Tariff and Non Tariff

NTM and Market Access :
key concepts and information tools

Generic Presentation – Trade and Market Intelligence team
CUSTOMS TARIFFS
What are customs tariffs ?
Customs tariffs ( thuế hải quan) are a form of tax or duty

levied by governments on the importation or exportation of
goods.
They are generally levied on imported goods.
Customs tariffs are levied at the time of importation.
Customs tariffs are generally paid by the importer of record.

Types of customs tariffs under the WTO
Bound Tariffs Applied Tariffs

 Maximum level of customs tariffs to  Tariffs actually imposed by a country
which a WTO Member is committed on goods imported into their
toward other Members. markets.
 Published and administered by
 Bound tariffs are set on a product-by- national customs authorities.
product basis and classified based  Sometimes lower than the Bound
on Harmonized System (HS). tariffs.
 Cannot be raised above the bound
 Bound tariffs are not partner-specific
rates without compensation (among
(same commitment toward all WTO
WTO countries).
members)
 Include:
 Most Favoured Nation (MFN)
tariffs
 Non-MFN tariffs
 Preferential tariffs
Applied tariffs in Market Access Map
MFN Tariff
Non-MFN Tariff
Preferential Tariffs
MFN tariffs
MFN tariffs are the customs tariffs imposed by a WTO member state on imports
from any other WTO member states without discrimination.
Direct Implication
Every time a WTO member improves tariff benefits that it gives to one trading
partner (whether a member or not), it has to give the same “equally
favoured " treatment to all other WTO members.
… but with a few exceptions, including

Regional trade agreements (free trade areas and customs
unions), in which the Members being parties to such agreements
may eliminate duties to imports from each other, while
maintaining duties on imports from other countries.
Generalized System of Preferences (GSP), which allows

developed and some developing countries to provide ‘unilateral’
tariff concessions on imports from developing countries.
MFN tariffs
Data availability in Market Access Map
Go To: https://beta.macmap.org/en/resources/data-availability
Non-MFN Tariffs
The non-MFN tariff is a customs duty levied on imports from a country that is not
granted most favoured nation (MFN) status.
Countries with MFN and Non-MFN status
Source: WTO https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm

Preferential tariffs
Preferential tariffs are customs tariffs lower than the MFN

and levied on imports from a country that is being given
preferential treatment through
Unilateral arrangements
Generalized System of Preferences to developing
countries
Reciprocal agreements
Partial Scope Agreement
Free Trade Agreement/Area
Customs Union
Common Market
Economic Union
Trade agreements in force worldwide
(www.macmap.org)
Trade agreements in Market Access Map
Source: https://beta.macmap.org/en/query/trade-agreement?reporter=704&relation=E&partner=all
Preferential tariffs
In order to take advantage of a preferential tariff, exporting firms must
Demonstrate where the product was produced
Comply with the rules of origin (RoO)
Prove the originating status of the products with the

certificate of origin (CoO) or origin declaration
Trade agreements &
Rules and Certificates of Origin
in Market Access Map
QUIZ TIME
What is the difference between the Bound and MFN tariffs?
When can I claim preferential tariffs?

How do I know which customs tariff
is applicable to my product?
Every country maintains a tariff schedule with its customs tariff rates for all
imported goods.
All imported goods are classified according to the importing country’s National
Tariff Line (NTLC), which are based on the Harmonized Commodity Description
and Coding System (HS).
Structure of the HS
10 - Cereals
Chapter
1001 – Wheat and

Headings
1002 - Rye 1006 – Rice
meslin
1006.30 – Semi-
1006.10 – Rice in
husk (paddy or
1006.20 – Rice, milled rice, 1006.40 – Rice Subheadings
husked (brown) whether or not broken
rough)
polished or glazed
Importing NTLC – Product description

country NTLC
Viet Nam 1006.10.1000 – Rice in the husk (paddy or rough): Suitable for sowing
1006.10.9000 – Rice in the husk (paddy or rough): Other
South Africa 1006.10.00 – Rice in the husk (paddy or rough)
Argentina 1006.10.1000 – Arroz con cáscara (arroz «paddy»): Para siembra
1006.10.9100 – Arroz con cáscara (arroz «paddy»): Los demás: Parboilizado
1006.10.9200 – Arroz con cáscara (arroz «paddy»): Los demás: No parboilizado
What’s my product code?
How to find the HS code for your products using Market Access Map?
Example ‘Live demonstration’ 1 : choose a product with it code

and be ready to show how to find it in the HS page.
What are the tariffs on my product?
Example ‘Live demonstration’ 2 : for your product, show how to find the tariffs for
your selected product. Be ready to explain what they are.
https://beta.macmap.org/en//query/results?reporter=156&partner=704&product=100630&level=6
Format of customs tariffs
Tariffs
Ad Tariff
valorem
Non-ad valorem tariffs rate
tariffs quotas
Outside rate
Specific Compound Mixed ______
Technical Contingent
tariffs tariffs tariffs tariffs ______
Inside rate
Examples:
20% of the $314/ton
value of $2 per kg 20% + $2 30% or £2 8.3% + ______
per kg, agricultural 326 tons
certain per kg
whatever is component ________
product the highest MAX 18.7% $0/ton
Tariffs
Ad Tariff
valorem
Non ad valorem tariffs rate
tariffs quotas
Outside rate
Inside rate
Examples:
20% of the $314.0/ton
value of $2 per kg 20% + $2 30% or £2 8.3% + ________
certain per kg
product the highest MAX 18.7% $0.0/ton
Ad Valorem Tariff
Australia applies MFN tariff of 5%
on imported wine (2204.21.20)
French wine New Zealand wine
Price without tariff Price without tariff

AUD 8 AUD 6
Tariff paid = Price × Rate

Tariff paid Tariff paid
AUD 0.40 AUD 0.30
Price including Price including

tariff: AUD 8.40 tariff: AUD 6.30
Tariffs
Ad Tariff
valorem
tariffs quotas
Outside rate
Inside rate
Examples:
20% of the $314.0/ton
value of $2 per kg 20% + $2 30% or £2 8.3% + ________
certain per kg
product the highest MAX 18.7% $0.0/ton
Specific Tariffs and their Effects on Price
Switzerland imports beef (0201.30.99) from Argentina
Tariff = CHF 2,212 100 kg gross
Before Border CHF 22 / kg After Border

tariff
CHF 22 / kg
CHF 62 / kg
CHF 32 / kg CHF 22 / kg
CHF40 / kg CHF40 / kg
CHF 10 / kg CHF 10 / kg
Low quality Prime quality Low quality Prime quality
beef beef beef beef
The prime beef is The prime beef is now

4 times the price of the only ≈ 2 times the price
low-quality beef of the low-quality beef
Compound Tariffs
Roasted coffee substitutes (NTLC 2101.30.19.00)
imported from Sri Lanka into Germany
Price w/o tariff = 80 EUR MFN Tariff

(package of 10 kg) 5.1% + 12.7 EUR/100 kg
0.127 EUR/1 kg
Tariff = 5.1% × 80 EUR + 0.127 EUR/kg × 10 kg

= 5.35 EUR
Price with tariff = 85.35 EUR

(package of 10 kg)
Mixed Tariffs
Leather shoes (6405.10.119) MFN Tariff =
30% or 4,300 yen/pair,
imported from Viet Nam to Japan whichever is the greater
Branded shoes Option 1

30% × 1,000 yen/pair
JPY 1,000/ pair = 300 yen/pair Tariff =
4,300 yen/pair
Final Price: Option 2
5,300 yen / pair 4,300 yen/pair
Option 1
Unbranded shoes 30% × 300 yen/pair
= 90 yen/pair Tariff =
JPY 300 / pair
Option 2 4,300 yen/pair
Final Price: 4,300 yen/pair
4,600 yen / pair
Technical Tariffs
Tariffs that include product-specific technicalities.
Examples:
Importing country NTLC Product Description Customs duty as reported
Wine of fresh grapes, including
fortified wines; grape must other
Yemen 2204.30.00 than that of heading 20.09 : Other Prohibited
grape must
Motor cars and other motor vehicles

principally designed for the transport
of persons (other than those of
Russian Federation 8703.32.90.93 heading 8702), including station 2.2 euro per cm³ of engine volume
wagons and racing cars: Other
vehicles, with compression-ignite
Roundabouts, swings, shooting

galleries and other fairground
amusements; travelling circuses and The rates applicable to the separate
New Zealand 9508.10.00 travelling menageries; travelling
theatres: Travelling circuses and
components
travelling menageries
Alarm clock movements, complete

and assembled, electrically 3.9% on the movement + 5.3% on the
United States 9109.10.10 operated, with opto-electronic
display only
battery
Non-Ad Valorem Tariffs
The share of national tariff lines (NTL) with non-ad valorem tariffs
varies depending on the importing country.
Examples:
Switzerland 80.8% of tariff lines

Russia 14.6% of tariff lines
EU 11.1% of tariff lines
USA 8.5% of tariff lines
Thailand 7.5% of tariff lines
South Africa 3.8% of tariff lines
Tariffs
Ad Tariff
valorem
Non ad valorem tariffs rate
tariffs quotas
Outside rate
Inside rate
Examples:
20% of the $314/ton
value of $2 per kg 20% + $2 30% or £2 8.3% + _______
certain per kg
Tariff Rate Quota (TRQ)
A two-tiered tariff:
 The first level of tariff, inside-quota tariff rate (IQTR), applies up to a specified
quantity of import (contingent).
 A higher customs tariff, outside-quota tariff (OQTR), is levied on the imported
goods outside of the contingent .
Quantity
imported
OQTR
Contingent
IQTR
0
The United States applies TRQ on imports of (5201.00.18) Cotton originating
from Burkina Faso
Quantity
imported
OQTR
$314 / Ton
Contingent
326 metric tons IQTR
$0 / Ton
0
https://beta.macmap.org/en//query/results?reporter=842&partner=854&product=52010018&level=8
Inside-quota NTLC:
• National Tariff Line Code (NTLC) used to define the product for
claiming the inside-quota tariff.
• Generally the same as the outside-quota NTLC
• Some countries apply different NTLCs for the same product
depending on whether it is imported inside the contingent or
outside of it.
Product coverage: The list of products covered by the TRQ.
Country coverage: The list of countries that can claim an

allocation or a portion of the TRQ.
Administration method: The method used to manage the TRQ

allocation.
Categories of principal TRQ administration methods
Applied tariffs: No shares are allocated to importers. Imports of the products concerned are
allowed into the territory of the Member in unlimited quantities at the in-quota tariff rate or below.
Auctioning: Importers' shares are allocated, or licenses issued, largely on the basis of an
auctioning or competitive bid system.
First-come, first-served (at the border): No shares are allocated to importers. Imports are
permitted entry at the in-quota tariff rates until such a time as the tariff quota is filled; then the
higher tariff automatically applies. The physical importation of the good determines the order and
hence the applicable tariff.
Licenses on demand: Importers' shares are generally allocated, or licenses issued, in relation to
quantities demanded and often prior to the commencement of the period during which the physical
importation is to take place. This includes methods involving licenses issued on a first-come, first-
served basis and those systems where license requests are reduced pro rata where they exceed
available quantities.
Historical importers: Importers' shares are allocated, or licenses issued, principally in relation to
past imports of the product concerned.
Imports undertaken by state trading entities: Import shares are allocated entirely or mainly to
a state trading entity which imports (or has direct control of imports undertaken by intermediaries)
the product concerned.
Producer groups or associations: Import shares are allocated entirely or mainly to a producer
group or association which imports (or has direct control of imports undertaken by the relevant
Member) the product concerned.
Other: Administration methods which do not clearly fall within any of the above categories.
Mixed allocation methods: Administration methods involving a combination of the methods as
set out above with no one method being dominant.
WTO Tariff Rate Quota:

• Global allocation
• Country-specific allocation
Tariff Rate Quota committed in trade agreements

• Preferences on the IQTR and/or Contingent
• Preferences on both IQTR and OQTR
• Preferences on IQTR, OQTR and Contingent
• Country-specific allocation
Tariffs
Ad Tariff
valorem
tariffs quotas
Outside rate
Inside rate
Examples:
20% of the $314/ton
value of $2 per kg 20% + $2 30% or £2 8.3% + ______
certain per kg
QUIZ TIME
What is the difference

between a Quota and a
Tariff Rate Quota?
QUIZ TIME
How would the relative price of a low-quality and a prime-quality goods
change after the border if the tariff is ad valorem (100%)?
100$
50$
100$ 100$
50$ 50$
=100$ =200$
x2 x2
QUIZ TIME
How would the relative price of a low-quality and a prime-quality goods
change after the border if the tariff is specific ($100)?
100$
100$
100$ 100$
50$ 50$
=150$ =200$
x2 x 1.3
Tariffs Comparison and Aggregation
HOW TO
 Compare tariffs across products or product groups (e.g. agricultural products vs
industrial products) ?
 Evaluate the effects of tariffs on price at the border (e.g. high-end vs low-quality
shoes) ?
 Compare tariffs across countries at the product level or on aggregate (e.g.
Tariffs applied by each country in the world on fridges from Turkey)
 Compute tariff averages?
Not straightforward for non-ad valorem tariffs
Ad Valorem Equivalent
Ad Valorem Equivalent (AVE)
An AVE is an estimate of a non-ad valorem

tariff in the form of a percentage.
Basic formula:
𝑆𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝑡𝑎𝑟𝑖𝑓𝑓
𝐴𝑉𝐸 ( % ) = ∗100
𝑈𝑛𝑖𝑡 𝑣𝑎𝑙𝑢𝑒
𝑉𝑎𝑙𝑢𝑒 𝐼𝑚𝑝𝑜𝑟𝑡𝑒𝑑
𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝐼𝑚𝑝𝑜𝑟𝑡𝑒𝑑
Ad Valorem Equivalent (AVE)
https://beta.macmap.org/en//query/results?reporter=757&partner=032&product=0
2013099&level=8
Compare Markets
https://beta.macmap.org/en/query/compare-market?reporter=All&partner=704&product
=100630
Compare Competitors
https://beta.macmap.org/en/query/compare-competitor?reporter=504&partner=All&prod
uct=841810
Compare Products
Average Tariffs applied by Switzerland on imports of meat
and edible meat offal (chapter 02) from Argentina
Source: https://beta.macmap.org/en/query/compare-product?reporter=757&partner=03
2&product=02&level=2
Tariffs Comparison and Aggregation
QUIZ TIME
 Why do we need ad valorem equivalents (AVEs) of non-ad valorem

tariffs?
 Which market applies the highest tariffs on milled rice (1006.30) from
Viet Nam?
Hint: go to Compare Markets module
 Does Viet Nam apply the same tariffs on imports of milled rice
(1006.30) from each partner? Which countries have the most tariff
advantage?
Hint: go to Compare Competitors module
Summary
CUSTOMS TARIFFS
Customs Tariffs - Summary
 What is a customs tariff? How to find tariffs applicable on my

product?
 What are the differences between bound and applied tariffs ?
 What’s a MFN and preferential tariffs? When can I claim preferential

treatment ?
 What is an ad valorem and a non-ad valorem tariff ?
 How to assess whether or not you have any tariff advantage or

disadvantage over your competitors in a target market ?
 In which markets do I have the highest margin of preference?
 Understand how and why ad valorem equivalents (AVEs) are

calculated?
EXPORT AND IMPORT
REQUIREMENTS (NTM)
Reminder: Market access
Market access for goods refers to the conditions, customs

tariffs and non-tariff measures, applied by countries to
goods imported into their markets.
Market access: a different perspective
From an exporter’s point of view:

• Tariffs as “the last thing the exporter worries about”
A tax paid (or not) once you managed to reach the other country
• Some prerequisites:
• You found a buyer (importer) / someone interested in your product
• You comply with mandatory requirements of the importing country (e.g. product
quality requirements)
• At times: you comply with private standards required by the buyer (e.g.
GlobalG.A.P. certification)
Export
• You managed to get the export licence and other documentation required by your
licence
own country
 If pre-requisites are fulfilled: preferential access = more competitive

 It is important to look at NTMs
Market access: Non-tariff measures (NTMs)
Overview
• Definition of NTMs
• Key concepts related to NTMs
• Role of NTMs in international

trade
• International classification of
NTMs
• Data sources; Market Access

Map
• Business experiences with NTMs

Discussion question: What are non-tariff
measures?
1) Definition?
2) Any examples?
3) Who applies them?

Definition
Non-tariff measures (NTMs)

Official policy measures on export and import, other than
ordinary customs tariffs, than can potentially have an effect on
international trade in goods, changing quantities traded, or prices
or both.
Mandatory requirements, rules or regulations legally set by the

government of the exporting, importing or transit country (in
contrast to private standards which are not legally set)
Can affect both export and import

Related terms
Non-tariff barriers (NTBs)

Different definitions: “NTMs with a discriminatory intent” / “NTMs that negatively affect
international trade”  in ITC’s work, the first definition is used
Procedural Obstacles
Procedural obstacles are practical challenges and processes that make compliance with a
particular regulation difficult when trading goods. These may include administrative hurdles,
transparency issues, infrastructural challenges and security issues companies may experience
when proving their compliance to a given regulation.
Public / international standards

Developed by international standards organisations, international standards are often
referenced in NTMs to align national requirements with international practice (as such reducing
technical barriers to trade). Examples include Codex Alimentarius (collection of internationally
recognized standards, codes of practice, guidelines, and other recommendations relating to
food production and food safety) and ISO standards.
Private (Voluntary) Standards

Standards developed by non-governmental entities which include individual firms, industry
organisations, and non-governmental organisations, among others. Compliance to these
standards is not legally required by national governments or multilateral regulations. Private
standards vary widely in their objectives and scope.
NTMs and related trade obstacles
NTMs
Excessively strict/
Regulations on trade and products, complex requirements
other than tariffs, which may negatively The requirements are too
Trade Obstacles
affect the international trade of goods. strict or complex to comply
with.
NTBs
NTMs that have
Practical challenges or
a ‘protectionist or administrative hurdles
discriminatory intent’ which make compliance to
NTMs difficult.
Business Environment
General operating conditions in the country that are not related to NTMs
but which may hinder a company’s ability to trade.
To remember
NTMs are policy measures other than ordinary customs

tariffs, which can potentially have an economic effect on
international trade in goods, changing quantities traded or
prices or both.
 Export- and Import-related regulatory requirements

 Wide variety : technical and non-technical measures
 Businesses are constrained: meet the regulations and remain competitive.
Non-Tariff Barriers (NTBs)
Trade Barriers
Class. of Non-Tariff Measures (NTMs )
Import-related
measures
Export-related
measures
Class. of Non-Tariff Measures (NTMs)
Import-related
measures
Technical measures
Class. of Non-Tariff Measures (NTMs)
Non-technical measures
Import-related
measures
Class. of Non-Tariff Measures (NTMs )
Import-related
measures
Export-related
measures
QUIZ: Which of these NTMs are real?
1. A country bans imports of a popular chocolate egg-shaped candy.

Importers who violate the ban are fined $2500 per chocolate egg.
2. A country requires imported skis to adhere to rigorous

product design standards, because of the “unique” snow in
that specific country.
3. Imported oranges are allowed to be green, but only if the

green does not cover more than 1/5th of the fruit’s surface
area.
4. A country only clears imported lobsters if the lobsters are

alive. The country begins inspecting all lobsters, which
causes them to die while waiting for inspection. The
lobsters do not clear customs.
Why do governments impose NTMs?
• NTMs can be introduced for legitimate reasons, for example protection of

human, animal and plant health
• But can also be misused as an instrument of protection
Why do countries use NTMs? Why do countries use NTMs?
Importing Country Exporting Country

• Health and safety of consumers • Ensure adequate supply for the
• Environmental factors domestic market
• Infant industry protection • Maintain quality
• Achieve political goals • Ensure best value for their exports
 NTMs are not necessarily a trade barrier

They play an important role in enabling trade
Market Access: overview
Tariffs
Import related
regulations
Certificates,
Export related regulations inspection
Licenses, … requirements, …
NTMs: Why do we talk about them so much?
NTMs are omnipresent and are becoming increasingly important and complex
• Trade policy: national regulations are used as a trade policy instrument
• Consumer awareness: Swift in focus from protection to precaution. (e.g. increasing
demand for product and production-specific information)
• Complexity: NTMs often vary across products and countries and can change
quickly; e.g. requirements of US are different from EU
• Transparency: finding information and staying up-to-date on NTMs can be
challenging; information is scattered across many sources, only available in local
language etc.
• Trade obstacles and trade cost: NTMs can imply important trade cost, e.g. because
of the lack of infrastructure and efficient procedures in the exporting country to meet
complex requirements and demonstrate compliance with NTMs
• Policy makers often lack a clear understanding about what makes NTMs so costly
and how to reduce these cost
Why are NTM increasingly relevant?
Even as tariffs fall, new trade barriers arise...
Why are NTMs increasingly relevant?
Products must comply with wide range of ‘legitimate’ trade-related regulations.
However:
 Can a business remain competitive while meeting NTMs?
 Does business have the technology, the infrastructure, and the human and
financial resources?
 Will the business be fined if it does not comply with important regulations?
 Are NTMs harmonized across countries ?
NTMs can raise costs for businesses.
NTMs can inhibit trade even when not design to do so.

How to find the NTMs applied on my product?
Customs Tariffs vs NTMs
Customs Tariffs Non-Tariff Measures

 Taxes imposed on goods.  Mandatory requirements, rules or
 Collected at the time of importation regulations imposed by governments on
by Customs (at the border). internationally traded goods.
 Published and administered by  Inhabit the twilight zone between trade
policy and national regulation.
national customs authorities,
 Applicable at every step of the value
generally every fiscal year.
chain: supply, production, transportation
 Expressed in percentage or value
and distribution.
per quantity.
 Applicable on Imports and Exports.
 Include:
 Published and administered by various
 General tariffs
national institutions.
 Most Favoured Nation (MFN)
 Can take the form of a prohibition, MLR,
tariffs technical requirements, taxes, etc.
 Preferential tariffs  Include:
 SPS
 TBT
 Technical and non-technical
measures.
 Export-related measures
How do exporters and importers experience non-tariff
measures?
71
Who is affected? Who applies the burdensome NTMs?
ITC’s NTM Survey results: www.ntmsurvey.org
The share of companies affected by burdensome NTMs varies across sectors

and trade direction
- Exporters of agricultural products report more problems than those in manufacturing
- Exporters are more affected than importers
Small firms report more frequently problems related to burdensome NTMs

- 57% of firms with 1-4 employees face burdensome NTMs compared to about 43% of firms
with more than 250 employees
Trade-hampering measures lie much closer to home than one might expect
- About 25% of obstacles reported by exporters concern measures applied by the home
country on exports
- Another 20% (agriculture) to 30% (manufacturing) are NTMs applied by regional trading
partners (members of regional trade agreements)
 Despite existing agreements, regional market access is disproportionately difficult,

especially for manufactured products
Source: ITC (2015);The Invisible Barriers to Trade – How Businesses Experience

Non-Tariff Measures; www.intracen.org/publications/ntm
Exporters of agricultural products report more problems
than those in manufacturing
Share of exporters who encounter burdensome NTMs, by sector

The trade-hampering measures lie much closer to home
than one might expect
Distribution of reported NTM cases, by country applying the measure
Home OECD countries

(exporting)
country
28% 26%
31%
39%
13%
Agriculture 13% Manufacturing
Other developing
countries
20% 30%
Regional trade
agreeement partners
Source: ITC business surveys on NTMs; www.ntmsurvey.org

The challenge? SPS & TBT measures for agriculture, rules of
origin for manufacturing
Technical requirements 11%

22% Regulations on product characteristics, quality,
poduction process. etc.
23%
Conformity assessment
Technical inspections, testing, certification etc to
prove compliance with technical regulations
Inspections and other entry formalities 13%

48% Customs clearance and border control
Charges and taxes

9%
Service charges, customs surcharges, etc. 4%
Quantity control measures
Quotas, licences, prohibitions
5%
5% Rules of origin and related certificate 35%
Criteria & related certificate to determine the country of
5% origin of a product.
11% Other import-related measures

Finance measures, anti-competitive measures, trade remedies, etc.
4% 5%
Agriculture Manufacturing
Source: ITC (2015),The Invisible Barriers to Trade – How Businesses Experience

75
And what about the exporting country?

Types of challenging NTMs that are applied by the exporting country
Export Export taxes

inspections and charges
Export
prohibitions
Export
Export certifications
licence
Source: ITC business surveys on NTMs; www.ntmsurvey.org

Most regulations pose a problem because of
procedural obstacles
Share of NTM cases, by type of difficulty
100%
90%
80% 40% The regulation is difficult only
70% 58% because of procedural obstacles
60%
50% 25% The NTM is too strict + there
are procedural obstacles
40%
30% 19%
20% The regulation itself is too
35% strict/difficult
10% 23%
0%
Agriculture Manufacturing

What types of home country procedural obstacles are reported?
High cost
24%
Exporti
Admin ng
burden
Delays
15% Exporting
42%
country
Lack of
facilities Other
7% 12%
Source: ITC (2015);The Invisible Barriers to Trade – How Businesses Experience Non-Tariff Measures; www.intracen.org/publications/ntm
Where should we look to find the solutions?
Distribution of procedural obstacles, by agency
Administrative burdens related to regulation
Discriminatory behaviour of officials

Informal or unusually high payment
Information/ transparency issues
Lack of recognition/ accreditation

Lack of sector-specific facilities
Time constraints
Type of
Other

Location of the

Customs authority

Ministry in charge of international trade

Ministry in charge of agriculture

Ministry in charge of public health

Public/private organization for standard and quality

Chamber of commerce and trade support institution

Public/private organizations for certification

Ministry in charge of environmental affairs

Public/private organizations for inspection

Products testing and analysis laboratory

Port authority
Airport Source: ITC (2015);The Invisible Barriers to Trade – How

Businesses
Experience
Ministry in charge of finance Non-Tariff Measures; www.intracen.org/publications/ntm

Other ministries/agencies

How do we know this? ITC’s business surveys
... document the experiences of companies that are involved in international trade
and identify at product, sector and partner country level the predominant
regulatory and procedural trade obstacles.
• NTMs imposed by importing countries
• NTMs imposed by exporting countries

• Identification of existing national procedures and
facilities that could use strengthening
• Coverage of gaps in understanding of specific
measures resulting form a lack of access to
relevant information
NTM series of more than 40 publications &

survey results available at www.ntmsurvey.org
Key concept: SPS and TBT measures
Technical (SPS/ TBT) versus non-technical NTMs
o What is a technical regulation?
“A document which lays
• Refer to product-specific properties.
down product characteristics
• Product characteristics, technical specifications, and the or their related processes
production process. and production methods,
• They also include conformity assessment methods including administrative
which confirm that products fulfill the requirements laid provisions, with which
down in regulations compliance is mandatory.”
(Annex 1, WTO TBT Agreement)
include measures that are applied in order to protect food
safety and animal and plant health (Sanitary and
Phytosanitary Measures – SPS)
as well as other technical measures for national security
reasons, consumer safety reasons (also known as “Technical
Barriers to Trade – TBT”)
o Non-technical requirements:
• do not refer to product specific properties but to trade requirements
• shipping requirements, customs formalities, trade rules, taxation policies, etc.
• all other NTM measures, which are not technical requirements
Who prepares technical regulations and SPS measures?
Technical regulations SPS measures

- Ministry of Trade - Ministry of Health
- Ministry of Industry - Food and Drug Administration
- Ministry of Agriculture - Plant Protection Authorities
- Ministry of Health - Veterinary Services
- Consumer Protection Unit - Ministry of Fisheries and Livestock
- Environment Protection Unit - …
- …
Examples of products subject to TR
• Machinery and equipment which could endanger human life, e.g.

boilers, electricity-driven tools, metal and wood – working
equipment
• Potentially dangerous consumer articles, e.g. synthetic detergents

and cleaning agents, household electrical appliances, video and TV
sets, motor vehicles
• Hazardous raw materials and agricultural inputs, e.g., fertilizers,

pesticides, and specified chemicals.
Technical regulations compared to standards
Technical Regulations Standards

• Compliance is MANDATORY and • Compliance is VOLUNTARY
form part of legislation
• Can be developed by a variety of
• Responsibility of the government bodies in the public or private
sector
• Consensus not necessary • Developed by consensus
• Encompass product characteristics
and administrative provisions • Contain only product
characteristics, or technical
• Goods cannot enter the country requirements
• Goods can enter the country

TBT in international trade
Technical regulations
Standards
Testing, Calibration
C Inspection
Certification
Packaging
U Labelling
Other requirements
Country B
S
T
Country
Technical regulations A
Standards O
Testing, Calibration
Inspection
Certification M
Packaging
Labelling
Other requirements S
Example of a TBT measure
Product characteristics requirements on oranges
Oranges with light green colour are

allowed,
Size provided
is determined the maximum
by the colour does not of
diameter
exceed theone fifth ofsection
equatorial the total surface
of the fruit. of
Oranges: 53 mm
the fruit
Example: Canada labeling requirement on a box
of fish product
Labels on fish products exported to Canada

must include:
A. Brand name A. Canada Inspected Logo

B. Nutrient Content Claim B. Common Name
C. Storage Instructions C. Nutrition Facts Table
D. Country of Origin D. "Contains" Statement
E. Composition Claim E. List of Ingredients
F. Net Quantity F. Identity and Principal Place of Business
Example of technical NTMs
Customization : you can replace this example with a meaningful example in your own
sector, for the product you w
89
Main challenges reported by businesses for SPS / TBT
 Lack of information on foreign market standards
 High certification cost
 Burdensome certification and inspection procedures
 Duplication of control among different regulatory bodies

 Lack of testing facilities
 Lack of recognition in destination market of local labs
 Stringent requirements (difficult to comply with)
Source: ITC Businesses Surveys on NTMs in 66 countries, www.ntmsurvey.org

90
Main challenges reported by businesses for SPS / TBT

Example: Inefficient testing and certification procedures
 Lengthy procedures
 Frequent renewal The problem? It’s the

quantity of papers to
 Excessive paperwork and numerous submit! There are too
administrative windows many documents
needed to prepare the
 Inaccessible or absent infrastructure dossier. More than 20
different documents
are required for the
conformity assessment
The testing process takes 1 - 2 months
process.
while the validity of the product itself is
just a year. Another issue is that it is very
expensive to undertake this test which
hinders us from exporting.
Source: ITC Businesses Surveys on NTMs in 66 countries, www.ntmsurvey.org

Technical Regulations and WTO TBT Agreement rules
• Technical regulations should not create unnecessary obstacles to

trade, therefore, should
− Not be more trade-restrictive than necessary
− Serve legitimate objective
− Take into account risks that non-fulfilment would create
− Be based on scientific and technical information
• Foreign and domestic products treated equally
• Be based on international standards (except when not appropriate /
not sufficient to fulfil legitimate interests)
Objective
Prevent creation of unnecessary technical barriers to

trade
• Establish rules for development, adoption and
application of Technical Requirements (technical
regulations, standards, and conformity assessment)
• Technical requirements for trade to be based on
international standards, guides or recommendations
as far as possible
• Transparency of requirements
92
Rights
Agreement acknowledges countries’ rights to regulate for legitimate

purposes:
Protection of animal or
Quality of their Protection of human life or
plant life or health
exports health
Protection of
Protection of Prevention of
security interests
environment deceptive practices
Salient features
• Base technical requirements for trade on international
standards, guidelines or recommendations as far as
possible
• Make requirements transparent
 Publish notifications of the proposed technical regulations
and conformity assessment procedures
 Provide reasonable opportunity to other interested parties
to comment on the proposed technical regulations and
conformity assessment procedures
 Take into account these comments in finalizing the drafts
 Justify the requirements of the technical regulations, should
they be requested to do so
Salient features
Technical regulations, standards, conformity assessment procedures

should be
• Not more trade restrictive than necessary (based on performance

requirements than product descriptors)
• Not applied arbitrarily, or
• Not discriminatory against imports (national treatment)
• Not maintained if no longer necessary, (changed circumstances or can be
addressed in a less trade restrictive manner)
95
TBT - Main principles
Non-
discriminati
on
Mutual Harmonizat
recognitio ion
n
Avoidance
of
Transparen Equivalen
cy unnecessar
ce
y obstacles
to trade
Sanitary and phytosanitary measures
PROTECTING HUMAN, ANIMAL, PLANTS, ENVIRONMENT
What is a sanitary or phytosanitaryvmeasure?
To protect
…
Additives, contaminants, toxins or
Human or animal
from disease –causing organisms in
life or health
foods, drink, feedstuffs
Diseases carried by animals,

Human life or health from plants or their products, or from
pests
Animal or plant Entry, establishment or spread of

from pests, diseases, disease-causing
life or health
organisms, etc.
from Other damage caused by entry,

A country establishment or spread of pests
(Annex A WTO Agreement on SPS)

SPS measures comprise of
Laws, decrees, End product Processes and

regulations criteria production methods
Testing, inspection, Risk

Quarantine
certification, approval assessment Packaging and labelling related
procedures treatments to food safety
methods
Some examples of SPS measures
(1/4)
To protect…
Additives, contaminants,
Human or animal From toxins or disease organisms
life or health in foods, drink, feedstuffs
Residue limits in Aflatoxin limits in

seafood nuts
(2/4)
To protect…
Diseases carried by animals,
Human life or health From plants or their products, or from
pests
Requirement for Avian influenza

rabies vaccination
(3/4)
To protect…
Entry, establishment or spread of
Animal or plant
From pests, diseases, disease-causing
life or health
organisms, etc.
Foot- and mouth Prevent the spread of

disease fruit fly
(4/4)
To protect…
From Other damage caused by entry,
A country
establishment or spread of pests
Prevent entry of Zebra

mussels via
Ballast water
Regulate seeds to
avoid entry of weeds
Important footnote!
 “Animals” include fish and wild fauna
 “Plants” include forests and wild flora
 “Pests” include weeds
 “Contaminants” include residues of pesticides and

veterinary drugs, as well as extraneous matter
Rights
Members have the right to take sanitary and

phytosanitary measures necessary for the protection of
human, animal or plant life or health, provided that such
measures are not inconsistent with the provisions of
this Agreement.
Obligations
Only to extent necessary Based on scientific principles
Non discriminatory /
national treatment
Not maintained without

sufficient scientific
evidence (unless No disguised protectionism
provisional )
Key Provisions of the SPS
Agreement
• Non-discrimination
• Scientific justification
• harmonization
• risk assessment
• consistency
• least trade-restrictiveness
• Equivalence
• Regionalization
• Transparency
• Technical assistance/special treatment
• Control, inspection and approval procedures
Consistency
Members shall
avoid arbitrary distinctions
in appropriate level of SPS

protection (ALOP) considered in
different situations
if distinctions result in discrimination or

disguised restrictions on trade
Measure be least trade restrictive
Once the NEED and LEVEL of protection are determined
Technically and economically

Conformity assessment &TBT rules
Information on
Applied equally Carried out requirements provided on
irrespective of origin expeditiously request
Fees equitable to Facilities and

domestic and foreign sampling not to be Review complaints
applicants inconvenient on procedures
What matters to exporters?
Key messages from ITC’s interviews with nearly 30,000
businesses
1. Clarity of what is being applied when
Multitude of regulations and agreements, types of certifications and related procedures leads
to confusion not only of businesses but also of customs officials
 Transparency; policymakers’ awareness of practical implications of rules
2. Consistency of what is being applied when

(Preferential) rules versus (non-preferential) practice: At times, the practice on the ground
differs from what is written in laws / has been negotiated. Unpredictability comes with
significant cost for businesses.
 Training of customs officials; transparency; appeal procedures
3. Procedural efficiency
Rules imply procedures and procedures have time and cost implications. Example RoO: if a
preference can be gained, it may be worth it (but at times is not…). In cases of non-preferential
rules, this is just a cost with (in most cases) no gains
 Review procedures; Think (again) about non-preferential rules
Tackling the transparency challenge: NTM
data collection coverage
So back to our information tools….
k
Where do I find all this information for products and markets of my
interest?
Market Access Map Let’s focus

on this first
www.macmap.or
g
Sanitary and Phyto-Sanitary measures (SPS)

and Technical Barriers to Trade (TBT)
notification alert system: www.epingalert.org
Rules of Origin Facilitator

Find and compare rules of origin, related provisions and certification
requirements
http://findrulesoforigin.org/
Data types
Market Access Map

Other market access
Tariffs
conditions
Applied Ad Sanitary
MFN and Trade and Technical Inspection Other Non-
and Tariff Rate valorem agree-
Rules of Trade
preferenc Origin remedies
Phytosanit Barriers require- tariff
bound Quotas equi- ments ary to Trade ments measures
es
tariffs valents Measures
Let’s go live
Market Access Map
www.macmap.or
g
Show MacMap with a live example on NTMs, for the product/destination of your choice.
For this product / destination , process a simple search: find non-tariff measures (e.g.: India – avocadoes).
• Show the list of regulations (it’s long!)

• Show type of regulations (e.g. SPS / TBT labelling), additional info of the issuing authority etc
• Be able to talk a little bit about each NTM, and why are they classified in their respective category.
• Mention that the data is meant to give a first orientation to simplify further search
• I would then use the time for specific exerces related to finding NTMs in MAcMap
Time for exercises
RULES OF ORIGIN
147
Introducing your gateway to trade agreements

Unilateral arrangements
Generalized System of Preferences to developing
countries
Reciprocal agreements
Partial Scope Agreement
Free Trade Agreement/Area
Customs Union
Common Market
Economic Union
149
For MSMEs, duty savings in the form of reduced tariffs

is the most direct, tangible benefit from international trade
agreements concluded by nations
They improve competitiveness:
#1. Make your products #2. Improve margins by

more affordable in foreign letting you source inputs at
countries a lower cost
In order to take advantage of preferential tariffs, a firm must
Demonstrate where the product was produced
Comply with the rules of origin (ROO)
Prove the “originating” status of the products with the

Certificates of Origin (COO)
151
What are rules of origin?
 Rules of origin are the criteria to determine the economic “nationality” of

the good.
 They list conditions that need to be fulfilled for the good to be
considered originating in a given country.
There are two types of rules of origin: https://youtu.be/K9bl1o_9-UU
 Preferential rules of origin

 Non-preferential rules of origin
Help: Learn more at  http://findrulesoforigin.org/glossary/glossary_roo

152
Many MSMEs fail to use trade agreements
Rules of Origin
153
Rules of origin are #1 non-tariff barrier for

manufacturing firms: ITC NTM surveys
154
Trade landscape gets more and more complex
“Noodle bowl” of trade agreements in the RCEP region
Source: ITC Trade agreement database

Note: The chart displays trade agreements in force as of January 2017
155
How complicated are rules of origin ?

• Not standardized: rules of origin can be a few lines to hundreds of
pages long (e.g., agreements involving Pacific Rim countries)
• Not easy to find:
- a provision, a chapter in the text;
- a separate annex/protocol;
- a section incorporated in domestic law
• Not easy to comprehend:
- highly technical provisions
- requirements vary from one agreement to another
- varying terminology
Example: Origin criteria

for T-shirts in ASEAN-
Korea FTA
156
157
Information in Rules of Origin Facilitator
800+ 200+
(countries)
Trade
Tariff
agreements
schedules
400+
250+ Documents
Rules of (texts,
origin certificates
of origin)
158
Quiz Time
• A container of toys is shipped from Kuantan Port (Malaysia) to Port of Los Angeles
(U.S.). Can we say that the origin of these items is Malaysia?
No. Port of departure does not tell us anything about the origin of the items.
If MFN tariff on your product is 0%, can you still need a certificate of
origin?
Yes. You might steel need a non-preferential certificate of origin in certain cases.
You might also need a preferential certificate of origin if the buyer keeps insisting,
or to be exempt from certain additional fees (i.e. merchandise processing fee in the
case of some U.S. agreements)
159
Rules of Origin: Institutional Frameworks

The World Customs Organization and the revised Kyoto Convention.
 Annex K of the revised Kyoto Convention introduced definitions, standards
and recommended practices for both non-preferential and preferential rules
of origin.
 Full text:
http://www.wcoomd.org/en/topics/facilitation/instrument-and-tools/convention
s/pf_revised_kyoto_conv/kyoto_new.aspx
The WTO Agreement on Rules of Origin (ARO)

 Annex 1 A to the Agreement establishing the WTO.
 ARO provides definitions for preferential and non-preferential rules of origin.
 ARO sets out some standards and obligations for WTO members in managing non-
preferential rules of origin.
 ARO allows the formation of a Committee on Rules of Origin at the WTO and a
Technical Committee on Rules of Origin under the support of the WCO.
 In the long term, ARO aims to achieve the harmonization of non-preferential rules of
origin.
160
Non-preferential rules of origin

161
Overview of non-preferential rules

In general, non-preferential rules of origin are not related to contractual or autonomous
trade regimes leading to the granting of tariff preferences.
Usually based on the revised Kyoto Convention and the ARO principles and standards.
HOWEVER, local customs legislation or guidelines can include more detailed definitions of
“wholly obtained” and “last substantial transformation”.
Example:
The EU customs legislation outlines definitions and provisions for non-preferential rules of origin
applied by the EU (UCC Delegated Act 2015 Articles 31-36)
162
What are they used for?

ARO, Art 1:2: Non-preferential rules of origin are used for a range of “non-
preferential commercial policy instruments”, for example:
• MFN duties
• Anti-dumping duties
• Countervailing duties
• Labelling and marking
• Tariff quotas and quantitative restrictions
• Safeguard measures
• Embargoes
• Government procurement
• Trade statistics
Exporters can obtain a document confirming the non-preferential origin of their
product. Non-preferential Certificate of Origin is usually issued by local
Chambers of Commerce or a designated customs authority.
163
Non-preferential Certificate of Origin

Different types of certificates
are used under different non-
preferential schemes
Example: European Union
http://findrulesoforigin.org/home/compare?reporter=276&partner=156&product=2103200000
164
Preferential rules of origin

165
What is preferential origin?
• Preferential origin relates to trade agreements.
• These agreements can be either unilateral (offered by one side to

another) or reciprocal (negotiated and agreed by both sides) trade
treaties and schemes.
• These agreements can be signed by two (bilateral) or more

(multilateral) parties.
166
Origin in practice
Toothed-wheels of cast iron and steel (HS code 8483.90.81.90) imported into the EU
http://findrulesoforigin.org/home/compare?reporter=276&partner=410,484,842&product=8483908190
Cost of goods: MFN tariff: 2.7%
$500
$500 + 2.7%
No trade agreement in place =
MFN rate
$500
$500 + 0%
Meet the rule of origin under the EU-
Mexico agreement = preferential rate
$500
$500 + 2.7%
Do not meet the rule of origin under the
EU-South Korea agreement = MFN rate
167
Preferential origin qualifying process

In order for a product to be traded under preferential origin (low tariff), the exporter
needs to answer ‘YES’ to each of the five questions.
IF the answer to any of the questions is ‘NO’, the product must be

traded under the MFN rate
• Is there a trade agreement between

1. Agreement the country of export and import?
• Is there a preferential tariff rate for the

2. Product product under the agreement?
• Does the product comply with the rule of

3. Rule origin under the agreement?
• Can the exporter comply with all origin

4. Compliance provisions and conditions?
• Can the exporter prove the origin of the

5. Proof product?
Origin criteria: basic principles
Substantial / sufficient transformation of goods

Wholly obtained goods
- Change of tariff heading: all non-originating
materials used in the production of the product
have undergone a change in tariff classification
- Value addition:
HS4 08.05 HS4 20.09
E.g. production in which the value of all non-originating materials used

- Technical requirements:
does not exceed 50 % of the transaction value of the product.
E.g. pasteurization of milk

169
14 basic types of rules of origin

Occurrence Rule Definition
6% WO Good is entirely (i.e. wholly) obtained or manufactured in one country without using any non-originating
materials.
5% NC The non-originating inputs are not required to be classified in a different HS code than the final good to
confer originating status.
7% CC The originating status is conferred to a good that is classified in a different HS chapter than the non-
originating inputs.
43% CTH The originating status is conferred to a good that is classified in a different HS heading than the non-
originating inputs.
6% CTSH The originating status is conferred to a good that is classified in a different HS subheading than the non-
originating inputs.
0% CTI The originating status is conferred to a good that is classified in a different HS tariff item than the non-
originating inputs.
CTC
10% ALW The originating status is allowed to be conferred from non-originating inputs of specific HS codes.
10% ECT The originating status cannot be conferred to a good if the non-originating inputs are from HS codes listed
under exception.
13% SP A good originates in the country where a defined technical requirement, i.e. a specific working or
processing, has taken place.
61% RVC A good obtains originating status if a defined regional value content percentage has been reached.
0.1% RQC A good obtains originating status if a defined regional quantity content percentage has been reached.
3% RVP A good obtains originating status if a defined regional value content percentage on a part or parts has
been reached.
0% RQP A good obtains originating status if a defined regional quantity content percentage on a part or parts has
been reached.
2% Other Origin criteria other than related to wholly obtained, CTC, value (quantity) content, or specified process.
170
14 basic types of rules of origin

Occurrence Rule Definition
6% WO Good is entirely (i.e. wholly) obtained or manufactured in one country without using any non-originating materials.
The non-originating inputs are not required to be classified in a different HS code than the final good to confer originating
5% NC status.
7% CC The originating status is conferred to a good that is classified in a different HS chapter than the non-originating inputs.
43% CTH The originating status is conferred to a good that is classified in a different HS heading than the non-originating inputs.
6% CTSH The originating status is conferred to a good that is classified in a different HS subheading than the non-originating inputs.
0% CTI The originating status is conferred to a good that is classified in a different HS tariff item than the non-originating inputs.
10% ALW The originating status is allowed to be conferred from non-originating inputs of specific HS codes.
10% ECT The originating status cannot be conferred to a good if the non-originating inputs are from HS codes listed under exception.
13% SP A good originates in the country where a defined technical requirement, i.e. a specific working or processing, has taken
place.
61% RVC A good obtains originating status if a defined regional value content percentage has been reached.
0.1% RQC A good obtains originating status if a defined regional quantity content percentage has been reached.
3% RVP A good obtains originating status if a defined regional value content percentage on a part or parts has been reached.
0% RQP A good obtains originating status if a defined regional quantity content percentage on a part or parts has been reached.
2% Other Origin criteria other than related to wholly obtained, CTC, value (quantity) content, or specified process.
Note: “Occurrence” means % of presence of the rule among all 500,000 FTA x HS6 combinations (as of Oct 12, 2018)
Rules of Origin
Wholly obtained Substantial transformation

(WO) basic standard describing what confers to the good its ‘essential
obtained from the earth or sea, or grown on land character’
Help: What is wholly obtained?

 http://findrulesoforigin.org/glossary/wo
Specified process
Change in tariff classification (SP)
(CTC)
Ch. 01  Ch. 02
Value added content
(RVC)
Help: What is CTC?
 http://findrulesoforigin.org/glossary/ctc
Help: What is RVC?
 http://findrulesoforigin.org/glossary/rvcformula
+ any combination
172
Example of rules of origin classification

Good: Sports car - HS 8703.24
Trade agreement Rule of origin Criterion (ITC)

A change from any other heading, provided
FTA, China-Peru there is a regional value content of not less CTH and RVC 50%
than 50 percent.
A change to subheading 8703.21 through

8703.90 from any other heading, provided
NAFTA there is a regional value content of not less CTH and RVC 62.5%
than 62.5 percent under the net cost method.

8703.90 from any other heading, provided
EPA, Japan-Mexico there is a regional value content of not less CTH and RVC 65%
than 65 percent.
173
Value added calculations - example
Parts Motor cars and other motor vehicles
Various HS codes HS Heading 87.03
Rule of origin: production in which the value of all non-

originating materials used does not exceed 50 % of the
ex-works price or transaction value of the product.
174
Change in tariff classification – Tomato juice

Good: Tomato juice - HS 2009.50
Process: Tomato juice is made from tomato paste, which in turn is made from
fresh tomatoes. Tomato juice and tomato paste are classified in the same Ch. 20
(Prepared fruits,vegs,nuts), but in different headings. Tomatoes are in Ch. 07.
Will the tomato juice comply with the Roo regulations when importing tomatoes or tomato
paste ? Let’s see some examples.
Tomatoes Tomato paste Tomato juice
HS 0702.00 HS 2002.90 HS 2009.50
Change in tariff heading (CTH)
Change in chapter (CC)

175

Example 1: LDC of Switzerland: “The good obtained should be classified under a HS

tariff heading other than that covering each of the non-originating products used ”
Criterion (ITC): CTH
?
HS 0702.00 HS 2002.90 HS 2009.50

176

Example 2: NAFTA: “A change to subheading 2009.50 through 2009.80 from any

other chapter.”
Criterion (ITC): CC
?
HS 0702.00 HS 2002.90 HS 2009.50

177

Example 3: EPA, Japan-Mexico: “A change to subheading 2009.50 from any other

chapter, except from heading 07.02. ”
Criterion (ITC): CC + ECT
?
HS 0702.00 HS 2002.90 HS 2009.50

178

Example 4: AGADIR: “Manufacture from materials of any heading, except that of the
product, and in which the value of all the materials of Chapter 17 used does not exceed
30% of the ex-works price of the product.”
Criterion (ITC): CTH + ECT 30%
?
HS 0702.00 Sugar HS 2002.90 HS 2009.50
30% Change in tariff heading (CTH)

Complicated ROO: Example
Preference hs6 rule criterion

3810.90 from any other chapter, except from
chapter 28 through 38; or A change to
EPA, Japan- subheading 3810.10 through 3810.90 from any
381010 CC + ECT or CTSH + RVC 50 %
Mexico other subheading within chapter 28 through 38,
whether or not there is also a change from any
other chapter, provided there is a regional
value content of not less than 50 percent.
Example ‘Live demonstration’ 3 : Find a product to put in this slide and update the slide.
It must be a complicated ROO 
180
What do I do if I don’t understand the rule?

Example: NAFTA: “A change to subheading 2009.40 through 2009.80 from any other
chapter.”
1. Click on “Criterion (ITC)”
2. Click on ‘Find Out More’ and read general (introductory) notes to the rules
In the case of NAFTA, you will see that you need to print out the following words in front of the
rule:
“All non-originating materials used to produce the good must undergo…”

181
Exercise 1: Ketchup from Jordan

Good: Ketchup - HS 2103.20
Task: Using findrulesoforigin.org, find applicable rule of origin for ketchup under Canada-
Jordan FTA and work out whether this ketchup made in Jordan qualifies for preference.
Bill of Materials* Watch how ketchup is made: https://youtu.be/pzKdUYtlXSQ
Ingredient HS code Origin Cost

Tomato paste 2002.90 China $1
Sugar 17 Turkey ¢30 Final price (EXW):
Salt 2501.00 Pakistan ¢10
$3
Cloves 0907.20 unknown ¢10
Vinegar 2209.00 Turkey ¢10
Onion powder 0712.20 China ¢10
Glass bottle 7010.90 China ¢30
* all other materials not listed are of Jordanian origin

182
Solution: Ketchup from Jordan qualifies!

Key: The ketchup rule of origin under Canada-Jordan FTA is “A change from any other
subheading.” (CTSH). This means every non-originating material has to be classified in a
subheading (6-digit code) other than 2103.20.
Bill of Materials* Watch how ketchup is made: https://youtu.be/pzKdUYtlXSQ
Ingredient HS code Origin Cost Passes CTSH shift? Final

Tomato paste 2002.90 China $1 Yes price
Sugar 17 Turkey ¢30 Yes (EXW):
Salt 2501.00 Pakistan ¢10 Yes $3
Cloves 0907.20 unknown ¢10 Yes
Vinegar 2209.00 Turkey ¢10 Yes
Onion powder 0712.20 China ¢10 Yes
Glass bottle 7010.90 China ¢30 Disregarded (see Packaging)

183
Most relevant provisions for Change in

Tariff Classification rules
Some of them can be regarded as loopholes to help pass the rule
184
Value added calculations - example
Parts Motor cars and other motor vehicles
Various HS codes HS Heading 87.03
Rule of origin: production in which the value of all non-

originating materials used does not exceed 50 % of the
ex-works price or transaction value of the product.
185
Value added rules: calculation methods

Example: ASEAN: “A regional value content of not less than 40 percent; or…”
Value of ketchup
Method 1. “Build-up” method
A minimum requirement for regional, i.e. originating, content
40%
originating
Method 2. “Build-down” method

A maximum allowance for non-originating inputs 60%
non-originating
Here “region” is defined as the 10 ASEAN countries combined

186
Exercise 2: Ketchup from Jordan

Task: Using findrulesoforigin.org, find applicable rule of origin for ketchup under GSP of
Russia and work out whether this ketchup made in Jordan qualifies for preference.
Bill of Materials* How it’s made: https://youtu.be/pzKdUYtlXSQ
Ingredient HS code Origin Cost

Tomato paste 2002.90 China $1
Sugar 17 Turkey ¢30 Final price (EXW):
Salt 2501.00 Pakistan ¢10
$3
Cloves 0907.20 unknown ¢10
Vinegar 2209.00 Turkey ¢10

187
Solution: Ketchup from Jordan qualifies!

Key: The ketchup rule of origin under GSP of Russia states that value of non-originating
materials should not exceed 50% of Ex-works price (see also Value Added Calculations).
Cumulation of inputs from other GSP beneficiaries is allowed.
http://findrulesoforigin.org/home/detail?reporter=643&partner=400&product=2103200000&id=672&status=True&rank=1
Bill of Materials*
Final
Ingredient HS code Origin Cost Cumulation price
Tomato paste 2002.90 China $1 (EXW):
Sugar 17 Turkey ¢30 GSP beneficiary 50% $3
Salt 2501.00 Pakistan ¢10 GSP beneficiary is not
Cloves 0907.20 unknown ¢10 exceeded
Vinegar 2209.00 Turkey ¢10 GSP beneficiary
Total $2 - ¢50 = $1.5, or 50% of $3
188
Most relevant provisions for Value Added rules

Some of them can be regarded as loopholes to help pass the rule
189
Quiz Time
• If you are a small business, which type of value added calculation will you likely find
easier to apply: “build-down” or “build-up”?
Build-down. Taking the bill of materials and marking inputs that are non-originating is easier than to
estimate the originating content including labor, royalties, profits – which requires advanced
accounting skills. Furthermore, accounting of certain components, such as profits, differs from one
agreement to another.
• Can you see any risks associated with relying on value added rules?
Yes. There can be currency exchange impact. If domestic currency depreciates,
the relative value of imported inputs will go up and will risk violating the value
content threshold.
Also same effect if the world price of non-originating inputs goes up.
190
Specific processing - example
Yarn Fabric Garments
Various HS codes Various HS codes Various HS codes
Rule of origin: manufactured from yarn

191
Exercise 3: Baby clothes from Morocco

Good: Baby clothes, of cotton, unembroidered - HS
6209.20.00.90
Task: Using findrulesoforigin.org, find applicable rule of origin under EU-Morocco FTA for
a baby clothes set described above and work out whether this item made in Morocco
qualifies for preference.
Bill of Materials*
Material HS code Origin Cost Final price (EXW):
Cotton yarn 5205 Viet Nam $3 $8
Cotton thread 5204 China ¢50
Buttons 9606 China ¢10
Zipper 9607.19 unknown ¢40
* all other materials not listed are of Moroccan origin

192
Solution: Baby clothes from Morocco qualify!

Good: Baby clothes, of cotton, unembroidered - HS
6209.20.00.90
Key: The rule of origin for cotton baby clothes, unembroidered, under EU-Morocco FTA is
“Manufacture from yarn” (SP). Firm uses cotton yarn from Viet Nam to manufacture cotton
fabric and then the clothes, thus it respects the specific process requirement.
Bill of Materials*
Final price (EXW):
Material HS code Origin Cost
Cotton yarn 5205 Viet Nam $3 $8
Cotton thread 5204 China ¢50
Buttons 9606 China ¢10
Zipper 9607.19 Germany ¢40
* all other materials not listed are of Moroccan origin

193
Combined / alternative rules - example

The Canada – EU Comprehensive Economic and Trade Agreement
HS code 2103.90 ‘Sauces and preparations therefor; mixed condiments and mixed
seasonings; mustard flour and meal and prepared mustard’
“A change to barbeque sauce, fruit-based sauces, mixed condiments or mixed seasonings from
any other subheading, provided that:
(a) the net weight of non-originating sugar used in production does not exceed 40 per cent of the
net weight of the product,
(b) the net weight of non-originating material of heading 04.07, 04.08 or 04.10 used in production
does not exceed 20 per cent of the net weight of the product, and
the net weight of non-originating sugar and non-originating material of heading 04.07, 04.08 or
04.10 used in production does not exceed 50 per cent of the net weight of the product;
OR
A change to any other product of subheading 2103.90 from any other subheading, provided that:
(a) the net weight of non-originating sugar used in production does not exceed 20 per cent of the
net weight of the product, and
(b) the net weight of non-originating material of heading 04.07 through 04.10 used in production
does not exceed 20 per cent of the net weight.”
194
Don’t forget to check additional notes!

They are there because they are important
Good: Frozen shrimp - HS 0306.17
Example: CPTPP http://findrulesoforigin.org/home/compare?reporter=484&partner=704&product=

03061701
They are in ‘Find Out More’ section!
This Chapter Note allows to import non-

originating larvae (baby shrimp) from
China and grow it into originating
Vietnamese shrimp
195
Restrictiveness of rules of origin

Good: 87.03 – Cars
196
Restrictiveness of rules of origin

Good: Sausages – HS 1601.00
Restrictive Liberal
A change to heading A change from any A change to Manufacture in which

16.01 through 16.02 other chapter, heading 16.01 all the materials used
from any other except from through 16.05 are classified within a
chapter, except from Chapter 2. from any other heading other than
chapter 1 or 2. chapter. that of the product
• FTA, EU-Canada
• EFTA-Mexico • NAFTA & USMCA Ham (16.02)
• FTA, Australia-Japan • FTA, China-Peru • CPTPP • GSP of Switzerland
• EFTA-Costa Rica • FTA, Canada-Korea • EFTA-GCC
• EPA, Japan-Mexico • FTA, China-Switzerland • ECOWAS
• Chile LDC
- restricted input - allowed input
197
Other origin requirements 5. Compliance
In addition to fulfilling the rule of origin, products exported under preference

need to comply with a number of other origin requirements and conditions.
These requirements are sometimes referred to as regime-wide origin and
certification provisions and cover a number of issues.
Exporters and importers often find that these additional requirements

are less transparent, difficult to navigate and comply with than rules of
origin themselves. They can be the reason exporters of goods eligible
for preferential treatment decide to export under the MFN tariffs.
198
Other origin requirements - examples
 Origin calculation and application: How to calculate value added? How to

treat inputs used during the production process originating in partner countries?
How to treat spare parts? (e.g. Cumulation, Value added calculation, Wholly
obtained products, Sets, Accessories, Spare Parts and Tools)
 Flexibility: Are there any rules that allow for additional flexibility? (e.g. De
Minimis)
 Certification and proof of origin: What type of document is required? Can the
exporter self-certify origin or does the proof need to be issued by an authorised
body? How long is the proof valid for? (e.g. Certification, Approved exporter,
Period of validity, Exemption of certification)
 Shipping and handling: Does the good need to be shipped directly from the
country of export to the country of import? Can it be repackaged on the way?
(e.g. Principle of Territoriality, Direct transport)
 Accounting: How long do the documents relating to originating goods need to
be stored? (e.g. Retention period, Supporting documents, Verifications)
Main challenges reported: Rules of Origin
The cost of preferential market access
• Cost of obtaining the certificate of origin

1
• De jure versus de facto preferential treatment

2
• Strict origin requirements / mutually exclusive
3 requirements between agreements
 Sometimes it is more costly to prove product

origin than to pay MFN
Source: ITC business surveys on NTMs in 30 countries, 2010-2016, www.ntmsurvey.org

Preferential market access: the cost
• Getting the certificate of origin

1
2 to 3 months to prepare
the dossier. It’s a waste of 10 different
time. In addition, it’s documents,
Up to two weeks repetitive. every time!
only for issuance
 Inefficiencies in issuing the

certificate of origin
2 weeks to prepare the

3-4 additional days just documents to be submitted,
because I have to come to 5 days to receive the
the capital certificate
3-4 days Source: ITC business surveys on NTMs in 66 countries, 2010-2016,
www.ntmsurvey.org
201
• Exporter testimonies (continued)

2
 Language issues The partner country

doesn't apply both
 De jure versus de facto preferential existing agreements
treatment although the product
satisfies the rules of
origin. The situation
When exporting to any Arab country and forces us to pay tariffs […]
issuing GAFTA certificate of origin, the and for some products it
certificate must be written 100% in Arabic. becomes non-profitable
There are some technical wordings, letters and to export.
numbers that cannot be translated. The
customs officials do not understand this point
and usually reject the certificate.
Source: ITC business surveys on NTMs in 66 countries, 2010-2016, www.ntmsurvey.org

The majority of difficulties linked to the certificate of origin are
encountered at home (in the exporting country)
Share of procedural obstacles*, by location
Rules of Origin Other types of NTMs
94% 59% 41%

6%
In the partner In the partner

In the home country In the home country
country country
*Note: Only cases reported by exporters

Source: ITC business surveys on NTMs in 30 developing countries, 2010-2016
www.ntmsurvey.org
203
Rules of Origin Facilitator: https://www.youtube.com/watch?v=XQioEBZT8jA

204
Rules of Origin – Why?
Non-preferential ROOs
- Trade statistics
- Trade policy measures: e.g. anti-dumping / tariff rate quotas
- Government procurement
- Etc.
Preferential ROOs
“Except as otherwise
- Trade agreements: determining provided in this Agreement,
eligibility for preferences each Party shall eliminate its
customs duties on
originating goods of the
Each trade agreement has its other Party”
own sets of rules of origin!
205
Garment
Let’s look at this example factory
$1 $2
? ?
cutting,
sewing
% Duty?
Fabric T-shirt
Client
HS Chapter 52 HS Chapter 61
206
Step 1. Trade agreements
Step 2. Duty savings

207
Step 3. Specific rule of origin

208
Step 4. Origin compliance

209
Step 5. Proof of origin

210
211
Tailored call to action in the end

TRADE REMEDIES
In the headlines
Boeing, Airbus, Bombardier disputes
In the headlines
US-China tit-for-tat tariffs
In the headlines
US-China tit-for-tat tariffs
What are Trade Remedies?
Trade policy measures that allow governments to take

remedial action against imports which cause material
injury to a domestic industry.
 Actions taken against dumping (selling at an unfairly low price)

 Subsidies and special “countervailing” duties to offset the subsidies
 Emergency measures to limit imports temporarily, designed to
“safeguard” domestic industries.
 Other remedial actions that are taken by governments outside of the
scope of the three situations above.
Type of Trade Remedies
Measures Situation Applying Member
Anti-dumping Dumping WTO Member with
measures domestic industry suffering
injury
Countervailing Subsidies WTO Member with
measures domestic industry suffering
injury
Safeguard Unforeseen increased WTO Member with

measures imports domestic industry suffering
injury
Other measures
Anti-Dumping measures
Anti-dumping measures are authorized when

Essential conditions are met:
1. Dumping
2. Injury
3. Causal link
Fundamental procedural rules are respected

Countervailing measures
Countervailing measures are authorized when

1. Subsidy
2. Benefit conferred to the recipient
3. Causality

Safeguard measures
Countervailing measures are authorized when

1. Unforeseen increased imports
2. Injury (actual or threat)
3. Causation and non-attribution

Which countries apply trade remedies?
Around 54 countries. Insert data availability of trade remedies here
Trade Remedies in Market Access Map
Source: https://beta.macmap.org/en//query/results?reporter=504&partner=792&product=841810&level=6
Trade Remedies in Market Access Map
Trade Remedies
QUIZ TIME
 What are the three main types of trade remedies?
Anti-Dumping, Countervailing and Safeguard measures.
 Do the WTO rules always require trade

remedies to be non-discriminatory?
Anti-dumping and countervailing measures can be country- and firm-specific.
 OPEN DISCUSSION: How do trade remedies affect conduct of international

businesses? Why is it essential to stay informed on their evolution?
Summary
TRADE REMEDIES
Trade Remedies - Summary
 What are trade remedies?
 How do I know if the destination market applies any trade remedies on my

product? Where to find the measures?
 What is an anti-dumping measure?
 What is a countervailing measure?
 What is a safeguard measures?
 Where to classify the additional duties and quotas applied by the United
States in 2018 on imports of certain steel and aluminium products under
Section 232 of the Trade Expansion Act of 1962 and the countermeasures
taken by the affected countries (China, the EU, Canada and Mexico)?
WTO TBT -Government structures
Central National enquiry National

government point (NEP) notification
responsible authority (NNA)
for
compliance
Facilities for
Central /
conformity
National
assessment
standards body
services
(NSB)
Technical Regulations and TBT rules
IF TR / CAP Performance-
International based
Standard
AND
Significant Allow &
consider Finalize
effect on trade
commen
60tsdays
Justify
Transparency: SPS
establish an Enquiry Point

AND
designate a Notification Authority
Members shall
Publish all SPS measures.
notify other Members of new or changed

SPS regulations when
no international standard exists regulation may

OR AND have significant
the new regulation is different than effect on trade
the international standard
WTO Committee on SPS

So back to our information tools….
k
Where do I find all this information for products and markets of my
interest?
Market Access Map

www.macmap.or
g
Sanitary and Phyto-Sanitary measures (SPS)

and Technical Barriers to Trade (TBT)
notification alert system: www.epingalert.org
Rules of Origin Facilitator

Find and compare rules of origin, related provisions and certification
requirements
http://findrulesoforigin.org/
What is e-Ping?
Les pays modifient leurs réglementations SPS et OTC (prescriptions

Alert system for
relatives aux produits) assez régulièrement.
SPS and TBT
Comment notifications
rester à jour?
Enables the private (and public) sector to keep track

of SPS / TBT notifications of interest
1. Published by export markets
2. And also by products
SPS/TBT notifications on the rise
More than 4,000
notifications in 2017!
4500
4000
3500
3000
2500
SPS
2000
TBT
1500
1000
500
0
95
96
97
98
00
01
02
03
05
07
08
10
13
15
99
04
06
09
11
12
14
16
17
19
19
19
20
20
20
20
20
20
19
19
20
20
20
20
20
20
20
20
20
20
20
20
Example of notifications
ePing: tool to track/manage
notifications
 SPS/TBT notification  Communication platform
email alerts matching facilitating dialogue among
users’ filtering criteria public/private sector
Publicly available in EN, FR, ES

Launched in Nov. 2016
Prior to e-Ping
Prior to ePing
SPS/TBT
Notificatio
n Enquiry Point
(EP)
Notifyin WTO or Sector
Governmen Producers/
g (SPS and National organization
t agencies Exporters
member TBT IMS) Notification s
Authority
(NNA)
Commen
ts in 60
days!
Goal is to address potential trade problems at an early
stage
Notifying member
Producer/Export
Commen er
ts in 60 Enquiry Point or
days!
National
SPS/TBT Notification Government
Notification
Authority agencies
WTO
(SPS & TBT
IMS)
Other interested Sector

parties Associations
Growing user community More than
3,400 users
March 2018
ePing’s value-added
1. One interface for SPS/TBT
2. Rapid and customized alerts for users, avoiding information

overflow
3. Forum to discuss, share information, assisting public

consultations
4. Increased compliance with transparency obligations
5. Drawing on resources and expertise of three coordinating

agencies
Register and receive notification alerts
Register and receive alerts
http://www.epingalert.o
rg
Register to receive alerts

and access all functionalities
Select your
language
Register page - overview
1. If you like to receive all

notifications, leave all boxes
blank
2. To render the best filter results

with respect to products, fill
out each box
(product names: OR)
Example of email alert
Example of notification summary
Example of email alert (2)
Direct link to the SPS/TBT

Enquiry Point contact details on
the website
Enquiry Point contact list
Search notifications and create filters for
additional alerts
The “search notifications” page
Filter
Names
Filter
Details
Notification
List
Record Navigation
Footer
Functionalities on ePing enhancing communication
Functionalities on ePing enhancing
communication
Functionalities on ePing enhancing
communication
Access the notifications in all
three official WTO languages
Write contributions and share files

related to a given notification
These functionalities need to be
activated by EP or NNA
Create favourites lists and

share notifications with
other users or external
contacts
Add notifications to favorites list
Add notifications to favourites list
Optional: select reminder

date
Create/select category
Share notifications
Share notifications
Share notifications
 Share a notification issued by your

government (or neighbouring
government ) with a colleague
 Add email address(es), subject and

message (or select a group you have
created if you have group
management or Enquiry Point rights)
Example ‘Live demonstration’ 4 : demonstrate ePing live and ask your participants to
register ! Let us know afterwards how many people were registered.
Starting point for further research? ?
• Information is scattered across different national, regional and
international sources
• Availability depends on the destination country
• It is necessary to take the time and to do desk research in order to get an

overview and understanding of the relevant the NTMs
- Business associations, Chamber of Commerce, etc.... might have additional

information
- Other exporters – however, as compliance with NTMs is such a challenge for
exporters, they are often not willing to share their experiences with others
258
National Standards – getting information
about them
Many countries use Codex standards to develop their national standards  Codex provides exporters
insight into national standard baselines
WTO member countries are bound by the SPS and TBT Agreements which provide guidelines on
standards relating to
• Health protection measures (SPS)
• Technical requirements and conformity assessment procedures (TBT)
Each WTO member has a national enquiry point for questions about the country’s standards, control,
inspection & risk assessment procedures.
See WTO website for national enquiry point contacts details for SPS & TBT:
• SPS:http://www.wto.org/english/tratop_e/sps_e/sps_agreement_cbt_e/c10s1p1_e.htm#enquirypoints
• TBT: http://www.wto.org/english/tratop_e/tbt_e/tbt_enquiry_points_e.htm
Codex Alimentarius
“Food code” created 1963 by FAO and WHO to:
• Protect health of consumers

• Ensure fair trade practices in food trade
• Promote coordination of food standards work undertaken by
international governmental and non-governmental organizations
Source:
www.codexalimentarius.org
CBI Market Information: https://www.cbi.eu/
EU Trade Helpdesk
Everything you need to know about accessing the EU market
• General and specific

requirements
• (Regional and country)
• Internal Taxes
• Import procedures
Source: http://trade.ec.europa.eu/tradehelp
Tracking the reasons for food rejection at
customs
WHY ?
263
RASFF (European Union)
• The RASFF portal was put in place to enable EU food and feed
control authorities to exchange information about measures taken
responding to serious risks detected in relation to food or feed
• Helps EU Member States act rapidly and in a coordinated manner in

response to a health threats caused by food or feed
• RASFF has an interactive searchable online database. Here you can

see the most recent RASFF notifications as well as search for
information on any notification issued in the past
Link: http://ec.europa.eu/food/food/rapidalert/index_en.htm
RASFF Portal (EU)
What it regulates
• Foods
- Bottled water
- Additives
- Infant formulas
• Drugs • Electronic products
- Prescription
emitting radiation
- Non-prescription
(microwave, x-ray, lasers)
• Biologics
- Vaccines • Cosmetics
- Blood and blood - Colour additives for
products makeup
- Allergenics - Skin products
• Medical devices - Perfumes
• Veterinary products
• Tobacco products
Source:
http://www.fda.gov/AboutFDA/
Transparency/Basics/ucm194
879.htm
OASIS Portal (USA)
Operational and Administrative System for Import Support (OASIS)
U.S. Food and Drug Administration prepares this information in an effort to provide the public with
information on products that have been found to appear in violation of the Food, Drug, and
Cosmetic Act.
Maximum Residue Levels (MRL)
• MRLs are the maximum legal concentration
levels for pesticides and veterinary drug residues
in or on food or feed
• Based on good agricultural practices and to
ensure the lowest possible consumer exposure.
Finding MRL regulations:
• The US Foreign Agricultural Service (FAS) has an MRL database

for all plants & animals, all pesticides & veterinary drugs and
covering all countries: http://www.mrldatabase.com/
• The EU has a database for pesticides regulations in the EU:

http://ec.europa.eu/dgs/health_food-safety/index_en.htm
Other selected data sources on NTMs
Source Description Source
Global database on countries regulations on food safety &

FAOlex http://faolex.fao.org/
animal & plant health
Japan External Trade Numerous documents devoted to Japan's standards and

http://www.jetro.go.jp/en/reports/reg
Organisation regulations concerning import procedures, quarantine periods, ulations
(JETRO) technical requirements
Regulations.gov Find and comment on proposed regulations and related

http://www.regulations.gov
(USA) documents published by the U.S. Federal government
General Administration of Quality Supervision,

Inspection and Quarantine of the People's Republic of http://english.aqsiq.gov.cn/Lawsand
AQSIQ (China)
China - Regulations on food safety & animal & plant Regulations/
health
Australia’s Biosecurity Import Conditions database for
more than 20,000 plants, animals, minerals and
https://bicon.agriculture.gov.au/Bico
BICON (Australia) biological products. It helps you to determine what nWeb4.0
import conditions exist and if an import permit is
required.
The Integrated Trade Intelligence Portal provides
information compiled by the WTO on trade policy
WTO I-TIP measures. I-TIP covers both tariff and non-tariff https://i-tip.wto.org
measures, government procurement, regional trade
agreements and the WTO accession commitments.
Summary: you should now be able to…
Understand what Non-Tariff
Measures are and be aware of
different types of regulations Better understand the business
perspective on NTMs and
practical challenges that they
struggle with when trying to
comply with NTMs
Find information about non-
tariff measures in
www.macmap.org, ePing and
the Rules of Origin Facilitator
Define rules of origin and
understand their importance in
international trade
Please evaluate the training
Give the evaluation sheet to the participants and make them evaluate the training ! Only
10 minutes and some good feedback. Then please scan everything and send it to the ITC
team.
For more information
www.ntmsurvey.org
ntm@intracen.org
@ITC_MktAnalysis
ITCmarketanalysistools
Trade and Market Intelligence

section (TMI)
International Trade Centre

Tariff and Non Tariff

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NTM and Market Access :

key concepts and information tools

Customs tariffs ( thuế hải quan) are a form of tax or duty

Customs tariffs are levied at the time of importation.

Customs tariffs are generally paid by the importer of record.

Bound Tariffs Applied Tariffs

… but with a few exceptions, including

Generalized System of Preferences (GSP), which allows

Countries with MFN and Non-MFN status

Source: WTO https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm

Preferential tariffs are customs tariffs lower than the MFN

In order to take advantage of a preferential tariff, exporting firms must

Demonstrate where the product was produced

Comply with the rules of origin (RoO)

Prove the originating status of the products with the

What is the difference between the Bound and MFN tariffs?

When can I claim preferential tariffs?

1001 – Wheat and

Importing NTLC – Product description

Example ‘Live demonstration’ 1 : choose a product with it code

Price without tariff Price without tariff

Tariff paid = Price × Rate

Price including Price including

Before Border CHF 22 / kg After Border

The prime beef is The prime beef is now

Price w/o tariff = 80 EUR MFN Tariff

Tariff = 5.1% × 80 EUR + 0.127 EUR/kg × 10 kg

Price with tariff = 85.35 EUR

Branded shoes Option 1

Motor cars and other motor vehicles

Roundabouts, swings, shooting

Alarm clock movements, complete

Switzerland 80.8% of tariff lines

Product coverage: The list of products covered by the TRQ.

Country coverage: The list of countries that can claim an

Administration method: The method used to manage the TRQ

WTO Tariff Rate Quota:

Tariff Rate Quota committed in trade agreements

What is the difference

Not straightforward for non-ad valorem tariffs

An AVE is an estimate of a non-ad valorem

 Why do we need ad valorem equivalents (AVEs) of non-ad valorem

 What is a customs tariff? How to find tariffs applicable on my

 What are the differences between bound and applied tariffs ?

 What’s a MFN and preferential tariffs? When can I claim preferential

 What is an ad valorem and a non-ad valorem tariff ?

 How to assess whether or not you have any tariff advantage or

 In which markets do I have the highest margin of preference?

 Understand how and why ad valorem equivalents (AVEs) are

Market access for goods refers to the conditions, customs

From an exporter’s point of view:

 If pre-requisites are fulfilled: preferential access = more competitive

• Key concepts related to NTMs

• Role of NTMs in international

• Data sources; Market Access

• Business experiences with NTMs

3) Who applies them?

Non-tariff measures (NTMs)

Mandatory requirements, rules or regulations legally set by the

Can affect both export and import

Non-tariff barriers (NTBs)

Public / international standards

Private (Voluntary) Standards

NTMs are policy measures other than ordinary customs