ITUC OnLine – July 18, 2007(1)

Brussels, 18 July 2007 (ITUC Online) : The International Trade Union Confederation (ITUC) has been sharply critical of new proposals in world trade talks on manufactured goods. The new modalities, put on the table yesterday at the World Trade Organisation (WTO) by the chair of the “NAMA” negotiations, ignore the numerous concerns that the ITUC and many of its affiliates have expressed on NAMA over the past couple of years.

“We cannot support a trade deal that systematically ignores the interests of workers worldwide and undermines the developmental needs of developing countries”, says Guy Ryder, General Secretary of the ITUC.

“We need to see a balanced outcome of the negotiations that advances development in developing countries, whereas this proposal will simply aggravate existing imbalances.”

The proposals for a “coefficient” for developing countries of between 19 and 23 will have serious impacts on employment and industrial development in a large number of developing countries at a moment when the creation of decent work poses a major challenge. A coefficient of around 20 will lead to average tariff cuts of around 60% for developing countries and will bring maximum tariff levels for all tariff lines down to levels of around 12%, a level so low as to undermine prospects for industrialisation and diversification in many developing country economies.

Previous simulations by the ITUC have shown that such low coefficients will lead to substantial cuts in applied tariff rates in developing countries that will further increase already high unemployment and underemployment levels.

In addition the proposed “flexibilities” that would allow developing countries to shield a specified number of labour intensive sectors are so minimal as to provide little protection for the workers who are vulnerable. According to ITUC calculations sectors such as textiles and clothing, leather and footwear, plastics, paper, rubber, metals, automobile and furniture will be particularly affected in terms of job losses.

The ITUC General Council, in its recent resolution of 22 June, had strongly rejected NAMA proposals based on low coefficients and very restrictive flexibilities, as are being proposed now in the draft modalities text. Many ITUC affiliates in developed and developing countries alike – including from the NAMA 11 group, the EU, US and Latin American group – have written to their ministers on several occasions to demand a more balanced outcome in NAMA. Their views are not being taken into account.

“The disconnect between the discussions on development strategies and the creation of decent work in developing countries on the one hand and the NAMA proposals as presented yesterday is enormous and cannot result in a pro-development outcome of the Doha Round,” concluded Ryder.