Economic Cooperation (APEC), both developed and developing countries, have successfully taken the ATL approach for a number of years.

European manufacturers are stepping up pressure on negotiators to conclude early agreements eliminating tariffs in eight key industrial sectors during the forthcoming world trade talks.