Breakthrough for WTO Tariff Reduction

In a major breakthrough toward progressing the World Trade Organization (WTO) trade negotiations, Asia-Pacific Economic Cooperation (APEC) economies have agreed for the first time on a common formula for tariff reductions for industrial goods.

Attending a meeting of APEC Ministers Responsible for Trade on Jeju Island, Korea, Australian Trade Minister Mr Vaile said "This decision is a significant step forward because the APEC Trade Ministers from both developed and developing economies represent almost half of world trade.

"The agreement announced today will inject new momentum into the World Trade Organization negotiations. I will now urge other WTO members to support the Swiss formula as a basis to begin tariff negotiations on industrial goods.

"The Swiss formula, as its known, involves steeper cuts to higher tariffs in order to harmonize tariff rates across countries. This greatly reduces the gap between high and low tariff rates and in addition sets a top limit for all tariffs."

Mr Vaile said "We have now made significant progress in two of the five key areas highlighted by WTO Ministers in Davos, Switzerland earlier this year aimed at progressing the current Doha Round of world trade negotiations.

"Those two areas are; the structure of the final package for agriculture including the abolition of export subsidies and now - an agreed formula for achieving greater market access for industrial products.

"Our remaining objectives include: a critical mass of market opening offers for services; significant progress in strengthening World Trade Organization rules and; agreement on specific measures that will cut the cost of doing business globally through the Trade Facilitation negotiations.

"Just as APEC's commitment to free and open trade has enhanced economic growth and development in the APEC region, an ambitious outcome to the Doha Round will deliver substantial benefits globally," Mr Vaile said.

The APEC decision comes at a critical time in preparing for the WTO Ministerial Conference which will be held this December in Hong Kong.

Mr Vaile also launched an Australian-prepared Guide to FTA Negotiations at APEC, to assist negotiators in the region to construct high quality agreements.

A copy of the guide can be downloaded from the DFAT website.

Contact: Mr Vaile's office 02 6277 7420 - DFAT Media Liaison 02 6261 1555