Glossary of the Asia-Pacific Trade and Investment Agreement Database (APTIAD)
The Asia-Pacific Trade and Investment Agreement Database (APTIAD) is an online database of trade agreements in the Asia-Pacific region. The database contains information on all agreements within the region, an agreement-country matrix, and an advanced search engine allowing to locate agreements by country, agreement name, status, scope, WTO notification status, and keywords.
- Accession: A process through which a country needs to satisfy conditions on becoming a member to the World Trade Organization or a regional trade agreement agreed to by other members.
- Accumulation: When a good is produced by two or more producers located in territories of different members of a trading bloc, the value added in both (all) members may be taken into account.
- Actionable subsidy: A type of subsidy that is not prohibited under WTO rules but against which a WTO member may respond by imposing a countervailing duty.
- Ad valorem equivalent tariff: AVE tariff is a tariff presented as a percentage of the value of goods cleared through customs, even though the duty imposed was originally in a form of a specific tariff. The ad valorem equivalents are sensitive to the method of calculation and changes in product prices.
- Ad valorem tariff (AVT): Duty or tariff expressed in terms of per unit of value (i.e., a certain per cent of value or price).
- African, Caribbean and Pacific (ACP) countries: A group of African, Caribbean and Pacific less developed countries that were parties to the Lom? Convention and now of the Cotonou Agreement with the EU. As of July 2000, the group included 77 countries. See www.acpsec.org
- Agreement on Customs Valuation: Formally the WTO Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994. It contains the methods to be used by customs authorities when they value goods for the purpose of applying the tariff rate. The most important of these is the transaction value, i.e. the price actually paid or payable for the goods but there are other methods available.
- Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS): One of the agreements concluded under the Uruguay Round (1986-94) to set out rules with respect to trade-related aspects of intellectual property rights, including copyright and related rights, trademarks, geographical indications, industrial designs, patents, layout-design of integrated circuits and protection on trade secrets.
- Anti-dumping duty: Tariff levied on imports deemed dumped into a market and a form of a non-tariff barrier.
- 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 (see Dispute settlement).
- Applied tariff rates: Considered to be applied by a customs administration on imported goods. Normally these are the rates that are published by national customs authorities for duty administration purposes and are therefore actually in effect at a country's border. They may differ significantly from bound tariff rates (see tariff binding).
- ASYCUDA: Automated System for Customs Data developed and implemented by UNCTAD. It covers most foreign trade procedures and handles manifests and customs declarations, accounting procedures, transit and suspense procedures.
- Autonomous preferential rules of origin: Rules applicable, for example, under Generalized System of Preferences (see GSP) schemes, where the importing country has discretion to determine how the scheme should operate
- Averaging: A method of inventory management in which the average cost of goods bought over a given period is taken as the basis for valuation.
- Bilateral agreement: Agreement between two countries, in contrast to plurilateral (among more) and multilateral (many) countries. For example, plurilateral agreements comprise a subset of WTO multilateral agreements which pool together all 149 members at present.
- Bilateral cumulation: When the value added to a good by two economies can be combined to achieve the regional value content. This can occur, for example, in a free-trade agreement or under the GSP.
- Bilateral quotas: Import (or export) quotas reserved for a specific country.
- Border tax adjustment: Fiscal measurecompensating for the different treatment between imports and similar domestic production or between exports and similar products sold on the domestic market. Examples include refunds of domestic indirect taxes on goods destined fro export, charges on imports similar to the taxes levied on like domestic products. See also Duty drawback.
- Capacity building: In trade context, activities supported by bilateral or international donors aimed at strengthening the ability of developing countries to trade. They focus on strengthening capacity to develop national trade policy, undertake analysis, identify positions in regional or global negotiations or on developing supply capacities.
- Cartel: Arrangements between firms (or in some cases countries) to control a market by fixing prices or limiting production between members of the cartel.
- Certificate of origin: The document certifying or proving that a particular country is origin of imported goods. This document is used for administration of rules of origin.
- Change in chapter heading: A method to determine whether substantial transformation has occurred. Strictly speaking, the change would have to occur from one chapter to another, but the term is often used to mean change in tariff classification. The tariff classification referred to is the Harmonised Commodity Description and Coding System (see also subtantial transformation).
- Change in tariff classification: A method to determine whether substantial transformation has occurred. The change required is spelt out in a schedule attached to the agreement.
- Change in tariff lines: A method similar to change in tariff classification to determine whether substantial transformation has occurred. The change required is spelt out in a schedule attached to the agreement.
- Chapter: A two-digit entry in the Harmonised System.
- CIF Cost, insurance and freight: The seller pays all costs relating to the good until its discharge at the port of destination. The buyer is responsible for the cost of unloading and the import duties.See www.iccwbo.org
- Codex Alimentarius Commission: The "food code"-an international set of standards, codes of practice, and guidelines and recommendations relating to food quality and safety, including codes governing hygenic processing practices, recommendations relating to compliance with standards, limits for pesticide residues, and guidelines for contaminants, food additives, and veterinary drugs. The Codex Alimentarius Commission is the body responsible for compiling the standards.
- Commercial presence: Covers services supplied by a service supplier of one Member, through commercial presence, in the territory of any other Member (also known as Mode 3 of supply).
- Common Effective Preferential Tariff: Also known as CEPT, is an agreed effective tariff, preferential to ASEAN, to be applied to goods originating from ASEAN Member States, and which have been identified for inclusion in the CEPT Scheme in accordance with Articles 2 (5) and 3 of the Agreement on the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area (1992).
- Common external tariff: The single tariff rate agreed to by all members of a customs union on imports of a product from outside the union.
- Common market: A type of regional integration (see Regional integration) where in addition to establishing a customs union (see Customs Union), member countries agree to free movements of capital and labor among themselves in order to build a fully integrated market area for goods, services and factors of production. The movement of factors of production is freed through the harmonization of laws and certain supranational institutions. Examples of this type of integration include the Single Market (known as the European Union since 1992) and Mercado Com?n del Sur (MERCOSUR). There are no common markets in Asia and the Pacific.
- Compensatory adjustment: Measure taken in response to withdrawal of a concession (tariff or other type) to compensate for such withdrawal (GATT Art. XXVIII).
- Competition policy: Policies intended to prevent collusion among firms and to prevent individual firms from having excessive market power. Major policy examples include oversight of mergers and prevention of price fixing and market sharing.
- Compound tariff: A tariff that combines both a specific and an ad valorem component. Also called a mixed tariff.
- COMTRADE database: A database of trade statistics managed by the United Nations Statistics division. It is the world's largest trade database covering about 90 per cent of world trade. See comtrade.un.org
- Concessions: The term used in the General Agreement on Tariffs and Trade (see GATT) negotiations for a country’s agreement to bind a tariff or otherwise reduce import restrictions, usually in return for comparable “concessions” by other countries.
- Consumption abroad: Includes services supplied in the territory of one Member to the service consumer of any other Member (also known as Mode 2 of supply).
- Content, domestic or local: A minimum proportion (by value or volume) of a product that must be domestically or locally produced in order to obtain a benefit (for example, a tariff concession). Most often part of Rules of Origin conditions.
- Contigent protection: Trade barriers that are imposed if certain circumstances (contingencies) are met. Examples include antidumping or countervailing duties (to offset subsidies) and safeguards. Also called administered protection.
- Copyright: Instrument to protect the rights of authors of original works (print, audio, video, film, software) from unauthorized copying and use. Generally for the life of the author, plus 50 years.
- Cotonou Agreement: Partnership agreement between the EU and the ACP countries signed in June 2000 in Cotonou, Benin. Replaces the Lome Convention. Its main objective is poverty reduction, “to be achieved through political dialogue, development aid and closer economic and trade cooperation.”
- Countervailing duty: A tariff levied against imports that are subsidized by the exporting country's government, designed to offset (countervail) the effect of such subsidies given to producers or exporters in the exporting country.
- Country of origin: The country where a good was produced or where its last substantial transformation took place.
- Cross-border supply: Includes services supplied from the territory of one Member (of the WTO) into the territory of any other Member (this is also known as Mode 1 of supply).
- Cumulation: Deviation from basic rules of origin (see Rules of Origin) which promotes and enhances trade between free trade agreement partners allowing for use of imported originating products. There are two main types of cumulation: bilateral and diagonal. Bilateral cumulation applies to a single FTA. Diagonal cumulation refers to more FTAs where members use identical rules of origin. This allows products originating in all of the participating partner countries to be considered as originating materials.
- Customs duty: Charge levied on imports and listed in an importing country's tariff schedules. Duties may be specific or ad valorem or a combination of the two (ad valorem with a specific minimum or the greater of the two).
- Customs Union: A type of regional integration (see Regional integration) where members lower all intra-union trade barriers and establish a common set of external tariffs on imports from non-members, thereby forming a new customs territory. Examples of a customs union include the earlier form of integration in Europe known as the European Economic Community (EEC), the former customs union of Czech and Slovak Republics, and the Union Douaniére des Etats de l’Afrique Centrale (UDEAC). Turkey, a UNESCAP member country, has a customs union with the European Union (EU).
- Customs valuation: Establishment, according to defined criteria, of the value of goods for the purpose of levying ad valorem customs duties on their importation.
- De minimis: An amount so small that it is not taken into account when calculations are made. Used as de minimis dumping margins, de minimis imports, de minimis safeguard rule, and de minimis subsidies.
- Deep integration: Intergovernmental cooperation in designing and applying domestic policies such as taxes, health and safety regulations, environmental and labour standards and qualification standards. May involve either harmonization of policies or mutual recognition; generally occurs in the context of regional economic intgeration.
- Degressivity: Mechanism to ensure that the application of a measure gradually becomes less severe over time. For example, a tariff set at 50 percent that is reduced by 10 percentage points each year and becomes zero in year 5.
- Dispute settlement: The process by which countries settle trade problems through negotiated means or if they are members of the WTO with the help of a WTO process involving a panel of experts which rules on legal questions and recommends solutions.
- Dispute Settlement: Body WTO body that is responsible for dealing with disputes between WTO members. Consists of all WTO members meeting together to consider the reports of dispute settlement panels and the Appellate Body.
- Double transformation: When a good has to undergo two substantial transformations to qualify for preferential treatment.
- Dumping: A form of price discrimination by which export price of the product exported from one country to another is less that the comparable price, in the oridnary course of trade (including transport and related costs) for the like product when destined for consumption in the exporting country (GATT ART. VI). The margin of dumping is the difference between the two prices.
- Duty drawback scheme: A form of border tax adjustment whereby the duties or taxes levied on imported goods are refunded, in whole or in part, when the goods are re-exported.
- Economic Integration Agreement: Term used to describe the services aspects of preferential agreements. These are notified under Article V of GATS.
- Economic needs test: Measure requiring a demonstration that an import (of goods but more usually natural persons as service providers) cannot be satisfied by local producers or service providers.
- Economic union: A type of regional integration where members move beyond the level of a common market by harmonizing national economic policies, most importantly monetary, fiscal and social policies. Examples of an economic union include the European Union (EU).
- Effective rate of protection: A measure of the protection afforded by an import restriction calculated as a percentage of the value added in the product concerned. Takes into account the protection on output and the cost-raising effects of protection on imputs.
- Enabling Clause: A decision made by the General Agreement on Tariffs and Trade (see GATT) in 1979 on Differential and More Favorable Treatment, Reciprocity, and Fuller Participation of Developing Countries. This document allows for differential and more favorable treatment accorded to developing countries, bearing in mind their development objectives.
- Enabling Clause Paragraph 2(c): Legal cover avaialble only to regional trade agreements among developing countries which may include partial scope agreements with limited trade concessions or fully fledged FTAs or CUs. Such partial scope agreements can be notified only under this enagling clause.
- Escape clause: Clause in a legal text allowing temporary derogation from its provisions under certain specified emergency conditions.
- Everything But Arms EBA: a European Union initiative for duty-free and quota-free access to all products except arms originating in least developed countries (LDCs). It took effect in 2001 for all products except sugar, rice and bananas, which will be included by 2009.
- Exchange control: Restrictions imposed by a government or central bank over the holding, sale, or purchase of foreign exchange. Typically used when the exchange rate is fixed and the central bank is unable or unwilling to enforce the rate by exchange-market intervention.
- Exhaustion: Policy stance of a country regarding parallel imports of goods protected under intellectual property rights. Under national exhaustion, rights end upon the first sale of the good within a nation, and right holders may prevent unauthorized imports of the goods concerned. Under international exhaustion, rights end upon the first sale anywhere in the world, after which parallel imports are permitted.
- Export promotion: A strategy for economic development that emphasizes support for exports through removal of anti-export biases created by policy. May be associated with policies such as duty drawbacks, export subsidies, marketing support, or matching grants for exporters.
- Export restraint arrangements: A restriction on a country's imports that is achieved by negotiating with the foreign exporting country for it to restrict its exports. Most commonly known as a voluntary export restraint (VER). The arrangement may be concluded at either government or industry level.
- Export-processing zone (EPZ): A designated area or region in which firms can import duty-free as long as the imports are used as inputs into the production of exports. Traditional EPZs are fenced-in industrial estates specializing in manufacturing for exports. Modern ones have flexible rules that may permit domestic sales upon payment of duties when leaving the zone. EPZs generally also provide a liberal regulatory environment for the firms involved as well as infrastructure services.
- Fast track: A procedure under which the U.S Congress agrees to consider implementing legislation for international trade agreements on an "up or down" basis, that is, gives up its right to propose amendments. Now called Trade promotion authority.
- FOB Free on board: A term which describes a price for or valuation of a good which is calculated on the basis of the process of manufacture, and does not include the cost of transporting the good to the consumer. See www.iccwbo.org
- Foreign Direct Investment: FDI involves an acquisition or construction of physical capital by a firm from one (source) country in another (host) country as it is based on a long-term relationship and lasting interest of a direct investor in an economy other than its own.
- Foreign trade zone: An area within a country where imported goods can be stored or processed without being subject to import duty. Also called a free zone, free port, or bonded warehouse.
- Free Trade Agreement (FTA): A form of regional integration in which participating countries remove tariff and quantitative restrictions on trade among themselves but retains its own national tariff barriers against non-members. To prevent trade deflection, a free trade agreement or area needs elaborate rules of origin (see Rules of Origin). Examples include regional FTAs such as the North American Free Trade Area (NAFTA) involving Canada, Mexico and the United States of America; the European Free Trade Area with membership of Iceland, Liechtenstein, Norway and Switzerland (EFTA); and the Association of Southeast Asian Nations (ASEAN). Bilateral FTAs include the Australia-New Zealand Closer Economic Relationships Agreement (ANZCERTA) and the India-Sri Lanka Free Trade Agreement. The EFTA, NAFTA and ANZCERTA are often classified as “advanced” FTAs since their areas cover, in addition to goods, some or all of the following: trade in services, investment, government procurement, competition, and intellectual property rights. Such coverage is similar to a common market (see Common Market) but does not provide for the harmonization of laws.
- Full cumulation: When any processing of a good within a free-trade area is counted towards the qualifying content, regardless of whether a process is in itself enough to give the good originating status.
- General Agreement on Tariffs and Trade (GATT): An international agreement signed in 1947 to set out the rules of conduct for international trade relations and to provide a forum for multilateral negotiations regarding trade liberalization.
- General Agreement on Tariffs and Trade Article XXIV: Provides exceptions that allow members to adopt measures in trade in goods, which are otherwise WTO-inconsistent as they run against the Most Favored Nation (see MFN) principle, for the purpose of regional economic integration. The type of agreements that qualify for notification to the WTO under this Article are free trade agreement (see FTA) and customs union (see CU).
- General Agreement on Trade in Services (GATS): An international agreement concluded during the Uruguay Round (1986-1994) to set out the fundamental principles of the multilateral trading system with respect to trade in services.
- General Agreement on Trade in Services Article V: Provides for exceptions that allow members to adopt measures in trade in services, which are otherwise WTO-inconsistent, for the purpose of regional economic integration.
- Generalized System of Preferences (GSP): Refers to a scheme accepted through the UN Conference on Trade and Development (UNCTAD) by which a developed country agrees to charge no duty on imports from developing countries, while not requesting reciprocal concessions from those developing countries.
- Geographical indication: "Geographical indications are place names, terms or words closely associated with a certain place, location and cultural heritage, which is used to identify products that have a particular quality, reputation or other characteristic because of the place of their origins. The WTO’sTrade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement prescribes a higher level of protection for wines and spirits than for other products. "
- Harmonization of policies: Change of government regulations and practices, as a result of an international agreement, to make those of different countries the same or more compatible.
- Harmonization of tariffs: Process making tariff rates more similar across industries and/or countries.
- Harmonized System (HS): Officially Harmonized Commodity Description and Coding System. An international system for classifying goods in international trade and for specifying the tariffs on those goods. It was adopted at the beginning of 1989, replacing the previously used schedules in over 50 countries, including the Brussels Tariff Nomenclature.
- HS1996: HS1996 stands for the 1996 revision of the Harmonized System. HS1996 contains 5,113 subheadings and 1,241 headings, grouped into 97 chapters and 21 sections. As a general rule, goods are arranged in order of their degree of manufacture: raw materials, unworked products, semi-finished products and finished products. For example, live animals fall under Chapter 1, animal hides and skins under Chapter 41 and leather footwear under Chapter 64. The same order also exists within the chapters and headings.
- Import monitoring: Monitoring of the import trends of specific product(s), sometimes applied with the purpose of signalling concern over import surges and to persuade trading partners to reduce exports. It may also be applied for environmental purposes. sometimes it is precursor to import restraints.
- Intra-industry trade: Trade in which a country both exports and imports goods that are classified to be in the same industry.
- Labeling: Requirement, either mandatory or voluntary, to specify whether a product satisfies certain conditions relating to the process by which it was produced or its characteristics.
- Market access: Conditions under which imports compete with domestically produced substitutes. These are determined by the extent to which foreign goods (services) are confronted with tariffs, discriminatory taxes, and other regulations.
- Mode of supply: The method by which suppliers of internationally traded services deliver their services to buyers. The four modes usually identified are: cross-border supply (mode 1), consumer movement (mode 2), commercial presence (mode 3) and movement of natural persons (mode 4).
- Most Favored Nation (MFN): Clause and a cornerstone of the multilateral trading system built into the General Agreement on Tariffs and Trade (see GATT) and the WTO. By accepting this clause a country agrees not to charge tariffs on another country’s goods that are any higher than those it imposes on the goods of any other country member of the multilateral trading system. In some instances MFN status is accorded by one country member of the WTO to another non-member country, guaranteeing the receiving country no less favorable treatment than any other third member receiving the same status.
- Multilateral Trading System (MTS): The non discriminatory arrangement for international trade which came into existence with the GATT in 1947 and which is now represented by the WTO system.
- Mutual recognition: The acceptance by one country of another country's certification that a product has satisfied a product standard. Often based on formal agreements between countries if the standards are mandatory.
- National Treatment: Treatment of imported goods and services no less favorably than domestic goods and services with respect to internal taxes, regulations and other requirements.
- Necessity test: Procedure to determine whether a policy restricting trade is necessary to achieve the objective that the measure is intended to attain.
- Negative list: In an international agreement, a list of those items, entities, and products to which the agreement will not apply, the commitment being to apply the agreement to everything else.
- Nominal rate of protection: The proportion by which the (tariff-inclusive) internal price of an import exceeds the border or world price.
- Non-preferential rules of origin: Rules of origin that apply to goods traded under most-favoured-nation (see MFN) conditions.
- Nontariff barrier (NTB): A catchall phrase describing barriers to international trade other that the tariffs- for example, quotas, licensing, or voluntary export restraints.
- Nontariff measure: Any government action with a potential effect on the value, volume, or direction of trade.
- Noodle bowl: Term frequently used in the Asia-Pacific context to describe the "spaghetti bowl" phenomenon of the tangle of relationships created by multiple overlapping preferential trading arrangements. Spaghetti bowl was introduced by Jagdish Bhagwati in early 1990s.
- Normal value: Price charged by an exporting firm in its home market. Used to compare with the price charged by the firm on an export market to determine if there is dumping.
- Originating goods: Goods that satisfy the requirements for preferential treatment.
- Panel: "In the WTO dispute settlement procedure, an independent body of three experts is established by the Dispute Settlement Body to examine and issue recommendations on a particular dispute in the light of WTO provisions.
- Para tariff: Charges on imports that act as a tariff but are not included in a country’s tariff schedule. Examples include a statistical tax, stamp fees, and so forth.
- Parallel imports: Trade that is made possible when a good that is protected under intellectual property provisions (patents, copyrights) is sold in different countries for different prices. A parallel import comprises arbitrage activity and occurs when traders import the good from a lower-price market into a higher-price country.
- Patent: A right granted to its owner to exclude all others from making, selling, importing or using the product or process described in the patent for a fixed period of time, generally 20 years. To be patentable, inventions have to be novel, non-obvious, and be useful or have industrial applicability.
- Phytosanitary regulation: Pertaining to the health of plants.
- Plurilateral agreement: In WTO, an agreement to which membership is voluntary, dealing with an issue that is not covered by the WTO, In 2002 there were two plurilateral agreements- on civil aircraft policies and government procurement.
- Positive list: In an international agreement, a list of those items, entities, and products to which the agreement will apply, with no commitment to apply the agreement to anything else. Contrasts with negative list.
- Preference Preferential treatment: In GATT terms, this represents a derogation, in the sense of treatment that is more favorable than MFN.
- Preferential rules of origin: Rules of origin under preferential trade arrangements, such a free-trade agreements and the Generalised System of Preferences (see GSP).
- Preferential tariff or duty: A tariff or duty lower than the MFN tariff, levied against imports from a country that is being given favored treatment, as in a preferential trade agreement or under the General System of Preferences (see GSP).
- Preferential Trade Agreement (PTA): A generic term describing any process of trade integration by which participating countries extend full or more often partial reciprocal trade concessions. The term “preferential” signals the fact that members of such agreements are entitled – by virtue of GATT Article XXIV or GATS Article V – to grant each other preferences that are not compulsory to extend to other WTO members (see MFN). Historically, PTAs were concluded between countries of the same geographical region leading to the use of the term "regional trade agreements".
- Presence of natural persons: Covers services supplied by a service supplier of one Member, through the presence of natural persons of a Member in the territory of any other Member (also known as Mode 4 of supply).
- Preshipment inspection: Mechanism under which goods are inspected and certified in the country of origin by specialized inspection agencies or firms. Often used by importing governments to combat over- or underinvoicing of imports by having the value of consignments determined by independent entities (firms).
- Principal- supplier rule: Rule, in bilateral negotiating procedures, according to which an import concession on a specific product is to be negotiated only with the country that is actually or potentially the major supplier of that product. Note that the WTO MFN rule requires that the concession be extended to all other members.
- Protocol of accession: Legal document specifying the procedures for a country to join an international agreement or organization, including the rights and responsibilities that accompany such accession.
- Public (government) procurement: Purchase of goods and services by government and by state-owned enterprises. Transparency in government procurement is one of the Singapore issues.
- Quantitative restriction or quota: Measure restricting the quantity of a good imported (or exported). Quantitative restrictions include quotas, nonautomatic licensing, mixing regulations, voluntary export restraints, and prohibitions or embargoes.
- Regional integration: In a narrow sense, refers to extension of trade preferences under one of the types of preferential trade agreements (see PTA). In a broader sense, refers to the multidimensional processes that include economic cooperation and dimensions of political, diplomatic, security, and cultural cooperation, among others, in a specified region of the world, such as Asia and the Pacific.
- Regional Trade Agreement (RTA): see PTA.
- Request- offer procedure: Negotiating procedure based on the tabling, by each party, of a list of concessions requested of other parties, followed by an offer list of the concessions that could be granted if its request were met.
- Revealed comparative advantage (RCA): The ratio of a country’s exports of a good to the world’s exports of that good divided by that country’s share of exports of manufactures in the world exports of manufactures. A value of the ratio above (below) one, is interpreted as a revealed comparative advantage (comparative disadvantage) for the good.
- Rules of Origin: Used to determine origin of production of a good, and thus to restrict freedom of intra-area trade in products which incorporate certain proportions of imported products from outside the area of regional integration or alternatively undergo certain transformation processes in member countries.
- Safeguard measures: Also known as "safeguards". Temporary measures taken to protect specific industries from an unexpected surge of imports causing, or threatening to cause, serious injury. Usually refer to actions taken under GATT's Article XIX (Emergency Action on Imports of Particular Products), Article XII (Restrictions to safeguard the Balance of payments) and Article XVIII (Governmental Assistance to Economic Development).
- Sanitary and phytosanitary (SPS) measure: A technical requirement specifying criteria to ensure food safety and animal and plant health. Many international SPS standards are set by the FAQ/WHO.
- Sensitive products or sectors: Lists of particular products or sectors often identified by countries in trade negotiations and agreements regarded as especially vulnerable to import competition and that they wish to exempt from trade liberalization.
- Shallow integration: Reduction or elimination of border barriers to trade. Contrasts with deep integration.
- Singapore issues: The issues on which it was agreed to form working groups at the Singapore Ministerial: trade and investment, competition policy, transparency in government procurement and trade facilitation.
- Single Undertaking: During WTO negotiations, member governments are required to accept or reject the outcome of multiple negotiations in a single package, rather than selecting among them.
- Special and differential treatment: The principle in WTO that developing countries be accorded special privileges, either exempting them from some WTO rules or granting them preferential treatment in the application of WTO rules.
- Specific tariff: A tariff expressed as a specific charge on the particular imported good based on unit quantities such as weight, number of volume.
- Split sub-heading: A six-digit tariff line in the Harmonised System divided further, for example, into two eight-digit lines.
- Sub-heading: Usually a six-digit entry in the Harmonised System.
- Subsidy Assistance: granted by government to the production, manufacture, or export of specific goods, and taking the form either of direct payments, such as grants or loans, or of measures having equivalent effect, such as guarantees, operational or support services or facilities, and fiscal incentives.
- Substantial transformation: "The change of a product into new one that is significantly different. For example, a steel rod may be transformed into fencing wire. A term relevant to the administration of rules of origin. "
- Sufficient processing: Virtually the same as substantial transformation.
- Tariff binding: Commitment made in multilateral trade negotiations to not increase a rate of duty beyond an agreed level. Once a rate of duty is bound, it may not be raised without compensating the affected parties.
- Tariff classification: A descriptive name attached to a tariff line, indicating the product to which it applies. Same as tariff heading.
- Tariff equivalent: Measure of the protective effect of an NTB- the tariff that would have the exact same effect on imports as the NTB.
- Technical barrier to trade: Trade-restrictive effect arising from the application of technical regulations or standards such as testing requirements, marketing standards, certification requirements, origin-marking requirements, health and safety regulations, and sanitary and phytosanitary regulations.
- Technical regulation: A mandatory requirement or standard specifying the characteristics that an imported product must meet. Usually aimed to protect public health or safety. Can be used as technical barrier to trade.
- Temporary admission: Customs regime under which firms may import intermediates duty free if used in export production, and are required to document ex post that imports have been used for this purpose.
- Terms of trade: The price of country's exports relative to the price of its imports.
- Trade capacity: The supply-side ability or capacity of a country to benefit from the opportunities offered by the world market and MFN or preferential access to markets.
- Trade creation: Occurs when liberalization results in imports displacing less efficient local production and/or expanding consumption that was previously thwarted by artificially high prices due to protection.
- Trade diversion: Occurs when a trade reform discriminates between different trading partners and a less efficient (higher cost) source displaces a more efficient (lower cost) one. Can arise whenever some preferred suppliers are freed from barriers but others are not.
- Trade facilitation: In the Doha Declaration referred to as “expediting the movement, release and clearance of goods, including goods in transit.” This includes customs procedures and other practices that may add to the cost or time requirements of trade.
- Trade integration: Process of reducing barriers to trade and increasing participation in the international economy though trade. Also used to describe efforts to integrate trade policy and strengthening of trade- related institutions into a country’s overall development strategy.
- Trade liberalization: Reduction of tariff and removal or relaxation of non-tariff barriers.
- Trade Policy Review Mechanism: WTO mechanism for periodic review of trade policies and practices of members
- Trademark: Distinctive mark or name to identify a product, service or company.
- Trade-related Investment Measure: Policy used by governments to influence the operations of foreign investors by establishing specific performance standards relating to trade. Examples are export performance requirements and local content rules (mandating that investors use a certain proportion of domestic inputs in their production).
- Trade-related Technical Assistance: Services financed and/or provided by donors and development agencies to strengthen trade-related institutions and build trade capacity in developing countries.
- Transaction value: Used for customs valuation purposes- the prices of a good actually paid or payable.
- Transparency: Clarity, openness, predictability, and comprehensibility in trade area used in regard to individual trade-related regulations and operation of institutions.
- Transparency Mechanism for Regional Trade Agreements: A decision that was adopted on 14 December 2006 by the WTO General Council. It establishes a process to enhance the quantity and quality of information on RTAs made available to the WTO members. It is an outcome of negotiations under paragraph 29 of the Doha Ministerial Declaration and is provisionally applied pending the conclusion of the negotiations of the Doha Work programme.
- Triple transformation: When a good has to undergo three substantial transformations to qualify for preferential market access.
- TRIPs: Trade-related intellectual property rights. In WTO, used as an acronym for the Agreement on Trade-Related Aspects of Intellectual Property Rights.
- Value added: The value of output minus the value of all intermediate inputs representing the contribution of and payments to factors of production like labour and capital.
- Value-added method: Measuring whether a good qualifies for preferential treatment by the amount of value that has been added to it in the exporting country.
- Wholly obtained materials: Materials and goods that originate in their entirety in the territory of the exporting party. These are usually minerals, agricultural and fisheries products.
- WITS: World Integrated Trade Solution is database and software package developed by UNCTAD and the World Bank to allow analysis of market access conditions and the impact of trade liberalization.
- World Trade Organization (WTO): Established in 1995, the WTO is the only global organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by most of the world's trading nations and ratified in their parliaments. The WTO is the successor of the GATT established in 1947. See www.wto.org
- Yarn-forward rule: A rule in the free-trade agreements (FTAs) concluded between the United States and other countries which says that textiles must be made of yarn produced in the same country.