ACM - Arab Common Market

ACP - Africa, Caribbean and Pacific

AFTA - ASEAN Free Trade Area

ALADI - Latin American Integration Association

ANZCERT - Australia-New Zealand Closer Economic Relations Trade Agreement

APEC - Asia-Pacific Economic Co-operation

APTA - Automobile Products Trade Act

ASEAN - Association of South East Asian Nations

ASYCUDA - Automated System for Customs Data

ATCA - Agreement on Trade in Civil Aircraft

AVE - Ad Valorem Equivalent

BAFTA - Baltic Free-Trade Area

BANGKOK - Bangkok Agreement

BTN - Brussels Tariff Nomenclature

CACM - Central American Common Market

CAN - Andean Community

CAP - Common Agricultural Policy

CARIBCAN - Caribbean-Canada Preferential Trading Arrangement

CARICOM - Caribbean Common Market

CBERA - United States-Caribbean Basin Economic Recovery Act

CCC - Customs Co-Operation Council

CCCN - Customs Co-operation Council Nomenclature

CD-ROM - Compact Disk - Read-Only Memory

CEAO - West African Economic Community

CEFTA - Central European Free Trade Agreement

CEMAC - Economic and Monetary Community of Central Africa

CEPT - Common Effective Preferential Tariff Scheme

CER - Closer Trade Relations Trade Agreement

CET - Common Tariff

CIF - Costs, Insurance and Freight

CIS - Commonwealth of Independent States

COMESA - Common Market for Eastern and Southern Africa

CPC - Central Product Classification

CPs - (GATT) Contracting Parties

CT - Countertrade

CTS - Consolidated Tariff Schedules Database

CU - Customs Union

CXT - Common Tariff

DDA - Doha Development Agenda

EAC - East African Cooperation

EAEC - Eurasian Economic Community

EC - European Communities

ECO - Economic Co-operation Organization

ECOWAS - Economic Community of West African States

EEA - European Economic Area

EFTA - European Free Trade Association

EU - European Union

FOB - Free-On-Board

FTA - Free Trade Area

FTAA - Free Trade Area of the Americas

GATT - General Agreement on Tariffs and Trade

GCC - Gulf Co-operation Council

GSP - Generalized System of Preferences

GSTP - Global System of Trade Preferences among Developing Countries

HS - Harmonized System

IAF - (IDB/CTS) Internet Analysis Facility

IBRD - International Bank for Reconstruction and Development (World Bank)

IDB - Integrated Data Base

IMF - International Monetary Fund

INR - Initial Negotiating Right

ISO - International Standards Organization

ITA - Information Technology Agreement

ITC - International Trade Centre

LAIA - Latin American Integration Association

LCA - Life Cycle Analysis

LDC - Least Developed Country

MERCOSUR - Southern Cone Common Market

MFN - Most Favoured Nation

MSG - Melanesian Spearhead Group

MTN - Multilateral Trade Negotiations

NAFTA - North American Free Trade Agreement

NRBP - Natural Resource-Based Products

NTM - Non-Tariff Measure

OCT - Overseas Countries and Territories

ODC - Other Duties and Charges

OMA - Orderly Marketing Arrangement

PACTRA - Australia-Papua New Guinea Trade and Commercial Relations Agreement

PSI - Preshipment Inspection

PTN - Protocol relating to Trade Negotiations among Developing Countries

QR - Quantitative Restriction

SAPTA - South Asian Preferential Trade Arrangement

SDT - Special and Differential Treatment

SITC - Standard International Trade Classification

SPARTECA - South Pacific Regional Trade and Economic Agreement

TMB - Textiles Monitoring Body

TRIPARTITE - Tripartite Agreement

UDEAC - Central African Customs and Economic Union

UNCTAD - United Nations Conference on Trade and Development

VER - Voluntary Export Restraint

VRA - Voluntary Restraint Arrangement

WAEMU/UEMOA - West African Economic and Monetary Union

WCO - World Customs Organization

WTO - World Trade Organization

Any state or customs territory having full autonomy in the conduct of its trade policies may become a member (“accede to”) the WTO, but all WTO Members must agree on the terms. This is done through the establishment of a working party of WTO Members and through a process of negotiations.  As part of the accession to the WTO pursuant to Article XII, the acceding country or territory negotiates concessions and commitments relating to Market Access for Goods and Services with WTO Members.

An ad valorem duty is a customs tariff duty expressed as a percentage of the value of the imported goods (e.g. 10% of the value). In the case of specific duties (i.e. $2.00 per kg.), the ad valorem equivalent (AVE) can be calculated, which gives the equivalent level of the duty in percentage terms at a given time (the year of imports used in the calculation).

An ad valorem equivalent is the equivalent in percentage terms of a specific, mixed, compound or other duty containing a specific element. Ad valorem equivalents are calculated for customs duties that are not ad valorem. The AVE is calculated from the actual duty collection or from an historical unit value of imports. For example, the AVE of a specific duty of $1.00 per KG levied on a product with a unit value of $10.00 per KG is equal to 10% ($1.00/$10.00).

An AVE can be global or bilateral. Global AVEs can be calculated from the unit value of imports from a group of countries. The group can be all partners, WTO Members, MFN origins, etc. Bilateral AVEs are calculated from the unit values of imports of individual trading partners.

The IDB software applications provide aggregates of imports from groups of partners, such as WTO Members, MFN+GSP partners, etc. These aggregates contain accumulations of import values and quantities from countries falling within each relevant group.

Policies which support domestic prices, or subsidize production in some other way, encourage over-production. This squeezes out imports or leads to export subsidies and low-priced dumping on world markets. The Agreement on Agriculture distinguishes between support programmes that stimulate production directly, and those that are considered to have no direct effect.

Domestic policies that do have a direct effect on production and trade have to be cut back. WTO members calculated how much support of this kind they were providing per year for the agricultural sector (using calculations known as “total aggregate measurement of support” or “Total AMS”) in the base years of 1986-88. Developed countries agreed to reduce these figures by 20% over six years starting in 1995. Developing countries agreed to make 13% cuts over 10 years. Least-developed countries do not need to make any cuts.(This category of domestic support is sometimes called the “amber box”, a reference to the amber colour of traffic lights, which means “slow down”.)

Measures with minimal impact on trade can be used freely — they are in a “green box” (“green” as in traffic lights). They include government services such as research, disease control, infrastructure and food security. They also include payments made directly to farmers that do not stimulate production, such as certain forms of direct income support, assistance to help farmers restructure agriculture, and direct payments under environmental and regional assistance programmes.

Also permitted, are certain direct payments to farmers where the farmers are required to limit production (sometimes called “blue box” measures), certain government assistance programmes to encourage agricultural and rural development in developing countries, and other support on a small scale (“de minimis”) when compared with the total value of the product or products supported (5% or less in the case of developed countries and 10% or less for developing countries).

Refer to Domestic Support on the WTO Website for more information on Domestic Support measures.

The Multi Fibre Arrangement (MFA), which allowed countries to maintain discriminatory quantitative restrictions on imports of textiles and clothing, was terminated in 1994 with the entry into force of the World Trade Organization. The WTO Agreement on Textiles and Clothing provides for a transitional period for integrating the textiles and clothing sector into the GATT 1994. The Textile Monitoring Body (TMB) supervised the implementation of this Agreement, which was phased out as of January 2005.

 

The Agreement on Agriculture defines in its Annex 1 agricultural products by reference to the Harmonised System of product classification — the definition covers not only basic agricultural products such as wheat, milk and live animals, but the products derived from them such as bread, butter and meat, as well as all processed agricultural products such as chocolate and sausages. The coverage also includes wines, spirits and tobacco products, fibres such as cotton, wool and silk, and raw animal skins destined for leather production. Fish and fish products are not included, nor are forestry products.

For a specification of the relevant HS items covered see Annex 1 of the Agreement.

See also NON-AGRICULTURAL PRODUCTS.

A Tokyo Round agreement formally known as the "Agreement on Trade in Civil Aircraft" entered into force on 1 January 1980 and now has 30 signatories. This plurilateral agreement establishes an international framework governing the conduct of trade in civil aircraft. The agreement applies to all civil aircraft, civil aircraft engines and their parts and components and to ground flight simulators and their parts and components. Signatories to the agreement agreed to eliminate customs duties and other charges levied on the importation of products for use in a civil aircraft in the course of its manufacture, repair, maintenance, rebuilding, modification or conversion. Zero duties for all products covered by the agreement are incorporated by signatories in their respective GATT/WTO schedules. The signatories established the Committee on Trade in Civil Aircraft composed of representatives of all signatories, for surveillance, review, consultation and dispute settlement.

Refer to the WTO Website for more information.

Article VI of the GATT 1994 permits the use of anti dumping measures. Such measures can be imposed on imports of a product with an export price below its "normal value" (usually the comparable price of the domestic market of the exporting country) if such dumped imports cause injury to a domestic industry in the importing country. These anti-dumping measures take the form either of duties or undertakings on pricing by the exporter. The duties levied on any dumped product should not be greater in amount than the margin of dumping (price difference).

Related terms:

DEFINITIVE ANTI-DUMPING DUTIES - The anti-dumping duties imposed once all the investigations have been completed. They have to be ended after five years unless a review initiated beforehand indicates that dumping would continue or recur.

Source: Walter Goode: Dictionary of Trade Policy Terms, Fourth Edition, (Cambridge University Press/WTO, 2003), p.95

LESSER-DUTY PRINCIPLE - The principle in the administration of anti-dumping measures that additional duties imposed on products found dumped should be less than the margin of dumping if a lesser duty is enough to eliminate the injury.

Source: Walter Goode: Dictionary of Trade Policy Terms, Fourth Edition, (Cambridge University Press/WTO, 2003), p.213

See DUTY

Regulates how customs unions and free trade areas may be formed as exceptions to the most-favored-nation provisions of Article I. Provides for notification to the GATT contracting parties, review in a Working Party, and the application of substantive criteria to the formation of such regional trade associations.

Source: http://usinfo.state.gov/products/pubs/trade/glossac.htm#article23

See also:  Regionalism on the WTO Website.

 

Article XXVIII of GATT 1994 refers to the Article of the General Agreement which deals with the procedure to be followed when a contracting party intends to modify its Schedule. In broad terms, Article XXVIII stipulates that a contracting party can withdraw or modify a concession in its Schedule, after negotiation and agreement with any contracting party with which the concession was originally negotiated and any contracting party that is recognized to have a principal or a substantial supplying interest with a view to offering compensation. Notifications of changes in Schedules should include a list of items to be modified or withdrawn, accompanied by statistics of imports of the products involved, by country of origin, for the last three years for which statistics are available. If specific, mixed or compound duties are affected, both values and quantities should be provided, if possible.

 

These are in the main bilateral trade agreements with unequal sets of obligations for the partners. This might mean different timetables for tariff reductions or the phasing out of nontariff measures. In other cases, one party might give free entry to the products of the other party without expecting similar treatment in return.

Source: Walter Goode: Dictionary of Trade Policy Terms, Fourth Edition, (Cambridge University Press/WTO, 2003), p.33

WTO differentiates between asymmetrical agreements (usually based on different timetables for liberalization) and non-reciprocal agreements, where only one party offers concessions.

A computerized management system developed by UNCTAD for handling freight manifestos, customs declarations, accounting requirements and other procedures related to foreign trade. It can be adapted to individual customs regimes.

Source: Walter Goode: Dictionary of Trade Policy Terms, Fourth Edition, (Cambridge University Press/WTO, 2003), p.33

See DUTY.

 A tariff average measures the average level of nominal tariff protection. There are two types of tariff averages: a simple average and a trade weighted average. The example below illustrates how those two types of tariff averages are calculated.

Tariff line number	Duty rate	Import value	Duty collected
0101.11.10	50%	10	5
0101.11.90	10%	100	10
0101.19.10	0%	1000	0
0101.19.90	20%	100	20
Total (4 tariff lines)	80% (Sum of duties)	1210 (Sum of import values)	35 (sum of duties collected)

Tariff Averages:

SIMPLE = Sum of duties/Number of tariff lines = 80/4 = 20%

TRADE WEIGHTED = (Sum of duties collected/Sum of import values) X 100 = (35/1210) X 100 = 2.9% 

It should be noted that the trade weighted average is often lower than the arithmetic average. This is because theoretically, low duties carry more imports than high duties. Subsequently, in the trade weighted average, low duties are given more weight than high duties, thus introducing a downward bias. In the arithmetic average, each duty carries the same weight, whatever its level of imports.