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Ongoing WTO Negotiations and the Issue of Preference Erosion: Concerns of Asia-Pacific LDCs

ongoing WTO

The ongoing WTO negotiations on non-agricultural market access (NAMA) aims at (a) reducing tariffs on industrial products, including reduction or elimination of tariff peaks, high tariffs and tariff escalation and (b) eliminating (or accelerating reduction of) all tariffs in particular sectors (the so-called sectorals). Even if tariff reductions are based on bound rates, as specified in the July Framework, tariff reduction commitments are expected to lead to a lowering of most-favoured nation (MFN) tariffs, since the spread between bound rates and applied rates for most industrial products imported by the developed countries is not significant. Therefore, the reduction of MFN tariffs under the current NAMA negotiations is likely to have important adverse implications for the least developed countries (LDCs) in the form of preference erosion.

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