GLOSSARY OF TRADE LAW TERMS

ACCESSION A government joining the WTO. , , As part of the accession to the WTO pursuant to Article XII, , the acceding government , negotiates , concessions , and commitments relating to Market Access for Goods and Services with WTO Members.

ACPs Countries in Africa, the Caribbeans and the Pacific which benefit from preferential tariff treatment in the E.C. These tariff preferences were introduced under the Lom? Conventions (Lom? I ? Lom? IV), which were later replaced by the Cotonou Agreement. In terms of the Cotonou Agreement these tariff preferences had to be replaced with reciprocal, WTO compliant free trade agreements (Economic Partnership Agreements or ?EPAs') between the ACPs and the EC by 1 January 2008.

AD VALOREM DUTY An ad valorem duty is a customs tariff duty expressed as a percentage of the value of the imported goods (e.g. 10% of value). , In the case of specific duties (i.e. $2.00 per KG) it is necessary to calculate an ad valorem equivalent (AVE) which gives the equivalent level of the duty in percentage terms.

AD VALOREM EQUIVALENT (AVE) An ad valorem equivalent is the equivalent in percentage of a specific duty, mixed, compound or other duty containing a specific element. , An ad valorem equivalent is calculated for each customs duty that is not ad valorem. The AVE is calculated from the actual duty collection or from the 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).

AFRICAN GROWTH AND OPPORTUNITY ACT (AGOA) The African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000. It is a US Trade Act that provides unilateral tariff preferences into the US market to 39 Sub-Saharan African countries. AGOA is an expansion of the existing (duty-free) benefits previously available only under the Generalised System of Preferences (GSP) programme. Together AGOA and the GSP programme provides duty-free access to the U.S. market for approximately 7,000 product tariff lines, including around 1,800 product tariff lines that were added to the GSP by the AGOA legislation.

AIRCRAFT AGREEMENT (ATCA) A Tokyo Round plurilateral agreement formally known as the "Agreement on Trade in Civil Aircraft". , This MTN 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 schedules. , The signatories established the Committee on Trade in Civil Aircraft composed of representatives of all signatories, for surveillance, review, consultation and dispute settlement.

ANTI DUMPING DUTIES 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).

APEC , see Asian-Pacific Economic Cooperation

ARTICLE XXVIII Article XXVIII 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 GATT Schedule after negotiation and agreement with any contracting party with which the concession was originally negotiated and any contracting party which is recognized to have a principal or a substantial supplying interest with a view to offering compensation. Notifications of changes in GATT 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.

ASEAN , See Association of South East Asian Nations.

ASIAN-PACIFIC ECONOMIC COOPERATION (APEC) A Forum formed to achieve regional free trade and investment. , Member countries are Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Republic of Korea, Chinese Taipei, Thailand, the United States and Vietnam.

ASSOCIATION OF SOUTH EAST ASIAN NATIONS (ASEAN) An Association establishing an interim agreement for the formation of the ASEAN Free Trade Area (AFTA). Member countries are Brunei Darussalam, Cambodai, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

ATCA , See AIRCRAFT AGREEMENT (Agreement on Trade in Civil Aircraft)

AUTONOMOUS DUTY , See Statutory Duty

AVE , See Ad Valorem Equivalent

BARTER TRADE Contract by which an exporter accepts goods or services from the importer as payment for its exported products.

BILATERAL AVE An ad valorem equivalent of a specific duty calculated from the unit value of imports from an individual country. An AVE can be global (applying to all countries entitled to the duty) or bilateral.

BILATERAL QUOTA Limits on the value or quantity of a good which can be imported from or exported to a given partner or group of partners.

BINDING GATT Article II provides that signatories may "bind" tariff rates by including them in schedules annexed to the General Agreement. Once a duty is bound, it may not be raised above that bound level without compensating affected parties. If the actually applied rate is lower than the bound rate, the bound level of the duty rate is called a "ceiling" binding (see Ceiling Binding). , , If the binding does not cover all products in the tariff item the binding is "partial" and identified by "ex" in the GATT Schedules.

BOUND RATE , See BINDING

CEILING BINDING A binding is "ceiling" if the applied duty is lower than the bound duty. , The following example illustrates the difference between "ceiling" bindings and bindings at "prevailing" level.

CHAPTER The CCCN and the HS are structured nomenclatures. , The first two digits of CCCN and HS numbers represent the chapter level. The CCCN comprises 99 chapters and the HS 97 chapters. HS chapter 77 is not used at present.

COMMON EXTERNAL TARIFF A uniform tariff adopted by a customs union (e.g. the European Communities) to be assessed on imports entering a region from countries outside the union.

COMPOUND DUTY A compound duty is a tariff duty comprising an ad valorem duty to which is added or subtracted a specific duty: , , 10% plus $2.00/KG, , , 20% less $2.00/KG.

CONCESSION A tariff reduction, tariff binding or other agreement to reduce import restrictions: usually accorded pursuant to negotiation in return for concessions by other parties.

CONTRACTING PARTIES (CPs) , Those governments which were signatory to the GATT 1947 were known as contracting parties. Upon signing the new WTO agreements (which include the updated GATT, known as GATT 1994), they officially became known as ?WTO members?.

COUNTERVAILING DUTIES Article VI of the GATT 1994 permits the use of countervailing measures which are duties imposed by the importing country to offset the effect of the subsidy on the product in question.

COUNTRY OF ORIGIN Individual supplying countries from which goods are imported are called "countries of origin".

CPs , See Contracting Parties.

C.U. , See Customs Union.

CUSTOMS UNION (C.U.) Substitution of a single customs territory for two or more customs territories, so that duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories of the union. The same duties and other regulations of commerce are applied by each member of the union to the trade of territories not included in the union.

DRAWBACK Repayment of import duties on a product re exported or used in the manufacture of goods to be exported.

DUTY (CUSTOMS) Tax levied at the border on imported goods. , Customs duties can be ad valorem, specific, mixed, compound, etc.

EAC see Eastern African Community

EASTERN AFRICAN COMMUNITY A regional intergovernmental organisation comprising of the Republics of Kenya, Uganda, the United Republic of Tanzania, Republic of Rwanda and Republic of Burundi

ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS) A preferential trading arrangement between Benin, Burkina Faso, Cape Verde, C?te d'Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

ECOWAS , See Economic Community of West African States.

EFFECTIVELY APPLIED DUTY A customs duty which is lower than the statutory or bound duty. , The effectively applied duty can be for an undetermined period of time or for a limited period of time (temporary duty). , Effectively applied duties are sometimes passed by Parliament or decided on and put into effect by a government for economic reasons.

EFTA , See European Free Trade Association.

ESCALATION (TARIFF) Tariff escalation refers to the fact that, as a rule, tariffs on raw materials are lower than tariffs on semi manufactures, which in turn are lower than tariffs on finished products. Tariffs escalate with the stage of processing. In theory, a reduction of the tariff escalation entails a reduction of the effective protection.  , EUROPEAN FREE TRADE ASSOCIATION (EFTA) A free trade area between Iceland, Liechtenstein, Norway and Switzerland. ,

EUROPEAN UNION A customs union between Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

EXCISE DUTY (also known as fiscal tax or revenue duty) , See Fiscal Tax.

EXPORT QUOTA Restraint imposed by an exporting country on the value or quantity of a product which can be exported.

EXPORT RESTRAINT A restriction by an exporting country of the quantity of exports to a specific importing country, established usually at the request of the importing country.

FISCAL TAX A tax which is levied on imported products as well as on domestically produced goods to generate revenue. , A fiscal tax is therefore not equivalent to a customs tariff duty since it has no protective effects. , Fiscal taxes are sometimes included in the customs tariff duties. ,

FORMULA APPROACH A tariff reduction negotiating method by which tariffs are reduced across the board using a mathematical formula agreed upon by participants.

FREE TRADE AREA (FTA) A group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on substantially all the trade between the constituent territories in products originating in such territories.

FTA , See Free trade area.

GATT ROUNDS Multilateral Trade Negotiations conducted under the GATT. , Eight rounds took place under the GATT 1947:

1947 Geneva, creation of the GATT 1949 Annecy, negotiations with countries wishing to accede to GATT. During this , round the focus was on tariff reductions. 1951 Torquay, new accessions and tariff reductions. 1956 Geneva, similar to previous rounds. 1960 1962 Geneva, the "Dillon Round". , Revision of the GATT and new accessions. 1964 1967 Geneva, the "Kennedy Round". , First time the formula approach was adopted , , (50% reduction, with exceptions) in addition to the traditional product by product approach. 1973 1979 Geneva, the "Tokyo Round". , Formula tariff reductions with a view to "harmonize" the levels of tariffs. , Agreements on the use of selected non tariff measures. 1986 1994 Geneva, the "UruguayRound". , Product by product approach by all participants, especially reciprocal offers and sectorial negotiations by a number of participants, to eliminate or harmonize duties in certain sectors ("zero for zero" approach). , Strengthening of the GATT and its expansion to new areas (services, counterfeit goods, etc.). , Active participation of developing countries offering extensively new bindings at "ceiling rates". , Use of the new concept of "credit for bindings" and "recognition of autonomous liberalization measures" for developing country participants. , New accessions to WTO. , Creation of the World Trade Organization (WTO).

GATT SCHEDULES OF CONCESSIONS All concessions negotiated in GATT negotiations are reported in the GATT legal instruments containing Schedules of concessions. , Each WTO Member incorporates its concessions in its own schedule. , (See also Loose-leaf Schedule)

GENERAL TARIFF General tariffs are the customs duties which apply in some countries to partners which are not members of the WTO. , The general duties are generally higher than the MFN duties.

GENERALIZED SYSTEM OF PREFERENCES (GSP) Generalized system of preferences offered unilaterally by developed/transition economies to developing countries. , GSP is accorded to developing countries by the following countries: Australia, Belarus, Bulgaria, Canada, Estonia, the European Union, Japan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the United States.

GSP , See Generalized System of Preferences.

HARMONIZED SYSTEM (HS) The Harmonized Commodity Description and Coding System (known as the Harmonized System), instituted by the World Customs Organization in 1988, is an international product classification for customs tariffs and trade statistics. HS , See Harmonized System.

IMPORT LICENSING A procedure which must be followed by importers before they can import goods.

IMPORT SURCHARGE , A charge on imports, in addition to the customs duty.

INSTRUMENTS (WTO LEGAL) The results of tariff negotiations are published in the "WTO Legal Instruments" which contain all the Uruguay Round schedules.

ISO , International Organization for Standardization.  , LDC , See Least Developed Countries.

LEAST DEVELOPED COUNTRIES (LDCs) The WTO recognizes as least-developed countries (LDCs) those countries which have been designated as such by the United Nations. There are currently 49 least-developed countries on the UN list, 32 of which to date have become WTO members.

LEGAL DUTY , See Statutory Duty

MARGIN OF PREFERENCE The difference between the duty paid on an MFN basis and the duty paid under a preferential system.

MARKET ACCESS The extent to which a market is accessible to foreign exporters depends on the existence and extent of trade barriers (tariff and non tariff). , In the Uruguay Round, a Group of Negotiations on Market Access was established to deal with: tariffs, non tariff measures, tropical products and natural resource based products. , Under the WTO, a Committee on Market Access has been established to deal with these issues.

MERCOSUR , See Southern Common Market.

MFA , See Multi Fibre Arrangement.

MFN , See Most Favoured Nation.

MIXED DUTY A mixed duty is a duty where a minimum or a maximum tariff protection is ensured by the choice between, in general, an ad valorem duty and a specific duty as in the following examples: 10% minimum $2.00/KG, 10% or $2.00/KG whichever is less, 10% maximum $2.00/KG, etc.

MOST FAVOURED NATION (MFN) With respect to customs duties, any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country are accorded immediately and unconditionally to the like product originating from or destined for the territories of all other contracting parties, under the principle of MFN treatment. , GSP, FTA and other preferential trading arrangements are exceptions to the MFN treatment.

MTN , See Multilateral Trade Negotiations.

MULTI FIBRE ARRANGEMENT (MFA) The Arrangement Regarding International Trade in Textiles (known as the Multi Fibre Arrangement), 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 provided for a transitional period for integrating the textiles and clothing sector into the GATT 1994. , The Agreement on Textiles and Clothing and all restrictions thereunder terminated on January 1, 2005. The expiry of the ten-year transition period of ATC implementation means that trade in textile and clothing products is no longer subject to quotas under a special regime outside normal WTO/GATT rules but is now governed by the general rules and disciplines embodied in the multilateral trading system.

MULTILATERAL TRADE NEGOTIATIONS (MTN) Trade negotiations between GATT Members aiming at eliminating or reducing tariff and non tariff barriers. , The Uruguay Round was the eighth round of MTN under the GATT. The current WTO trade round, the Doha Round, was launched by WTO members in 2001.

NAFTA , See North America Free Trade Agreement

NATURE OF DUTIES Nature of duties or the duty nature refer to the different kinds of customs duty. , The duty nature can be an ad valorem, specific, compound, mixed, variable, "tariffied" or unclassified duty.

NOMENCLATURE A nomenclature is an agreed system for classifying goods according to defined criteria, and in given detail and order, by associating to product groups a number which is used by all parties which adopt the nomenclature.

NOMINAL PROTECTION The measurement of the nominal tariff protection relates the duty to the value of the imported product as opposed to the effective protection which relates the duty to the value added in manufacturing the product. ,

NON TARIFF MEASURES (NTM) , Measures other than tariffs which restrict imports or exports, such as quotas, import licensing systems, sanitary regulations, prohibitions, etc. Also known as non-tariff barriers.

NORTH AMERICA FREE TRADE AGREEMENT (NAFTA) Free-trade area agreement between Canada, Mexico and the United States.  , NTB , Non Tariff Barrier.

NTM , Non Tariff Measure.

PARALLEL IMPORTS The importation of products produced legally (i.e. not pirated) abroad without the permission of the intellectual property right-holder (e.g. the trademark or patent owner). Some countries do not allow parallel importation.

PARTIAL BINDING , See BINDING.

PEAKS (TARIFF) A customs tariff contains tariff peaks if it is relatively homogeneous but contains in selected sectors high tariffs compared to the overall average tariff. , During the Uruguay Round, tariff peaks were defined as duties over 15%.

PLURILATERAL (CONSULTATIONS OR NEGOTIATIONS) Several participants involved in consultations or negotiations among themselves.

POST-URUGUAY DUTY , See Pre-Uruguay and Post-Uruguay Duty

PREFERENCES Special trade advantages (e.g. tariff preferences) granted by a government to some of its trading partners to promote trade with them.

COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA (COMESA) A preferential trade area between Burundi, Comoros, Democratic Republic of Congo (DRC), Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe. 13 of the COMESA members are part of the COMESA free trade area.

QR , See Quantitative Restriction.

QUANTITATIVE RESTRICTIONS (QRs) Restrictions which limit the value or quantity of goods which can be imported or exported during a given period.

ROUNDS of Multilateral Trade Negotiations , see GATT ROUNDS

RULES OF ORIGIN Regulations to define a country of origin of goods in international trade. , A country must satisfy the rules of origin to be considered as the country of origin of goods for the purpose of obtaining MFN treatment or preferential treatment.

SAFEGUARD A special safeguard may be invoked in specific cases to partly offset a significant decline in import prices or a surge in the volume of imports.

SANITARY AND PHYTOSANITARY MEASURES (SPS) Food safety and animal and plant health measures. These measures are regulated in the WTO in terms of the Agreement on Sanitary and Phytosanitary Measures and the Agreement on Technical Barriers to Trade.

SITC , See Standard International Trade Classification.

SCHEDULE OF CONCESSIONS , See GATT Schedule of concessions

SECTIONS HS chapters are logically grouped in sections representing groups of products. , There are 21 HS sections.

SOUTHERN AFRICAN CUSTOMS UNION (SACU) A customs union between South Africa, Botswana, Lesotho, Namibia and Swaziland. SACU is the oldest customs union in the world.

SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC) A preferential trading agreement between Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe. Twelve of its members established a Free Trade Area in 2008 under the SADC Trade Protocol.

SOUTHERN COMMON MARKET (MERCOSUR) An interim agreement for the formation of a customs union between Argentina, Brazil, Paraguay and Uruguay.

SPECIFIC DUTY A specific duty is a customs duty which is not related to the value of the imported goods but to the weight, volume, surface, etc. of the goods. , The specific duty stipulates how many units of currency are to be levied per unit of quantity (e.g. 2.00 Swiss Francs per KG).

STANDARD INTERNATIONAL TRADE CLASSIFICATION (SITC) The SITC is a classification developed by the United Nations for statistical analysis of trade data. , In the SITC, articles are grouped by classes of goods such as food, raw materials, chemicals, machinery and transport equipment and also by stage of fabrication and by industrial origin. The SITC was first revised in 1960 (Revision 1) to match the Customs Co operation Council nomenclature (CCCN). A second revision was established to match the revised version of the CCCN, in 1972. , The third revision was established in 1985 to match the HS.

STATUTORY DUTY , A customs duty which is generally a Customs Tariff Law voted by Parliament. , The statutory duty is also referred to as the autonomous or legal duty. The published customs tariff generally report the statutory duty. , For WTO Members, the statutory duty cannot be higher than the GATT bound duty.

SUBSIDIES Any form of income or price support granted by a country, which serves to increase exports of any product from or reduce imports of any product into its territory.

TARIFF ESCALATION , See "ESCALATION".

TARIFFICATION Conversion of border measures, other than ordinary customs duties, to tariff equivalents of non-tariff measures. , As part of the Uruguay Round Market Access for agricultural products, all non-tariff border measures were "tariffied" by participants before a tariff reduction was made.

TARIFFIED , See Tariffication

TARIFF LINE National customs tariffs contain a list of all products which can be imported. , Within the tariff, products are grouped according to the material they are made of, or according to the industrial sector to which they pertain either as input or as output materials (HS six-digit headings). , Within those product groups customs tariffs contain as many tariff lines as there are different levels of customs duties. , In other words, each duty rate is attached to a tariff line.

TARIFF QUOTA A tariff applying to goods imported within a limit in value or quantity. , A higher tariff applies to goods imported above the quota.

TROPICAL PRODUCTS This trade area refers to agricultural and other products exported by developing countries in tropical climates. , In the Uruguay Round, tropical products included the following product sectors: tropical beverages, spices, flowers and plants, planting products, etc., certain oilseeds, vegetable oils and products thereof, tropical roots, rice and tobacco, tropical nuts and fruits, rubber and tropical wood, and jute and hard fibres.

 , UNBOUND DUTIES A customs duty rate is unbound if it was never subject to a tariff concession during any GATT round of tariff negotiations (see BINDING).

VARIABLE DUTY A variable duty is a duty relating the customs duty collection to the price of the imported products. , For example, a variable duty could be the price difference between the unit value of the imported product and the unit value of the equivalent product produced domestically in the import market. , If the price of the imported goods is lower than the internal price, a variable duty is levied.

VARIABLE LEVY , See VARIABLE DUTY.

WORLD CUSTOMS ORGANIZATION (WCO) An international body located in Brussels through which participating countries seek to simplify and rationalize customs procedures. , WCO is responsible for all issues related to the nomenclature and classification of products. , This institution was formerly called the Customs Co-operation Council.