introduction aiff bariers to trade in goods 52.1. Customs duties or tariffs 52.2. Negotiations on tariff reductions 52.3. Tatiff concessions and Schedules of Concessions 52.4, Protection of tariff concessions 52.5. Modification or withdrawal of tariff concessions 526. Imposition of customs duties 527, Other duties and charges sh Non-tariff barriers to trade in goods 53.1. Quantitative restrictions 53.2. Rules on quantitative restrictions 533. Administration of quantitative restrictions 53.4. Other non-tariff barriers Barriers to trade in serv 54.1. Market access bariiers to trade in services 54.2, Other barriers to tr services Summary Exercise: Carlie® Goes to Europe 401 403 403 407 a7 422 426 a8 438 444 aaa aay 454 460 476 4am 493 499 Tisesanbe no international trade without access" tne dome ales t nen j e countries. It is important for countries. 7 see of othe! countries Rules se ‘ a a Predictable and growing access © ma en acces are, therefore, atthe core of WOutes on market access from other countries is imp tv a i 5 foods and services ain categories of barriers ig . or for 8 a : aa ways, There are i various Ways: restricted in access: + tariff barriers: and airs and . stoms duties, ie, ta. + nontariff bart barrios primarily includes ot hey are itm {arifg, i at i ‘The ecregory of pater relevant for oa of non-tariff barriers inc pari barriers are parthy og. The catego i iets’ (such Fa for trade in services, 1M Od ‘other non-tariff barriers’ (such a, a scti uch as qui 7 t $"(su quantitative restrictions ie de regulation, unfair and acbtrary application & ta on transparency fas formalities, technical barriers to ‘i zi govern trade regulation, caste Tices) These “other non-tariff barriefs undou tedly con. a " n-tariff barriers. sutte the tn st and most diverse sub-category of nonin Member pitey a issctd tin the Preamble to the WTO Agreement, P Members pu th jects of higher standards of living, full employment, gi sustain. 7 . able economic development by: and mutually advantageous arrangements directed to the substan. centering into reciprocal = tial reduction of tariffs and other barriers to trade. ‘The substantial reduction of tariff and non-tariff barriers to market access is, together with the elimination of discrimination, the Key instrument of the WIo to achieve its overall objectives." Few economists and trade policy-makers dispute that further trade liberalisation can make a significant contribution to the eco- nomic development of most developed and developing countries? The WTO calcu. lated that if all customs duties were eliminated, the resulting economic benefits would range between US$80 billion and US$500 billion.’ The estimates of the share of these economic benefits going to developing countries range from 40 to 60 per cent. Potential gains from the liberalisation of trade in services are esti- mated to be between two and four times the gains from liberalising trade in goods. As already noted in chapter 1, some barriers to market access, such as quanti- tative restrictions on goods, are prohibited, while other barriers, such as Customs duties, are allowed in Principle and are only limited to the extent ofa Thi is chapter on the rules on market access addresses the rules on: * tariff bartiers to trade in goods; . Don-tariff barriers to trade in goods; and * barriers to trade in services, , § See above, p, 3 s Dp. 15~; ito.orgl 2 Sateen sa passe above, pp, 15-20, Seetey BeMO_clminist eee xo pn ieP24_ehi cee vr "ap anc 0 Mini ead oo2 Befing Notes, available at www 'm, visited on 10 May 2003,m0} so mi _ gnost CO : - arket ag oy referred (0 as tariffs. Furthermore, mS © g0005 ig 1 pyother duties and charges. This section qu nkt Ac customs ged N discusses: for goods ig eh gduties or tariffs; rom . . ‘ ction on tariff reductions; . sos orbit concessions or bindings and Schedules of «oon of tariff concessions; + Fe ication oF withdrawal of tariff concessions gsition of customs duties; and ° nd charges other than customs duties, Concessions; » re MPS , daties @ tariffs are normally not imposed on trade in services ct : 7 ffs on trade in goods. this sectic reses tal tion only 41, Customs duties or tariffs saul. Dgfinition and types sostoms duty, or tariff, is a financial charge, in the form of a tax, imposed on paducs at the time of, andjor because Of their importation.’ Market access is aalifonal upon the payment of the customs duty. Customs duties are specific, ad valorem or mixed. A specific customs duty on a ducts an amount based on the weight, volume or quantity of that product, Srexample a duty of €100 per hectolitre of vegetable oil or a duty of €3,000 on cath car. An ad valorem customs duty on a good is an amount ased on the value sftat good. It is a percentage of the value of the imported product, for example 21Sper cent ad valorem duty on computers. In that case, the duty on a computer ‘orth €,000 will be €150. A mixed, or compound, duty is a customs duty com- ving an ad valorem duty to which a specific duty is added oles frequen “Stated: for example, a customs duty on woo! of 10 per cent SOF vet tein In that case, the duty on three ton! ‘woo! worth €1 €450. customs duties. ty ‘en customs duties are by far the most — ‘peo reasons. Fst, digg’ Preferable to specific and mined specie “ities. THe protectionist an sess for consumers ae case arepecfic ‘The lack of transparel nes of duties are more transparent 7 id the negative effect on prices T duties than for specific duties. : cease of y of, andjor es that the ty ee tine or Note tt go exon products 3100 is aD Nd Sep eR can aso impose customs dies nat ag ha DIPPER pp cn However his uncommon snd re ofthe ONE nat, Wig ras been advocating in the eo unseen age the Cr aks "act age oping Prohibj teit ‘a eae bing bition on export taxes. To dat toencot ip Dol eg COUT i P export (3% ‘Taxes A Drogen eS Wish to keep the right 10 USE? tag EXPO WMapes 218 industries. See F. Williams._cerest groups to obtain governmental sy py definition, ad valorem customs qr snment’s tariff revenue will keen ‘ction will remain the same, py’ be increased to maintain the .” he same level of protection’ Overal, sfc duties as well a8 mixed dutio oducts, however, non-ad valorem ¢) duties makes it eas for high levels of PI are indexed. In times with price increases # trast, specific duties will OMe real tariff revenue oF manta oe respect t industrial product! fT, timustal with respect 0 8BTICUENT os mi pari nd i juties can be MFN duties, Preferentig Ad valorem, spe xed customs 4 : ‘ tuties or neither of the two- MEN the ‘standard’ customs duties app, duties duties are estoms ble to all other WTO Members in compliance with ee eee Mry veratment obligation of Article 1 of the GATT 1994! Preferential duties ae 7 Faron ad to specific countries pursuant (0 conventional o, customs duties app! products from these countric o der which autonomous arrangements Um hich produ i subject to duties lower than MEN duties. For example, the customs duties cy. rently still applied by the European Communities to products from ACP coun. tries under the terms of the Cotonou Agreement are conventional preferential duties," The customs duties applied by the European Communities on products from developing countries under the EC’s Generalised System of Preferences (GsP) are autonomous preferential duties." Finally, there are customs duties that are neither MEN duties nor preferential duties. These are the duties applic able to goods from countries which are not WTO Members and do not benefit from MEN treatment." The number of such countries is small and the latter cat- egory of customs duties is therefore of limited importance. rotection.° § 1s of inflation nd the level of Prove 1 constany have the govel with, Sate ties, Customs duties or tariffs serve three different purposes. First, customs duties are a source of revenue for governments. This purpose is less important for * See WTO Secretariat, Mar _ * Note thatsneca ae atket Aces: Unfinished Business, Special Studies Series 6 (WTO, 2001), luties have the advantage that they are easier to impose as they do not requite customs authorities to determi © Shitaeland, and tose te ale ofthe imported products, See below, pp. 431-4 Deemer i Lanka and Thailand, is an exception in thi customs duties are ;ption in this respect. Over 80 © See above pt - Uh Se ori anon be 'sines, Special Studies Series 6 (WTO, 2001), 46and 47. ‘0nd the European Compan eeeween the Mer Deon Community and is eet Aca, Cartbean and Pate Group of States of he OH rest oF Annex Vo the Agreerse le? Fart, signed in Cotonou, Benin, on 23 une nonaPean Communities free of neta products from ACP countries shall be (ected to be replaced On 1 January 2098, thi of customs duties; agricultural products benefit from metuded een arte ree gee ree aH treatment will come fo an end a0 » Nore ne PE 726-8," "the ECand regional greene mae EME Economic PartnersbiP a roupings of ACP trade agreements. MPS may benesit from ygp es countries. om MEN ‘(eatment under the terms of bilateral oF regionalTari if barriers to trade im goods ‘i cl courte with a welldleveloped system of dine od CO" eloPiDS countries, however, cust. ct and indi “ny ove gevene. In com crisonwitiviaee duties are ani” rr mment re i parison with income tas and NTs easy 10 collec®s Imports are relativel sand sales taxe ies .s can be con latively easy to mor Kes, rors a \centrated in a few ports of mnitor and the oo sn OS A en Seon, imported PLO the ‘like’ domestic produ toms duties era Wag them ice a vantage and thus some degree of, cts relatively 2 ott vp. Thirdly: customs duties can be used to ‘protection from ; used to promote a rational of reign exchange To promote the ise acne al se aT goods (indus machine) snd dome ts dog luxury goods (6g. luxury cars), a count ‘courage its ‘he former and higher customs duti ry can impose 5 ies on the I pe an instrument of an eco) ae omic development policy. anion ms mportation ; auties: OF scan thus toms duties’ and “tarffs' are synonyms, However sated above: oe wo taift as @ econd meaning. A ‘tariff is also @ structured list of * ire and their corresponding custon duty. The customs duties it in a country’s tariff, Most “hare due on importation, are set ou ‘ucture set out in the Harm« low or reflect the str jonised jain tariffs NOW folll tranodity Description and Coding System. usually referred tos the ‘Harmon jzégitem’or HS" igiscussed in detail later In this chapter* ‘penational tarifrof the puropean Communities is referzed toas the Common sons Tariff Its structure follows the HS butis more detailed, asis the case for ‘surifsof many industrialise Per cent ag totrade 100703 21 10 (Vehicles principalty ges, and th, tn goods xen persons: including the driver’) jg paisa for te 0 407 ver 01 00 10 (" atl item 7 10 (Common salt - ” ad vat Of me il ed co the customs duties imposed yy 125 rect ore compar’ states, the duties i POSE by the PET Cent ad yn ene nite St “aeed MPosed by India... Europea (3 at India ee its overall applied rane ow Setinitely yier es ft cent to 15.8 per cent.” ate between a hth Note “otro Members have an online databa 2.and 2006i9 ny _wwepsite of the World Customs Orginin, hss 102 number of these databases, inc , a : at communities. Alternatively, the EU Mark stabase of the uP offered by the Directorate-General for Tae Access Database, a es og, also gives uptodate information on the c of the uropean co gat ninety other countries or customs territo vstoms duties imposed were ries? 7 i jent link to the TARIC database. ries. This database also il Og we ¢ Of the cy ; Customs dl ‘ation htc ation, wivws¥coomd sei they ing the TARIC dena 4 wes convent tuestions and Assignments 5.1 hat are specific customs duties and how do they differ from ad yalorem customs: duties? What are MFN customs duties? What is a tariff? Why do countries impose customs duties on imports? Find out and campate the MFN customs duties imposed by the European Communities, the United States, China, South Afric, Bangladesh and poland on cocoa powder and road tractors. If you area national ofa wo Member other than those Members referred to in this section, find ‘out what the MFN customs duties which your government imposes on cocoa powder and tractors are: 322, Negotiations on tariff reductions 221, Tariffs as a lawful instrument of protection) ities On imported mac i ms dul i principle, WTO Members are free t0 impose aan does not probit the Moluets, WO law, and in particular, the GATT 1994 ai aaiableat ms ie for chewing gum, the European Communities’ Commot nex ct ae se earopacufxaion, customs}tds/!2zn0™e-09 nN | Seti, Pde aly Review Report Ii ci gon a tage leeeuropa uftaxation. customs/ads[eniattores 1 ac en cia = rcxtrpnentnaton casio pai pata Wana gc ts Faye’ Generalised System of Preferences. Um rahe Ci i er tage Eemomic Area Agreement for Iceland. Tyechtenstein 304 Ned Paes se big tpettets With, for example, Algerie Egypt» sel ee ce ai _ - aA TAR stabs seo incomporates 27 EGE 3 ae sia Rehip and import restrictions. See OJ 2003, C10: 30 A sa ae ae oes inkaccdb.eu.int, visited on 21 ‘November 2007. is tion O° i Fade maintained by other countess general i Nd statistics on trade.access : trast to the general prohipy js is in sharp com gene _ customs duties. This fos, unlike quantitative restyjcy, ji con of imposition o ut i jons.2? Customs aut ee " rrrmraneitative restrictions.” GUST ins im ore nly ong o1 present an instrument of pr Onis preference foi a te represent a et @ reason rT 1994. The reasot cussed below. Rules on market tol egotiations / duties, it does recognise that customs Je XXVIII bis of the GATT 1994, they. ne reduction of customs duties. Th, 5.22.2. Acall for tariff" ; nibit custom: White WO taw does not prohib T c stitute an obstac A ae calupon WTO Hembersto negotiate t fides, in relevant part: see ene wally advantageous basis, directed to the sub. 1a arf and other charges On mpors and expors Fon of such high tariffs as discourage the importation even ae del ind 2 muted with due regard to the objectives of this of minimum quant aro individual [Members], ae of grea importance tothe face nett of interational trade. thus negotiations on eeiprocal a stantial reduction of the general level from time to time. i i GATT 1994 calls upon developed-country that Article XXXVII:1 of the : Members to accord, in the interest of the economic development of developing. country Members: high priority to the reduction and elimination of barriers to products currently or poten- tially of paricular export interest to (developing-country Members]... 5.2.2.3, Success of past tariff negotiations Under the GATT 1947, negotiations on the reduction of tariff duties took place primarily in the context of eight successive ‘Rounds’ of trade negotiations. In fact, the first five of these Rounds (Geneva, Ann: ecy, Torquay, Geneva and Dillon) were exclusively dedicated to the negotiation of tii reduction of tariffs. The sixth, seventh and eighth Rounds (Kennedy, Tokyo and Uruguay) had an increas ingly broader agenda, although the negotiation of tariff reductions remained an important element on the agenda of these Rounds. The eight GATT Rounds of trade negotiations were very successful in reducing impocat wees o i. late 1940s, the average duty on industrial poi the Gent ce Ped an was about 40 per cent ad valorem. As a result o ; » Me average duty of developed-country Members 0” 2 Seebelow. pp. 447-50,» Notes however, that Article xx ome PP- 409, 41, 445, 446 See WTO Trade Policy Re geeeePt When compellin 5 Wooo igTeasons.. . make it impossible’ RDS8O2(WTO, 1999), 2. Multlateral Approaches to Marker cess Negotialons, Staff WorkingTa il] barriers to trade in goods igure 5:2: Fity years oF tif eduction negotiations» First five ; =a CAT ond bee mas rend ed ay we Tyo sound 973-9 v5 Rad ee 5224. Customs duties remain important trade barriers Boonomists often consider a customs duty, or tariff, below 5 eo tade he 5 per cent to be a isance rather than a barri nuisan uTier to trade. Nevertheless, customs duties remain on important barrier in international trad 0 u 2 Hi le for several reasons developing-country Members still maintain high customs duties Seefe ess, Kfany of them have an average duty for industrial product z between 25 's ranging between 25 ‘and 50 per cent ad valorem. Secon, dev bers sii ‘veloped-country Members still have nigh, to very high, duties on Specific groups of ‘sensitive’ industrial and agricultural_products. With respect to industrial products, these socalled “tariff peaks”* are quite common for textiles and clothing, leather and, to a lesser extent, transport equipment. With respect to agricultural products, under the WIO Agreement on Agriculture all non-tariff barriers to trade have been eliminated and substituted by customs duties at often very high levels" Thirdoin very competitive markets and in trade between neighbouring coun- tries, a Very low duty may still consti ries. In addition, customs duties may also impede the economic development of developing-country Members to the extent that duties increase with the level of, processing that products have undergone. The duties on processed and semi- processed products are often higher than the duties on non-processed products nomenon is referred to as ‘tariff escalation’. Tariff 530 and raw materials. ‘This } escalation discourages manufacturing or processing in developing countries The customs duties of Canada and Australia increase at each production stage. US customs duties increase significantly only between raw materials and at_e/2afact_ehtm, visited on 22 «jmin99_efenlishyabo oingo_ lenght ‘countries on industrial products, ® See www.wto.orglenglish/thewto_¢/minist_¢ November 2007: The tariff reductions concer MEN tas of developed ew sries 6 (WTO, 2001), 10. The concept © SeWT0 Secretariat, Mare cs Unie sine, Sr Series 6 WTO, 201), of average duty’ refers to the ‘simple average bound customs ¢1 septate tiation * Taritpeaks cae anita exceed a selected reference level. The: Seren iene ‘he national eaks' and ‘international peaks’. National peaks’ are tails which rete _, Mean tarifeIntemnatfonal peaks’ ae tariff of 15 er CEREOE MON FOE i gextiesand clothing > Seeibid 12. Note that the European communities does not have aril " 2 Note that Ane eee PR. #50: sry Members to accord “high priority Note that Article XXXVIi of the GATT 1994 calls upon d Meer acu exo" ‘o the reduction and elimination of barriers to products et) asec interest to [developing-country Members), including customs is ifeentarcueroniy ren sch pdt nepal ein ths respect, however, also p. 408, footnote 4 Jevelope-coun rent or Ft per ets ni their processed forms’ (emphTariff barriers to trade in goods semi-processed products. The same holds true for the customs duties of Japan. In general, the customs duties of the European Communities appear to deescalate je. they are higher on raw materials than on semi-processed or processed prod. ucts.» However, consider that the European Communities ienpestes ° + zero duties on cocoa beans; « anad valorem duty of 9.6 per cent on cocoa paste; and + a mixed duty of 8 per cent and €31.40 per 100 kg net on cocoa powder con- taining added sugar:* Questions and Assignments 5.2 Is the imposition of customs duties or tariffs on products imported into the territory of a Member prohibited under WTO law? What does Article XXVIII bis of the GATT 1994 provide for? Have past efforts to reduce customs duties through negotiations been successful? Are customs duties still a major barrier to trade? What is ‘tariff escalation’ and why is it a problem? 5.2.2.5. Basic principles and rules governing tariff negotiations 7 As noted above, Article XXVIII bis of the GATT 1994 calls for ‘{tariff] negotiations ‘on a reciprocal and mutually advantageous basis’. As discussed in chapter 4 of this book, Article I:1 of the GATT 1994 requires that ‘{wJith respect to customs duties. . .any advantage. . . granted by any [Member] to any product originating in. . . any other country shall be accorded immediately and unconditionally to the like product originating in . . . all other [Members|’. The basic principles and rules governing tariff negotiations are thus: © the principle of reciprocity and mutual advantage; and © the most-favoured-nation (MFN) treatment obligation. ‘The principle of reciprocity and mutual advantage, as applied in tariff nego- na Member requests another Member to reduce its son certain products, it must be ready to reduce its own customs hh the other Member exports, or wishes to export. For The tariff reductions requested must be consid- ered to be of equivalent value to the tariff reductions offered. There is no agreed method to establish or measure reciprocity. Each Member determines for itself whether the economic value of the tariff reductions received is equal to the value of the tariff reductions granted. Although some Members apply rather sophisticated economic methods to measure reciprocity, in general the methods tiations, entails that whe! customs dutie: tariff negotiations to succeed, 2 and 13. See WTO Secretariat, Market Aces: Unfinished Business, Special Studies Series 6 (WTO. 2001), 12 and t Mee the TARIG dotabasec available at httpjec:curopa.cultaxation_customs/ddsfen(tarhomehem visited on 1 December 2007,irket access of the ‘acceptability’ of the outcome of Rules on mat al assessment i nature2> . ne at least not t0 its fall exten, d developing-country Members, Antig i int}) of the GATT 1994 provides; are basic. The fin applied The fi tai jations is prim tariff negoti ; The principle tariff negotiations betwe XXXVES of Part IV (Trade bers Developed county Members] Jo oe ast ee 8 ‘oping-country Members) en de ‘and Developme! i itments made by scx reciprocity for commitments made by thom 3] dono ext and ote barter C0 the trade Of (dey move tills Round Decision on Different; in the 1979 Tokyo Differentiay es Joni Counties “commonly referred to as the Enabling Clause, which pro, eveloping 7 vides, in paragraph 5: not seck, neither shall (developing-country [Dewtopecoury Mem sta» ot sec, ser shal relping county Members] be required to make. concessions that ar ‘opment, inanial and wade needs. In tatiff negotiations between developed: and developing-country Members, the principle of relative reciprocity applies. In tariff negotiations aie developed. country Members, developing-country Members are expected to ‘reciprocate’ only to the extent consistent with their development, financial and trade Needs, With respect to least-developed-country Members, paragraph 6 of the Enabling Clause furthermore instructs developed-country Members to exercise the ‘utmost restraint’ in seeking any concessions for commitments made by them to reduce or remove tariffs. Note, however, that paragraph 7 ofthe Enabling Clause states, in pertinent part; {Developing-countty Members} expect that their capacity to make contributions or nego. tiated concessions... would my development of their pavicipate ae ttprevement in thei trade situation and they would sesordingly expect to pareenene {aly in the framework of rights and obligations under the General moni wc? appli harmonisation rose t2*h but als Rot only to “Alon formula approach oo ST 'aifT negotiat , Wa approach erasing Aoi cat et "See below ‘ar reduction approach, "PP. 14-17,As noted above. tariff negotiations ar reciprocity : " or relative), but 'd not only by the principle of article i oa he GATT 1994. Any tariff redctio teatment obligation set out in country as the result of tarife Regorieg ee see” * Member would grant to any TF ~ 4 other Members, i lations with that ¢ ‘atLother Members, immediately and uncorsiee oun Must be granted 10 : a unconditi ALY must be granted cates tariff negotiations. Member A, ime oe” This considerably compli © governe also by the MEN f c ‘oms duties on product b. As a re: i sult of the MEN treatment obligation, the tariff reductions to which Members A and B-would agree would — benefit all other Members. However, Members A and B will be hesitant to S other Members the benefit of the tariff reductions ‘without Serac nie canny es i ph en é ; product b until it has been able ‘to get something in return’ from, for example, Member C which also exports product b to Member A and would thus also benefit from the reduction of the customs duty on product b. Likewise, Member B will be hesitant to reduce the customs duty on product a as long as Member D, which also has an interest in exporting product a to Member B, has not given Member B ‘something in return’ for this reduction. In tariff negotiations, Members may try to benefit from tariff reductions agreed between other Members without giving anything in return, If their export inter- ests are small, they are likely to succeed and will therefore be ‘free-riders’. The free-rider problem can be mitigated by opting for an approach to tariff negotia- tions other than the product-by-product request-and-offer approach. Other approaches to tariff negotiations include the linear reduction approach, the har monisation formula approach and the sector approach, all discussed below3?” Questions and Assignments 5.3 What are the basic principles and rules governing tariff negotiations? Does the principle of reciprocity also apply to tariff negotiations between developed- and developing-country Members? Why does the MFN treatment obligation complicate tariff negotiations? What does the term ‘free-rider’ refer to in tariff negotiations? : : ‘ade Centre|Commonwealth % See Business Guide to the World Trading System, 2nd edition (International Trade Centre] ma pacretarint, 1999), 59. ‘ed to bilateral) tariff negotiations has led to " {f multilateral (as OPPOs feral tariff negotiations. Note, camesecnatyie i pe of reciprocity (full or relative) and the 4 4-17. continue to be the underlying principles governing te negouiatonsyecess of tariff nego ed tions may De rules on market tions gifferent ways. As Article XXVII bjs e carried out: 5.2.2.6. Organisation ‘tariff negotiations can be onganise vg Gitr 1994 provides, tariff NEO mm basis: roduct by produc Proce such multilateral Pro «+ onaselective cedures as may be acc 2 by the application “Pred Dy the Members ‘concerned. . - se GaTT Rounds (up and including the 1961-2 Dillon Roung Row prc request ance APP 0 rif ng eye participants in the tariff negotiation: wa then its offer list, identifying respectively te products with regard ro which it's seeking and is willing to make tariff requ. eee ne negotiations take place between the principal suppliers and importes of each product. However, the productby-product approach has one major gi, Oa tial reasons, the number of prodiicts that can be subject this kind of tariff negotiation is necessarily limited, and the product coverage : the tariff reductions that can be achieved is thus ‘restricted’ - +r vty product requestandofter approach t tariff negotiations ii used, in bilateral or plurilateral negotiations outside a Round, both for Artic) XXVIII renegotiations and for tariff negotiations in the context of the aceession of whew Members to the WTO. However since the 1963-7 Kennedy Round, the produc. by-product requestand-offer approach has no longer been used in multitate tariff negotiations. A linear reduction approach to tariff negotiations was Binghites the Kennedy Round tariff negotiations. Under this approach, the negotiations ain stagreeing on a reduction of customs duties across the board, ue. a reduction ot the customs duties on all products, by for example 50 per cent. By aj oe certain products are excluded from the linear reduction, and, with poet tndan products, the tariff negotiations are conducted on a product-b rou and-offer basis. While successful, the linear reductio! i "product reques: problems. Members with low customs duties on averse. approach also presented sonable to expect them to cut these duties by th Stace crewed that it was notre with high customs duties. tis clear thata $0 percent selhcang ae of 40 per cent still leaves a 20 per cent Per cent vetuction of a customs duty pblem thee of10 percent leaves only a 5 er cent Greta tonite the negotiators in the Tokye ustoms duty. To mitigate this formula approach to tariff a ‘ound (1973-9) applied a hi is non-linear redu negotiations. A harmonisat ore hore edcton approach which requester ation formula approach is a fea ofower customs duties. The negotiations Baran eher customs duties onthe products excluded from theron ne asreement onthe application of the formula. negotiati sie abyilet (1986-94), both old and new d at the dint the new sector elimination tor (such as the men harmonisation) of the pharmaceutical, construction During the fi negotiators opted for a7" ations. Under this approac! submits first its request list; Tariff barr quipment, medical equipment and beers, to rade goods Uruguay Round tarifl nego sectors). Other ay : ons proaches ‘ ‘peak ation fe on residual products, Peaks and a tinear re a dct eqeen the end ofthe Urvguay Round and th ction of 33 per yelopment Round, a the sta peslopment Round. 2 group of WTO Members age tart o guties on information technology products (ie. comme wminae all customs equipment, semiconductors, etc.) At the “ -computers, seiference in 1996, twenty-nine Members one fade in Information Technology Products and tine tation Techn and thu in information Tesinoleay Products (ITA) attached to the Minister : rhe TA provided for participants to eliminate duties com eee rene qechnology Pro ducts by 1 January 2000.'The ITA entered Fee on information forty Members had adopted the agreement, and the a wes, force in 1997 when nan 90 per cent of world trade in information technolosy meinen ne ee ofthe ITA, almost all trade ey product Acree ies. roducts is now free from Customs duties. Over the last ten years worl i , ogy products have grown at an Id exports of information technol aver 8 lon In S008 Tage rate of 8.5 per cent, and amounted to of the current Doha telecommunications information technology ‘The Doha Ministerial Declaration of Nove i a mber 2001, in whi Members agreed to start the Doha Development Round, proved le gaidence with respect to the approach to be taken to tariff negotiations in the Doha Development Round. The Doha Ministerial Declaration states, in relevant part: We agree to negotiations which shall aim, by modalities to be agreed, to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in panicular on products of export interest 10 developing countries. Produet coverage shall be comprehensive and without a priori exclusions. The negot shall take fully into account the special needs and interests of developing and least-developed country participants, including through less than full reciprocity in reduction commitments. [Emphasis added) The approach to be taken to the tariff negotiations in the context of the Doha Development Round ~ negotiations commonly referred to as negotiations on non-agricultural market access or NAMA negotiations ~ was further clarified by the General Council in its Decision of 1 August 2004 and by the Ministerial Conference at its session in Hong Kong in December 2005." In its Decision of 1 August 2004, the General Council stated: » See A. Hoda, Tariff Negotiations and Renegotfations under the GATT and he WTO: Procedures and Practice (T0jCambridge University Press, 2001).37- 1 = Minsteriat Conference, Singapore Ministerial Declaration on Trade in Information Technology Products, WI/MIN(96)/16, dated 13 December 1996. “ dein TT «HIRING dated 3 December rh 207 Products’, See WTO: 2007 News Items: Lamy says ITA succes is inspiration nO, “ee eo November Palle at vwwavtoorglenglishynevs_elnews07_elsymp.ita.mare _ ‘ « © Ibid. ja miber 2001, para. 16. & Ministerial Conference, Doha Ministerial Declaration, wrstNy DEC at a Decent 7005, 4-5. Ministerial Conference, Hong Kong Ministerial Declaration. ‘WI)MIN( ztariffs, and reducing oF elimina. agzce that the Negotiating Groyn, tied on a line-by-line bass whey aay interests of developing and Jeg arket access tes on ma a, I Retin, We Jat formula 3 al cognize th os ween peak, hig near form ing tai peaks hat i sa cone #8 the SE fs tha il FESO I eg woke i ig evelopd count Ps sven, aiming teminaion OF Naemonizatgn carom i nil Nee ere en the Sinan fn pa caper Hey element 10 achiev ' win ih re sa to developing count Seat Devan i pret of expt corn on or Don Stephenson, ie eae he Nesting 2007, Ambassa Cea poposed the i In July 2007, 1 eee ( ee i ragricultu “6 Group on Nom-Aaicut™ aiff negotiations on non agricul rapa uaa Modalities’ with Pe conduct the tariff reduction negolstions Broa The Chait Pero commonly referred to as the Swiss formal - According te basi of 3 err jeson a Finebyrtine basis, the tariff reductions wile this formula, which a calculated as follows: faorb)X ty (ord) +f where, 1,= final bound rate of duty 1,= base rate of duty a= [8-9] = coefficient for developed Members b = [19-23] = coefficient for developing Members Note that the Swiss formula provides for different coefficients for developed- and ing-country Members.*” Least-developed-country Members would not be 46 s develo, required to undertake tariff reduction commitments The Chair's July 2007 proposals for tariff negotiations on non-agricultural products were not received with much enthusiasm. \viany developing-country Members have grave concerns regarding both the Swiss jormula approach and the sector elimination approach. They consider that the specific interests of devel- oping countries are not sufficiently taken into account. The Financial Times reported on the reaction of developing-country Members to the Chair's propos: als, as follows: “ See General Council, Doka Wo secanea Counc a ee rogramme, Framework for Establishing Modalities in Market Access for Now. ico deeon tei cone tree eas {ahd 7 Se pa 6and «fom for future work on the modalities for the Doha Development egotiationg G NAMA TOUp on Market Acc sored bse eles, Da Ne Modalities, ]OB(07)/126, dated 17 July 2007. This raft « Negot ait Markt Aces, TAMA 103, dated Fess oN dl 7 ion eb Market Access, Dry nang see ‘uary 2008,Tari y aries sion emerged 10 RW Proposals fo trade in good or orf ae Ks wh ros 9c mnt ‘ Be ent NynaccePtable. severing conus ane a ies an ay South Alfica and including Argentina on ot He pits industy against imports id Ven eee i we ez xenon" S {Canadian Ambassador] paper, la, wants to con. yap per cent for developing country Pe tlessed this week. 1g of more than 30 stia tariffs,” “UBEEsed sai: “The hallmark of ee Imatk ofa god text is one that hae the on the pot 8... this teat aes on also sad the draft indus mS ‘goods text deman: emeatent, es undermining the aim ofthe pamande a bigger us tha cost concern to developing countries ha round 0 focus on agit 7 cure Me {na statement to th et 1 eyelopi ties privately accused Indi sje vevetonine com ly accused India and Braz of fii sino see08 Brazil of falting o take their x ycountry Members are also dissatisfied with the Chair's 7 e aniti ; 10) bet proposals are not, in their opinion, sufficiently otibes need 7 ggons aie: mene Does questions ‘and Assignments 54 piseuss the different approaches to tari negotiations applied sine 1947 iihich approach to tariff negotiations is applied in the Doha Development Round tariff negotiations? 503, Tariff concessions and Schedules of Concessions 5234. Tariff concessions 0 tariff bindings events of tariff negotiations are referred 10% ‘tariff concessio tadings. A tariff concession, of tariffbinding, isa commitment no stoms duty on_a certain ‘AS “guay Round Taff negotiations, all, oF mes, mt ey Members are now pound’ 1 ae te on teen Latin American developing-counuy TT try intrevarieg for Asian and ‘African ae as Nd oretha ried 5° While Members guch as indonesie°P ultra n95 per cent of their customs duties on™ sa eet Attack on Doha Talks Pan ce art Fi eh are ig Commanities, 100 Pr p10 CF tHE the a ies lucts are bound. For the ‘United States: : ‘pound: _ yeitesana vac ucts are Bound. For Me ines or NEUSE ou. nae ‘ ets ans Special stulies Se%e% 7 WO ing NE a me toy ed Bans ember ap 4 Ue ore ie. ye utoms dt eres duties oa single maximum Iees , China, 37.5 a per cent: Hong Kong China, 3 75 Ber con, «i aout 70 PH cent; and Cams + O Per cones; and Hae Po zimbabwe. 9 Pe ard to only three products, or cont: wit lesh 15 pe earittconcess ns ade t Rules on market Ba Cameroon has 1 ns / of Concession ra Member are set out in that Member, dings 0! + of the WTO has a schedule, except whe, ns. Each Member which case the Member hay » ee men f the customs union. " is fa custom bers 0! nber is part of mem ee the Memmenedute with the otlter MEM otiations are all annexed 4, commiot is he Uruguay ‘Article I:7 of the GATT 199, ting from U rsuant to 4, eames otal tothe GATT 1994. rm art of the GATT 1994. The Schedule, aed ers are an integra’ Pn site.» See, for example, China: dules of Memb WTO website. 2s the Schedules oF Me red on te £Concess re con a ; Sehute of Concessions HEUEES soup pares The most important pan, jons conta a a Pena a recessions with respect to agricultural products (tari, Paftl sets out Be a ouetl (Section 18) and with respect to non-agricuttur| ie only (ection 2). Furthermore, a Schedule sets out referential eee a ii) concessions on non-tariff measures (Part Ill) and speci concessions (Part Il) commitments on domestic support and export subsidies on agricultural prod. 5.23.2, Schedules ‘The tariff concession schedule of Concessio jons or bin HEIs (Pare ste for Members to agree in their Schedules to treatment which is inconsistent vith the basic GATT obligations. In EC ~ Bananas II, the Appellate Body addressed the question of whether the allocation of tariff quotas agreed to and inscribed in the EC's Schedule was inconsistent with Article Xl ofthe GATT 1994, The Appellate Body referred first to the Report of the Panel in US ~ Sugar, which stated, inter ali Aniete Il permits contracting parties to incorporate into their Schedules acts yielding rights under the General Agreement but not acts diminishing obligations under that Agreement * Subsequently, the Appellate Body ruled in EC ~ Bananas III: ‘This principle is equally valid for the market access concessions and commitments for ‘agricultural products contained in the Schedules annexed to the GATT 1994, The ordi ao resent f the term ‘concessions’ suggests that a Member may yield rights and ‘rant benefits but it cannot diminish its obligations.*8 b All Schedules are structured according to the Harmonised Commodity escription and Coding System (‘Harmonised System’ or ‘HS'), discussed below, * See WTO Secretariat, Market Access: se reentages nk Ace: Unfinished Business, Special Studies Seri oe Bn Se eric a el seo. pn * Behera tent pee ofcuoms dutiesis unbound, the 8 dale at9Pean Union do not have thers ied duties are zer0. individual schedule. Appetite Bot epon ea OS, pang wg Sthedules_table_e.htm, visited on 15 Novernbet : tm, PISO Paty. pa ‘ira. 154.The Appellate Body confirmed this ruling in AppelRules on market access ion for each product SUDJECt (0 tariff conc, mat and contain the following infor” sions: it ber: «HS tariffitem num «description of the produ + rate ofduty; ‘+ present cone’ + initial negotiating righ! ‘and charges: an o + other duties and charges cial saleguards « for agricultural products only, " se and the United States, which have made tariff concessions on vi Colla proiets are lengthy and detailed. The file containing the Schedule ae eis munities on the WTO's website is 759KB in size. By contray, ie an “fmany developing-country Members are short. The files contain ds .ssion established i ts (INR):” Note that the Schedules of 13KB respectively. 5.2.3.3. Interpretation of tariff schedules and concessions Since the tariff schedules are an integral part of the GATT 1994, they constitutea ‘covered agreement’ under the DSU. Article 3.2 of the DSU applies to the interpre tation of tariff schedules and the concessions set out therein. As discussed in chapter 3 of this book, Article 3.2 of the DSU provides that the provisions of the covered agreements are to be clarified in accordance with customary rules of inter Pretation of public international law!" Accordingly, the tariff schedules and tariff concessions must be interpreted in accordance with the customary rules of inter pretation of public international law as codified in Articles the EC's tariff concessions on the ‘legitimate if expectati p sting Member; in casu, the United States, On Pectations’ of the exporting appeal, the Appellate Body rejected this ‘Oncessions, ruling as follows: 2 Seton. 6a f Sele tgenraey ce OE. eet. Sere ESM Sets eee >nKEX Of the ‘Uruguay Round ‘riff negotiati “ : binding for auto wwlomatie data ens : Products or duryinae ge PUES equips ' European Communities agreed to a tari oun te afr thers) acre oP *of49 ercent fo be reduced ens ee som ome Opean Commune oti the Uni hipient-acer a omMNesNED e anata. duting and shortly after the Urvgus¥ : however com tupment. a produer caret 82d classify pea cauipment as automatic data processing esoced 103 ae per gO Ueto AN computer nee mnieations Per cend very ighr see ween lee luties, in le range of 4.6 to 7.5 per cent (to!js of the suibjective and unilaterally det lermtin gy Ti eOneessions provided fo “ey a ra ph is at issue bere ~ are "eciprocal ant aM tony el Fano getween importing and exporting Men sel i chide «yi OF the ta ATT 1994 by Article 1:7 of the Garp we eri hat Seed ae a ofthe tem gf flees heen ie an vie re apied 0 interpreting the meaning ofa eg eat eral 2 ton sev it the Viewa Convention’ i tate Body furthermore noted with res fe nd tariff schedules: PECK To the ta 3 ns all kof clarity of tanitr ess sl x negoiations ate 2 process of reciprocal wif 1 sel somal that importing Menber dees ia mss, of een ines Wc it hei needs On he th es ensure tat their corresponding Tights are described in such Leporing Meter hae cing Mebers that thi export interests a gre in Sein te Ses Ugh (Te Ft that Members’ Schedules are an ineerat prey ots a 20x ees ht wile exch Schedule represen thet Poth GATT 194 ipo wepeset COMIN SEEEITEN ong Me Seine male by ou Fei reasons stale above, We coneade tat the Pane reli ited States Was not required to clarify the scope of the European eins that ‘the ‘ions on LAN equipment’. We consider that any claicaton of theseme ny sons that may be requted during the negotiations isa ask tora iuseeed gates w ai sgethat, at the very end of the Uruguay Round, a special arrangement was cata allow the negotiators to check and control, through consultations with ‘tir negotiating partners, the scope of tariff concessions agreed to. This “eas of verification’ took place from 15 February to 25 March 1994. z ‘stiscussed above, all schedules are structured according to the Harmonised The Uruguay Round tariff negotiations were held on the bass ofthe “monised System's nomenclature; requests for, and offers of, concessions were ally made in terms of this nomenclature. For that reason, the Appellate ‘aly expressed surprise in EC - Computer Equipment that neither the European Camunities nor the United States argued before the Panel that the Harmonised ‘sem and its Explanatory Notes were relevant in the interpretation of Schedule {0Yofthe European Communities. The Appellate Body ruled: LLXXX stould have ineoded 99 Netelive. that a proper intenpretation of Schedule fe tuition ofthe Harmonized Sytem anit Explain Ne . end . 5 Organization “eae to the Appellate Body, decisions © tion of elt the Harmonised System may also be relevan concessions and should therefore be examined” imeof the tariff ll, note that the consistent classification practice a ossions AS the ai ation of tariff ¢O lations i ‘ns is also relevant to the interpre" “Peay ae pat pre 08 \y mehr. EC— Computer Ep p99 teen SY, dated January 1994 ei Y Report,EC~ Computer Equipment PBF 89 ast cation, see below. pp. 428-31 see tid. paclassification practice durin, [the] conclusion’ of the wr jementary means of inter, Convention? s noted im Ec - compute” Prances ‘of pretation within the meaning of Article — Questions and Assignments 55 cq were can you ind the What are tariff concessions oF carbine pe? Do tariff bindings 287° have a tariff tariff concessions oF resyands ea the Nett i - Sethe tariff Binding of You" country on what i rctors. How ae tai ‘schedules and tari irr whose obligation i it 10 ensure that the ‘unambiguous? age schedule? Find out cocoa powder and on 108 concessions to be interprete scope of tariff concession: 5.2.4, Protection of tariff concessions ‘As noted above, under WTO law cus mean, however, that there are no ru) duties relate primarily to the protecti to in the context of tariff negotiations. The of the GATT 1994. stoms duties axe not prohibited. This does not les on customs duties. WTO rules on customs ‘on of tariff concessions or bindings agreed pasic rules are set out in Article Ii 5.2.4.1. Articles I1(a) Article II:1 of the GATT 1994 states: a. Each [Member] shall accord to the commerce of the other [Members] treatment no Jess favourable than that provided for in the appropriate Part of the appropriate Schedule annexed to this Agreement. b. The products described in Part Iof the Schedule relating. to any [Member], whieh are the products of territories of other [Members], shall, on their itnportation into the ter- son wich te a elas and subject to the terms, conditions or qualifica- jons set forth in that Schedule, inary custorn ae eon 7 pe exempt from ordinary customs duties in excess of 1(b), first t sentence, of the GATT 1994” Article I:1(a) provides that Members shall accord to products imported fro outer Nembes treatment _no_less favourable than that provided or in the a rede Article EA) ist sentence, provides that products described in Pat tustoms duties in scorer ember shall, on importation, be exempt from ordine may not be subjected t set outin the Schedule. This means that produ 'o customs duties above the tariff concessions or bindin With res Sens pect to the relationship between Article Tila) and Article H:1(b), £ sentence, ice, the Appellate Body noted in Argentina - Textiles and Aj \pparel: © See above, pp. 201-6. 5 See al while the prior classification Appellate Bod ‘i ty Report, EC- Hiited value than the pra Computer Equipment, paras. 92 and 95. Note! nn practice of only one of i ctice ofall parties See aa ee May be relevant, it is clearly of moreTariff barrie Paragraph (0) of Arle I! contin a senea ee favourable {0 impor than that provided for ye ein hibits a specific Kind of practice thay gr act it 2 Member Ei cing tenet ies sins wih pra "SM EXCess of those J ae UP at Provided for in the Schedule.” qhe requirement of Article first senten: ce, that a M u “duti tt lember may not impgentina ~ Teles and Apparel uties set out in its Schedule was at issue however, these products were subj : vu ject to the hi Senanye nnn eat roa foun © be inconsistent with Argentina's obligati 'M’). The Panel r:1(b) of the GATT 1994 for two reasons: gations under Article «+ first, because Argentina appli applied a different t i if duty) than that set out in its Schedule (an ad aermdueand (specs + secondly, because the DIEM would, in certain cass, ‘be in excess of th binding of 35 per cent ad valorem. , “us On appeal. the Appellate Body agreed with the Panel thatthe DIEM was incon. sistent with Argentina's obligations under Article 1h1(b), but it considerably modified the Panel's reasoning. The Appellate Body first noted: “The principal obligation in the first sentence of Article Il:1() .. requires a Member 10 refrain from imposing ordinary customs duties in excess of those provided for in that Member's Schedule. However, the text of Anticte Ii:1(b), fist sentence, does not address whether applying a npe of duty different from the type provided for in a Member's ‘Schedule is inconsistent, in itself, with that provision?" According to the Appellate Body, the application ofa type of duty different from the type provided for in a Member's Schedule is only inconsistent with Article Il:1(b) to the extent that it results in customs duties being imposed in excess of those set forth in that Member's Schedule.” In Argentina ~ Textiles and Apparel, the Appellate Body concluded: In this case, we find that Argentina has acted incor tly with its obligations under Antile Hz1(b), ist sentence, of the GATT 1994, because the DIEM regime, by is str fore and design, results, with respect to a certain NEE of impor prices in any relevant tariff category to which it applies, inthe levying of customs dis in excess ‘of the bound fate of 35 percent ad valorem in Argentina's Schedule’ ‘As Article II:1(b), first sentence, explicitly states, the obligation to exempt products from customs duties in excess of those set forth in Sea & i i edule. ‘subject to the terms, conditions or qua _ lifications set fort Canada ~ Dairy, the Appellate Body ruled in this respect: that such concessions are ‘subject 1" is aie “qualified by, 309 ‘TERS. In our views the ordinary meaning of the F fore, without prejudice to and are ‘subordinated 10, and ae. there! > pid, para. 46- ® Appellate Body Report, Argentina ~ Testis and Apparel pare $5: . Seeibid.,para,55.” Ibidmarket access a ber's Schedule «- A strong presumption per’s Schedule under the heading, effect on the substantive na Men cid ved in a Member’ Seh i re nang 8 . mitment.” fa) and (b). first sentence, of the Garp arges imposed in excess of those con, ys inscribed 38 i lest Some of the disputes under een a i y ym tia ore ees or Concessions. In EC - Chicken Cuts, the European le ae a he customs duties as contained in it iti eviate from s Communities, si eons Tt ‘did, however, reclassify @ cet 9 af chick Schedule of ; frozen boneless chicken cuts impregnate aw th sa er adit at, name peat ae ei heading (heading 0207 “Meat and edible poultry of e frozen’)? Under that particular tarity heading No, 0105. Freshy Jo yas higher than under the heading that heading, the customs duty ene ‘in the case (heading 02.10 “Meat and ing (0 tne on ried, smoked: edible flours and meals of re ‘Computer Equipment, discussed above, the outcome of the EC~ Chicken Cuts dispute depended on the interpretation of the tariff head. in this case more specifically, on the interpretation of the term veted’. According to the European Communities, the key element under heading 02.10 was preservation and therefore the term salted’ implied that the meat should be impregnated with salt sufficient to ensure long-term preserva: tion. The complainants, Thailand and Brazil, contended that ‘salted’ did not imply long-term preservation and that the chicken cuts thus fell within heading 02.10. The Panel and Appellate Body followed the customary rules of treaty inter- pretation as codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties Both the Panel and the Appellate Body came to the conclusion that ‘salted’ did not imply long-term preservation in any way and that therefore the chicken cuts did fall under the more favourable ‘aviff heading 02.10. The European Communities had acted inconsistently with Article H:1(a) and (b) by wrongly classifying the chicken cuts, which reswlted in treatment less favourable than that provided for in its Schedule applied acco edible meat offal, salte meat or meat offal’), As in EC~ ings, and, * Anpelate ody Report Canada - Daly. para 134 At sue in Cana - Dry was aff quota see blow for dud milk of 64500 tonnes included in Canada’s Schedule Inthe column ‘Other Terms and Sal con onde eels that ‘his quantity 64.50 tonnes] represent the estimated trios anaaan onsen Pyatice, Canada restricted impor Saschota nereseacate Z the personal use of the importer and hi ‘The United States contested that the 1g C$20 in value constituted a violation of oe ie Panel that the ‘condition’ was merely ‘tossborder purchases to ‘Canadian consumers ffective limitation of access to the tariff quota t? EC ~ Chicken Cuts, paras. 7.46-7.47. imports for‘personal use. 7 Note, however, that the Appell Practice of classifying, bet Schedute “amounts tos ‘onvention’ Appellate B See bid. paras, 346, 34 tween 1996 an equne at 202the preducsat swe uncer heaging ier he Bay Report EC~Ciden Cus pare St US SURI) oe Ves 9.) and 347 ey i i.! Tarif bare 5242. Tariff concessions and customs duti "otadein gods es actual anally, note on the difference bg lly appliea Regoms duties actually appl gestiles and Apparel; plied. As ¢] levels agreed upon. For example, hesieacanty lower than the maxima shout 42.8 percent, while its average applied trifisoo ne sees simple average bound tariff of Turkey i around ong once tes the sintied tariffis9.6 per centThesieing round 28.4 per cent, while its average tnt. The applied rates of India, however are one a ens Ao 2 er extent that this reflects a unilateral Towering of tants fete cuales Soares atmo mene is erat eis te Icomed. However this difrence aio gies the importing cerned ample opportunity to increase the applied tariffs, . up to the level ofthe tariff binding, The tariff bindings thus do not ie export ing Members and traders much security and predictability with respect tothe level of the customs duties that will actually be applied on the im ted prod ucts, The Economist reported on this issue in June 2007 as follows: pense’ In WTO negotictions, countries haggle not over tariffs, but over tariff ceilings. In many cases, however, these mutually agreed ceilings give counties much more latitude than they choose to use. Brazil for example, has pledged not 1 re its dies on industrial goods above about 30% on average, But the duis it actually imposes average less than 13%. ‘The gap botwwen these two mumbers is known a5 “water in WTO.speak. Afier the lib- erlising wave of the past two decades, in which counies decided to open their cconomies without waiting for others 10 do likewise, here oe big gaps between srtual tariffs and alfowable ones. Exporters fear the Doha round will amount to ithe more the trading system. than a mangle, squeezing water out of _ For example, Brazil, Argentina and oers Nave ‘offered to lower their ceilings by over ‘4o%e, But this proposal would trim the tails Brat and Argentina actually impose by Iss than a percentage point, the WTO has aleulaed. Even the more ambitious efforts ured by America and the EU would shave nly about three percentage points of the South ‘Americans’ average. ‘Why all the fuss then’ tries cowers behind barrie Africa's garment-makers enjoy 2 5 aot of variation. A handful of indus: the WTO ceilings. For example, South tariff of about 40%; its carmakers one of 30%." 1 Behind these averages Ti rs that brush close to . ; 46. Appellate Body Report, Argentina = Textiles and. Apparel, para. 2 Sek World Tariff Profs 2005 (WTO/ITC. 2007) 6. vailable at or profiles.2006.epaf. visited on S Seed Ton Pe a ag ee November 2007. Sec ibid. 106. ‘but foran snfariliat eas 2 ‘Global Trade Talks Suffer a Familiar Outcome Unfa son’ The Econoist, 28 june 2007-arket access ; uit, any Member having a principay Rules on interest shall be free tg aver holding a” ember mavper avis, # SUD ncessions."* stant In that case, any M poli plying interest and any Member Bay ea aravy substantially equivalen 1 forth in a Member's Schedule, be ers hold INRs? Which Members erest’ and which Members have 2 ig intereesjon to be modified or withdrawn? Why binding be modified or Questions and Assignments 5:7 “an tariff concessions or bindings: $6 car or witha? Which Memb have a ‘principal supplvin ‘substantial interest’ in the concess ie this important? Can a tariff conces withdrawn without agreement 0” CO! sion of pensation? 52.6. Imposition of customs duties in adalition to rules forthe protection of tariff concessions, WTO law also pro. aeaaetfor rules on the manner in which customs duties must be imposed. The three determinations to be made: imposition of customs duties may require fication of the imported good; «the determination of the proper classi the customs value of the imported good; and + the determination of «the determination of the origin of the imported good. The need for these determinations follows from the fact that customs duties differ from good to good: are usually ad valorem duties and thus calculated on the basis of the value of the products concerned; and may differ depending on the exporting country. 5.26.1. Customs classification As illustrated above, when discussing EC ~ Computer 2cuipment and EC ~ Chick Cuts, the imposition of customs duties requires the detr:nination of the pro “ customs classification of the imported good.” WTO law does not § ciel address the issue of customs classification. In Spain ~ Unroasted Coffee, the fond ruled: thatthe gai ing soo and at fonnclng ony GATT fallow any paisa system for csi recat enacting ty the iho imodis ntsc i ek However, in classifi to consider their gone oblae Customs purposes, Members have of cours? MEN treatment obligati Hons under the WTO a; sh as the . ligation. As dis i greements, such as Spain Unroasted Coffe ruled thats MAPLE 4 OF this book, the Panel ® * See Article I: 2 Carrel XXVIIS ofthe GATT 1994. © See above, — BP. 424,Tariff barriers to trade in goods a L whatever the classification adopt Footed to Tike products at MP AMticle E required thatthe same sit weat treatment be specific rules on classification i prt Como Dan 0 rata ean on 1 January 1988 and to which most WTO Member re eeae he a enone eee and Coding System, commonivcterel 3 fa stem’ or ‘HS’, i ional ‘ got, developed under Me auspices ofthe Brienne ee Council (CCC), known today as the World Customs Organization WOO}? The Harmonised System consists of 21 sections covering 9 chs “ headings and over 5,000 commodity groups. The sections and chaptersare. . Section {chapters 1-5, live animals and animal products); . (Chapters 6-14, vegetable products); + Section Ill (Chapter 15, animal or vegetable fats and oils); * Section IV (Chapters 16-24, prepared foodstuffs, beverages and spirits, tobacco); * Section V (Chapters 25-7, mineral products); * Section VI (Chapters 28-38, chemical products); * Section VII (Chapters 39-40, plastics and rubber); * Section Vill (Chapters 41-3, leather and travel goods); * Section IX (Chapters 44-6, wood, charcoal, cork); + Section X (Chapters 47-9, wood pulp, paper and paperboard articles); © Section XI (Chapters 50-63, textiles and textile products); + Section XII (Chapters 64-7, footwear, umbrellas, artificial flowers); «Section XIII (Chapters 68~70, stone, cement, ceramic, glass); «Section XIV (Chapter 71, pearls, precious metals); « Section XV (Chapters 72-83, base metals); « Section XVI (Chapters 84-5, electrical machinery); « Section XVII (Chapters 86-9, vehicles, aircraft, vessels): Section XVIII (Chapters 90-2, optical instruments, musical instruments}; Section XIX (Chapter 93, arms and a (Chapters 94-6, furniture, clocks and watches, munition); * Section XX toys, miscellaneous manufactured arti cles}; and * Section XXI (Chapter 97, works of art, antiques)" mmodity group has a sixdigit HS code. em, each con " clectric trains, including tracks, signals and other In the Harmonised 5) For example, the HS Code for anadajapan Tarif on Imports Spr Pine Fr ,-31; and GATT Panel Report. Ct 1p. 329-31 eo % Ibid, See also above, P {SPF) Dimension Lumber, para. 5.9. . son and Ce 1» rnatnal Gomention on he Harmenised Commodi) Dacron bc i amended by the Protocol of ‘Amendment of 24 June 1986, leat nvisited on December: www. ea erro co, topics_hsoverviewboxes hscont ont. ied Porte oma ornome= 0 Fy or cuts Sa Fs inion calleton of radestatstes and for wen he come of vaous 9Pe trade suchas insurance and tansPOr) este % Chapters 98 and 99 are reserved for special use by cont" 2 sng Sytem, Brussels, 14 June #get assembly Kits 18 95030020. 0r,, i Chapter 95 ("Te hapter, i this case ys, gan es St is thereof). while the first four digits me i scooters, pedal ¢ ing 95.03 (‘Tricycles. st on is ca a iol ; reduced-size (scale) m ey dolls tar working oF 80% puzzies of all kinds’) models working" 1 -, to include new products (resuty dave eoriew developments in inte, | eg every four to SIX years. system is revised ev od SY: ovation of goods. the Harmoniseg | 4 uniform class ; 1 Pi sist of commodity descriptions but also to the heading: similar wheeled (09' nd similar recreational so keep the Harmonised ing from new technologies) ational trade, the Harmon's ‘Toallow for a systematic an system not only provides Fors structt! includes: the Harmonised System; and «+ General Rules for the interpretation of «Explanatory Notes. on of the Harmonised System provide les for the Interpretatic governed, inter alia, by the following The General Rul {f goods shall be that the classification of principles: are classified as finished goods (in the event « Incomplete or unfinished goods that they do not have their own line) when the goods already have the essen. tial character of the complete or finished good © When goods are, prima facie, classifiable under two or more headings, classifi- cation shall be effected as follows: a. the heading which provides the most specific description shall be pre- ferred to headings providing a more general description;” b. when goods cannot be classified as provided under (a), mixtures, com- posite goods consisting of different materials o» made up of different 525 components, and goods put up in sets for retail sale, shall be classified as if they consisted of the material or compoxcnt which gives th their essential character;2* : ° = c. when goods cannot be classified as provided urce* (a) or (b), they shall be classified under the headii ich vical order ¢ heading which occ : : urs last in numeri among those which equally merit consideration.” Goods which ca i ii cannot be classified in accordance with the above rules shall be classified under the headi fied ui h ling appropriate to the g i akin, i. with which they bear most ikeness foodsrowhich heyaremet The Explanatory Notes give the official interpretation of the Harmon: System as agreed by the WCO, ‘See Article 16 of the In 1992, 1996, 2002, * 2002 and 2007, ion on the Ha See General irmonised System, ‘General Rules for the Inter d System. To date, there have been revisions > Ibid, para, la), fon of = . % n ofthe Hi Tear cgi ipa. 30) age amie” Sst lished in four vol bid, para "m. para. (a) 'mes in Engl 3tc). 1°" Pata » Para. 4 ‘database givin ig the HS classifi ish and Fr ssifcation of rench but a mn of more than 200,000 se, are also available on CD-ROM, a pat ofayro Members are not obliged under the GATT 194, o wro agreement, to adopt the Harmonised System. However ae nena other Members are a patty to the International Convention on the nee ee MO anticle 3.12) of this Convention provides, in relevant pare eo nse stem. Jonvention: ant part, that a party to the undertakes that, in respect of its ‘Customs tariff and statistical nomenct: it shall use all the headi ings and subheadir “sys i headings ofthe Harmonized Syste ,_ Honor molcaion, together wth the rlted numerical cass, nn a MR gly the Gener Rules for he Inteeatin of he Harmonized Sytem and ale Setion, Chapter and Subang Noes, and stall nt my the seep oe s. Chapters, headings or subheadings ofthe Harmonized Systems and ence ofthe Harmonized System, i, it shall follow the numerical seq Consequently, most WIO Members use the Harmonised System, its General Rules for the Interpretation of the Harmonised ‘System and its Explanatory Notes in their national tariffs and for the customs classification of goods. Although the Harmonised System is not part of WTO law, it can be relevant to the interpretation and application of WTO obligations. As discussed above, in EC- Computer Equipment, the Appellate Body expressed surprise that: Neither the European Communities nor the United States argued before the Panel that the ed System and its Explanatory Notes were relevant in the interpretation of the terms of Schedule LXXX. We believe, however, that a proper interpretation of Schedule LXXX should have included an examination of the Harmonized System and Explanatory Notes.! Disputes between the importer and the relevant customs authorities on proper classification are resolved by national courts or tribunals.'® Parties to the International Convention on the Harmonised System may bring a dispute to the WCO for settlement. Questions and Assignments 5.8 Are there any WTO rules on tariff classification? What is the Harmonised system? Discuss the key principles that govern the classification of goods ‘al Rules for the Interpretation of the Harmonised forth in the Gener pret n system ‘Ate these tules of any relevance in disputes on WTO rights and obligations? 5.2.6.2. Valuation for customs purposes m. The cu As previously explained, most customs duties are ad valore i imported istrations must therefore determine the value of the imp be able to calculate the customs duty due. ee above, pp- 420-2 470, * Appetite Body Report, EC Computer Equipment, Para 89. 6° CG ibunals. Se below P veto national courts a © Article X of the GATT 1994 concerns the access €© RAUORS Tarif barriers to trade in goods °~ stoms admin- goods in order tojarket access: WTO agreements provide for rules on Rules on mi the ification, the W eal out in: led “Valu: sion of Article VII of the GATT 1994.1 the Customs Valuation Agreemenp vide greater uniformity las mlike for customs cl iain ation. These rules GATT 1994, entitl vil;and ne Implement rred to a 1 in order to Pro\ cunt ation for Customs Purpose: + Article VIT of th « the Note Ad Article © the WTO Agreement on fe ‘The latter agreement, commonly He elaborates the provisions of Artic: © plementavio® ystoms valuation is found in paragraph, and certainty in thei ‘The core provision of Article VII on cus 2{a), which states: “ ert merchandise should be based on the actual The vale for customs purposes of ImDSEG TNE sce, oF of like merchandise, and sac fhe impo metcan fationl origin or on arbitrary orf should not be based on the value of mere tious values. leprae Paragraph 2(b) of Article VII defines the concept of the ‘actual value’ of goods as the price at which such or like goods are sold or offered for sale in the ordinary course of trade under fully competitive conditions. ; Elaborating on and elucidating Article VII:2 of the GATT 1994, Article 1.1 of the Customs Valuation Agreement provides: ‘The customs value of imported goods shall be the transaction value, that is the price actu- ally paid of payable for the goods when sold for export to the country of importation adjusted in accordance withthe provisions of Article 8... [Emphasis added] The primary basis for the customs value is thus the ‘transaction value’ of the imported goods, ie. the price actually paid or payable for the goods. This price is normally shown in the invoice, contract or purchase order." Article 11 is tobe read together with Article 8, which provides for adjustment: to be mad to th price actualy Paid or payable, as discussed below. “um in Ales 2 ‘07 ofthe Customs Valuation Agreement provide methods for determin- 1g ‘oms value whenever it cannot be determined under the Provisions of "The WO Agreement on the on the Implementation of Ar Agreement on the implementati ticle VI of the GATT 1994 replacy Snafaride ofthe cart but isnot significantly dieses a sore Note that in the proviso to Article 1.1, m imber of situat eth oth so toArticte 1.3, fsituati cegannet be used to determine thecusin is e are ofthe, isis, for example, the care wins ther ‘ettain restrictions on the: Should not Beans the wear disposiionof tne a lated (within the mex 00d, Fu ated (within the m ‘ning of Arcle 15) renee 38 a rule the buyer and seller the use of the transaction value Hot influence ‘ ee m Price See Article 1.2a)) or the transaction wis ate identified in which the transaction 3, i atement ga tinistrations have the right to a ‘Ocument or declaration’. In cases ofTariff barriers to trade in goods ~~~ se 1. These methods to determine the customs value, arti t atau’ method of Article 1, are: other than the ‘transac- ne transaction value of identical goods (Arti i eiceap the transaction value of similar goods Pinas on the deductive value method (Article 5); if * the computed value method (Article 6) 6); } the fallback method (Article 7). iad smiese methods to determi ; applied in the above orden Under the dunes ait aan Boods are to be ett o imported goods is determined on the basis ofthe unt pice a which greatest aggregate quantity to an unrelated buyer in the country of importa- tion, The greatest aggregate quantity is the greatest number of units sold at one price." Under the computed value method, the customs value is deter- mined on the basis of the computed value. ‘The computed value is the sum of the production cost (ic. the cost of materials and fabrication), profit and general expenses and other expenses transport costs 10 the place or port of importation). ‘The fallback method, set out in Article 7, applies when the customs value cannot be determined under any of the other four methods. Under this method, the customs value shall be: dotermined using reasonable means consistent with the principles and general provisions of this Agreement and of Article VII ‘of the GATT 1994 and on the basis of the data avail- ‘able in the country of importation.!"? However, the customs value of imported goods may never be determined on the basis of, for example: price in the country of importation of goods produced in that + the selling country; « the price of goods on the domes « minimum customs values; oT + arbitrary or fic 3.18 tic market of the country of exportation; jous values. Goods are ‘identical’ if they are thes expects, including physical characteristics, quality and ba identical’ if they are the same in all respects, including physical Gen ots ls a Se ett ns goods is which enable them to perform the same aeaariot ies and like component materials which perm tse neo sially in ion, goods shall not be re; inde unless they are produced in the same cot ment, Note, howeres, thatat the Valuation Agreement,‘ Toid ™ See Article 4 of, and Annex I, General Note, 10+ the Customs Valuation Agr re Ne janahe ‘i mmputed Tequestof the importer the order of application ofthe ‘deductive met 1g Bethe (Article maybe reverse (i) vsica weeded See rtleg f and Annex Note ARES. 1 tne Customs Valuation AEE Sine ne Seedtile Sof and Annes rte country of mmpOrtaion 25° spor et) are neeesey ‘o ety ‘value, a number of deductions: (for profits general expenses ay Teduce the sale price tothe relevant custonne ve ; -_ % Searle sof ana Annes Note APECIEG TOBE ie A au Article 7:1 of the Customs Valuation Agreement. 3 See Articleses on market access ntfs = Ral ecustoms value of mperted £00 ean, Tt B asibl ¢ ngetermined on the veribe adjusted as provided 7 oF usally, tis Pome penction vale must Se Article 8.1, the follow.” these goods. This tra nae et PS Ait ota a f vival must be added to the price actually Paid Bd s. for example, costs and values, for © payable for the imported products: seit * commissions and brokerage: + thecost of packingi'” sated to the goods being valued that the buye, « royalties and licence fees relate yay; and ° rane tony part of the proceeds of any subsequent resale that accrues ig + the value ofany the seller.” Pursuant to Article 8.2, each Member is free either to include or to exclude from the customs value of imported goods: + the cost of transport to the port or place of importation: Cs + loading, unloading and handling charges associated with the transport to the port or place of importation; and ¢ the cost of insurance. Note in this respect that most Members take the CIF price as the basis for deter mining the customs value, while the United States takes the (lower) FOB price. is Questions and Assignments 5.9 Why must customs administrations determine the value of imported g00ds? Which provisions set out the WTO rules on custors valuation? What isthe principal, and most common, method for determining the Customs value of imported goods? Briefly discuss other «1thods for determining the customs value of imported products. Wiis: the cost of the packaging and/or the cost of transport to the port or siae of imy ii , Import be included in the customs value of imported goods? 526.3. Determination of origin he sel on board) are {0 te named port of destin ct 8US Pathe costs te) Se International ; lamage rt of destination Costs, insurance a ommercial terms (INCO GAM BBE. the goods rom tne ree AS thatthe buyer secu eight involved in binging the goo ***egoods pass the ship's reptcoxs and sks of lss of o¢ ve named port of shipmenTar cums arf barriers to trade in goods __ geveloped-country Members than goods from — ; other de i jnbers: and on goods from Members that are a patty to the sage geen ent no cst i apply. Moreover, only the goods from Wro aebe +r WTO law from MEN treatment wi bers ith respect to duties. It is, therefore, important to determine the origin of imported goods and, surprisingly perhaps, ths is not always an easy determination to make, Many industrial products, available on the market . e today, are produced in more than one country. For example, inthe case of cotton shits, its possible that the cot use in their production is manufactured in country A, the textile wore, ‘and printed in country B, the cloth cut and stitched in county irts packed for retail in country D i a 'y D before being exported to The rules to determine the origin of imported goods differ from Member to Member and many Members use different rules of origin depending on the purpose for which the origin is determined. "® However, generally speaking, the rules of origin currently applied by Members are based on: «the principle of value added; or * the principle of change in tariff classification. Under rules of origin based on the principle of value added, an imported good will be considered to have originated in country X if in that country a specified percentage (for example, 50 per cent) of the value of the good was added. Under rules of origin based on the principle of change in tariff classification, a good will be considered to have originated in country X, if, as a result of processing in that country, the tariff classification of the product changes. The GATT 1947 had no specific rules on the determination of the origin of imported goods, and the GATT 1994 still provides no specific rules on this matter. However, the negotiators during the Uruguay Round recognised the need for multilateral disciplines on rules of origin in order to prevent these rules from being a source of uncertainty and unpredictability in international trade. ‘The consensus on the need for such disciplines resulted in the WTO Agreement on Rules of Origin. This Agreement makes a distinction between: in; and + non-preferential r «preferential rules of origin. se Agreement on Rules of Origin, most of the multilateral dis- fie. Parts 1 to IV) concern only non-preferential rules of ules of origin are rules of origin used in nonpreferential ter alia, MEN treatment, antiumping and origin marking or tariff quotas)" Pursuant to Article 1 of ciplines set forth theve origin, Non-preferentia trade policy instruments (relating to, int countervailing duties, safeguard measures, ade Centre|Commonvrealth © See Business Gide to the World Trading System, 2nd edition (International Trade Cents C0 Secretariat, 1999), 155. ‘ ‘ordinary customs ° Eg whethor ene origin of imported products is determined forthe impsion of otis eee dies, antidumping or countervailing duties or the administration of Shares, 1 See Article 1.2 of the Agreement on Rules of ORSyarket access Jes on a rovides some multi Rules on rent on Rules of ‘Origin provi ul tilateral gi, jal rules of origin are rules of, referential rule z les of ine whether, goods ual for preferentay trea on ermin eading to t 7 cine yates Ode gies leading (0 the Branting ogy nder contra , ligation preferences going beyond ihe bt ati nducted on apreterential basis. 5 ve igi vement 01 that around 45 percent sje rules of origin the Agent me 7 pe OF Origin, With respect (0 Hon DTA on the harmonisation of hes ules." Parsyann rovides for a work ercrreement on Rules of Origin, this Harmonisation won, 9.2 of inex completed by July 1998. However; due to the cory the WTO Members failed to meet this deadline. In fact, wor}, e - preferential rules of origin is still not completeg.2s pars to agree, to date, on harmonised rules of origi, 1 WIO disciplines apply to non-preferentia] rules of origin. Article 2 of the Agreement om Rules of Origin contains a rather extensiyg Ist of multilateral disciplines for rules of origin already applicable during the ‘transition period’, ie. the period until the Harmonisation Work Programme is completed. These multilateral disciplines applicable during the transitionay period include: + a transparency requirement: the rules of origin must clearly and precisely define the criteria they apply (Article 2(a)); * a prohibition on using rules of origin as instruments to pursue trade objec. reer e110 Oe cover, AMM i How ential rules ciplines for pn te to Article Programme should hi plexity of the matter, the on the harmonisation of nol ‘The failure of WTO Mem! does not mean, however, that m tives (Article 2(b)}; * a requirement that rules of origin shall not themselves create restrictive, dis torting or disruptive effects on international trade (Article 2(c)); * anational treatment requirement, namely, that the rules of origin applied to imported products shall not be more stringent than the rules of origin applied to determine whether or not a good is domestic (Article 2(¢)); * an MEN requirement, namely, that rules of ori : between other Members, irrespective of the aff of the good concerned (Article 2(d)); * a requirement that rules of origin shall be admin uniform, impartial and reasonable manner (Article > * arequirem ; a 2(e)); sirement that rules of origin state what does conter or gin (positive stam wh at does not confer origin (negative standard all not discriminate ation of the manufacturers stered in a consistent, * A requirement to publish laws rey dicial decisions, et “ im ‘Sulations, judicial ns, etc., relating " See Asticl See abe’ Hof and Annex th to, 4 D404, See Article. of tne Sonlunction with the weg ment on Rul ™ See WTO Secretaria Twelftia Am ofthe Implementation and 'peration of the Agi anual Repo Delft Annual Review of thy 4 Implementat Ski. Note bythe Secretar GIRO}, ‘ated November 2006; ana Wenn Secret rn "0 eal . the Agno ono 9 aE OW sof OriginTarif barriers to trade in goods | gequirements regarding the issuance of a sess igi rep days after the Fequest) and the validity of iit tree years) (Article 2(h)}; © assessments (in principle | prohibition on the retroactive applicati ‘ 2 pena fe application of new or amended rules of «a requirement that inistrati sere ent that any ministrative action relating to the determina " eforsn sev Ble promptly by independent tuna 2 ana n cont sal ’ . : a segue 10 eect the lentiality of information provided on a te that iscipli wae a of a Asiptines are in fact the specific application of general : Articles 1, Ill and X of t i preferential rules on the determination fang. Ga aepa)natonner foda is : ons ate, Se as only been one dispute before a panel dealing with rules of origin. tn extles Rules of Origin, India claimed that the United States jpplied rules of origin on textiles and certain other products that were incon- sistent with several obligations under ‘Article 2 of the Agreement on Rules of Origin. The Panel in US ~ Textiles Rules of Origin noted that Article 2 does not provite aeha WTO Members must do, but rather what they should not do. nd that: By seitng out what Members eannot do hese provisions leave for Members themselves ay sei Oy doce what, within those Bounds, they can do, In his egal tis Com teround between the paris that Article 2 does nat prevent Members from determining the ao hich confer origin, changing those eriteria overtime, or app1yiNB different crite ria to different goods.” Once the Harmonisation Work Programme is completed, all Members will apply only one set of non-preferential rules of origin for all purposes." As pro- Vuled for in Article 3 of the Agreement on Rules of Origin, the disciplines set out in ‘Article 2, alteady applicable, will continue fo apply. As an instruction to Members for the negotiations under the Harmonisation Work Programme, ‘Amticle 3 provides that Members must ensure that under the harmonised rules of origin: tormined as the origin of a particular good is ether the country where ‘sholly obtained or, when more ‘than one country is concerned in the ‘ood, the country where the Tast ‘substantial transformation has been the country tote the good has been production of the carried ovt.' 1 See Panel Ri ort, Us ~ Tetiles Rules of rit. para 62% veasta inconsi il fb) (prohibition to pursue trade OU (prob ies ive of the afBliation oft sree sites imports were rade objectives Seely or indirectly artiele eh ingorcisruptive effects 0 nd sentence article 22), second clause (shall ot der ‘smanufacturers’) of the Agreement On Rules of Origin. did not adduce sufficient ‘evidence to! ‘make a prima, aster of Origin paras. 6.118: 6190 6, 6: 1s See Article 3a) of the Agreement on Rule © in. origin. eer ey cod) and articte i) to(g)or he on ules ef 1 ariel) of te Agreement on Rules of O75rket acces jrerefore be required the Wdeteg ys must goods: polly obtained: oF ation to the good: io’ 800d has been ules on 3 Member imported under the ha count where the good the last st mine as the: + thecountry + the country where carried out. successful in achieving consensus either oy ave been BMments fF 2 good f be ‘wholly obtained’ jn SE ation’ detailed rules reg: it a for a ‘substantial transformation (a change in 11 pr on the criteria " Sree oon djor a specific percentabe of value added), ines on Per meussed above Concern, PUTSUANE to The disciplines on ntalulesoten Article 1 of the Agreement Rules of Orig ; P ental ot A alre r dy noted, Annex II to the Agreement on igin provides vever, as already noted, e agree ‘ vie ore form of a ‘common Declaration” for some multilateral disciplines an aveable to preferential rules of conduct: Pursuant to Annex Il, the general Frements set out in the Agreement 0” Rules of Origin in respect rere tandards, administrative assessments, judicial review, nges and confidentiality apply also to preferential rules of tarmonisation Work Programme, however, will not To date, Members hi garding the ret tariff'cla: applicable principles and requ' of transparency, posi non-retroactivity of cha origin. The results of the apply to preferential rules of origin. Questions and. Assignments 51 Why is itimportant to determine the origin of imported goods? How do Members commonly determine the origin of goods? Why is there a need for multilateral disciplines on rules of origin? Are there any WTO rules on the determination of the origin of goods? Briefly describe the disciplines currently applicable to non-preferential rules of origin. Discuss the rules which will be applicable once the Harmonisation Works Programme is completed. Are there any multilateral disciplines applimible on preferential rules of origin? 5. Other duties and charges in addition to ‘ordinary customs duties’, tariff barriers can also take the form of ! customs duties’, tari ier: ; \ 1 n also ti 5.2.71. Definition and types ‘Other duties a nd i charges’ are financial charges, other than ordinary customs duties, imposed on, ori , é1.or and charges’ form reid of, the importation of a good. ‘Other duties al category encompassing financial charges that a Under debate is f the forexampe, the question selves, confer origin on apes te” OF Which minimal operations or processes can and cannot)