A key element of the Doha Development Agenda (DDA) negotiations under the WTO is the liberalization of trade in industrial products, so-called non-agricultural market access (NAMA). The mandate on the NAMA negotiations is contained in Paragraph 16 of the Doha Ministerial Declaration which aim(s), by modalities to be agreed, to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in particular on products on export interest to developing countries (WTO, 2001).
Services constitute a large and growing share of economic activity in developing countries. This is especially so in middle and upper income developing countries where the services sector makes up about 60 per cent of GDP on average. Concomitantly, many developing countries have also developed substantial comparative advantages in various services activities. Apart from its direct contribution to output, employment and export revenue, the services sector plays an integral role in terms of its links to the other parts of the economy.
Rapid advancements in Information and Communications Technologies (ICT), along with reductions in barriers to cross-border trade and factor flows, have worked in tandem to promote cross-border production sharing. This slicing of the value added chain in manufactured goods has been going on for several decades in Asia and elsewhere. However, many services activities and processes are also becoming fragmented from the actual production process and are taking place in different geographical locations, both within and outside a country.
As the multilateral process of trade negotiations stagger and founder, multiple and simultaneous negotiating rings in the regional and bilateral context have emerged. Countries embarking on regional trade negotiations no longer ask the question of ‘whether they should?’, but rather ‘with whom?’ and ‘how?’. From a theoretical context, the first question is actually far from settled, but policymakers consider it moot and academic. Although some theoretical arguments for North-South bilateral trade agreement exist, ‘With whom?’ is largely established through political decisions.
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).