WORLD TRADE
ORGANIZATIONTN/MA/W/43
1 September 2003
(03-4555)
Negotiating Group on Market Access Original:  English
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
Malaysia's Proposal on Chairman's Tariff Reduction Formula
Communication from Malaysia
The following communication, dated 13 August 2003, has been received from the Permanent
Mission of Malaysia.
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The Coefficient to be used in the formula is an important element  in providing a harmonizing
effect of the formula.  However, applying a sing le coefficient to all Members could result in tariff
reduction inequities.
To address these inequities, it is proposed:
- Different coefficients be used for different bands of average bound tariffs of each
country.
For example:
For developed countries:
Coefficient = 1For others:
Average bound tariffs     Coefficient
0-20 4
20-30 3
30-40 2Above 40 1
- The application of different coefficient for different tariff bands will:
- Reduce the gap of unequal tariff reduction even though the average bound
tariff is incorporated in the formula (Refer Annex 1 – using single coefficient
and Annex 2 – using different coefficient);  and
- Provide the harmonizing effect.
Malaysia reserves the right to modify its proposal.TN/MA/W/43
Page 2
ANNEX 1
CHAIRMAN'S FORMULA USING A SINGLE COEFFICIENT
AVERAGE BOUND TARIFFS (Ta)
Country A Country B Country C
Average bound Tariff 14.9 24.5 35.3
Coefficient 2 2 2
Case 1
Product bound rate
Final rate
Case 2
Product bound rate
Final rate
Case 3
Unbound product with
applied rate
Final rate40
17.1
5
4.3
50
23.040
22.0
5
4.5
50
32.940
25.5
5
4.7
50
41.4TN/MA/W/43
Page 3
ANNEX 2
CHAIRMAN'S FORMULA USING
DIFFERENT COEFFICIENTS FOR DIFFERENT TARIFF BANDS
AVERAGE BOUND TARIFFS (Ta)
Developing countries
0-20 : 4
20-30 : 330-40 : 2
>40 : 1
Country A Country B Country C
Average Bound Tariff 14.9 24.5 35.3
Coefficient 4 3 2
Case 1
Product bound rate
Final rate
Case 2
Product bound rate
Final rate
Case 3
Unbound product with
applied rate
Final rate40
23.9
5
4.6
50
37.340
25.9
5
4.7
50
42.440
25.5
5
4.7
50
41.4
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