Doha Round Meeting Fails - Sectoral Proposals Move to Center Stage

On July 29, after nine days of meetings in Geneva, Switzerland, trade ministers gave up on their efforts to forge a consensus on modalities for the Doha Round agricultural and non-agricultural market access (NAMA) negotiations at this time.
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WASHINGTON, D.C. – On July 29, after nine days of meetings in Geneva, Switzerland, trade ministers gave up on their efforts to forge a consensus on modalities for the Doha Round agricultural and non-agricultural market access (NAMA) negotiations at this time. The breakdown occurred at the end of three long days in which the small group of “G-7” countries (United States, European Union, Brazil, Australia, Japan, China and India) were unable to overcome the opposition of two of its members -- India and China -- to pending proposals on a special safeguard mechanism for agricultural imports.

Assuming the breakdown in the Doha Round talks is a temporary one, SGMA members can take some comfort in two developments from these meetings. First, there was a broad consensus that much was accomplished at this trade ministerial meeting and that the outline of a final deal on modalities was within sight. Significantly, Brazil broke ranks with India and China as a major opponent to a more ambitious market access package in the NAMA negotiations and this could bode well in future negotiations.

Second, U.S. and EU negotiators steadfastly refused to accept a NAMA modalities package that did not include a strong sectoral element. This is important to SGMA because one of our top negotiating objectives is to secure a sectoral tariff elimination agreement on sports equipment, which is one of 14 sectoral proposals under consideration. The representations made by SGMA and other pro-sector groups helped contribute to the strong U.S. and EU stances on sectoral negotiations, marking a significant improvement from U.S. negotiating positions earlier in the Doha Round and a remarkable improvement from the EU's previous lukewarm position on sectoral talks.

As reported, the pending sports equipment proposal -- which is formally backed by the United States, Taiwan, Norway, Switzerland and Singapore -- calls for a “critical mass” of WTO members representing no less than 90 percent of global trade in sports equipment to participate in the sectoral agreement. Under the proposal, the United States and other developed countries would be expected to eliminate their tariff on sports equipment in equal installments over a period of five years, while developing countries would be allowed the flexibility of longer implementation periods for some product categories within the sector.

As urged by SGMA, the proposal covers nearly all sports equipment categories under HS 9506. However, the proposal fails to include most sports balls other than those for golf, table tennis and lawn tennis, and SGMA continues to work with U.S. negotiators to try to ensure that no sporting goods categories are excluded from a final agreement.

There was progress on sectoral agreements with India softening its position and Brazil agreeing with more of the G7 countries on access issues. However, China dashed all hope for progress with new demands. For the first time, India began engaging in substantive negotiations over the language on sectorals, pressing for developing countries to be given the ability to exclude sensitive tariff categories, receive longer phase-in periods, and not be required to completely eliminate tariffs. China sought the addition of language highlighting the voluntary nature of sectoral negotiations and objected to language saying the goal of sectorals was to reach a “critical mass” of participation, mindful that the critical mass objective would be difficult to reach in most sectors without participation by China. The Chinese conditions were unacceptable to the group.

“SGMA is disappointed that our effort to eliminate tariffs on sporting goods products worldwide has been derailed by differences on agricultural issues,” said Bill Sells, SGMA's Vice President of Government Relations. “SGMA is encouraged by increased attention to sectoral tariff relief, including sporting goods, and is committed to the goal of tariff relief on a global basis.”

Trade ministers' failure to reach a consensus on negotiating modalities at this meeting means the Doha Round will not be concluded this year. Trade ministers have asked for a brief time to reflect on this trade ministerial meeting before taking up the question of how best to resume the Doha Round negotiations in the future.

The Sporting Goods Manufacturers Association, the owner of the Sports Research Partnership, is the global business trade association of manufacturers, retailers, and marketers in the sports products industry. SGMA enhances industry vitality and fosters sports, fitness, and active lifestyle participation. More information about SGMA can be found at www.sgma.com.

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