HON. PETER FAVILA
Secretary
Department of Trade and Industry
Dear Secretary Favila,
We are alarmed over reports of a possible compromise deal on Non-agricultural Market Access (NAMA) negotiations. The latest proposal from developing countries led by Chile for a "middle ground" solution represents a serious break from the position of NAMA 11 of which the Philippines is an active member.
It is clear that the United States and the European Union want to squeeze as much as they can from developing countries on NAMA as pay back for what they claim to be their own concessions in agriculture, concessions that many analysts feel are not even enough to level the playing field in agriculture. It is clear that the US and EU want an ambitious NAMA formula in order to pry open the market for industrial and fisheries sector in developing countries.
The new NAMA proposal coming as it were in the aftermath of the collapse of the G4 meeting in Potsdam, and which is projected as an initiative from developing countries plays dangerously into the strategy of the US and EU. This is exactly the opening that the US and EU were hoping for in Potsdam. The proposal hands the compromise to them in a silver platter.
The call from the new proposal for more flexibility and compromise should be seriously challenged. In Hong Kong, developing countries have already made a huge compromise when they agreed to adopt the ambitious Swiss formula for tariff reductions. Under an ambitious formula, developing countries would absorb close to 70% cuts in their industrial and fishery tariffs as opposed to the measly 25 % cuts for developed countries. Simulations done by both the WTO and international trade unions have already provided us a picture of the possible consequences on jobs and revenues under an ambitious NAMA agreement.
A coefficient for developing countries in the high teens would be a murderous compromise on the part of the Philippines. Such an ambitious formula would result in a substantial reduction of our average bound rates for industrial and fishery products and would constitute a serious erosion of our policy space. Sectors that would be adversely affected include the automotive sector, apparel, plastics, leather products and footwear, and the furniture sector which would all absorb cuts not just in bound rates but in actual applied rates. Huge cuts on bound rates would be felt in rubber products, fabricated metals, wood and wood products, and paper and paper products.
A compromise deal on NAMA would compromise jobs. Job losses could be expected in the motor vehicles sector, which employs around 39,000, the apparel sector with an even bigger employment of 370,000, the leather and footwear sector with 69,000 workers, furniture sector with 143,000 workers and plastic products which provides jobs to 54,000 workers.
We do not need to remind you that central to the NAMA 11 position is the demand to put the development objective at the heart of the NAMA negotiations. The compromise deal on NAMA undermines this very objective.
We challenge you now in this most critical time in the negotiations to exhibit leadership in NAMA 11. We challenge you to be the leading developing country voice in NAMA 11 in calling for the rejection of the new NAMA proposal.
"No deal is still better than a bad deal" Mr. Secretary and in the interest of Filipino workers, we hope that this is still your guiding principle.
Stop the New Round! Coalition
Akbayan
Alliance of Progressive Labor (APL)
Alternate Forum for Research in Mindanao (AFRIM)
Association of Genuine Labor Organization (AGLO)
Bukluran ng Manggagawang Pilipino (BMP)
Coalition Against Trafficking in Women - Asia Pacific (CATW-AP)
Confederation of Independent Unions in the Public Sector (CIU)
Convergence for Community Centered Area DevelopmentFocus on the Global South - Philippines
Freedom from Debt Coalition (FDC)
Global Network Asia
International Gender and Trade Network - Asia
Kilusang para sa Pambansang Demokraysa
Kongreso ng Pagkakaisa ng Manggagawa sa Pilipinas (KPMP)
Labor Education and Research Network (LEARN)
Liga Manggagawa
Makabayan - Pilipinas
Manggagawa para sa Kalayaan ng Bayan (MAKABAYAN)
Pambansang Katipunan ng Malayang Magbubukid - PKKM
Philippine Metalworkers' Alliance (PMA)
Philippine Rural Reconstruction Movement (PRRM)
Resource Center for People's Development (RCPD)
Women and Gender Institute (WAGI)
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