Negotiating Group on Market Access
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
Japan's submission on "zero-for-zero"and "harmonization"

This proposal on zero-for-zero and harmonization which was submitted at the meeting of the Negotiating Group on 19 February 2003 .
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Negotiating Group on Market Access
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
Japan's submission on "zero-for-zero" and "harmonization"

1. Regarding the "zero-for-zero" and "harmonization" approaches, it was agreed, during the UR, to take these two approaches for 11 sectors, including paper, steel and chemicals. These approaches have achieved substantial results, which is enabling the liberalization of 70-80 per cent of imports of each sector through the participation of many Members, including developing countries. In addition, since the UR, 56 Members have participated in eliminating tariffs on information technology products and have bound the results in their Schedules.
2. In view of liberalization, Japan proposed in its submission dated 5 November 2002 (TN/MA/W/15) a hybrid approach that consists of two pillars:

i) a formula which reduces tariff rates by setting a target level of a trade weighted average tariff rate for each Member in accordance with the level of its bound rate(trade-weighted average) to address the wide disparity in tariff rates that exists among Members and

ii) the "zero-for-zero" and "harmonization" approaches among certain sectors.

3. In order to clarify matters, Japan submits herewith a further proposal for the "zero-for-zero" and "harmonization" approaches.
4. The sectors proposed by Japan account for two-thirds of the world's non-agricultural products trade, including products of export interest to developing countries, and products that are growing in the amount of trade during this decade.
5. Our empirical study indicates that if "zero-for-zero" and "harmonization" in these proposed sectors will be achieved, the GDP of the world would grow 0.24 per cent. Furthermore, it indicates that GDP would grow far large in developing countries, by 0.7 per cent.
6. As for tackling tariff peaks and tariff escalation, Japan considers that to agree on a definition for tariff peaks and tariff escalation is difficult because dispersion of average tariff rate world wide and difference of tariff structure are still large. Thus Japan would like to propose that the "zero-for-zero" and "harmonization" approaches suggested in the following sectors are the most realistic approach to tackle tariff peaks and tariff escalation.
7. These tariff reductions through the "zero-for-zero" and "harmonization" approaches should be evaluated comprehensively, together with tariff reductions by the formula approach, and Members must discuss actively in order to reach an agreement by the end of May when an agreement on modalities is due. In addition, when discussing "zero-for-zero" and "harmonization" in such sectors as motor vehicles and textiles and clothing, problems of non-tariff barriers in each sector should be addressed simultaneously.
8. Japan reserves the right to submit additional proposals on "zero-for-zero" and "harmonization", along with any evolvement in the negotiations.
   

Information technology products/Electronics
1. Information technology products (Annex1)
2. Consumer electrical products (Annex2)
3. Office machines (Annex3)

Motor vehicles
4. Motor vehicles (Annex4)

Textiles and clothing
5. Textiles and clothing (see Annex1 of Japan's proposal on modality dated 5 November)

Chemicals
6. Chemicals (including rubber and articles thereof) (Annex5)

Machinery
7. Machine tools (Annex6)
8. Construction machinery
9. Bearing
10. Watches and clocks
11. Cameras

Others
12. Bicycles
13. Titanium and articles thereof
14. Paper, pulp and articles thereof (enlargement of participating members)
15. Glass and articles thereof
16. Ceramic products
17. Toys
18. Certain articles of iron or steel