WTO Glossary of Terms.pdf

WTO Glossary of Terms A Accession Becoming a member of the WTO, signing on to its agreements. New members have to negotiate terms: — bilaterally with individual WTO members — multilaterally, (1) to convert the results of the bilateral negotiations so that they apply...

WTO Glossary of Terms A Accession Becoming a member of the WTO, signing on to its agreements. New members have to negotiate terms: — bilaterally with individual WTO members — multilaterally, (1) to convert the results of the bilateral negotiations so that they apply to all WTO members, and (2) on required legislation and institutional reforms that are need to meet WTO obligations. ad valorem tariff A tariff rate charged as percentage of the price anti-dumping duties GATT’s Article 6 allows anti-dumping duties to be imposed on goods that are deemed to be dumped and causing injury to producers of competing products in the importing country. These duties are equal to the difference between the goods’ export price and their normal value, if dumping causes injury.. Appellate Body An independent seven-person body that considers appeals in WTO disputes. When one or more parties to the dispute appeals, the Appellate Body reviews the findings in panel reports. Applied tariff / Applied rates Duties that are actually charged on imports. These can be below the bound rates ASEAN Association of Southeast Asian Nations. Eight ASEAN members are members of the WTO — Brunei, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore and Thailand. The other ASEAN members — Laos and Vietnam — are negotiating WTO membership B Basel Convention A multilateral environmental agreement dealing with hazardous waste Berne Convention A treaty, administered by WIPO, for the protection of the rights of authors in their literary and artistic works border protection Encompasses any measure which acts to restrain imports at point of entry C C.i.f Cost, insurance, freight (included in the price) cabotage In maritime transport, sea shipping between ports of the same country, usually along coasts circumvention Getting around commitments in the WTO such as commitments to limit agricultural export subsidies. Includes: avoiding quotas and other restrictions by altering the country of origin of a product; measures taken by exporters to evade anti-dumping or countervailing duties Committee on Agriculture WTO committee established in Article 17 of the Agreement on Agriculture and in charge of the review of the implementation of the Agreement. compulsory licensing For patents: when the authorities license companies or individuals other than the patent owner to use the rights of the patent — to make, use, sell or import a product under patent (i.e. a patented product or a product made by a patented process) — without the permission of the patent owner. Allowed under the WTO’s TRIPS (intellectual property) Agreement provided certain procedures and conditions are fulfilled. concentric circles a system of small and large, informal and formal meetings handled by the chairperson, who is at the centre. The outer “circle” is the formal meeting of the full membership, where decisions are taken and statements are recorded in official minutes or notes. Inside, the circles represent informal meetings of the full membership or smaller groups of members, down to bilateral consultations with the chair. Members accept the process so long as they all have input and information is shared. counterfeit Unauthorized representation of a registered trademark carried on goods identical or similar to goods for which the trademark is registered, with a view to deceiving the purchaser into believing that he/she is buying the original goods countervailing measures Action taken by the importing country, usually in the form of increased duties to offset subsidies given to producers or exporters in the exporting country Cumulation A provision allowing producers in one country to source parts and inputs from other countries without losing the originating status of that input. Under cumulation, foreign parts and inputs are not considered as imported (non-originating) for purposes of "substantial transformation" requirements D de minimis Minimum amounts of trade distorting domestic support that all WTO Members can use, calculated as a percentage of the value of production (5% of the value of production for developed Members, and up to 10% for developing Members). De minimis can be product-specific and non-product specific deficiency payment A type of agricultural domestic support, paid by governments to producers of certain commodities and based on the difference between a target price and the domestic market price or loan rate, whichever is the less Digits, digit-level (tariffs) A reference to the codes used to identify products. Categories of products are subdivided by adding digits. See Harmonized System distortion When prices and production are higher or lower than levels that would usually exist in a competitive market Doha Round Or Doha Development Agenda. Unofficial name of the Doha Work Programme on negotiations and implementation-related issues launched in Doha, Qatar, in November 2001. dumping Occurs when goods are exported at a price less than their normal value, generally meaning they are exported for less than they are sold in the domestic market or third-country markets, or at less than production cost E Enabling Clause This refers to the 1979 Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries. Paragraph 2c allows developing country members of the WTO exemption from the MFN principle when entering regional or global arrangements to reduce or eliminate tariffs in trade in goods among themselves enquiry point an official or office in a member government designated to deal with enquiries from other WTO members and the public on a subject such as technical barriers to trade or sanitary/phytosanitary measuresen Equivalence In sanitary-phytosanitary measures (SPS): governments recognizing other countries’ measures as acceptable even if they are different from their own, so long as an equivalent level of protection is provided Exclusive Economic Zone (EEZ) The United Nations Convention on the Law of the Sea (UNCLOS) defines an Exclusive Economic Zone (EEZ) as generally extending 200 nautical miles from shore, within which the coastal state has the right to explore and exploit, and the responsibility to conserve and manage, both living and non-living resources. Some proposals would calibrate certain disciplines depending on whether the subsidized fishing activity takes place within or beyond a member's EEZ exhaustion In intellectual property protection, the principle that once a product has been sold on a market, the intellectual property owner no longer has any rights over it. (A debate among WTO member governments is whether this applies to products put on the market under compulsory licences.) Countries’ laws vary as to whether the right continues to be exhausted if the product is imported from one market into another, which affects the owner’s rights over trade in the protected product. See also parallel imports Export competition One of the pillars of the Agreement on Agriculture covering export subsidies and other programmes which could provide loopholes for governments to circumvent their commitments, export finance (credit, guarantees and insurance) and international food aid. The agriculture negotiations cover also the activities of exporting state trading enterprises. A Decision on Export Competition was adopted by ministers in December 2015 at the 10th Ministerial Conference in Nairobi, Kenya. Export prohibitions and restrictions Export measures that have a limiting effect on the quantity or amount of a product being exported. They can take the form of a tax or a quantitative restriction. The latter is generally prohibited with some exceptions notably those applied to prevent or relieve critical shortage of foodstuffs. F FOB Free on board (price, excluding insurance and freight). Food security People are considered “food secure” when they have access to sufficient, safe, nutritious food to maintain a healthy and active life. Food security-related discussions at the WTO take place regularly in the Agriculture Committee. Since 2013, WTO members have agreed to negotiate and find a permanent solution to the issue of public stockholding programmes for food security purposes (PSH) for developing members. Under these programmes, countries can purchase and stockpile food, and distribute it to people in need. However, some of these programmes can be used to provide support to farmers and are therefore considered to distort trade. Formal/informal Formal meetings are recorded in minutes, decisions can be taken, and formal procedures apply. Informal meetings are for exchanging views or information, with no official record free trade area Trade within the group is duty free but members set their own tariffs on imports from non-members (e.g. NAFTA) free-rider A casual term used to infer that a country which does not make any trade concessions, profits, nonetheless, from tariff cuts and concessions made by other countries in negotiations under the most- favoured-nation principle G GATT General Agreement on Tariffs and Trade, which has been superseded as an international organization by the WTO. An updated General Agreement is now the WTO agreement governing trade in goods. GATT 1947: The official legal term for the old (pre-1994) version of the GATT. GATT 1994: The official legal term for new version of the General Agreement, incorporated into the WTO, and including GATT 1947 generic Copies of a patented drug, or of a drug whose patent has expired (sometimes also related to trademarks) geographical indications Place names (or words associated with a place) used to identify products (for example, “Champagne”, “Tequila” or “Roquefort”) which have a particular quality, reputation or other characteristic because they come from that place H Harmonized System An international nomenclature developed by the World Customs Organization, which is arranged in six- digit codes allowing all participating countries to classify traded goods on a common basis. Beyond the six-digit level, countries are free to introduce national distinctions for tariffs and many other purposes HS 6-digit The World Customs Organization’s Harmonized System (HS) uses code numbers to define products. A code with a low number of digits defines broad categories of products; additional digits indicate sub- divisions into more detailed definitions. Six-digit codes are the most detailed definitions that are used as standard. Countries can add more digits for their own coding to subdivide the definitions further according to their own needs. Products defined at the most detailed level are “tariff lines”. I Import licensing the need to obtain a permit for importing a product; administrative procedures for obtaining an import license inclusive Ensuring all members have input into a process even when meetings involve only some of them. In WTO negotiations and other decision-making, ideas are tested and issues are discussed in a variety of meetings, many of them with only some members present. Members approve of this process so long as information is shared and they have input into it either by being present or being represented by a group coordinator. The final decision can only be taken by a formal meeting of the full membership. Independent entity Constituted jointly by the International Federation of Inspection Agencies (IFIA), representing preshipment inspection agencies, and the International Chamber of Commerce (ICC), representing exporters, this body admisters an independent review procedure under the Agreement on Preshipment Inspection to resolve disputes between an exporter and a PSI agency initial commitments Trade liberalizing commitments in services which members are prepared to make early on intellectual property rights Ownership of ideas, including literary and artistic works (protected by copyright), inventions (protected by patents), signs for distinguishing goods of an enterprise (protected by trademarks) and other elements of industrial property J Job document Unofficial document assigned a number preceded by the word “JOB”. Up until 2009, the number in brackets identified the year, for example JOB(09)/99. However, from 2010 onwards, it identifies the subject, eg, JOB/AG/1. Because “job” documents are unofficial, they are usually restricted. L Life Cycle Analysis Life cycle analysis — a method of assessing whether a good or service is environmentally friendly Lisbon Agreement Treaty, administered by the World Intellectual Property Organization (WIPO), for the protection of geographical indications and their international registration. M Madrid Agreement Treaty, administered by the World Intellectual Property Organization (WIPO), for the repression of false or deceptive indications of source on goods Market Access Market access for goods in the WTO means the conditions, tariff and non-tariff measures, agreed by members for the entry of specific goods into their markets Market distortion Any departure from perfect competition due to governmental intervention, taxes, market power, etc. MFN Most-favoured-nation treatment (GATT Article I, GATS Article II and TRIPS Article 4), the principle of not discriminating between one’s trading partners. MFN (most-favoured-nation) tariff Normal non-discriminatory tariff charged on imports (excludes preferential tariffs under free trade agreements and other schemes or tariffs charged inside quotas) Minimum import price A tariff regime seeking to ensure that imports may not enter a member's domestic market below a certain minimum price. Should the price of an individual consignment be below the specified minimum import price, an additional charge is imposed corresponding to the difference between the two prices. modality A way to proceed. In WTO negotiations, modalities set broad outlines — such as formulas or approaches for tariff reductions — for final commitments Modes of delivery Examples of the four Modes of Supply (from the perspective of an “importing” country A) Mode 1: Cross-border A user in country A receives services from abroad through its telecommunications or postal infrastructure. Such supplies may include consultancy or market research reports, tele-medical advice, distance training, or architectural drawings. Mode 2: Consumption abroad Nationals of A have travelled abroad as tourists, students, or patients to consume the respective services. Mode 3: Commercial presence The service is provided within A by a locally-established affiliate, subsidiary, or representative office of a foreign-owned and controlled company (bank, hotel group, construction company, etc.). Mode 4: Movement of natural persons A foreign national provides a service within A as an independent supplier (e.g., consultant, health worker) or employee of a service supplier (e.g. consultancy firm, hospital, construction company). multi-modal Transportation using more than one mode. In the GATS negotiations, essentially door-to-door services that include international shipping N NAFTA North American Free Trade Agreement, comprising Canada, Mexico and the US NAMA Non-agricultural market access: broadly covers industrial, fisheries and forestry products national schedules In services, the equivalent of tariff schedules in GATT, laying down the commitments accepted — voluntarily or through negotiation — by WTO members national treatment The principle of giving others the same treatment as one’s own nationals. GATT Article 3 requires that imports be treated no less favourably than the same or similar domestically-produced goods once they have passed customs. GATS Article 17 and TRIPS Article 3 also deal with national treatment for services and intellectual property protection natural persons People, as distinct from juridical persons such as companies and organizations Net food importing developing countries WTO developing countries eligible as beneficiaries within the framework of the Marrakech Decision on the Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries. The list is established by the Committee on Agriculture and is regularly reviewed and updated. non-agricultural products In the non-agricultural market access negotiations, products not covered by Annex 1 of the Agriculture Agreement. Fish and forestry products are therefore non-agricultural, along with industrial products in general. notification A transparency obligation requiring member governments to report trade measures to the relevant WTO body if the measures might have an effect on other members NTBs Non-tariff barriers, such as quotas, import licensing systems, sanitary regulations, prohibitions, etc. nuisance tariff Tariff so low that it costs the government more to collect it than the revenue it generates. Sometimes, a tariff that does not have any protective effect — some countries defend this as necessary in order to raise revenues O offer In a negotiation, a country’s proposal for its own further liberalization, usually an offer to improve access to its markets Overcapacity (fishing) Overcapacity generally refers to the ability of a fleet to fish at levels which exceed the sustainable catch level in a fishery (for example, because of too many vessels and/or too many fishers). There is, however, no generally agreed method to measure capacity. The FAO has warned that overcapacity frequently leads to overfishing and IUU fishing. In the negotiations, WTO members are debating whether and how to discipline subsidies that contribute to overcapacity, including how such subsidies could be identified. Overfishing/overfished stocks Overfishing of a stock is generally a circumstance where the fishing effort is excessive in relation to the stock's abundance and rate of reproduction, such that a reduction of the level of fishing would lead to an increase in the total catch. A stock generally is considered overfished when it is exploited beyond an explicit limit set to ensure safe reproduction. In the negotiations, members are debating what indicators and reference points, and what approaches, could be used as the basis for prohibiting subsidies that contribute to overfishing, or that harm already overfished stocks. panel In the WTO dispute settlement procedure, an independent body is established by the Dispute Settlement body, consisting of three experts, to examine and issue recommendations on a particular dispute in the light of WTO provisions parallel imports When a product made legally (i.e. not pirated) abroad is imported without the permission of the intellectual property right-holder (e.g. the trademark or patent owner). Some countries allow this, others do not. Paris Convention Treaty, administered by the World Intellectual Property Organization (WIPO), for the protection of industrial intellectual property, i.e. patents, utility models, industrial designs, etc. plurilateral In the WTO, involving only some members. precautionary principle Member countries are encouraged to use international standards, guidelines and recommendations where they exist. When they do, they are unlikely to be challenged legally in a WTO dispute. However, members may use measures which result in higher standards if there is scientific justification. They can also set higher standards based on appropriate assessment of risks so long as the approach is consistent, not arbitrary. And they can to some extent apply the “precautionary principle”, a kind of “safety first” approach to deal with scientific uncertainty. Article 5.7 of the SPS Agreement allows temporary “precautionary” measures. Preferential trade arrangements (PTAs) This is the term used in the WTO for trade preferences, such as lower or zero tariffs, which a member may offer to a trade partner unilaterally. These include the Generalized System of Preferences schemes, under which developed countries grant preferential tariffs to imports from developing countries. They also include non-reciprocal preferential schemes granted through a waiver by the General Council, meaning the member has been exempted from applying the most favoured nation (MFN) principle. price undertaking Undertaking by an exporter to raise the export price of the product to avoid the possibility of an anti- dumping duty Q Quad Canada, EU, Japan and the United States R Regional trade agreements (RTAs) In the WTO, these refer to reciprocal trade agreements between two or more partners to liberalize tariffs and services. They include free trade areas and customs unions and economic integration agreements on services regionalization Recognition that an exporting region (part of a country or a border-straddling zone) is disease-free or pest-free (or has a lower incidence) Rome Convention Treaty, administered by the World Intellectual Property Organization (WIPO), United Nations Educational, Scientific and Cultural Organization (UNESCO) and International Labour Organization (ILO), for the protection of the works of performers, broadcasting organizations and producers of phonograms rules of origin Laws, regulations and administrative procedures which determine a product’s country of origin. A decision by a customs authority on origin can determine whether a shipment falls within a quota limitation, qualifies for a tariff preference or is affected by an anti-dumping duty. These rules can vary from country to country. S safeguard measures Action taken to protect a specific industry from an unexpected build-up of imports — generally governed by Article 19 of GATT. The Agriculture Agreement and Textiles and Clothing Agreement have different specific types of safeguards: “special safeguards” in agriculture, and “transitional safeguards” in textiles and clothing sanitary and phytosanitary measures (SPS) Measures dealing with food safety and animal and plant health. Sanitary: for human and animal health. Phytosanitary: for plants and plant products. schedule of concessions List of bound tariff rates Schedules In general, a WTO member’s list of commitments on market access (bound tariff rates, access to services markets). Goods schedules can include commitments on agricultural export subsidies and domestic support. Services commitments include bindings on national treatment. Also: “schedule of concessions”, “schedule of specific commitments”. Sensitive products An example of flexibility considered in the agriculture negotiations where for a limited number of products, countries could offer market access improvements through a combination of smaller tariff reductions and the undertaking of tariff quota commitments rather than applying the full tariff reduction under a tiered formula Special Agricultural Safeguard (SSG) SSG is a provision in the Agreement on Agriculture permitting some members to temporarily apply additional duties on imports of agricultural products in response to import surges or price falls as specified in the Agreement. The safeguard may be invoked by a member only for those products that had been subject to tariffication and for which the right to use the SSG is inscribed in its schedule of commitments. Special products (SP) An example of flexibility considered in the agriculture negotiations where developing countries could designate a certain number of products for a flexible tariff reduction treatment based on the criteria of food security, livelihood security and rural development needs Special treatment Provision in the Agriculture Agreement which permitted members to defer tariffication (see "tariffication") on select products for a limited period. Specific tariff A tariff rate expressed as a specific amount of a currency per unit of quantity such as $100 per ton. Subsidy There are two general types of subsidies: export and domestic. An export subsidy is a benefit conferred on a firm by the government that is contingent on exports. A domestic subsidy is a benefit not directly linked to exports T Tariff binding Maximum duty level on a product listed in a member's schedule of commitments; it represents the commitment not to exceed the duty applied on the concerned product beyond the level bound in the schedule. Once a rate of duty is bound, it may not be raised without compensating the affected parties. Tariff escalation A situation where relatively higher imports duties are applied on processed products compared to those on the corresponding raw products, e.g. higher import duties on chocolate than on cocoa. This practice protects domestic processing industries and discourages the development of processing activity in the countries where the raw materials originate Tariff peaks Relatively high tariffs amidst generally low average tariff levels. Tariff quota (tariff rate quota) Import regime in which quantities inside a quota are charged lower import duty rates, than those outside (which can be high) Tariff water ("tariff overhang") The difference between bound and applied duties. Tariffication Procedures relating to the agricultural market-access provision by which non-tariff measures were converted into equivalent tariffs Tiered formula A formula where higher tariffs have steeper cuts than lower tariffs — products with higher tariffs are put in a higher category or tier, which has a steeper cut than lower tiers. Also used for cutting domestic support. U Uruguay Round Multilateral trade negotiations launched at Punta del Este, Uruguay, in September 1986 and concluded in Geneva in December 1993. Signed by ministers in Marrakesh, Morocco, in April 1994. V Variable import levy Tariff regime which entails an automatic and continuous variation in duty levels through a scheme or formula; duty levels generally vary in response to international price developments, thus potentially impeding the transmission of international prices to the domestic market. W waiver Permission granted by WTO members allowing a WTO member not to comply with normal commitments. Waivers have time limits and extensions have to be justified.