A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A criterion used in the assessment of whether a customs union is in conformity with the rules of the GATT. Article XXIV requires that the common external tariff of a new customs union must not on the whole be higher or more restrictive than the national tariffs of the members were before they joined the union. Much argument has arisen over the method to be used in ascertaining whether the criterion has been met, especially over the question of the use of the average tariff or a trade-weighted average tariff. Outcomes clearly can be quite different depending on which calculation is used. The Understanding on the Interpretation of Article XXIV concluded as part of the Uruguay Round clarified the matter. It says that an evaluation of tariff levels must be based on an overall assessment of weighted average tariff rates and of customs duties collected.
Source: Walter Goode: Dictionary of Trade Policy Terms, Fourth Edition, (Cambridge University Press/WTO, 2003), p.257-258