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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| Access, Market Access to Supplies Accession ACP Countries Across-the-Board Tariff Reductions ACTPN Ad Valorem Equivalent Ad Valorem Tariff Additionality Adjustment Adjustment Assistance Adjustments Administrative Review Advanced Developing Countries Advertising Advisory Committee for Trade Policy and Negotiations (ACTPN) African Growth and Opportunity Act (AGOA) Agency for International Development (USAID) Agreement on Agriculture Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) Agreement on Government Procurement (GPA) Agreement on Implementation of Article VI of GATT 1994 Agreement on Implementation of Article VII of GATT 1994 Agreement on Import Licensing Procedures Agreement on Preshipment Inspection (PSI) Agreement on Rules of Origin Agreement on Safeguards Agreement on Subsidies and Countervailing Measures |
Agreement on Technical Barriers to Trade (TBT) Agreement on Textiles and Clothing (ATC) Agreement on Trade in Civil Aircraft Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement on Trade-Related Investment Measures (TRIMS) Agricultural Adjustment Act of 1933 Agricultural Trade Development and Assistance Act of 1954 AID Aircraft Agreement Aircraft Code Andean Pact Antiboycott Legislation Antidumping Duties Antitrust APEC Apparel Appraisal Arbitration Article 2 (GATT Article II) Article 15 (GATT Article XV) Article 22 Article 24 (GATT Article XXIV) Articles of the GATT Asian Economic Crisis Asia-Pacific Economic Cooperation (APEC) Associated States Association Agreement ATA Carnet Australia-New Zealand Closer Economic Relations Agreement (CER) |
ACCESS, MARKET See Market Access.
ACCESS TO SUPPLIES See Supply Access.
ACCESSION The process of adhering to a legal instrument such as a bilateral or multilateral agreement or a treaty. In the case of the World Trade Organization, the prospective WTO member submits a communication to the director general of the WTO indicating its desire to accede to the WTO under Article XII of the WTO Agreement. A working party is then established to examine the application for accession. Any member of the WTO may join the working party. The prospective member is required to respond to a series of inquiries by the working party as it examines the prospective member's trade regime. Once this examination is sufficiently advanced, the prospective member enters into accession negotiations with the working party to determine the concessions (trade liberalization) or other specific obligations it must undertake before accession is concluded. The draft Protocol of Accession prepared by the working party contains the terms of accession agreed to by the prospective member and the working party. After negotiations have been concluded, a package of documents setting forth the working party's report, the draft protocol, and a schedule of specific commitments is submitted for approval to the WTO Council/Ministerial Conference. The Protocol of Accession enters into force once the General Council/Ministerial Conference adopts the package. Thirty days after the protocol is accepted by the applicant, it becomes a WTO member. See alsoConcession; Contracting Party; Grandfather Clause; Protocol of Accession; World Trade Organization.
ACP COUNTRIES African, Caribbean, and Pacific countries associated with the European Community under the Lomι Convention. See also Developing Countries; European Community; European Union; Lomι Convention; Reverse Preferences; Tropical Products.
ACROSS-THE-BOARD TARIFF REDUCTIONS See Linear Reduction of Tariffs.
ACTPN See Advisory Committee for Trade Policy and Negotiations.
AD VALOREM EQUIVALENT The duty collected under a specific tariff or a compound tariff expressed as a percentage of the value of the imported item. Since a specific tariff is calculated on the basis of units (of volume or weight), rather than value, and since prices can change over time, the ad valorem equivalent could differ when calculated for different time periods. See also Ad Valorem Tariff; Compound Tariff; Specific Tariff.
AD VALOREM TARIFF A tariff calculated "according to value," or as a percentage of the value of goods cleared through customs; for example, 15 percent ad valorem means 15 percent of the value of the entered merchandise. See also Specific Tariff; Tariff; Valuation.
ADDED-VALUE TAX See Value-Added Tax.
ADDITIONALITY A measure of the net increase in capital inflows into assisted developing countries as contrasted with a diversion from one form or target of development assistance to another. See also Bilateral Aid; Economic Development; Multilateral Aid; Official Development Assistance; Soft Loan; Transfer Payments.
ADJUSTMENT The process of adaptation in an economy that is triggered, for example, by technological developments, changes in demand, or shifting external trade patterns. The changes may involve a reallocation of labor and capital away from uncompetitive products or sectors and into new or other lines of production in which the economy is competitive. In the specific sense used by the International Monetary Fund, adjustment means the adoption of macroeconomic policies, including monetary, fiscal, and exchange rate policies, to adjust the level of domestic economic activity to conditions prevailing in the world economy, with the objective of correcting balance-of-payments disequilibria and pursuing domestic objectives such as lower inflation. See also Adjustment Assistance; Balance of Payments; Competitive; Conditionality; Devaluation; International Monetary Fund; Safeguards; Structural Change; Technology.
ADJUSTMENT ASSISTANCE Financial, technical, or other assistance to firms, workers, and communities to help them cope with difficulties arising from increased import competition or other changes in the economic environment. The objective of the assistance is usually to help an industry to become more competitive in the same line of production or to move into other economic activities. The aid to workers can take the form of training (to qualify the affected individuals for employment in new or expanding industries), relocation allowances (to help them move from areas characterized by high unemployment to areas where employment may be available), or unemployment compensation (to tide them over while they are searching for new jobs). The aid to firms can take the form of loans or guarantees of loans, tax benefits or other assistance. The benefits of increased trade to an importing country generally exceed the costs of adjustment, but the benefits are widely shared and the adjustment costs are sometimes narrowly and some would say unfairly concentrated on a few domestic producers and communities. Both import restraints and adjustment assistance can be designed to reduce these hardships, but adjustment assistance unlike import restraints allows the economy to enjoy the full benefits of lower-cost imported goods. Adjustment assistance can also be designed to facilitate structural shifts of resources from less productive to more productive industries, contributing further to greater economic efficiency and improved standards of living. See also Adjustment; Agreement on Safeguards; Agreement on Textiles and Clothing; Article 19 (GATT Article XIX); Codes of Conduct; Competitive; Concession; Escape Clause; Market Access; Protectionism; Quantitative Restrictions; Section 201; Structural Change; Trade Act of 1974.
ADJUSTMENTS In calculating the margin in an antidumping determination, modifications made to both the U.S. price and the normal value to ensure that price comparisons between the two are not distorted by factors extraneous to the central issue of price discrimination between markets. Differences in price for which adjustments are made include differences in physical characteristics, quantities sold, packing and delivery costs, circumstances of sale, and applicable indirect taxes and duties. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Dual Pricing; Dumping; Market Disruption; Normal Value; Uruguay Round Agreements Act.
ADMINISTRATIVE REVIEW A review that may be conducted by the U.S. Department of Commerce, 12 months after an antidumping or countervailing duty order is issued in an investigation, to determine whether entries should be liquidated at the duty rate specified in the order which is, in effect, an estimate of the final duty rate or at a different rate. Thereafter, annual reviews may be conducted on request to determine whether the existing duty rate should be modified. Under certain circumstances, the Department of Commerce may determine, on the basis of a series of administrative reviews, that an order should be revoked entirely. See also Countervailing Duties; Dumping; Liquidation; Sunset Review; Suspension of Liquidation.
ADVANCED DEVELOPING COUNTRIES See Developing Countries; Newly Industrializing Countries.
ADVERTISING See Services.
ADVISORY COMMITTEE FOR TRADE POLICY AND NEGOTIATIONS (ACTPN) A group of eminent individuals appointed by the U.S. president to advise him on trade agreements and trade policy. See also United States Trade Representative.
AFRICAN GROWTH AND OPPORTUNITY ACT (AGOA) Title I of the Trade and Development Act of 2000, which institutionalizes a process for strengthening U.S. relations with African countries and provides incentives for African countries to achieve political and economic reform and growth. The act offers designated beneficiary countries in sub-Saharan Africa duty-free and quota-free U.S. market access for essentially all products through the Generalized System of Preferences (GSP) program, provides additional security for investors and traders in African countries by ensuring GSP benefits for eight years, and eliminates the GSP competitive needs limitation for African countries. In addition, the act establishes a U.S.-sub-Saharan Africa Trade and Economic Cooperation Forum to facilitate regular trade and investment policy discussions, and it promotes the use of technical assistance to strengthen economic reforms and development, including assistance to strengthen relationships between U.S. firms and firms in sub-Saharan Africa. See also Generalized System of Preferences.
AGENCY FOR INTERNATIONAL DEVELOPMENT (USAID) The unit within the U.S. government responsible for the administration of U.S. bilateral development assistance programs. USAID also participates actively in the development of other U.S. policies and programs related to Third World economic development. See also Bilateral Aid; Developing Countries; Economic Development; Official Development Assistance.
AGREEMENT ON AGRICULTURE A WTO agreement establishing rules and commitments to ensure a fair and market-oriented system for trade in agricultural goods and products. The Agreement on Agriculture consists of rule-based commitments, as well as specific quantitative commitments to reduce protection and support of agricultural goods and products over a specified implementation period. Commitments assumed by members cover the following areas: market access in the agricultural goods and products sector; members' support of their own domestic producers; export competition; adherence to certain rules; the developmental needs of certain countries, such as net-food-importing developing countries; food security; and environmental protection. The products covered under this agreement are those listed in chapters 1 to 24 of the Harmonized Commodity Description and Coding System (HS), including hides and skins, certain animal or vegetable fibers, and other products, but excluding fish and fish products. See also Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Technical Barriers to Trade; Harmonized System; Quantitative Restrictions; Standards; Uruguay Round; World Trade Organization.
AGREEMENT ON THE APPLICATION OF SANITARY AND PHYTOSANITARY MEASURES (SPS) A WTO agreement establishing a set of rules, principles, and benchmarks for WTO members to ensure that sanitary and phytosanitary trade measures are justified and do not constitute disguised barriers to international trade. This agreement clarifies which factors a member may take into account when imposing health protection measures. Unlike the Agreement on Agriculture, the SPS Agreement does not impose any quantitative and legally binding schedules of concessions. Prior to the negotiation of the SPS Agreement, many food safety, animal, and plant health regulations fell within the scope of the 1979 Agreement on Technical Barriers to Trade (TBT), also called the Standards Code. The SPS Agreement complements the new WTO Agreements on Agriculture and on Technical Barriers to Trade by addressing measures to protect human, animal, and plant life and health. See also Agreement on Agriculture; Agreement on Technical Barriers to Trade; Nontariff Barriers; Quarantine, Sanitary, and Health Laws and Regulations; Standards; Uruguay Round; World Trade Organization.
AGREEMENT ON GOVERNMENT PROCUREMENT (GPA) A WTO agreement that went into effect on January 1, 1996, replacing the 1979 GATT Government Procurement Code. The GPA is one of four plurilateral nontariff barrier agreements concluded during the Uruguay Round of multilateral trade negotiations. As a plurilateral, rather than a multilateral, WTO agreement, the GPA is binding only on members that have acceded to it, not on WTO members generally. The 26 signatories are: Aruba; Canada; European Union Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Spain, Portugal, Sweden, and the United Kingdom; Hong Kong; Israel; Japan; South Korea; Liechtenstein; Norway; Singapore; Switzerland; and the United States. South Korea did not assume obligations until January 1997. The purpose of this agreement is to further open up government procurement markets to international competition. Among other things, GPA signatories are required to waive all discriminatory government procurement policies for GPA-covered purchases unless otherwise set out in their respective schedules. The GPA also requires each signatory to provide nondiscriminatory, timely, transparent, and effective bid challenge procedures to allow interested suppliers to challenge alleged violations of the GPA's procedures. The GPA prohibits the use of offsets in the qualification or selection of suppliers or the evaluation of tenders or the award of contracts unless a signatory specifically negotiates an exception in its schedule. See also Agreement on Technical Barriers to Trade; Codes of Conduct; Conditional Most-Favored-Nation Treatment; Discrimination; General Agreement on Tariffs and Trade; General Agreement on Trade in Services; Government Procurement Policies and Practices; Multilateral Agreement; Nontariff Barriers; Tokyo Round; Trade Agreements Act of 1979; Targeting; Transparency; Uruguay Round; World Trade Organization.
AGREEMENT ON IMPLEMENTATION OF ARTICLE VI OF GATT 1994 A WTO agreement resulting from the Uruguay Round that implements Article VI of GATT 1994, the set of antidumping rules that gives member countries the right to defend themselves against dumped imports while preserving proportionality and avoiding abuse. The agreement was negotiated to address the concern, on the one hand, that some member countries have misused the antidumping rules and, on the other, that exporting countries have circumvented the antidumping measures of the importing countries. The agreement sets forth in greater detail than its predecessor, the 1979 Anti-Dumping Code, the circumstances under which antidumping measures can be applied provisionally and can be terminated. It also provides more precise rules for calculating an antidumping margin and additional rules concerning the submission of information in antidumping inquiries and the evidentiary threshold that must be met in order to warrant an investigation. See also Anti-Dumping Code; Codes of Conduct; Dumping; Sunset Review; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF GATT 1994 A WTO agreement that is the successor to the Customs Valuation Code negotiated during the Tokyo Round to establish a uniform, fair, and predictable international system for the valuation of goods for customs purposes and to preclude the arbitrary use of national valuation systems as nontariff barriers to trade. The Customs Valuation Code established the "transaction value" or the price actually paid or payable for imported goods plus certain permitted additional costs as the primary method of valuation by customs officials, and it specified a hierarchy of other methods to be employed when the transaction value method could not be used. Like its predecessor, the WTO agreement applies only to the valuation of imported goods with respect to which ad valorem duties are levied. It does not set forth obligations concerning valuation in connection with export duties, quota administration, internal taxation, or foreign exchange control. See also Codes of Conduct; Customs; Customs Classification; Free Zone; Imports; Liquidation; Minimum Valuation; Most-Favored-Nation Treatment; Suspension of Liquidation; Tariff; Tariff Schedules; Tokyo Round; Uruguay Round; Valuation; World Customs Organization; World Trade Organization.
AGREEMENT ON IMPORT LICENSING PROCEDURES A WTO agreement implemented to prevent import licensing procedures from unnecessarily reducing or distorting international trade flows. The agreement, which entered into force on January 1, 1995, is a successor agreement to the Tokyo Round Import Licensing Code, which entered into force on January 1, 1980. During the Uruguay Round, the Import Licensing Code was revised to strengthen the disciplines on transparency and notification. Whereas the Import Licensing Code obligated only those countries that had signed and ratified it, the WTO Agreement on Import Licensing Procedures is a multilateral agreement binding on all WTO members. Under the agreement, WTO members must ensure that their import licensing procedures conform to the relevant provisions of the GATT, are applied neutrally, and are implemented fairly and equitably. See also Codes of Conduct; General Agreement on Tariffs and Trade; Licensing; Licensing Code; Nontariff Barriers; Tokyo Round; Transparency; Uruguay Round; World Trade Organization.
AGREEMENT ON PRESHIPMENT INSPECTION (PSI) A WTO agreement governing the use by private sector buyers and sellers of preshipment inspection to ensure that the quantity and quality of goods to be traded conform to the specifications of the sales contract. This agreement balances the need of parties importing goods from other countries to protect their interests by preventing commercial fraud, customs fraud, evasion of customs duties, capital flight, and other harmful activities with the potentially trade-distorting effects of preshipment inspection. The agreement applies to all government-mandated preshipment inspection activities carried out on the territory of members (that is, in the country of export prior to exportation). See also Transparency; Uruguay Round; World Trade Organization.
AGREEMENT ON RULES OF ORIGIN A WTO agreement addressing the rules that determine the country of origin of an imported product. Rules of origin play an important role in international trade due to the fact that the application of duties and other restrictions on entry often depends on the deemed source of the imports. The agreement provides for harmonization in the practices of WTO members in determining the country of origin of products. See also Customs and Administrative Entry Procedures; Uruguay Round; World Trade Organization.
AGREEMENT ON SAFEGUARDS A WTO agreement setting forth the rules governing the application of safeguard measures. According to GATT Article XIX, safeguard measures are emergency actions taken when increased imports of particular products cause or threaten to cause serious injury to the importing member's domestic industry. Safeguard measures involve suspension of concessions or obligations under the GATT or the WTO agreements. The most common safeguard measures are quantitative import restrictions and duty increases exceeding bound tariff rates. The WTO Agreement on Safeguards requires that, at a minimum, safeguard measures be temporary, be imposed only when imports are found to cause or threaten serious injury to a competing domestic industry, be applied on a most-favored-nation basis, and be progressively liberalized while in effect. Unlike other trade remedies, safeguard measures do not require a finding of an "unfair" practice. In addition, the member imposing a safeguard measure generally must pay compensation to the members whose trade is affected. The WTO Agreement on Safeguards was created during the Uruguay Round to add clarity to the safeguards provisions contained in GATT Article XIX and to address so-called gray-area measures limiting imports (that is, bilateral voluntary export restraints, orderly marketing agreements, and other informal trade-limiting agreements designed to curtail fairly traded imports) that were widely viewed as being contrary to GATT. The WTO Agreement on Safeguards also clarifies existing guidelines and tightens timetables, limiting the duration of a safeguard measure to a maximum of eight years. See also Adjustment; Agreement on Textiles and Clothing; Article 11 (GATT Article XI); Article 19 (GATT Article XIX); Codes of Conduct; Competitive; Concession; Escape Clause; Framework Agreement; General Agreement on Tariffs and Trade; Import Relief; Market Access; Omnibus Trade and Competitiveness Act of 1988; Orderly Marketing Agreements; Protectionism; Quantitative Restrictions; Safeguards; Section 22; Section 201; Section 406; Selective Quotas; Sensitive Products; Specific Limitations on Trade; Trade Barriers; Trade Act of 1974; Uruguay Round; U.S. International Trade Commission; Voluntary Restraint Agreements; World Trade Organization.
AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES A WTO agreement that was concluded during the Uruguay Round and is the successor to the Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the GATT, usually referred to as the Subsidies Code. The Subsidies Code was concluded in 1979 during the Tokyo Round. The foundation of the 1979 Subsidies Code was the principle that subsidies provided by a government to a domestic industry should not be permitted to harm or threaten harm to one's trading partners. Hence, the Subsidies Code permitted signatories to impose specific duties on imports to offset or "countervail" the benefits of subsidies to producers or exporters provided by the government of the exporting country. The Agreement on Subsidies and Countervailing Measures builds on these principles, disciplining both the use of subsidies and the actions that countries can take to counter the effects of subsidies. Under the agreement, a member country can use the WTO's dispute settlement procedures to seek the withdrawal of the subsidy or the removal of its adverse effects, or it can launch its own investigation and ultimately assess an extra, countervailing duty on subsidized imports that are injuring domestic producers. For the first time, the agreement provides a definition of a subsidy that distinguishes between prohibited, actionable, and non-actionable subsidies. As part of this definition, it introduces the concept of a "specific" subsidy that is, a subsidy available only to an enterprise, industry, group of enterprises, or group of industries in the country that gives the subsidy, rather than generally to all industries or enterprises in the subsidizing country. A specific subsidy can be a domestic or an export subsidy. The agreement disciplines only specific subsidies. It applies to agricultural goods as well as industrial products, except when the subsidies conform with the WTO Agreement on Agriculture. Unlike the 1979 Subsidies Code, which was binding only on those GATT contracting parties that affirmatively acceded to it, the new agreement is multilateral and binding on all WTO member countries. See also Agreement on Agriculture; Bounties; Codes of Conduct; Countervailing Duties; Domestic Subsidy; Export Subsidy; Illustrative List; Subsidy; Sunset Review; Tokyo Round; Trade Agreements Act of 1979; U.S. International Trade Commission; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
AGREEMENT ON TECHNICAL BARRIERS TO TRADE (TBT) A WTO agreement to ensure that the standards and regulations imposed by governments and governmental authorities do not unnecessarily restrict or distort trade. This agreement recognizes that the need to comply with different foreign technical regulations and standards has an impact on international trade, and that the high costs involved in such compliance may discourage manufacturers from trying to sell abroad. The agreement imposes rules to reduce the risk that technical standards and regulations are adopted and applied simply to protect domestic industries. The purpose of the agreement mirrors that of its predecessor, the 1979 Agreement on Technical Barriers to Trade, which was negotiated during the GATT Tokyo Round. The 1979 TBT Agreement, also called the Standards Code, laid down the rules for the preparation, adoption, and application of technical regulations, standards, and conformity assessment procedures. The WTO TBT Agreement strengthens and clarifies the provisions of the 1979 agreement. The WTO agreement is accompanied by a Code of Good Practice, which is designed to serve as a guide for bodies that prepare, adopt, and apply standards. See also Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Government Procurement; Codes of Conduct; Customs and Administrative Entry Procedures; General Agreement on Tariffs and Trade; Government Procurement Policies and Practices; Licensing; Most-Favored-Nation Treatment; Nontariff Barriers; Packaging, Labeling, and Marking Regulations; Quarantine, Sanitary, and Health Laws and Regulations; Standards; Technical Regulations; Tokyo Round; Transparency; Uruguay Round; World Trade Organization.
AGREEMENT ON TEXTILES AND CLOTHING (ATC) A WTO agreement concluded during the Uruguay Round that superseded the Multi-Fiber Arrangement (MFA). The MFA established quotas limiting imports of certain textile products into countries whose domestic industries were experiencing serious harm from rapidly increasing imports. The MFA and its predecessor, the Long-Term Agreement on International Trade in Cotton Textiles, provided the rules for the system of import quotas that has existed since the early 1960s and is being phased out by the ATC. These three agreements have provided for an internationally agreed derogation from GATT and, later, WTO rules, permitting an importing signatory country to impose quantitative import restrictions on textile imports when it considers such restrictions, even though contrary to GATT (or WTO) rules, necessary to prevent market disruption. Whereas the MFA did not include all GATT countries but could include non-GATT countries, the ATC is part of the Uruguay Round results and thus applies to all WTO members but not to other countries, even if they were parties to the MFA. Accordingly, non-WTO members that export textiles will not have the benefit of the ATC's phase-out restrictions unless they become members. Under the ATC, which entered into force in 1995, the textiles sector will be brought into full compliance with the GATT/WTO rules by 2005. Under the ATC, quotas will come to an end and importing countries no longer will be able to discriminate between exporters. The ATC, the only WTO agreement that phases itself out of existence, will cease to exist after 2005. See also General Agreement on Tariffs and Trade; Market Disruption; Multi-Fiber Arrangement Regarding International Trade in Textiles; Quantitative Restrictions; Safeguards; Sensitive Products; Textiles; World Trade Organization.
AGREEMENT ON TRADE IN CIVIL AIRCRAFT See Aircraft Agreement.
AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS) A WTO agreement that obligates countries to provide minimum standards of intellectual property (IP) protection in national laws and to enforce minimum standards for protecting intellectual property. The TRIPS Agreement covers copyright and related rights (that is, the rights of performers, producers of sound recordings, and broadcasting organizations); trademarks including service marks; geographical indications including appellations of origin; industrial designs; patents including the protection of new varieties of plants; the layout-designs of integrated circuits; and undisclosed information, including trade secrets and test data. The agreement sets out the minimum standards of protection to be provided by each member with respect to each of the main areas of intellectual property covered by the agreement. The agreement sets these standards by requiring, first, compliance with the substantive obligations of the main conventions of the World Intellectual Property Organization, as well as the most recent versions of the Paris Convention for the Protection of Industrial Property and the Bern Convention for the Protection of Literary and Artistic Works, as well as with the Treaty on Intellectual Property in Respect of Integrated Circuits (1989). With the exception of the provisions of the Bern Convention on moral rights, all the main substantive provisions of these conventions are incorporated by reference and thus become obligations under the TRIPS Agreement between member countries. The second main set of provisions deals with domestic procedures and remedies for the enforcement of intellectual property rights, a feature not found in other multilateral IP agreements. In addition, the agreement makes disputes between WTO members concerning TRIPS obligations subject to the WTO's dispute settlement procedures. Finally, the agreement provides for certain basic principles, such as national and most-favored-nation treatment. Developed country members were required to have implemented all of the obligations under the agreement as of January 1, 1996, while developing country members were permitted a transitional period of an additional four years (until January 1, 2000); least-developed country members are permitted a transitional period of an additional 10 years (until January 1, 2006) to comply with the obligations of the agreement. In addition, developing countries that, as of 1995, were without patent protection for a given area of technology, especially pharmaceutical or agricultural chemical inventions, have an additional five-year transition (until January 1, 2005) before being required to provide such protection. See also Bern Convention; Commercial Counterfeiting; Copyright; Dispute Settlement; General Agreement on Tariffs and Trade; Intellectual Property; Knowledge-Based Industry; Most-Favored-Nation Treatment; National Treatment; Patent; Process Patent; Property; Section 337; Special 301; Technology; Technology Transfer; Trademark; Trafficking in Counterfeit Goods and Services; Uruguay Round; Uruguay Round Agreements Act; World Intellectual Property Organization; World Trade Organization.
AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES (TRIMS) A WTO agreement that recognizes that measures and regulations that governments impose on investments and investors can reduce or distort international trade and may function as disincentives for investors in situations where investment is needed. This agreement clarifies disciplines established in the GATT 1947 provisions that are applicable to certain aspects of investment laws. The objectives of the TRIMS Agreement, as set forth in its preamble, include "the expansion and progressive liberalization of world trade and to facilitate investment across international frontiers so as to increase the economic growth of all trading partners, particularly developing country members, while ensuring free competition." The agreement applies to investment measures related to trade in goods only. Under TRIMS, WTO member countries agreed to eliminate investment measures that limit or force certain types of investments, to offer national treatment to foreign investors, and to eliminate quotas and other restraints. The agreement restricts the use of three TRIMS requirements: local content requirements (specifying that some minimum level of local resources be used in operations at foreign-owned plants), trade-balancing requirements (specifying that an investor not import more than a certain proportion of exports, or that a minimum trade surplus be maintained), and foreign exchange balancing requirements (limiting the importation of products used in local production by restricting a firm's access to foreign exchange to an amount related to its exchange inflows). See also Convertibility; Exchange Controls; General Agreement on Tariffs and Trade; Investment Performance Requirements; Trade-Related Investment Measures; Uruguay Round; World Trade Organization.
AGRICULTURAL ADJUSTMENT ACT OF 1933 See Section 22.
AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954 See Public Law 480.
AID See Agency for International Development.
AIRCRAFT AGREEMENT The Agreement on Trade in Civil Aircraft, sometimes referred to as the Aircraft Code, was signed in Geneva in December 1979 and entered into force on January 1, 1980. This was the only multilateral sectoral agreement designed to expand trade in manufactured products that was negotiated during the 1973-79 Tokyo Round of GATT negotiations. It is intended to provide a new international framework for free trade in civil aircraft. It uniquely addresses tariff and nontariff issues in a single sectoral context. It eliminates tariffs on civil aircraft, engines, most components, and ground flight simulators. On nontariff issues, the agreement establishes new international commitments concerning government intervention in aircraft, aircraft component, and simulator procurement, including disciplines on technical or standards barriers with respect to certification requirements and specifications on operations and maintenance procedures; government-directed procurement actions and mandatory subcontracts; sales-related inducements; quantitative trade restrictions; and government supports. Subsequent negotiations have resulted in modifications to the agreement and additions to its annex of duty-free items in 1982, 1983, 1985, and 1986. The original signatories to the agreement were Austria, Canada, the member states of the European Economic Community, the European Community, Japan, Norway, Sweden, Switzerland, and the United States. Romania and Egypt acceded to the agreement later, as did Greece, Portugal, and Spain when they joined the EC. Currently there are 22 signatories to the agreement. While the Uruguay Round did not result in changes to the Agreement on Trade in Civil Aircraft, the General Agreement on Trade in Services (GATS), a WTO agreement negotiated in the Uruguay Round, implements rules and obligations designed to liberalize trade in services generally, including air transport services. See also Codes of Conduct; Free Trade; General Agreement on Trade in Services; Nontariff Barriers; Tariff; Tokyo Round; Uruguay Round; World Trade Organization.
AIRCRAFT CODE See Aircraft Agreement.
ANDEAN PACT An arrangement between Bolivia, Colombia, Ecuador, Peru, and Venezuela for the coordination of economic policies, including the formation of a free trade zone in the Andean region. See also Customs Union; Free Trade Area Agreement.
ANTIBOYCOTT LEGISLATION The Export Administration Act was promulgated in 1969, amended in 1977 and 1979, and expired in 1990 but was continued by Executive Order 12730 under the International Emergency Economic Powers Act. It declares the policy of the United States to oppose restrictive trade practices or boycotts by foreign countries against countries friendly to the United States. The U.S. Department of Commerce, Bureau of Export Administration, Office of Antiboycott Compliance enforces regulations prohibiting U.S. citizens from engaging in activities that comply with, further, or support unsanctioned foreign boycotts. Prohibited activities include refusing and agreeing to refuse to do business for boycott reasons, taking discriminatory actions that are boycott based, furnishing information about business relationships with or in a boycotted country or with blacklisted persons, and engaging in evasion activities, such as devices or schemes intended to place a blacklisted person at a commercial disadvantage. The principal focus of the regulatory activities of the Office of Antiboycott Compliance relate to the Arab boycott of Israel. In addition, the U.S. Treasury Department enforces the antiboycott provisions of the Tax Reform Act of 1976, which deny certain tax benefits to those who agree to "participate in or cooperate with an international boycott." See also Boycott; Export Administration Act of 1979; International Emergency Economic Powers Act.
ANTI-DUMPING CODE A code of conduct negotiated under the auspices of GATT during the Tokyo Round (replacing an earlier code negotiated during the Kennedy Round) that establishes both substantive and procedural standards for antidumping proceedings in signatory countries. The Anti-Dumping Code was implemented in the United States through the U.S. Trade Agreements Act of 1979, which repealed the Anti-Dumping Law of 1921 and inserted new antidumping provisions in the Tariff Act of 1930 providing for the imposition of special duties equivalent to the margin of dumping of imported merchandise. Goods imported into the United States are considered dumped when they are found to have been sold at less than fair value and to have caused or threatened to cause material injury to a U.S. industry. The WTO Agreement on Implementation of Article VI of GATT 1994 clarifies and refines certain provisions of the 1979 Anti-Dumping Code. See also Agreement on Implementation of Article VI of GATT 1994; Codes of Conduct; Dumping; General Agreement on Tariffs and Trade; Kennedy Round; Sunset Review; Tokyo Round; Trade Agreements Act of 1979; Uruguay Round; World Trade Organization.
ANTIDUMPING DUTIES See Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Dumping; Sunset Review.
ANTITRUST A term used to describe a policy or action that seeks to curtail monopolistic power within a market. See also Export Trading Company; Market; Monopoly; Restrictive Business Practices; Webb-Pomerene Act.
APEC See Asia-Pacific Economic Cooperation.
APPAREL See Multi-Fiber Arrangement Regarding International Trade in Textiles; Textiles.
APPRAISAL See Valuation.
ARBITRATION An arrangement through which two parties to a dispute agree to the appointment of an impartial chairperson or a group of competent persons to decide the disputed issue and agree in advance to abide by the decision rendered. See also Dispute Settlement; Panel of Experts.
ARTICLE 2 (GATT ARTICLE II) See Concession.
ARTICLE 11 (GATT ARTICLE XI) A GATT provision that prohibits the use of quantitative restrictions (for example, embargoes, bans, quotas, restrictive licenses) to regulate imports and exports, except under certain specific conditions or unless provided for in some other GATT article. See also General Agreement on Tariffs and Trade; Quantitative Restrictions; Section 22; Section 201.
ARTICLE 15 (GATT ARTICLE XV) See Balance-of-Payments Consultations.
ARTICLE 19 (GATT ARTICLE XIX) A GATT safeguard provision that prescribes when emergency action (for example, restrictive measures other than normal tariffs) can be taken against imports that are injuring domestic producers. See also Agreement on Safeguards; Agreement on Textiles and Clothing; Article 11 (GATT Article XI); Codes of Conduct; Competitive; Concession; Escape Clause; General Agreement on Tariffs and Trade; Import Relief; U.S. International Trade Commission; Market Access; Omnibus Trade and Competitiveness Act of 1988; Orderly Marketing Agreements; Protectionism; Quantitative Restrictions; Safeguards; Section 22; Section 201; Section 406; Selective Quotas; Sensitive Products; Specific Limitations on Trade; Trade Barriers; Trade Act of 1974; Voluntary Restraint Agreements.
ARTICLE 22 See Article 23 (GATT Article XXIII).
ARTICLE 23 (GATT ARTICLE XXIII) Along with Article XXII, the provision of the GATT that requires GATT members to consult with each other concerning disputes that arise under GATT rules. Article XXIII also sets the basic provisions for resolving disputes that cannot be settled through bilateral consultations. See also Consultations; Dispute Settlement; General Agreement on Tariffs and Trade; Quantitative Restrictions; Understanding on Rules and Procedures Governing the Settlement of Disputes.
ARTICLE 24 (GATT ARTICLE XXIV) Regulates how customs unions and free trade areas may be formed as exceptions to the most-favored-nation provisions of Article I. Provides for notification to the GATT contracting parties, review in a Working Party, and the application of substantive criteria to the formation of such regional trade associations. See also Customs Union; Free Trade; Free Trade Area Agreement; Most-Favored-Nation Treatment.
ASIAN ECONOMIC CRISIS A series of economic events that resulted in the severe devaluation of a number of Asian currencies and destabilization of a number of Asian economies, most notably Thailand, Indonesia, South Korea, the Philippines, and Malaysia. The Asian economic crisis caused shock waves throughout the global economy. Many economists consider that one factor in the region's difficulties was its economic success during the preceding decade, which featured robust economic growth, increasing capital inflows, and macroeconomic management. The substantial capital inflows into the region from the mid-1980s to the mid-1990s led to rapid economic expansion that, in turn, resulted in increased investment and increased local lending based on unrealistically optimistic expectations and economic projections. Structural and policy distortions created fundamental imbalances in these economies that led to the market corrections experienced during the crisis. Some also believe that the macroeconomic difficulties facing the region were not as severe as many regional and international investors feared and that the crisis was exacerbated by the overreaction of market participants, who withdrew investment monies from the region. By 1999, capital inflows into the region had begun to increase again, and there were other signs that economies most directly affected by the crisis were beginning to recover. See also Adjustment; Asia-Pacific Economic Cooperation; Balance of Payments; Currency; Devaluation; Electronic Commerce; International Monetary Fund; Market Economy; Market Forces; Money; Newly Industrializing Countries.
ASIA-PACIFIC ECONOMIC COOPERATION (APEC) A forum established as a vehicle for multilateral cooperation among the market-oriented economies of the Asia-Pacific region to better manage their growing interdependence and sustain economic growth. Begun in 1989 as an informal grouping of 12 Asia-Pacific economies (Australia, Brunei, Canada, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and the United States), APEC admitted the People's Republic of China, Chinese Taipei, and Hong Kong in November 1991, and Mexico and Papua New Guinea in November 1993. Chile became a full APEC member in 1994 and Peru, Russia, and Vietnam joined in 1998. APEC's annual meetings of foreign political leaders and economic ministers have often served as catalysts for further cooperation and integration among APEC member nations. The most important meetings of the group are the annual leaders summits, though APEC meetings are held throughout the year in a variety of spheres: economic, infrastructure, business, education, resources. The annual leaders summits have set the direction for APEC's work program and continued development into a multilateral regional economic forum. The 1993 Blake Island Summit brought the political leaders of the APEC nations together for the first time and, in combination with the 1994 Bogor Summit, firmly committed APEC members to creating a free trade and investment zone in the APEC region by 2020. The framework for achieving this goal was established by the 1995 Osaka Summit's Action Agenda and the 1996 Manila Action Plan. The 1997 Vancouver Summit saw the adoption of a plan of early voluntary sectoral liberalization (EVSL) in 15 market sectors (nine by 1998), the modernizing and harmonizing of customs systems throughout the region by 2002, and the creation of an APEC work program on electronic commerce. In addition to its work on furthering regional cooperation and development, APEC has focused closely on monitoring and ameliorating the Asian economic crisis via a cooperative growth strategy including such elements as expanded international financial assistance and further efforts toward corporate sector restructuring and free and open trade and investment. Current focuses of APEC include trade and investment liberalization and facilitation, strengthening markets, and increasing support for APEC among the business community and other groups. APEC is also working toward extending its EVSL agreement to non-APEC members through the WTO. See also Codes of Conduct; Countertrade; Customs; Customs Harmonization; Customs Union; Developed Countries; Developing Countries; Economic Development; Electronic Commerce; Foreign Investment; Free Trade; Free Trade Area Agreement; Harmonization; Liberalization; Multilateral; Multilateral Agreement; Multilateral Aid; Pacific Rim; Seattle Ministerial.
ASSOCIATED STATES See ACP Countries; European Community; Lomι Convention.
ASSOCIATION AGREEMENT See European Community.
ATA CARNET An international customs document that is recognized as an internationally valid guarantee and may be used in lieu of national customs documents and as security for import duties and taxes to cover the temporary admission of goods and sometimes the transit of goods. The ATA (Admission Temporaire Temporary Admission) Convention of 1961 authorized the ATA Carnet to replace the ECS (Echantillons Commerciaux Commercial Samples) Carnet that was created by a 1956 convention sponsored by the Customs Cooperation Council. ATA Carnets are issued by National Chambers of Commerce affiliated with the International Chamber of Commerce, which also guarantees payment of duties in the event of failure to re-export. See also Codes of Conduct; Consular Invoice; Consular Formalities and Documentation; Customs; Customs and Administrative Entry Procedures; Customs Classification; Imports; Free Zone; Licensing; Liquidation; Nontariff Barriers; Port of Entry; Suspension of Liquidation; Tariff; Transit Zone; Valuation; World Customs Organization; World Trade Organization.
AUSTRALIA-NEW ZEALAND CLOSER ECONOMIC RELATIONS AGREEMENT (CER) An agreement aimed at increasing trade links by liberalizing trans-Tasman trade, thereby allowing for more efficient use of each country's resources. Implemented on January 1, 1983, the CER has the ultimate goal of eliminating import quotas, tariffs, and import licensing requirements. The CER contains provisions to gradually reduce duties, quotas, and licensing requirements. It also provides for the elimination of domestic export incentive schemes in Australia-New Zealand transactions, extension of government purchases between the two countries, and harmonization of customs policies. See also Bilateral Trade Agreement; Binding; Export Quotas; Trade Agreement.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| Balance of Concessions Balance of Payments Balance of Payments Consultations Balance of Trade (BOT) Bank for International Settlements (BIS) Banking Barter Basic Telecommunications Services Agreement Basket of Currencies Beggar-Thy-Neighbor Policy Bern Convention Bern Union Bilateral Bilateral Aid Bilateral Investment Treaty (BIT) Bilateral Trade Agreement Bill Binational Panel Binding BIT Bogus Goods |
Bond Bonded Goods Bonded Warehouse Border Tax Adjustments Bound Rates Bounties Boycott Break Bulk Bretton Woods Conference Bridging Credit Broker Brussels Ministerial Brussels Tariff Nomenclature (BTN) BTN Buffer Stocks Bulk Carrier Bureau of Export Administration (BXA) Buy American Act Buy-Back Buy National Bias BXA |
BALANCE OF CONCESSIONS See Concession; Reciprocity.
BALANCE OF PAYMENTS A tabulation of a country's credit and debit transactions with other countries and international institutions. These transactions are divided into two broad groups: current account and capital account. The main items included are exports and imports of goods and services (the balance of trade), foreign direct investments, intergovernmental loans, transfer payments, capital inflows and outflows, and changes in official gold holdings and foreign exchange reserves. See also Adjustment; Balance of Trade; Capital Account; Current Account; International Monetary Fund; Invisible Trade; Quantitative Restrictions; Transfer Payments; Visible Trade.
BALANCE-OF-PAYMENTS CONSULTATIONS Consultations in accordance with Article XV of GATT, which requires coordination between the General Agreement on Tariffs and Trade and the International Monetary Fund to ensure that the trade and payments implications of any quantitative restrictions imposed for balance-of-payments reasons are fully analyzed within the respective jurisdictions of both organizations. Any contracting party that imposes such quantitative restrictions for balance-of-payments reasons is expected to hold consultations with other interested contracting parties. The framework agreement concluded during the Tokyo Round provided that any other trade restrictive measures imposed for balance-of-payments reasons should also be discussed in such consultations. See also Consultations; Contracting Party; Exchange Controls; Framework Agreement; General Agreement on Tariffs and Trade; International Monetary Fund; Prior Deposits; Quantitative Restrictions; Tokyo Round.
BALANCE OF TRADE (BOT) A component of the balance of payments, the surplus or deficit that results from comparing a country's expenditures on merchandise imports with the receipts derived from its merchandise exports. See also Balance of Payments; Credit; Mercantilism.
BANK FOR INTERNATIONAL SETTLEMENTS (BIS) An organization established at the Hague Conference in January 1930 to serve as a forum for international monetary and regulatory cooperation, as a bank for central banks, as a center for monetary and economic research, and as agent or trustee to facilitate the implementation of various international financial agreements. Initial members included six central banks and a U.S. financial institution. Membership currently includes 45 central banks. See also Credit; European Central Bank; European System of Central Banks; Foreign Exchange; Inflation; Interest; Loan; Reserve Currency.
BANKING See Credit; Interest; Loan; Services.
BARTER The direct exchange of goods for other goods, without the use of money as a medium of exchange and without the involvement of a third party. See also Countertrade; Money.
BASIC TELECOMMUNICATIONS SERVICES AGREEMENT An agreement that contains specific commitments on market access and national treatment taken by 70 countries under the WTO General Agreement on Trade in Services in the area of basic telecommunications, which includes, but is not limited to, voice services, packet-switched data transmission services, circuit-switched data transmission services, telex services, telegraph services, facsimile services, and private leased circuit services. See also General Agreement on Trade in Services; Services; Uruguay Round; World Trade Organization.
BASKET OF CURRENCIES See Par Value; Special Drawing Rights.
BEGGAR-THY-NEIGHBOR POLICY A course of action through which a country tries to reduce unemployment and increase domestic output by raising tariffs and instituting nontariff barriers that impede imports, or by accomplishing the same objective through competitive devaluation. Countries that pursued such policies in the early 1930s found that other countries retaliated by raising their own barriers against imports, which, by reducing export markets, tended to worsen the economic difficulties that precipitated the initial protectionist action. The United States Smoot-Hawley Tariff Act of 1930 is often cited as a conspicuous example of this approach. See also Column 2 Rates; Devaluation; Protectionism; Retaliation; Tariff Act of 1930.
BERN CONVENTION The International Union for the Protection of Literary and Artistic Works, signed at Bern, Switzerland, on September 9, 1886, with additional protocols and revisions signed in 1914, 1928, 1948, 1967, and 1971. The Bern Convention is a major multinational treaty concerning the scope of copyright protection to be afforded works prepared by foreign persons whose countries are signatories. It provides copyright protection in the form of national treatment and also requires member countries to provide certain minimum protections for specified types of works. For instance, it requires that literary works be protected for the life of the author plus 50 years and forbids imposition of formalities (for example, a copyright notice) as a condition of protection. The other major copyright treaty, the Universal Copyright Convention, is somewhat less protective of the rights of authors. After decades of refusing to join, the United States became a signatory of the Bern Convention in 1989. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Commercial Counterfeiting; Copyright; Intellectual Property; Knowledge-Based Industry; National Treatment; Property; Trademark; Trafficking in Counterfeit Goods and Services; World Intellectual Property Organization.
BERN UNION See Bern Convention.
BILATERAL An agreement or arrangement involving two sides or parties. See also Multilateral; Unilateral.
BILATERAL AID Development assistance provided directly by a donor country to a recipient country (as opposed to aid channeled through a multilateral institution). See also Additionality; Agency for International Development; Developing Countries; Least Developed Countries; Multilateral Aid; Newly Industrializing Countries; Official Development Assistance; Overseas Private Investment Corporation.
BILATERAL INVESTMENT TREATY (BIT) An agreement establishing the terms and conditions for private investment by nationals and companies of one country in the country of the other.
BILATERAL TRADE AGREEMENT A formal or informal agreement involving commerce between two countries. See also Consultations; Trade Agreement.
BILL A document giving evidence of indebtedness of one party to another, as, for example, a written order for goods that can be used as security for a loan to the supplier of the goods from a bank, or a security such as a Treasury bill. See also Euro-Dollars; Medium of Exchange; Security; Trade Agreements Act of 1934.
BINATIONAL PANEL A panel established under the U.S.-Canada Free Trade Agreement to assist in the resolution of trade disputes. Subsequently incorporated into the North American Free Trade Agreement, review by the binational panel is the principal mechanism to settle disputes among or between the United States, Canada, and Mexico arising from antidumping duty, countervailing duty, and final injury determinations. Chapter 19 of the NAFTA proffers the binational panel review as an alternative to judicial review. To this end, in article 1904, the signatories have established rules of procedure, as well as an "extraordinary challenge procedure," to safeguard against any panel impropriety or gross error. In addition, article 1903 provides the opportunity for a party to request that any amendment to another party's antidumping or countervailing duty law be referred to a panel for a declaratory opinion on whether the amendment is consistent with the NAFTA. See also Bilateral Trade Agreement; Dispute Settlement; North American Free Trade Agreement; U.S.-Canada Free Trade Agreement; U.S.-Canada Trade Commission.
BINDING A provision in a trade agreement that no tariff rate higher than the rate specified in the agreement will be imposed during the life of the agreement. See also Bound Rates; Compensation; Concession; Tariff.
BIT See Bilateral Investment Treaty.
BOGUS GOODS See Commercial Counterfeiting.
BOND An interest-bearing certificate issued by a government or a business promising to pay the holder a specified sum on a specified date. A bond is a common means of raising capital. See also Capital Market; Credit; Customs Bond.
BONDED GOODS Imported goods stored in a bonded warehouse, usually after the owners of the goods have deposited a bond guaranteeing that the duty will be paid when and if the goods are withdrawn for domestic sale. See also Bonded Warehouse; Customs Bond; Free Zone.
BONDED WAREHOUSE A secure storage area in which goods subject to excise taxes or customs duties are stored pending payment of taxes or duties. See also Bonded Goods; Customs Bond; Free Zone.
BORDER TAX ADJUSTMENTS The remission of indirect taxes on exported goods, including sales taxes and value-added taxes, designed to ensure that national tax systems do not impede exports, and the imposition of domestic taxes on imported goods, to ensure that they do not receive preferential treatment as compared with domestically produced goods. Frontier adjustments on exports are permitted for indirect taxes under Articles VI and XVI of GATT, but not for direct taxes (such as income taxes assessed on producing firms). The U.S. government makes little use of border tax adjustments, since it relies more heavily on income (or direct) taxes than do most other governments, and since most goods exported from the United States are not subject to indirect taxes. See also Direct Tax; Indirect Tax; Tax; Value-Added Tax.
BOUND RATES Tariff rates resulting from GATT negotiations that are incorporated in a country's schedule of concessions and are thus enforceable as an integral element of the WTO regime. If a WTO member raises a tariff to a higher level than its bound rate, the major beneficiaries of the earlier binding have a right to receive compensation, usually in the form of reduced tariffs on other products they export to the country. If the beneficiaries do not receive such compensation, they may retaliate by raising their own tariffs against an equivalent value of the original country's exports. See also Binding; Compensation; Concession; General Agreement on Tariffs and Trade; Retaliation; Tariff; World Trade Organization.
BOUNTIES Payments by governments to producers of goods, often to strengthen the producer's competitive position. See also Countervailing Duties.
BOYCOTT A refusal to deal commercially or otherwise with a person, firm, or country. See also Antiboycott Legislation; Coordinating Committee for Multilateral Export Controls; Embargo; Export Administration Act of 1979.
BREAK BULK Loose, noncontainerized cargo imported in bulk, usually because of size or weight considerations (such as raw materials or oversized machinery). These shipments are often separated into individual lots and routed to different destinations and/or importers.
BRETTON WOODS CONFERENCE A meeting of central bank economists and other government officials, formally known as the United Nations Monetary and Financial Conference, that took place in Bretton Woods, New Hampshire, in July 1944. The conference was convened to consider alternative proposals put forward by British and American financial experts relating to international payments problems, the economic reconstruction needs of Europe upon the conclusion of World War II, and the need to ensure stable exchange rates and free convertibility of currencies. The compromise solution negotiated at Bretton Woods led to the establishment of an International Monetary Fund and an International Bank for Reconstruction and Development (the World Bank). The presumed need for an International Trade Organization was also informally considered at Bretton Woods. See also General Agreement on Tariffs and Trade; International Monetary Fund; World Bank.
BRIDGING CREDIT Borrowing ahead of receiving payment for a sale, or short-term credit to a customer pending his or her receipt of funds from another source. See also Credit.
BROKER An intermediary between a buyer and a seller in a highly organized market, as in the case of a stockbroker. See also Capital Market; Market; Security.
BRUSSELS MINISTERIAL An EC-hosted ministerial meeting scheduled for Brussels, December 3-7, 1990, to conclude the Uruguay Round of multilateral trade negotiations. However, discussions broke down, and the conclusion of the round was postponed. See also GATT Ministerial Meeting of 1982; General Agreements on Tariffs and Trade; Montreal Ministerial; Punta del Este Ministerial; Seattle Ministerial; Uruguay Round; World Trade Organization.
BRUSSELS TARIFF NOMENCLATURE (BTN) See Customs Cooperation Council Nomenclature.
BTN See Customs Cooperation Council Nomenclature.
BUFFER STOCKS Commodity stockpiles managed in such a way as to moderate price fluctuations. Goods may be sold from a stockpile when prices reach or approach predetermined ceiling prices, and they may be purchased for the stockpile when prices reach or approach predetermined floor levels. Rubber and cocoa are among the commodities considered most likely to benefit from buffer stocks, and international commodity agreements exist for both of these products. See also Commodity; Common Fund; International Commodity Agreement; Strategic Stockpiles.
BULK CARRIER A transporter (usually an ocean-going vessel) of large, heavy cargoes. "Dry" cargoes are usually mineral ores (such as phosphates or manganese), as opposed to "liquid hydrocarbons," a phrase that usually refers to petroleum.
BUREAU OF EXPORT ADMINISTRATION (BXA) The branch of the International Trade Administration of the U.S. Department of Commerce that is responsible for, among other tasks, administering the Export Administration Act of 1979. See also Antiboycott Legislation; Export Administration Act of 1979; U.S. International Trade Administration.
BUY AMERICAN ACT U.S. legislation passed in 1933 that mandates preference for the purchase of domestically produced goods over foreign goods in U.S. government procurement. The president has the authority to waive the Buy American Act within the terms of a reciprocal agreement or otherwise in response to the provision of reciprocal treatment to U.S. producers. Under the 1979 GATT Government Procurement Code, the U.S.-Israel FTA, the U.S.-Canada FTA, and the WTO Agreement on Government Procurement, the United States provides access to the government procurement of certain U.S. agencies for goods from the other parties to those agreements. Other "buy-national" legislative provisions exist separately from the Buy American Act requirements. See also Agreement on Government Procurement; Government Procurement Policies and Practices; U.S.-Israel Free Trade Agreement; U.S.-Canada Free Trade Agreement.
BUY-BACK See Countertrade.
BUY NATIONAL BIAS See Government Procurement Policies and Practices.
BXA See Bureau of Export Administration.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| C&F Cairns Group CAP Capital Capital Account Capital Goods Capital Market Caribbean Basin Initiative Cargo Sharing Carnet Cartel CBI CCC CCCN Ceiling Price Central Planning CEP CER Certificate of Origin CET CFR CFTA CIF CIP CIT Clearing Agreements COCOM Codes of Conduct Collateral Column 1 Rates Column 2 Rates COMECON Commercial Counterfeiting Commercial Paper Commission of the European Community Commodity Commodity Agreement Commodity Credit Corporation Commodity Exchange Commodity Stockpiles Common Agricultural Policy Common External Tariff Common Fund Common Market Commonwealth of Independent States Comparative Advantage Compensation Compensation Trade Compensatory Finance Compensatory Tariff Reductions Competition Policy Competitive Competitive Devaluation Competitive Need Compound Tariff Concession |
Concessional Aid Conditional Most-Favored-Nation Treatment Conditionality Constructed Export Price Constructed Value Consular Formalities and Documentation Consular Invoice Consultations Consulting Services Consumer Goods Consumer Preference Consumers Consumption Consumption Tax Contracting Party Conventional Tariff Conversion Product Convertibility Coordinating Committee for Multilateral Export Controls Copyright Core Commodities Core Labor Standards Cost and Freight Cost, Insurance, and Freight Cotton Textiles Council for Mutual Economic Assistance Council of the European Community Council of the European Union Council of Ministers Counterpurchase Contracts Countertrade Countervailing Duties (CVD) Country of Origin Certificate Court of International Trade (CIT) CPT Credit Creditor Clubs Currency Current Account Customs Customs and Administrative Entry Procedures Customs Area Customs Classification Customs Cooperation Council Customs Cooperation Council Nomenclature Customs Bond Customs Duty Customs Harmonization Customs Union Customs Valuation Code Customs Warehouse CXT |
C&F See CFR.
CAIRNS GROUP A group of agricultural-exporting nations comprising Australia, Argentina, Brazil, Canada, Chile, Colombia, Fiji, Hungary, Indonesia, Malaysia, New Zealand, the Philippines, Thailand, and Uruguay established to develop a common negotiating position for the Uruguay Round. See also Multilateral Trade Negotiations; Uruguay Round.
CAP See Common Agricultural Policy.
CAPITAL Property or wealth that yields income expressed in terms of money. Also, the accumulated stock of tools, machinery, equipment, buildings, and other goods employed, in turn, to produce other goods and services. See also Capital Goods; Infrastructure; Interest; Money; Profit; Risk.
CAPITAL ACCOUNT That portion of a country's balance of payments that includes the inward and outward flow of money for investment and international grants and loans (public and private). See also Balance of Payments; Current Account.
CAPITAL GOODS Industrial products or other goods that are used in the creation of additional wealth, such as machine tools. Capital goods are sometimes called intermediate goods because they only indirectly satisfy human wants (as opposed to consumer goods, which satisfy human wants directly), and they are sometimes called producer goods, because they are used to produce other goods. See also Capital; Consumer Goods; Production.
CAPITAL MARKET The market for longer-term loanable funds. The capital market in a country is not one institution; rather, it includes securities exchanges, underwriters, investment banks, and insurance companies that canalize supply and demand for long-term capital and claims on capital, especially when concentrated in such major financial centers as New York City and London. The marketing of securities is an important element in the efficient working of a capital market. See also Capital; Developing Countries; Insurance; International Finance Corporation; Market; Security; Underwriter; World Bank.
CARIBBEAN BASIN INITIATIVE (CBI) A broad program to promote economic development through private sector initiative in Central America and the Caribbean islands. The goal is to expand foreign and domestic investment in nontraditional sectors, diversifying CBI country economies and expanding their exports. The major elements of the program are duty-free entry to the United States in perpetuity for a wide-ranging group of products; U.S. economic assistance to the region; continuing self-help efforts to improve investment climate and trade; a deduction on U.S. taxes for companies that hold conventions in qualifying CBI countries to increase tourism; and U.S. government, state government, and private sector promotion program support from other trading partners and from multinational development institutions. See also ACP Countries; Agency for International Development; Bilateral Aid; Developing Countries; Economic Development; Enterprise for the Americas Initiative; Liberalization; Lomι Convention; Multilateral Aid; North-South Trade; Official Development Assistance; Overseas Private Investment Corporation; Reverse Preferences; Soft Loan; Special and Differential Treatment; Tariff Quota.
CARGO SHARING The reservation and division of maritime traffic between designated trading partners who agree that vessels owned or controlled by either will carry a specified percentage of the cargo moving between them.
CARNET See ATA Carnet.
CARTEL An alliance or arrangement among industrial, commercial, or state-controlled enterprises producing the same commodity, aimed at regulating the purchase, production, or marketing of the commodity. A cartel agreement is often accompanied by output and investment quotas. When a cartel gains monopoly power, it will normally seek to maximize profits by raising prices and limiting supply. See also Commodity; Monopoly; Organization of Petroleum Exporting Countries.
CBI See Caribbean Basin Initiative.
CCC See Commodity Credit Corporation.
CCCN See Customs Cooperation Council Nomenclature.
CEILING PRICE See Buffer Stocks.
CENTRAL PLANNING See Non-Market Economy.
CEP See Constructed Export Price.
CER See Australia-New Zealand Closer Economic Relations Agreement.
CERTIFICATE OF ORIGIN See Customs and Administrative Entry Procedures.
CET See Common External Tariff.
CFR An international commercial term (Incoterm) meaning "cost and freight." The term is used in international sales contracts to signify that the seller must pay the cost and freight necessary to bring goods to a port of destination, but that the risk of loss or damage passes from the seller to the buyer when the goods pass the ship's rail in the port of shipment. Because a CFR selling price includes the cost of the goods and freight but not the cost of insurance, this term of sale is often used when the government in an importing country requires that insurance be supplied by a company subject to its jurisdiction. Prior to the 1990 version of the Incoterms, C&F was used instead of CFR, with the same meaning. See also CIF; CIP; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB; Incoterms.
CFTA See U.S.-Canada Free Trade Agreement.
CIF An international commercial term (Incoterm), used in international sales contracts, meaning that the selling price includes all "costs, insurance, and freight" for any goods sold. The seller arranges and pays for all relevant expenses involved in shipping goods from their point of exportation to a given point of importation. In trade statistics, "CIF value" means that all figures for imports or exports are calculated on this basis, regardless of the nature of individual transactions. See also CFR; CIP; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB; CFR; Incoterms.
CIP An international commercial term (Incoterm), meaning "carriage and insurance" that is used in international sales contracts to impose the same obligations on the seller as "carriage paid to" (CPT), with the exception that the seller is also responsible for contracting and paying for cargo insurance. Hence, in addition to this obligation, the seller will clear for export and pay the freight and all costs incurred for the carriage of goods to a destination named by the buyer. The risk of loss or damage passes to the buyer when the goods are delivered to the carrier. See also CFR; CIF; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB; Incoterms.
CIT See Court of International Trade.
CLEARING AGREEMENTS See Countertrade.
COCOM See Coordinating Committee on Multilateral Export Controls.
CODES OF CONDUCT In general usage in trade law, any international agreement that prescribes or recommends standards of behavior by nation-states or multinational corporations deemed desirable by the international community. For example, the United Nations has encouraged the negotiation of several voluntary codes of conduct (meaning that they are not legally binding), including one that seeks to specify the rights and obligations of transnational corporations. More narrowly, "codes of conduct" refers to the six agreements that were negotiated during the Tokyo Round to liberalize and harmonize domestic measures that might impede or distort trade: the Agreement on Technical Barriers to Trade, or Standards Code; the Agreement on Government Procurement, or Government Procurement Code; the Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade, or Subsidies Code; the Agreement on Implementation of Article VII, or Customs Valuation Code; the Agreement on Import Licensing Procedures, or Import Licensing Code; and the Agreement on Implementation of Article VI, or Anti-Dumping Code. See also Agreement on Government Procurement; Agreement on Import Licensing Procedures; Agreement on Implementation of Article VI of GATT 1994; Agreement on Implementation of Article VII of GATT 1994; Agreement on Subsidies and Countervailing Measures; Agreement on Technical Barriers to Trade; Aircraft Agreement; Anti-Dumping Code; Articles of GATT; Consultations; Countervailing Duties; Customs; Customs Classification; Customs Valuation Code; Dispute Settlement; Domestic Subsidy; Export Subsidy; Government Procurement Policies and Practices; Liberalization; Licensing Code; Multilateral Agreement; Multinational Corporation; Nontariff Barriers; Restrictive Business Practices; Safeguards; Standards; Tariff; Tariff Schedules; Tokyo Round; Transparency; Valuation; World Customs Organization; World Trade Organization.
COLLATERAL See Security.
COLUMN 1 RATES U.S. tariff rates (nearly all of which are "bound" rates) established through trade negotiations. They are usually substantially lower than column 2 rates and apply to all countries to which the United States grants most-favored-nation treatment. See also Bound Rates; Column 2 Rates; Most-Favored-Nation Treatment.
COLUMN 2 RATES U.S. statutory tariff rates, generally set by the Smoot-Hawley Tariff Act of 1930, as amended. These rates are substantially higher than column 1 rates. For countries receiving most-favored-nation treatment, they have been supplanted by lower tariffs established through concessions, which are set out in column 1 of the tariff schedule. Column 2 rates are currently assessed only on imports from countries that do not receive most-favored-nation treatment from the United States, all of which are state-trading nations. See also Column 1 Rates; Concession; Most-Favored-Nation Treatment; Tariff Act of 1930.
COMECON See Council for Mutual Economic Assistance.
COMMERCIAL COUNTERFEITING The production or marketing of goods with the intent of defrauding the purchaser by falsely conveying, directly or indirectly, that the goods are produced by a known and reputable manufacturer. Counterfeit goods are usually distinguished from bogus goods in that, in addition to replicating the legitimate good, they bear a forged trademark. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights includes provisions to discipline counterfeiting. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; General Agreement on Tariffs and Trade; Intellectual Property; Knowledge-Based Industry; Property; Trademark; Section 337; Special 301; Trafficking in Counterfeit Goods and Services; Uruguay Round; Uruguay Round Agreements Act; World Intellectual Property Organization; World Trade Organization.
COMMERCIAL PAPER Short-term financial instruments that can be bought and sold, particularly promissory notes that call for the payment of specified amounts of money at a given time. See also Bond; Capital Market; Loan; Security.
COMMISSION OF THE EUROPEAN COMMUNITY See European Commission.
COMMODITY Broadly defined, any article exchanged in trade but most commonly used to refer to raw materials, including such minerals as tin, copper, and manganese, and bulk-produced agricultural products such as coffee, tea, and rubber. See also Buffer Stocks; Common Fund; Forward Market; International Commodity Agreement; Primary Commodity; Tropical Products.
COMMODITY AGREEMENT See International Commodity Agreement.
COMMODITY CREDIT CORPORATION (CCC) A public corporation attached to the U.S. Department of Agriculture that provides financial and other services associated with public price-support activities for certain agricultural commodities, including loans, guarantees, purchases, sales, storage, transport, and export programs. See also Export Enhancement Program.
COMMODITY EXCHANGE See Forward Market.
COMMODITY STOCKPILES See Buffer Stocks.
COMMON AGRICULTURAL POLICY (CAP) A comprehensive system of production targets and market regulations adopted by the European Community covering most agricultural goods produced within the EC. Its purposes are to achieve fair and rising standards of living for the farm populations of member states, stable agricultural markets, and increased farm productivity and food security within the EC. To achieve these objectives, the CAP relies on uniform prices and the free circulation of agricultural goods among member states; preferences for agricultural products produced within the EC; the imposition of variable levies on imported goods to bring their prices to the level of EC prices; and subsidization of exports to countries outside the EC. (In practice, agricultural prices sometimes vary from one member state to another, principally because exchange rates applied to goods moving from one country to another do not always reflect market exchange rates.) The European Community finances the CAP through receipts from customs duties, including variable levies, and the value-added tax. See also Conversion Product; Deficiency Payments; Domestic Subsidy; European Community; Export Subsidy; Restitutions; Threshold Price; Value-Added Tax; Variable Levy.
COMMON EXTERNAL TARIFF (CET or sometimes CXT) A tariff rate uniformly applied by a common market or customs union, such as the European Community, to imports from countries outside the union. For example, the European internal market is based on the principle of a free internal trade area with a common external tariff [sometimes referred to in French as the Tariff Extιrieur Commun (TEC)] applied to products imported from non-member countries. "Free trade areas" do not necessarily have common external tariffs, and free trade agreements seldom have common external tariffs. See also Customs; Customs Area; Customs Union; European Community; Free Trade Area Agreement; Free Trade Area of the Americas; Free Zone; General Agreement on Tariffs and Trade; Kyoto Convention; MERCOSUR; North American Free Trade Agreement; Tariff; Tariff Schedules; Trade Diversion; U.S.-Canada Free Trade Agreement.
COMMON FUND An international institution designed as the centerpiece of the UNCTAD Integrated Program for Commodities. Its first account (sometimes called its "first window" and financed from mandatory contributions of member governments) provides funds to help finance buffer stocks maintained under international commodity agreements to stabilize commodity prices. Its second account (sometimes called its "second window" and largely financed by voluntary contributions) supports research and development and export promotion for selected commodities. See also Buffer Stocks; International Commodity Agreement; United Nations Conference on Trade and Development.
COMMON MARKET See Customs Union; European Coal and Steel Community; European Community.
COMMONWEALTH OF INDEPENDENT STATES (CIS) A political group comprising the following independent nations formerly a part of the Soviet Union: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.
COMPARATIVE ADVANTAGE A central concept in international trade theory that holds that a country or a region should specialize in the production and export of those goods and services that it can produce relatively more efficiently than other goods and services, and that it should import those goods and services in which it has a comparative disadvantage. This theory was first propounded by David Ricardo in 1817 as a basis for increasing the economic welfare of a population through international trade. The comparative advantage theory normally favors specialized production in a country based on intensive utilization of those factors of production in which the country is relatively well endowed (such as raw materials, fertile land, or skilled labor), and perhaps also the accumulation of physical capital and the pace of research. See also Competitive; Efficiency; Exports; Imports; Structural Change; Welfare.
COMPENSATION The principle, central to GATT and the WTO, that any country that raises a tariff above its bound rate, withdraws a binding on a tariff, or otherwise impairs a trade concession must lower other tariffs or make other trade concessions to compensate for the disadvantage suffered by countries whose exports are affected. See also Binding; Bound Rates; Concession; Consultations; Dispute Settlement; General Agreement on Tariffs and Trade; Section 201; Understanding on Rules and Procedures Governing the Settlement of Disputes; World Trade Organization.
COMPENSATION TRADE See Countertrade.
COMPENSATORY FINANCE A loan or transfer of financial resources on concessional terms to a country when its export receipts either total receipts from merchandise exports or receipts from a component of total exports, such as an individual commodity or a stated group of commodities fall below a predetermined level. The loan, to be repaid according to a previously agreed formula, is intended to stabilize the country's export receipts over an indicated period. Compensatory arrangements exist under the International Monetary Fund and the Lomι Convention. See also Commodity; International Monetary Fund; Lomι Convention.
COMPENSATORY TARIFF REDUCTIONS See Special and Differential Treatment.
COMPETITION POLICY A framework of rules and regulations designed to foster the efficient allocation of resources as a means of promoting certain objectives, such as economic vitality, consumer welfare and/or other desirable public policy goals. Generally, antitrust laws and other competition laws and policies focus on efficient resource allocation at the national level. The extent to which restraints on competition, public or private, impair cross-border competition is being examined in a variety of international trade and economic forums such as the WTO. See also Antitrust; Export Trading Company; Monopoly; Restrictive Business Practices; Unfair Trade Practices; Webb-Pomerene Act.
COMPETITIVE Refers to a product that can be sold in an appropriate quantity within a specific market because buyers consider its price and quality acceptable, taking account of support services, credit, delivery terms, guaranteed repairs, promotion, or a combination of such factors, in comparison with other available goods. See also Comparative Advantage; Efficiency; Export Promotion; Market; Monopoly; Safeguards; Structural Change; Tariff.
COMPETITIVE DEVALUATION See Beggar-Thy-Neighbor Policy.
COMPETITIVE NEED See Generalized System of Preferences.
COMPOUND TARIFF A combination of an ad valorem tariff plus a specific tariff. Also called a "mixed tariff." See also Ad Valorem Equivalent; Ad Valorem Tariff; Specific Tariff; Tariff.
CONCESSION A grant of a position, privilege, or right by a party to a negotiation to induce the other party to yield an equivalent position, privilege, or right. In GATT trade negotiations, a country normally made concessions in the form of reductions in its tariff and nontariff import barriers, in exchange for reductions in the barriers of other countries to its exports. A country's "schedule of concessions," accepted as part of its obligations to other contracting parties, would become an integral part of GATT under Article II of the General Agreement on Tariffs and Trade. GATT Article II continues to govern the obligations of country members under the WTO, where it is incorporated by reference into GATT 1994. See also Binding; Bound Rates; Compensation; Conditional Most-Favored-Nation Treatment; Escape Clause; General Agreement on Tariffs and Trade; Most-Favored-Nation Treatment; Negotiations; Offer List; Principal Supplier; Reciprocity; Safeguards; Section 301; Special 301; Super 301; Tariff; Tariff Schedules of the United States; World Trade Organization.
CONCESSIONAL AID See Official Development Assistance.
CONDITIONAL MOST-FAVORED-NATION TREATMENT The extension of concessions by an importing country to other countries that provide equivalent benefits for its exports. The United States applied conditional most-favored-nation treatment in its trade relations with other countries from 1789 to 1923, when it first applied unconditional most-favored-nation treatment in a commercial treaty with Germany. See also Agreement on Government Procurement; Concession; Government Procurement Policies and Practices; Most-Favored-Nation Treatment.
CONDITIONALITY The set of conditions attached to the use of its resources by the International Monetary Fund, involving undertakings and adjustment policies that will restore a sustainable balance-of-payments position within a one- to three-year period. See also Adjustment; Balance of Payments; International Monetary Fund.
CONSTRUCTED EXPORT PRICE (CEP) The price at which particular merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. Under U.S. antidumping law, dumping consists of sales of merchandise exported to the United States at less than fair value, when such sales materially injure or threaten material injury to producers of like merchandise in the United States. The determination that sales have been made at less than fair value involves a comparison of "normal value" the price at which the merchandise is sold within the exporting country or to third countries (or a "constructed value") and the "U.S. price" the price at which the merchandise is sold in the U.S. market. The U.S. price may be derived either from the "export price" (EP) or the "constructed export price" (CEP). The price used to establish the CEP can be adjusted to take into account certain costs, charges, taxes, duties, commissions, and expenses. The term "CEP" was introduced into U.S. antidumping law by the Uruguay Round Agreements Act (URAA) in implementation of the WTO Agreement concluded during the Uruguay Round. The term CEP replaces the term "exporter's sales price" (ESP), which was its counterpart under pre-URAA law. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Dumping; Export Price; Normal Value; United States Price; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization..
CONSTRUCTED VALUE See Dumping.
CONSULAR FORMALITIES AND DOCUMENTATION Certain documents or procedures required by some countries before their customs authorities will permit goods produced in other countries to enter their markets, such as special invoices approved by a consul or another official of the importing country. These procedures impede trade, particularly when fees are charged for the authorizations. The number of countries that apply consular formalities has declined in recent years, and most countries that still apply them are developing countries. See also ATA Carnet; Codes of Conduct; Consular Invoice; Customs; Customs and Administrative Entry Procedures; Customs Classification; Free Zone; Imports; Licensing; Liquidation; Nontariff Barriers; Port of Entry; Quarantine, Sanitary, and Health Laws and Regulations; Suspension of Liquidation; Tariff; Tokyo Round; Transit Zone; Valuation; World Customs Organization; World Trade Organization.
CONSULAR INVOICE See Consular Formalities and Documentation; Customs and Administrative Entry Procedures.
CONSULTATIONS Formal discussions between two or more parties to an agreement with respect to their rights under the agreement. Typically, consultations are requested by a party that believes that its rights under an agreement have been nullified or impaired and are the first and often mandatory step in dispute settlement. If consultations are unsuccessful in resolving the dispute within a specified time, the dispute normally is submitted to a panel for a ruling. The most important multilateral agreements providing for consultations are the WTO's Understanding on Rules and Procedures Governing the Settlement of Disputes and GATT Articles XXII and XXIII. See also Article 23 (GATT Article XXIII); Balance-of-Payments Consultations; Compensation; Dispute Settlement; Panel of Experts; Understanding on Rules and Procedures Governing the Settlement of Disputes; World Trade Organization..
CONSULTING SERVICES See Services.
CONSUMER GOODS Goods that directly satisfy human desires (as opposed to capital goods). An automobile used for pleasure is considered a consumer good. An automobile used by a business person to deliver wares is considered a capital good. See also Capital Goods; Consumers; Goods.
CONSUMER PREFERENCE See Demand; Structural Change.
CONSUMERS Individuals or groups that use economic goods and services, thus deriving utility from them. See also Consumer Goods; Utility.
CONSUMPTION The purchase and utilization of goods or services for the gratification of human desires or in the production of other goods or services. The consumer may be an individual, a business firm, a public body, or other entity. See also Consumers; Demand; Goods; Production; Services; Utility.
CONSUMPTION TAX See Excise Tax.
CONTRACTING PARTY A country or economic entity that has adhered to the General Agreement on Tariffs and Trade, thereby accepting the body of specified obligations and benefits contained therein. The signatories to the GATT are referred to in GATT documents as the CONTRACTING PARTIES, in full capital letters, when they act collectively within the framework of the GATT. The corresponding term for entities that have adhered to the WTO Agreement is "Member." See also General Agreement on Tariffs and Trade; Protocol of Provisional Application; World Trade Organization.
CONVENTIONAL TARIFF A tariff established through a "convention" (or international agreement) resulting from tariff negotiations and, hence, not subject to modifications by national action. See also General Tariff.
CONVERSION PRODUCT A product, such as pork, eggs, or poultry, whose price is affected under the ECs Common Agricultural Policy by the price of feed grains. Its value is determined by the feed cost per unit produced. See also Common Agricultural Policy.
CONVERTIBILITY A characteristic of a currency when it may be legally exchanged by its holder for other currencies through banks in the issuing country. See also Currency; International Monetary Fund.
COORDINATING COMMITTEE FOR MULTILATERAL EXPORT CONTROLS (COCOM) A committee consisting of representatives from all NATO countries (except Iceland) that, between 1949 and 1994, coordinated policies restricting exports of products of potential strategic value to the former Soviet Union and certain other countries. Created in 1949, the committee not only reviewed military technology transfer for potential embargo but also tried to anticipate the end use of products manufactured for civilian purposes, such as computers and transistors. For reasons including the disintegration of the Soviet Union and the goal of assisting economic and political reform in Russia and the Newly Independent States, the COCOM partners agreed in 1993 to end the Cold War regime effective March 31, 1994, and to work toward a new arrangement to enhance transparency and restraint in exporting conventional weapons and sophisticated technologies to countries whose behavior is cause for serious concern and to regions of potential instability. The successor regime to COCOM is the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, which began operations in September 1996 and is headquartered in Vienna, Austria. See also Boycott; Embargo; Export Administration Act of 1979; Wassenaar Arrangement.
COPYRIGHT An exclusive right conferred by a government for a specified period to the creator of literary or artistic works such as books, maps, articles, drawings, charts, photographs, musical compositions, motion pictures, recordings, or computer programs. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights incorporates all substantive trade-related protection afforded under the Bern Convention for the Protection of Literary and Artistic Works, clarifying that computer programs are protected as literary works and compilations of databases as intellectual creation. Protection extends for the duration of the life of the author plus 70 years, and includes rights of translation, reproduction, public performance, broadcasting, adaptation and arrangement, and rental. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Bern Convention; General Agreement on Tariffs and Trade; Intellectual Property; Knowledge-Based Industry; National Treatment; Omnibus Trade and Competitiveness Act of 1988; Property; Section 337; Special 301; Technology; Technology Transfer; Uruguay Round; Uruguay Round Agreements Act; World Intellectual Property Organization; World Trade Organization.
CORE COMMODITIES See Integrated Program for Commodities.
CORE LABOR STANDARDS Core labor standards are human rights agreed by the International Labor Organization and other groups to include freedom of association, the right to organize and bargain collectively, a prohibition on forced labor, a prohibition on discrimination in employment, and a prohibition on exploitive child labor. Founded in 1919, the ILO is the United Nations specialized agency established to promote social justice and internationally recognized human and labor rights. See also United Nations Development Program; Workers' Rights.
COST AND FREIGHT See CFR.
COST, INSURANCE, AND FREIGHT See CIF.
COTTON TEXTILES See Multi-Fiber Arrangement Regarding International Trade in Textiles; Textiles.
COUNCIL FOR MUTUAL ECONOMIC ASSISTANCE (COMECON) An intergovernmental organization established in 1949 to coordinate the economies of member states, consisting of the Soviet Union, Bulgaria, Czechoslovakia, the German Democratic Republic (East Germany), Hungary, Mongolia, Poland, Romania, Cuba, and Vietnam. The purpose of the council, according to its charter, was to improve economic cooperation among participating countries and to accelerate their economic and technological progress. This organization was formally disbanded in June 1991. See also Group D.
COUNCIL OF THE EUROPEAN COMMUNITY See European Community.
COUNCIL OF THE EUROPEAN UNION Usually referred to as the Council of Ministers, one of the official institutions of the European Union. (It should not be confused with the European Council of the European Union.) While the European Commission is charged with proposing legislation, the Council of Ministers has the power to adopt it, although in certain cases only with the approval of the European Parliament. Depending on the matter at issue, the Council of Ministers must take decisions either by qualified majority voting or by unanimity. The Council of Ministers is made up of representatives usually government ministers from all EU member states. As a result, the council is a forum in which EU member states attempt to assert their interests. The Council of Ministers, which is based in Brussels, Belgium, addresses the major areas of EU policy, including agriculture, economy, environment, foreign affairs, finance, industry, and transport. See also European Community; European Commission; European Council; European Parliament; European Union.
COUNCIL OF MINISTERS See Council of the European Union.
COUNTERPURCHASE CONTRACTS See Countertrade.
COUNTERTRADE (CT) Arrangements under which the sale of goods or services from one country to another are linked to sales in the opposite direction. Countertrade arrangements frequently characterize East-West trade. Such transactions include:
See also Barter; East-West Trade; Nonmarket Economy; Offset Requirements; Tied Loan; Turnkey Contract.
COUNTERVAILING DUTIES (CVD) Specific duties imposed on imports to offset the benefits of subsidies to producers or exporters in the exporting country. The executive branch of the U.S. government has been legally empowered since the 1890s to impose countervailing duties in amounts equal to any "bounties" or "grants" reflected in products imported into the United States. Under U.S. law and the Tokyo Round Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade, usually referred to as the Subsidies Code, a wide range of practices are recognized as constituting subsidies that may be offset through the imposition of countervailing duties. The United States, which was a signatory to the 1979 Subsidies Code, modified U.S. trade law to conform to the code. Thus, the Trade Agreements Act of 1979 amended the Tariff Act of 1930 to establish rigorous procedures and deadlines for determining the existence of subsidies in response to petitions filed by interested parties such as domestic producers of competitive products and their workers. When the WTO Agreement on Subsidies and Countervailing Measures was concluded as a part of the Uruguay Round, the United States further modified U.S. trade law to conform to the new agreement. The 1995 Uruguay Round Agreements Act introduced a definition of subsidy, criteria for proving harm and determining whether the harm is caused by the subsidy at issue, and a method for calculating its impact. In cases involving subsidized products from countries that are signatories to the 1979 Subsidies Code, from member countries of the WTO, or from countries that have negotiated substantially equivalent obligations in a bilateral agreement with the United States, U.S. law permits countervailing duties to be imposed only after the U.S. International Trade Commission (USITC) determines that the imports are causing or threatening to cause material injury to an industry in the United States. Otherwise, where evidence of subsidization is found, countervailing duties may be imposed without the necessity for a material injury investigation by the USITC. See also Agreement on Subsidies and Countervailing Measures; Bounties; Codes of Conduct; Domestic Subsidy; Export Subsidy; Illustrative List; Subsidy; Sunset Review; Tokyo Round; Trade Agreements Act of 1979; U.S. International Trade Commission; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
COUNTRY OF ORIGIN CERTIFICATE See Customs and Administrative Entry Procedures.
COURT OF INTERNATIONAL TRADE (CIT) A court (formerly the U.S. Customs Court) established under Article III of the U.S. Constitution to provide a single forum with expertise in international trade law for the judicial review of administrative actions of government agencies arising from import transactions. The court reviews decisions of the United States Customs Service, the International Trade Administration of the U.S. Department of Commerce, and the U.S. International Trade Commission. Such cases include, among others, challenges to classification rates and duties charged, antidumping and countervailing duty determinations, and embargoes or other quantitative restrictions. Generally, in the review of administrative determinations of record, the court will uphold an agency decision unless it is found to be unsupported by substantial evidence or otherwise not in accordance with law. A party can appeal a decision by the CIT to the Court of Appeals for the Federal Circuit, which will apply the same standard of review. Finally, a party can appeal a decision of the Court of Appeals for the Federal Circuit by filing a writ of certiorari with the United States Supreme Court. See also Customs; International Trade Administration; U.S. International Trade Commission.
CPT An international commercial term (Incoterm), meaning "carriage paid to," that is used in international sales contracts to signify that a seller must clear for export and pay the freight and all associated costs to transport goods to a destination named by the buyer. While the seller is responsible for the risk of loss or damage that might be incurred in conveying the goods to a carrier, such risk is transferred to the buyer when the goods are delivered to the carrier. The seller is not obligated to contract or to pay for insurance. See also CFR; CIF; CIP; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB; Incoterms.
CREDIT A promise of future payment, usually with interest, given in exchange for present delivery of money, goods, or services. Interest is set at a rate that varies with the risk involved and with the reputation as a risk that a particular borrower enjoys with an actual or potential lender. See also Bond; Bridging Credit; Demand; Interest; Mixed Credits; Purchasing Power; Risk.
CREDITOR CLUBS See Paris Club.
CURRENCY The circulating media of exchange in a country. Prior to World War I, currency generally meant coins and paper money. But with the expanding use of credit instruments, it has come to include checks drawn on bank accounts, postal money orders, and prepaid travelers checks that usually require identification of maker or endorser. Most business transactions are carried out by means of bank checks. See also Convertibility; Devaluation; Mercantilism; Money; Par Value; Reserve Currency.
CURRENT ACCOUNT That portion of a country's balance of payments that records current (as opposed to capital) transactions, including visible trade (exports and imports), invisible trade (income and expenditures for services), profits earned from foreign operations, interest, and transfer payments. See also Balance of Payments; Capital Account; Invisible Trade; Transfer Payments; Visible Trade.
CUSTOMS The government service responsible for the assessment and collection of import and export duties and taxes and the administration of other laws and regulations that apply to the importation, transit, and exportation of goods. See also Agreement on Implementation of Article VII of GATT 1994; ATA Carnet; Consular Formalities and Documentation; Court of International Trade; Customs and Administrative Entry Procedures; Customs Classification; Customs Cooperation Council Nomenclature; Customs Harmonization; Customs Union; Free Zone; Harmonization; Harmonized System; Harmonized Tariff Schedule of the United States; Imports; Kyoto Convention; Licensing; Liquidation; Most-Favored-Nation Treatment; Nontariff Barriers; Port of Entry; Suspension of Liquidation; Tariff; Tariff Schedules; Transit Zone; Valuation; World Customs Organization; World Trade Organization.
CUSTOMS AND ADMINISTRATIVE ENTRY PROCEDURES Clearance formalities at national ports of entry. These may be considered nontariff barriers if they result in undue procedural delays that raise import costs. Such formalities may include licensing procedures, health and sanitary controls designed to protect consumers, certificates indicating the country of origin, and consular invoices confirming that the shipment is what it appears to be. See also ATA Carnet; Consular Formalities and Documentation; Consular Invoice; Customs; Customs Classification; Customs Bond; Free Zone; Imports; Licensing; Liquidation; Nontariff Barriers; Port of Entry; Quarantine, Sanitary, and Health Laws and Regulations; Suspension of Liquidation; Tariff; Tariff Schedules; Transit Zone; Valuation; World Customs Organization; World Trade Organization.
CUSTOMS AREA A geographic area, usually but not necessarily identical to one or several contiguous national political jurisdictions, applying a particular tariff schedule on goods entering or leaving the area. See also Common External Tariff; Customs; Customs Union; European Community; Free Trade Area Agreement; Free Trade Area of the Americas; Free Zone; General Agreement on Tariffs and Trade; Kyoto Convention; MERCOSUR; North American Free Trade Agreement; Tariff; Tariff Schedules; Trade Diversion; U.S.-Canada Free Trade Agreement.
CUSTOMS CLASSIFICATION The particular category in a tariff nomenclature in which a product is classified for tariff purposes. Also, the procedure for determining the appropriate tariff category in a country's nomenclature system used for the classification, coding, and description of internationally traded goods. Most major trading nations classify imported goods in conformity with the Harmonized Commodity Description and Coding System, also called the Harmonized System. The United States adopted the Harmonized System on January 1, 1989. See also Customs; Customs Bond; Customs Classification; Customs Cooperation Council Nomenclature; Customs Harmonization; Harmonization; Harmonized System; Harmonized Tariff Schedule of the United States; Imports; Kyoto Convention; Most-Favored-Nation Treatment; Tariff; Tariff Schedules; Valuation; World Customs Organization; World Trade Organization.
CUSTOMS COOPERATION COUNCIL (CCC) See Customs Harmonization; Harmonized System.
CUSTOMS COOPERATION COUNCIL NOMENCLATURE (CCCN) A system for classifying goods for customs purposes, formerly known as the Brussels Tariff Nomenclature (BTN). See also Agreement on Implementation of Article VII of GATT 1994; Codes of Conduct; Consular Formalities and Documentation; Customs; Customs Classification; Customs Harmonization; Harmonized System; Harmonized Tariff Schedule of the United States; Imports; Kyoto Convention; Tariff; Tariff Schedules; Valuation; World Customs Organization.
CUSTOMS BOND A bond that, in certain circumstances, importers must post to effect the entry of imported goods. A customs bond usually must be guaranteed by an approved surety. The bond acts as a security in order to ensure the collection of duties and taxes owed on imports and to facilitate compliance with other importation requirements. Customs bonds fall into three general categories: single entry bonds, continuous bonds, and carnets. See also ATA Carnet; Bonded Goods; Bonded Warehouse; Customs Classification; Customs and Administrative Entry Procedures; Imports; Liquidation; Port of Entry; Tariff.
CUSTOMS DUTY See Tariff.
CUSTOMS HARMONIZATION International efforts to increase the uniformity of customs nomenclatures and procedures in cooperating countries. The Harmonized System, a uniform system of tariff classification adopted by most major trading countries in recent years, was one such effort. Discussions and action to further these efforts are normally coordinated by the Customs Cooperation Council (CCC), an international organization with its secretariat headquartered in Brussels, Belgium. The CCC is also involved in developing international standards for the exchange of trade data and for determining international rules of origin and related international customs technical questions. See also Codes of Conduct; Customs; Customs Classification; Customs Cooperation Council Nomenclature; Customs Harmonization; Harmonization; Harmonized System; Harmonized Tariff Schedule of the United States; Imports; Kyoto Convention; Most-Favored-Nation Treatment; Tariff; Tariff Schedules; Valuation; World Customs Organization; World Trade Organization.
CUSTOMS UNION A group of nations that have eliminated tariffs and sometimes other barriers that impede trade with each other, while maintaining a common external tariff on goods imported from outside the union. GATT Article XXIV defines the meaning of a customs union in GATT and the application of other GATT provisions to customs unions. See also Common External Tariff; Customs Area; Customs; European Community; Free Trade Area Agreement; Free Trade Area of the Americas; Free Zone; General Agreement on Tariffs and Trade; Kyoto Convention; MERCOSUR; North American Free Trade Agreement; Tariff; Tariff Schedules; Trade Diversion; U.S.-Canada Free Trade Agreement; Welfare.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| DAC DAF Data Processing DDP DDU Declaration of Madrid Deficiency Payments Demand Demand Schedule DEQ DES Devaluation Developed Countries Developing Countries Development Assistance Committee Differential Export Tax Differential Treatment Dillon Round Direct Investment |
Direct Tax DISC Discrimination Dispute Settlement Disruption Distribution Domestic International Sales Corporation Domestic Subsidy Domestic System of Production Double-Column Tariff Downstream Dumping Drawback Dry Cargo Dual Pricing Dumping Duty Duty Suspension |
DAC See Development Assistance Committee.
DAF An international commercial term (Incoterm), meaning "delivered at frontier," that is used in international sales contracts to signify that the seller must clear for export, pay for the freight, and bear all costs and risks for the carriage of goods to a named destination at a frontier but before the customs border of the adjoining country. A DAF contract is used primarily when conveyance of the goods is by rail or road. See also CFR; CIF; CIP; CPT; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB; Incoterms.
DATA PROCESSING See Services.
DDP An international commercial term (Incoterm), meaning "delivered duty paid," that is used in international sales contracts to signify the maximum obligation (just as EXW signifies the minimum obligation) on the seller's part. The seller is responsible for all risks and costs incurred to have goods delivered to a named destination. This includes the obligation to contract and pay for freight and transportation costs, unloading fees, export and import licensing fees, and other taxes. The buyer is obligated only to assist in obtaining any import license or other official authorization necessary to import the goods. See also CFR; CIF; CIP; CPT; DAF; DDU; DEQ; DES; EXW; FAS; FCA; FOB; Incoterms.
DDU An international commercial term (Incoterm), meaning "delivered duty unpaid," that is used in international sales contracts to signify that the seller is responsible for all risks and costs incurred to have goods delivered to a named destination in the country of importation. This includes the obligation to contract and pay for freight and transportation costs, export licensing fees, and other taxes (unless specifically excluded in the contract). The buyer is responsible for obtaining import licensing, carrying out the customs formalities necessary for the importation of the goods, and paying any import duties on the goods. See also CFR; CIF; CIP; CPT; DAF; DDP; DEQ; DES; EXW; FAS; FCA; FOB; Incoterms.
DECLARATION OF MADRID See Inter-American Development Bank.
DEFICIENCY PAYMENTS Government payments to compensate farmers for all or part of the difference between producer prices actually paid for a specific commodity and higher guaranteed target prices. See also Common Agricultural Policy; Variable Levy.
DEMAND The quantity of an economic good that will be bought at a given price at a particular time in a specific market. A demand schedule indicates the quantity of an economic good that will be bought at all possible prices at a particular time in the market. Demand in a market economy is strongly influenced by consumer preference or the individual choices of many independent buyers, based upon their perceptions of value for price. See also Goods; Market; Market Economy; Price; Purchasing Power; Supply; Trade Diversion; Utility; Value.
DEMAND SCHEDULE See Demand.
DEQ An international commercial term (Incoterm), meaning "delivered ex quay," that is used in international sales contracts to signify that the seller is responsible for all risks and costs incurred to have the goods delivered and unloaded at a named port of destination. This includes the obligation to contract and pay for freight and transportation costs by sea or inland waterway, unloading fees, export and import licensing fees, and other taxes (unless specifically excluded in the contract). The buyer is obligated only to assist in obtaining any import license or other official authorization necessary to import the goods. See also CFR; CIF; CIP; CPT; DAF; DDP; DDU; DES; EXW; FAS; FCA; FOB; Incoterms.
DES An international commercial term (Incoterm), meaning "delivered ex ship," that is used in international sales contracts to signify that the seller must clear for export and must contract and pay for delivery of goods by sea or inland waterway transport to a named port of destination, but not for unloading. The seller assumes risks and costs up to arrival at the named destination, at which time the buyer, upon taking delivery of the goods, assumes all risks and responsibilities for the unloading and clearance of the goods. See also CFR; CIF; CIP; CPT; DAF; DDP; DDU; DEQ; EXW; FAS; FCA; FOB; Incoterms.
DEVALUATION The lowering of the value of a national currency in terms of the currencies of other nations. Devaluation tends to reduce domestic demand for imports in a country by raising their prices in terms of the devalued currency and to raise foreign demand for the country's exports by reducing their prices in terms of foreign currencies. Devaluation can therefore help to correct a balance-of-payments deficit and sometimes provide a short-term basis for economic adjustment of a national economy. See also Adjustment; Beggar-Thy-Neighbor Policy; Balance of Payments; Currency.
DEVELOPED COUNTRIES A term used to distinguish the more industrialized nations including most OECD member countries from developing or less developed countries. The developed countries are sometimes collectively designated as the Group B countries or the North, because most of them are in the Northern Hemisphere. See also Developing Countries; Group B; Group of 7; Industrial Revolution; Organization for Economic Cooperation and Development; Plaza Accord; Williamsburg Summit.
DEVELOPING COUNTRIES A broad range of countries that generally lack a high degree of industrialization, infrastructure, and other capital investment, sophisticated technology, widespread literacy, and advanced living standards among their populations as a whole. The developing countries are sometimes collectively designated as the Third World and sometimes as the South, because a large number of them are in the Southern Hemisphere. All of the countries of Africa (except South Africa), Asia (except Hong Kong, Singapore, South Korea, and Taiwan), and Oceania (except Australia, Japan, and New Zealand), Latin America, and the Middle East are generally considered developing countries, as are a few European countries (Cyprus, Malta, Turkey, Poland, and Hungary, for example). Some experts have identified four subcategories of developing countries as having different economic needs and interests:
See also ACP Countries; Additionality; Agency for International Development; Bilateral Aid; Caribbean Basin Initiative; Development Assistance Committee; Economic Cooperation Among Developing Countries; Economic Development; Enabling Clause; Enterprise for the Americas Initiative; Framework Agreement; Generalized System of Preferences; Global System of Trade Preferences; Graduation; Group of 77; International Finance Corporation; International Trade Center UNCTAD/WTO; Least Developed Countries; Lomι Convention; Multilateral Aid; Newly Industrializing Countries; Non-Aligned Movement; North-South Trade; Official Development Assistance; Paris Club; Part IV of the GATT; Public Law 480; Reciprocity; Reverse Preferences; Soft Loan; South-South Trade; Special and Differential Treatment; Structural Change; Substantial New Program of Action; Textiles; Transfer Payments; Tropical Products; United Nations Conference on Trade and Development; United Nations Development Program.
DEVELOPMENT ASSISTANCE COMMITTEE (DAC) The OECD body that reviews and assesses resource transfers from developed to developing countries. See also Official Development Assistance; Organization for Economic Cooperation and Development.
DIFFERENTIAL EXPORT TAX A multi-tier export tax usually structured so that the tax on exports of a raw material exceeds the tax (if any) on exports of processed goods made from the raw material, thereby creating an incentive to process the raw material domestically. See also Boycott; Embargo; Supply Access.
DIFFERENTIAL TREATMENT See Framework Agreement; Special and Differential Treatment.
DILLON ROUND Trade negotiations that took place under the aegis of GATT from 1960 to 1962, named after Douglas Dillon, then the U.S. under secretary of state, who publicly proposed the negotiations. See also General Agreement on Tariffs and Trade; Kennedy Round; Round; Tokyo Round; Uruguay Round.
DIRECT INVESTMENT Defined in the International Monetary Fund's Balance of Payments Manual as "investment that is made to acquire a lasting interest in an enterprise operating in an economy other than that of the investor, the investor's purpose being to have an effective voice in the management of the enterprise." The United States defines direct investment in different ways depending on the legal and factual context in which the term is used. For example, the International Investment and Trade in Services Survey Act defines direct investment as "the ownership or control, directly or indirectly, by one person of 10 percent or more of the voting securities of an incorporated business enterprise or an equivalent interest in an unincorporated business enterprise." Other statutes and international agreements to which the United States is a party use different definitions. See also Agreement on Trade-Related Investment Measures; Balance of Payments; Bilateral Investment Treaty; Capital Account; Foreign Investment; Framework Agreement; Industrial Policy; International Monetary Fund; Investment Performance Requirements; Multilateral Agreement on Investment; Multilateral Investment Fund; Multilateral Investment Guarantee Agency; National Treatment; North American Development Bank; Overseas Private Investment Corporation; Performance Requirements; Right of Establishment; Trade-Related Investment Measures.
DIRECT TAX A tax that is levied on the wealth or income of individuals. Income, wealth, and inheritance taxes and social security charges are examples of direct taxes. See also Equity; Indirect Tax; Tax.
DISC See Foreign Sales Corporation.
DISCRIMINATION Inequality of treatment accorded imports from different trading partners, as through preferential tariff rates for imports from particular countries or trade restrictions that apply to the exports of certain countries but not to similar goods from other countries. See also Government Procurement Policies and Practices; Most-Favored-Nation Treatment; Preferences; Quarantine, Sanitary, and Health Laws and Regulations; Tariff.
DISPUTE SETTLEMENT In the trade context, dispute settlement usually refers to procedures for consultation, conciliation, and possible referral to a neutral third party of a dispute between parties to a trade agreement. GATT articles XXII and XXIII contain provisions for consultations and for the GATT contracting parties to make recommendations and rulings in particular disputes. Under the auspices of the WTO, the Understanding on Rules and Procedures on Governing the Settlement of Disputes was concluded to strengthen the procedures established by the GATT. In addition, the U.S.-Canada Free Trade Agreement and the North American Free Trade Agreement contain detailed procedures for the settlement of disputes arising under those agreements. See also Arbitration; Article 23 (GATT Article XXIII); Binational Panel; Codes of Conduct; Compensation; Consultations; Framework Agreement; Government Procurement Policies and Practices; North American Free Trade Agreement; Panel of Experts; Tokyo Round; Understanding on Rules and Procedures Governing the Settlement of Disputes; Uruguay Round; U.S.-Canada Free Trade Agreement; World Trade Organization.
DISRUPTION See Market Disruption.
DISTRIBUTION The dissemination of goods and services in a market through the ordinary channels of trade. See also Export Promotion; Market; Sales Tax; Technology; Trade Fair.
DOMESTIC INTERNATIONAL SALES CORPORATION (DISC) See Foreign Sales Corporation.
DOMESTIC SUBSIDY Any act, practice, or measure other than an export subsidy by which a government confers a benefit upon a product and/or enterprise. For purposes of U.S. countervailing duty law, a domestic subsidy is considered countervailable if benefits under a program are provided or are required to be provided by government action, in law or in fact, to a specific enterprise or industry, or group of enterprises or industries. See also Agreement on Subsidies and Countervailing Measures; Bounties; Codes of Conduct; Countervailing Duties; Export Subsidy; Illustrative List; Subsidy; Sunset Review; Tokyo Round; Trade Agreements Act of 1979; U.S. International Trade Commission; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
DOMESTIC SYSTEM OF PRODUCTION The system of economic production that prevailed in Europe in the 16th and 17th centuries, prior to the Industrial Revolution, under which merchants supplied materials and sometimes tools and machines to workers who produced finished goods in their homes and turned them over to the merchants. See also Industrial Revolution; Production.
DOUBLE-COLUMN TARIFF A tariff schedule listing two duty rates for some or all commodities. Under such arrangements, imports may be taxed at a higher or lower rate, depending upon the importing country's trade and other relationships with the exporting country. Some British Commonwealth countries maintain a double-column tariff that provides preferential tariff treatment to other members of the commonwealth. The United States and other countries also have lower tariffs for countries to which they grant most-favored-nation treatment. See also Column 1 Rates; Column 2 Rates; Most-Favored-Nation Treatment; Preferences; Single-Column Tariff; Tariff.
DOWNSTREAM DUMPING Also known as "input dumping," the practice of exporting an end-product containing an input that has been purchased at less than normal value. U.S. antidumping law contains provisions for monitoring downstream dumping where the input is already the subject of an antidumping duty order. If monitoring reveals that imports of the end-product increase as a result of the diversion of the input product into the end-product, an antidumping investigation of the end-product may be initiated. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Dumping.
DRAWBACK Import duties or taxes repaid by a government, in whole or in part, when the imported goods are re-exported or used in the manufacture of exported goods. See also Re-exports.
DRY CARGO See Bulk Carrier.
DUAL PRICING Selling identical products for different prices in different markets. Dual pricing often reflects export subsidy and dumping practices. See also Domestic Subsidy; Dumping; Export Subsidy; Restitutions.
DUMPING Under U.S. law, sales of merchandise exported to the United States at "less than fair value," when such sales materially injure or threaten material injury to producers of like merchandise in the United States. The determination that sales have been made at less than fair value involves a comparison of "normal value" the price at which the merchandise is sold within the exporting country or to third countries (or a "constructed value") and the "U.S. price" the price at which the merchandise is sold in the U.S. market. A statutory cost-of-production provision requires that dumping determinations ignore sales in the home market of the exporting country or in third-country markets that are made below cost that is, at prices that are too low to permit recovery of all costs within a reasonable period of time in the normal course of trade. Dumping is recognized by the WTO rules as a potentially unfair trade practice that can disrupt markets and injure producers of competitive products in the importing country. In the WTO Agreement on Implementation of Article VI of GATT 1994, WTO members created more detailed rules governing their ability to take action against imports sold at an unfairly discounted export price. Members agreed to establish procedures for termination under certain conditions of antidumping duty orders after five years (which resulted in a corresponding change in U.S. law) and to raise the de minimis rule (the lowest rate at which a dumping margin can be determined) to 2 percent (U.S. law, which had previously defined it at 0.5 percent, was modified accordingly). The agreement also established a new Committee on Anti-Dumping Practices, which countries must promptly notify of all dumping actions. Economists disagree as to the harmful effects of dumping. Some consider the practice of dumping to establish a toehold in a new market to be an economically rational commercial practice. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Dual Pricing; International Trade Administration; Market Disruption; Sunset Review; Trigger Price Mechanism; Uruguay Round; Uruguay Round Agreements Act; U.S. International Trade Commission; World Trade Organization.
DUTY See Tariff.
DUTY SUSPENSION A unilateral nonapplication of a customs duty, or its application at a reduced level, usually on a temporary basis. See also Tariff; Unilateral.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| EAI Earnings East-West Trade EBRD EC ECDC ECGF Economic Cooperation Among Developing Countries Economic Development ECS Carnet ECSC EEC EEP Effective Tariff Rate Efficiency EFTA Elasticity Electronic Commerce Embargo Enabling Clause Enterprise for the Americas Initiative Entrepreneur Equal Percentage Reduction of Tariffs Equilibrium Equity Equity Joint Venture Equivalence of Advantages ERs Escalation Escape Clause ESP EU EURATOM Euro Euro-Bonds Euro-Currency Euro-Dollars Euro-Zone European Bank |
European Bank for Reconstruction and Development European Central Bank European Coal and Steel Community European Commission European Community European Council European Court of Justice European Currency Unit European Economic Area European Economic Community European Free Trade Association European Parliament European Recovery Program European System of Central Banks European Union Exceptions Exchange Controls Exchange Rate Excise Tax Executing Agency Eximbank Export Administration Act of 1979 Export Credit Guarantee Facility Export Credit Insurance Export Credits Export Embargo Export Enhancement Program Export-Import Bank of the United States Export Licensing Export Price Export Promotion Export Quotas Export Restraint Agreements Export Restraints Export Subsidy Export Trading Company Exporter's Sales Price Exports Exposure EXW |
EAI See Enterprise for the Americas Initiative.
EARNINGS See Foreign Exchange Earnings; Profit.
EAST-WEST TRADE Referred to trade between the former Soviet Union and the socialist countries of Eastern Europe (East) on the one hand, and the developed market economy countries of Western Europe, North America, and Japan on the other (West). See also Countertrade; Nonmarket Economy.
EBRD See European Bank.
EC See European Community.
ECDC See Economic Cooperation Among Developing Countries.
ECGF See Export Credit Guarantee Facility.
ECONOMIC COOPERATION AMONG DEVELOPING COUNTRIES (ECDC) Attempts by developing countries, especially the Group of 77, to increase South-South trade and other economic relationships among themselves. See also Andean Pact; Asia-Pacific Economic Cooperation; Developing Countries; Global System of Trade Preferences; Group of 77; MERCOSUR; Newly Industrializing Countries; Non-Aligned Movement; Preferences; South-South Trade; United Nations Conference on Trade and Development.
ECONOMIC DEVELOPMENT The process of growth in total and per capita income, especially in developing countries, accompanied by increased infrastructure, more industrial activity, improved agricultural practices, migration of labor from rural to urban industrial areas, rising literacy, broadened employment opportunities, and gradually diminishing reliance on official development assistance. See also ACP Countries; Agency for International Development; Bilateral Aid; Caribbean Basin Initiative; Developed Countries; Developing Countries; Development Assistance Committee; Domestic System of Production; Economic Cooperation Among Developing Countries; Enabling Clause; Enterprise for the Americas Initiative; Framework Agreement; General Agreement on Tariffs and Trade; Generalized System of Preferences; Global System of Trade Preferences; Graduation; Group B; Group D; Group of 7; Group of 77; Industrial Revolution; Infrastructure; Inter-American Development Bank; International Trade Center UNCTAD/WTO; Least Developed Countries; Lomι Convention; Market Economy; Newly Industrializing Countries; North-South Trade; Official Development Assistance; Paris Club; Part IV of the GATT; Production; Public Law 480; Reciprocity; Reverse Preferences; Soft Loan; South-South Trade; Special and Differential Treatment; Structural Change; Substantial New Program of Action; Textiles; Transfer Payments; Tropical Products; United Nations Conference on Trade and Development; United Nations Development Program; Williamsburg Summit; World Bank.
ECS CARNET See ATA Carnet.
ECSC See European Coal and Steel Community.
EEC See European Community.
EEP See Export Enhancement Program.
EFFECTIVE TARIFF RATE The concept that "effective" protection reflected in a tariff rate is the sum of the protection for the component parts of the final manufactured unit. This concept implies that the nominal tariff rate of the finished good significantly understates the de facto protection for the value added in the production process. Several academic studies in the late 1960s and early 1970s established the theoretical basis for the effective tariff rate concept, but most trade policy experts see little practical utility in the theory, since the many different circumstances affecting the component parts comprising most industrial products make it difficult to establish their actual effective rates. See also Nominal Tariff Rate; Tariff; Tariff Escalation.
EFFICIENCY Narrowly, the input-output relationship between the quantity of materials used and the quantity of goods produced. More broadly, economic efficiency implies the best result (taking quality as well as quantity into account) in the production or distribution of goods and services at the least cost. Most economists believe the reduction of barriers to trade contributes to international economic efficiency by encouraging countries to specialize in the production of those goods and services in which they have a comparative advantage, thus making the world's most competitive goods and services available to consumers outside the area that produces them. See also Comparative Advantage; Competitive; Entrepreneur; Textiles; Trade Diversion; Welfare.
EFTA See European Free Trade Association.
ELASTICITY See Price Elasticity of Demand; Price Elasticity of Supply.
ELECTRONIC COMMERCE Any activity that utilizes some form of electronic communication in the inventory, exchange, advertisement, and distribution of, and the payment for, goods and services. All forms of commercial transactions are based upon the transmission of digitized data, including text, sound, and visual images. See also Global Information Infrastructure; Informatics; Technology.
EMBARGO In international trade, government actions limiting or prohibiting imports and/or exports of goods and/or services from or to a country. Such limitations may be applied by the embargoing country against its own nationals, such as the United States embargo against trade from Cuba, or in concert with other countries against a third country, such as the 1990 United Nations embargo against trade in any form with Iraq or the earlier UN embargo against trade with South Africa. Embargoes may also be applied just against trade in certain products regardless of origin, such as the ban on trade in ivory. See also Boycott; Helms-Burton Act; International Emergency Economic Powers Act; Supply Access.
ENABLING CLAUSE Formally, the "Decision on Differential and More Favorable Treatment, Reciprocity, and Fuller Participation of Developing Countries" that was negotiated during the Tokyo Round as Part I of a new Framework Agreement on International Trade. The enabling clause legalized the extension by developed contracting parties of GATT of preferences to developing countries, notwithstanding the most-favored-nation treatment required under GATT Article 1. See also Articles of the GATT; Contracting Party; Developing Countries; Framework Agreement; General Agreement on Tariffs and Trade; Generalized System of Preferences; Most-Favored-Nation Treatment; Part IV of the GATT; Preferences; Reciprocity; Tokyo Round.
ENTERPRISE FOR THE AMERICAS INITIATIVE (EAI) A U.S. program designed to strengthen the economies of countries in Latin America and the Caribbean through debt reduction and increased trade and investment. The investment component is intended to help countries make reforms necessary to attract increased capital flows. The debt component seeks to reward broad economic reforms undertaken by countries in Latin America and the Caribbean by reducing official debt owed to the United States. The trade component is designed to promote a liberalized trading system and is based on the ultimate goal of hemispheric free trade.
ENTREPRENEUR A person who assumes responsibility for organization, management, and risk in the production of goods and services. In theory, his or her enterprise should make a profit if it is economically efficient and should incur losses if it is not. See also Demand; Efficiency; Profit; Risk.
EQUAL PERCENTAGE REDUCTION OF TARIFFS See Linear Reduction of Tariffs.
EQUILIBRIUM A state in which economic forces that are likely to cause change in opposing directions are in perfect balance, so that change is unlikely. A market is in equilibrium if the quantity of a product that consumers will buy at the prevailing price exactly matches the amount suppliers will sell at that price. See also Demand; Market; Market Economy; Market Forces; Price; Supply.
EQUITY Fairness, justice. Also, the value of property beyond the total amount owed on it. See also Direct Tax.
EQUITY JOINT VENTURE See Joint Venture.
EQUIVALENCE OF ADVANTAGES See Reciprocity.
ERs See Export Restraints.
ESCALATION See Tariff Escalation.
ESCAPE CLAUSE Also known as a safeguard provision, a provision in a bilateral or multilateral commercial agreement permitting a signatory nation to suspend tariff or other concessions when increased imports cause or threaten to cause serious injury to the producers of competitive domestic goods. GATT Article XIX sanctions such escape clause provisions to help firms and workers injured by increased imports adjust to the rising level of import competition. The WTO's escape clause provisions are contained in its Agreement on Safeguards. Section 201 of the Trade Act of 1974 is the main escape clause in U.S. trade law. See also Adjustment; Adjustment Assistance; Agreement on Safeguards; Agreement on Textiles and Clothing; Article 19 (GATT Article XIX); Concession; Import Relief; Market Access; Protectionism; Quantitative Restrictions; Safeguards; Section 22; Section 201; Section 406; Trade Act of 1974; U.S. International Trade Commission; World Trade Organization.
ESP See Constructed Export Price.
EU See European Union.
EURATOM See European Community.
EURO The common currency of those European Union countries that have elected to participate in the third stage of economic and monetary union. The euro was launched on January 1, 1999, with 11 participating countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain) converting their previous currencies at an irrevocably fixed conversion rate. The geographic area of the participating countries is popularly referred to as the "Euro Zone." The euro replaces the ECU (European currency unit) as the unit of account for the European Union. Existing national notes and coins will continue to circulate until July 1, 2002. Euro notes and coins will begin to circulate on January 1, 2002. See also European Currency Unit; European Central Bank; European Community; European System of Central Banks; European Union.
EURO-BONDS See Euro-Dollars.
EURO-CURRENCY See Euro-Dollars.
EURO-DOLLARS Claims for U.S. dollars held against banking institutions outside the United States. The claims arise when, through the purchase of bills of exchange or similar transactions, a foreign bank credits a dollar deposit account. Such deposit accounts (euro-dollars) are extensively used outside the United States for financial transactions such as short-term loans or the purchase of dollar bonds called euro-bonds, which are sometimes issued by U.S. companies to finance their operations, especially those outside the United States. See also Bill; Broker; Capital Market; Commercial Paper; Convertibility; Currency; Exchange Rate; Loan; Market; Medium of Exchange; Money; Multinational Corporation; Security.
EURO-ZONE An informal designation of the 11 European Union countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain) that use the common single currency, the euro. See also ECU; Euro; European Central Bank; European Community; European System of Central Banks; European Union.
EUROPEAN BANK (EBRD) See European Bank for Reconstruction and Development.
EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD) A regional development bank that supports market-oriented economic reforms in Central and Eastern Europe, including the former Soviet Union. The EBRD began operating in April 1991. See also Agency for International Development; Bilateral Aid; Economic Cooperation Among Developing Countries; Economic Development; European Recovery Program; Group D; Multilateral Aid; Official Development Assistance; Overseas Private Investment Corporation; Organization for Economic Cooperation and Development; Transfer Payments.
EUROPEAN CENTRAL BANK (ECB) The common central bank, located in Frankfurt, Germany, of the European Union countries that use the common single currency, the euro. The ECB, in combination with the national central banks of the Euro Zone countries, forms the European System of Central Banks (ESCB). The ESCB is responsible for defining and implementing monetary policy, for conducting foreign exchange operations, for holding and managing official foreign reserves, and for promoting the smooth operation of the payments systems of the member countries. See also European Currency Unit; Euro; Euro Zone; European Community; European System of Central Banks; European Union.
EUROPEAN COAL AND STEEL COMMUNITY (ECSC) A common market in coal and steel based on the 1951 Schuman Plan (named after Robert Schuman, French foreign minister). Its original members included France, Italy, the Federal Republic of Germany, Belgium, the Netherlands, and Luxembourg. ECSC member states agreed to abolish tariffs, quotas, and currency restrictions affecting intracommunity trade in coal, iron ore, and scrap metal. The ECSC subsequently served as a model for the institutions of the European Community and now constitutes part of the first pillar of the European Union. The ECSC will expire in 2002, 50 years after its entry into force. See also Customs Union; European Community; European Union.
EUROPEAN COMMISSION A body that proposes legislation, is responsible for administration, and ensures that provisions of the European Union's treaties and the decisions of the EU's institutions are properly implemented. The European Commission has investigative powers and can take legal actions against persons, companies, or member states that violate EU rules. The commission manages the EU budget and represents the EU in international trade negotiations. The president and 20 commissioners (two of whom are vice presidents) are appointed for five-year terms and oversee a staff of approximately 15,000 employees, most of whom are based in Brussels. The commission's responsibilities are divided among more than 25 directorates-general and other administrative services. See also Council of the European Union; European Community; European Council; European Parliament; European Union.
EUROPEAN COMMUNITY (EC) A regional organization of European countries, originally called the European Economic Community (EEC), that came into being on January 1, 1958, with the entry into force of the Treaty of Rome, now known as the EC Treaty. From the beginning, a principal objective of the Community has been the establishment of a customs union, other forms of economic integration, and political cooperation among member states. The Treaty of Rome provided for the gradual elimination of customs duties and other internal trade barriers, the establishment of a common external tariff, and guarantees of free movement of goods, services, persons, and capital within the Community. The six founding EC member states were France, Italy, the Federal Republic of Germany, Belgium, the Netherlands, and Luxembourg. Nine additional countries have acceded to the EC: Austria, Denmark, Finland, Greece, Ireland, Portugal, Spain, Sweden, and the United Kingdom. Formal accession negotiations are under way with the Czech Republic, Cyprus, Estonia, Hungary, Malta, Poland, and Slovenia. These countries may accede as early as 2002, and it is probable that, in the near future, additional European countries will be invited to join. While commonly referred to as the "European Community" or "EC," the European Community is in actuality made up of three communities the European Community (formerly called the European Economic Community, or EEC), the European Atomic Energy Community (Euratom), and the European Coal and Steel Community (ECSC). (Accordingly, the EC is occasionally referred to in the plural, as the "European Communities.") In 1967, the institutions of the three communities were fused together by the entry into force of the Merger Treaty, sometimes called the Treaty of Fusion. The Treaty on European Union (TEU, or Maastricht Treaty), which entered into force on November 1, 1993, formalized the use of "EC" as a reference to the European Economic Community. The TEU also introduced the term "European Union" as a broader, framework entity. Although the EC is part of the European Union, it is not synonymous with the EU but has a separate identity within the European system and is functionally and legally different. (For a discussion of when to use "EC" and when to use the term "EU," see European Union.) With the advent of the Single European Act (SEA) in 1987, the EC further deepened European economic integration by removing remaining barriers to free movement and completing the internal market. Perhaps the most significant EC undertaking, has been the introduction of a common currency, the euro. EC governing institutions include the European Commission, the Council of the European Union, the European Parliament, and the European Court of Justice. Most Community institutions are headquartered in Brussels, Belgium, with the exception of the European Parliament, which is headquartered in Strasbourg, France, and the European Court of Justice, which is headquartered in Luxembourg City, Luxembourg. See also Common Agricultural Policy; Common External Tariff; Council of the European Union; Customs; Customs Area; Customs Union; Euro; Euro-Zone; European Coal and Steel Community; European Commission; European Council; European Free Trade Association; European Parliament; European Union; Free Trade Area Agreement; Lomι Convention; Tariff; Tariff Schedules; Trade Diversion; Variable Levy.
EUROPEAN COUNCIL The heads of state or government of the EU member states. (It should not be confused with the Council of Ministers of the European Union.) While EU leaders met informally for a number of years, the European Council was formalized as a result of entry into force of the Single European Act and the Treaty on European Union. The European Council meets at least twice a year in conjunction with the rotating presidency of the Council of the European Union. In addition, the president of the European Commission attends and participates as a full member of the European Council, which reviews and establishes broad objectives for Community policy. In fact, the European Council has often provided the EU with much needed impetus in developing policy initiatives and furthering European integration. The Treaty on European Union gave the European Council responsibility for the EU intergovernmental pillars of the Common Foreign and Security Policy and Justice and Home Affairs. See also Council of the European Union; European Commission; European Community; European Parliament; European Union.
EUROPEAN COURT OF JUSTICE See European Community.
EUROPEAN CURRENCY UNIT (ECU) A currency "basket" or composite of member state currencies used by the European Union as the unit of account prior to the January 1, 1999, creation of the euro. See also Euro; European Central Bank; European Community; European System of Central Banks; European Union.
EUROPEAN ECONOMIC AREA (EEA) See European Free Trade Association.
EUROPEAN ECONOMIC COMMUNITY (EEC) See European Community.
EUROPEAN FREE TRADE ASSOCIATION (EFTA) A regional grouping, established in 1960 by the Stockholm Convention, that now includes Iceland, Liechtenstein, Norway, and Switzerland. A number of European Union member states, including Austria, Denmark, Sweden, and the United Kingdom, were previously members of EFTA but withdrew when they became members of the EU. EFTA member countries have gradually eliminated tariffs on manufactured goods originating and traded within EFTA and between EFTA and the EU. Agricultural products, for the most part, are not included on the EFTA schedule for internal tariff reductions. Each member country maintains its own external tariff schedule, and each has concluded a trade agreement with the EU that provides for the mutual elimination of tariffs for most manufactured goods except a few sensitive products. As a result, the EU and EFTA form a de facto free trade area. The EU and EFTA countries have deepened their economic integration with the creation of the European Economic Area (EEA). The EEA provides for the adoption by the EFTA countries of numerous EU laws and regulations with a view toward ensuring the freedom of movement of people, goods, services, and capital within Europe. See also Customs Area; Customs Union; European Community; European Free Trade Association; European Union; Sensitive Products.
EUROPEAN PARLIAMENT An official institution of the European Union. Currently, it has 626 members who are elected by constituencies in the respective member states. Some members of the European Parliament (MEPs) are also members of their national parliaments. The first direct elections to the European Parliament took place in June 1979, and such elections have continued since that time. The European Parliament, working with the European Commission and the Council of the European Union, assists in drafting, amending, and adopting European legislation and the EU budget. MEPs generally belong to national or pan-European political parties. In addition, the European Parliament uses a system of committees. Early in its existence, the European Parliament had little ability to influence legislation since the Commission and Council of Ministers were required only to consult the Parliament but not to obtain its approval. In subsequent treaties, however, the European Parliament has been granted significant new powers in the legislative process. Now, as a result, the European Commission and Council of the European Union must consult the European Parliament and, depending on the matter at issue, may be required to adhere to the Parliament's opinion before adopting final legislation. The European Parliament is based in Strasbourg, France, but holds a number of sessions in Brussels, Belgium. See also Council of the European Union; European Commission; European Community; European Council; European Union.
EUROPEAN RECOVERY PROGRAM (ERP) A broad range of trade reform and aid measures to hasten the rehabilitation of European economies after World War II. The European Recovery Program is better known as the "Marshall Plan," after U.S. Secretary of State George C. Marshall, who proposed the program in a speech at Harvard University on June 5, 1947. The aid program was first administered by the Economic Cooperation Administration (ECA) in Paris, while the program of economic cooperation among the 16 participating European countries was implemented by the Organization for European Economic Cooperation (OEEC). Between 1948 and 1952, when the program was terminated, the participating European countries received some $13,000 million from the United States. See also Organization for European Economic Cooperation.
EUROPEAN SYSTEM OF CENTRAL BANKS (ESCB) The framework organization that administers monetary policy in the European Union. The European System of Central Banks came into existence on January 1, 1999. It is composed of the European Central Bank and national central banks from the member states. However, national central banks from member states that are not a part of the Euro Zone may not participate in monetary policy-making as regards the euro. The ESCB's primary objective is to maintain price stability in the EU. See also European Currency Unit; Euro; Euro-Zone; European Central Bank; European Community; European Union.
EUROPEAN UNION (EU) The overarching entity encompassing the modern attempt at European integration. Created by the Treaty on European Union (also known as the Maastricht Treaty), which entered into force on November 1, 1993, the European Union is often described as a building supported by three pillars. Specifically, the pillars include the European Community (essentially the European Communities as they existed in pre-Maastricht Europe), the Common Foreign and Security Policy (establishing common foreign policy positions and developing a common defense policy), and Justice and Home Affairs (principally providing for cooperation between police and other authorities on crime, terrorism, and immigration issues). Some confusion exists as to when the terms European Union, European Community, and European Economic Community (EEC) may be properly used. The delimitation between these entities is far from clear, but generally, EU, EC, and EEC may not be used interchangeably. As noted, the EC continues to constitute part of the EU; however, the EC possesses a legal personality while the EU currently does not. As a result, the term EU should be used when referring to the system as a whole. The term EC is most properly used when referring to the laws and institutions falling within the first pillar of the EU. The term EEC should be used only when referring to the historical entity that preceded the EC. See also European Community; Euro-Zone.
EXCEPTIONS See Generalized System of Preferences; Linear Reduction of Tariffs.
EXCHANGE CONTROLS The rationing of foreign currencies, bank drafts, and other instruments for settling international financial obligations by countries seeking to ameliorate acute balance-of-payments difficulties. When such measures are imposed, importers must apply for prior authorization from the government to obtain the foreign currency required to bring in designated amounts and types of goods. Since such measures have the effect of restricting imports, they are considered nontariff barriers to trade. See also Balance-of-Payments Consultations; Currency; Nontariff Barriers; Specific Limitations on Trade.
EXCHANGE RATE The price (or rate) at which one currency is exchanged for another currency, for gold, or for Special Drawing Rights. See also Currency; International Monetary Fund; Par Value; Special Drawing Rights.
EXCISE TAX A selective tax sometimes called a consumption tax on certain goods produced within or imported into a country. See also Border Tax Adjustments; Indirect Tax; Road Tax; Tax.
EXECUTING AGENCY See United Nations Development Program.
EXIMBANK See Export-Import Bank of the United States.
EXPORT ADMINISTRATION ACT OF 1979 (EAA A statute that authorizes the U.S. president to control exports to specific foreign destinations of U.S. commodities and technical data, especially high-technology products, to protect the national security, to ensure against an excessive drain of scarce goods, and to further foreign policy objectives. It also prohibits compliance with foreign boycotts. See also Antiboycott Legislation; Boycott; Bureau of Export Administration; Coordinating Committee on Export Controls; Embargo.
EXPORT CREDIT GUARANTEE FACILITY (ECGF) A scheme developed in the United Nations Conference on Trade and Development that would enable developing country exporters to refinance their export credits extended to importers in other countries under an international guarantee. See also United Nations Conference on Trade and Development.
EXPORT CREDIT INSURANCE Insurance designed to guarantee that an exporter will be paid for his/her goods after delivery. If the exporter has such insurance, responsibility for collecting payment from the company that imports the goods in another country, or the company's agent, rests with the underwriter of the export credit insurance. See also Export-Import Bank of the United States; Insurance; Underwriter.
EXPORT CREDITS See Export Credit Guarantee Facility; International Arrangement on Export Credits; Mixed Credits; Subsidy.
EXPORT EMBARGO See Embargo; Supply Access.
EXPORT ENHANCEMENT PROGRAM (EEP) A direct U.S. response to export subsidies of other countries that subsidizes U.S.-produced agricultural products in the world market. The EEP was initiated in May 1985 under provisions of the Commodity Credit Corporation Charter Act and mandated by provisions of the Food Security Act of 1985 and the Food, Agricultural, Conservation, and Trade Act of 1990. Subsidies are paid to exporting operations in the form of either commodity certificates redeemable for stocks held by the CCC or cash payments. See also Commodity Credit Corporation; Domestic Subsidy; Export Subsidy; Subsidy.
EXPORT-IMPORT BANK OF THE UNITED STATES (EX-IM BANK) A public corporation created by executive order of the president of the United States in 1934 and given a statutory basis in 1945. The Ex-Im Bank makes guarantees and insures loans to help finance U.S. exports, particularly for equipment to be used in capital improvement projects. It also provides short-term, political risk guarantees, either directly or in cooperation with U.S. commercial banks. It is not an aid or development agency. Under the administration of President Bill Clinton, the Ex-Im Bank has focused on emphasizing exports to developing countries, countering trade subsidies of other governments, stimulating small business transactions, promoting the export of environmentally beneficial goods and services, and expanding project finance capabilities.
EXPORT LICENSING See Licensing.
EXPORT PRICE (EP) The price at which particular merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the merchandise outside of the United States to an unaffiliated purchaser in the United States, or to an unaffiliated purchaser for exportation to the United States. Under U.S. antidumping law, dumping consists of sales of merchandise exported to the United States at "less than fair value," when such sales materially injure or threaten material injury to producers of like merchandise in the United States. The determination that sales have been made at less than fair value involves a comparison of "normal value" the price at which the merchandise is sold within the exporting country or to third countries (or a "constructed value") and the "U.S. price" the price at which the merchandise is sold in the U.S. market. U.S. price may be derived either from the export price or the constructed export price. The price used to establish the EP can be adjusted to take into account certain costs, charges, taxes, duties, and expenses. The term EP was introduced along with other changes to U.S. antidumping law resulting from the Uruguay Round Agreements Act in implementation of the WTO Agreement concluded during the Uruguay Round. The term EP replaces the term Purchase Price (PP), which was its counterpart under the pre-URAA law. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Constructed Export Price; Dumping; Normal Value; United States Price; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
EXPORT PROMOTION Public or private sector support for foreign sales through such activities as trade missions and trade fairs, based on available market information and analysis. See also Common Fund; Competitive; Distribution; International Commodity Agreement; International Trade Center UNCTAD/WTO; Market; Ministry of International Trade and Industry; Supply; Trade Fair; Trade Mission; U.S. Foreign and Commercial Service.
EXPORT QUOTAS Specific restrictions or ceilings imposed by an exporting country on the value or volume of certain exports to protect domestic producers and consumers from temporary shortages of the goods affected or to bolster their prices in world markets. Some international commodity agreements explicitly indicate when producers should apply such restraints. Export quotas are also often applied in orderly marketing agreements and voluntary restraint agreements, and to promote domestic processing of raw materials in countries that produce them. See also International Commodity Agreement; Orderly Marketing Agreements; Organization of Petroleum Exporting Countries; Voluntary Restraint Agreements.
EXPORT RESTRAINT AGREEMENTS See Voluntary Restraint Agreements.
EXPORT RESTRAINTS Quantitative restrictions imposed by exporting countries to limit exports to specified foreign markets, usually pursuant to a formal or informal agreement concluded at the request of the importing countries. See also Orderly Marketing Agreements; Quantitative Restrictions; Voluntary Restraint Agreements.
EXPORT SUBSIDY A subsidy such as those described in the Illustrative List of Export Subsidies of the WTO Agreement on Subsidies and Countervailing Measures. For purposes of U.S. countervailing duty law, an export subsidy is considered countervailable when the eligibility for, or the amount of benefits under, a program is tied to the actual or anticipated exportation of merchandise or export earnings. See also Agreement on Subsidies and Countervailing Measures; Bounties; Codes of Conduct; Countervailing Duties; Domestic Subsidy; Illustrative List; Subsidy; Sunset Review; Tokyo Round; Trade Agreements Act of 1979; U.S. International Trade Commission; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
EXPORT TRADING COMPANY A corporation or other business unit organized and operated principally for the purpose of exporting goods and services or of providing export-related services to other companies. The Export Trading Company Act of 1982 exempts authorized trading companies from certain provisions of U.S. antitrust laws. See also Antitrust; Webb-Pomerene Act.
EXPORTER'S SALES PRICE (ESP) See Constructed Export Price.
EXPORTS Goods and services produced in one country and sold in other countries in exchange for goods and services, gold, foreign exchange, or settlement of debt. Countries devote their domestic resources to exports because they can obtain more goods and services with the international exchange they earn from the exports than they would from devoting the same resources to the domestic production of goods and services. See also Comparative Advantage; Export Promotion; Ministry of International Trade and Industry; U.S. Foreign and Commercial Service.
EXPOSURE See Reinsurance.
EXW An international commercial term (Incoterm), meaning "ex-works," that is used in international sales contracts to signify a seller's obligation to make the goods available to a buyer only at the seller's premises (that is, works, factory, warehouse, and the like). Thus, the seller is not responsible for loading, shipping, export clearance, etc. unless otherwise agreed. All costs, risks, and obligations incurred from moving the goods from the seller's premises to the buyer's destination are borne by the buyer. See also CFR; CIF; CIP; CPT; DAF; DDP; DDU; DEQ; DES; FAS; FCA; FOB; Incoterms.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| Factors of Production Factory System of Production Fair Fair Value FARA FAS Fast Track FCA FCN Final Act Floor Prices Florence Agreement FMV FOB FOR Foreign Agents Registration Act Foreign Exchange Foreign Exchange Controls Foreign Exchange Earnings Foreign Investment Foreign Market Value |
Foreign Sales Corporation Foreign Trade Zone Forward Market FOT Framework Agreement Free Alongside Ship Free List Free on Board Free Port Free Trade Free Trade Area Free Trade Area Agreement Free Trade Area of the Americas Free Trade Zone Free Warehouse Free Zone Freedom, Commerce and Navigation Treaty Freight Forwarder Fusion, Treaty of Futures |
FACTORS OF PRODUCTION All inputs materials, labor, capital goods, and capital necessary to produce a product. "Materials" refers to non-manmade materials, including raw materials, trees, energy, and land. "Labor" includes all forms of human productive effort. "Capital goods" represents manmade inputs, such as machines, equipment, and buildings. "Capital" is the money used to purchase other inputs, as well as interest costs. See also Capital; Capital Goods; Comparative Advantage; Infrastructure.
FACTORY SYSTEM OF PRODUCTION See Industrial Revolution.
FAIR See Trade Fair.
FAIR VALUE See Dumping.
FARA See Foreign Agents Registration Act.
FAS An international commercial term (Incoterm), meaning "free alongside ship," that is used in sales contracts to signify a seller's obligation to pay the costs and assume all risks for transporting goods from his or her place of business to the point of embarkation where a vessel or plane selected by the buyer will accept the goods. In trade statistics, "FAS value" means that the import or export figures are calculated on this basis, regardless of the nature of individual transactions reflected in the statistics. See also CFR; CIF; CIP; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FCA; FOB; Incoterms.
FAST TRACK Procedures enacted by the U.S. Congress under which it votes without amendment and within a fixed period on legislation submitted by the president to approve and implement U.S. international trade agreements. The procedures apply only if the president consulted with the Congress as the agreement was negotiated and fulfilled other statutory requirements. Fast track procedures were used in negotiating the Tokyo Round agreements; the United States-Israel Free Trade Area Agreement; the United States-Canada Free Trade Agreement; the North American Free Trade Agreement; and the Uruguay Round agreements. In 1997, Congress failed to renew fast track authority. See also Multilateral Trade Negotiations; North American Free Trade Agreement; Tokyo Round; U.S.-Canada Free Trade Agreement; U.S.-Israel Free Trade Area Agreement; Uruguay Round.
FCA An international commercial term (Incoterm), meaning "free carrier," that is used in international sales contracts to signify that a seller must deliver goods sold, cleared for export, to a carrier or freight forwarder specified by the buyer. The seller has no obligation with respect to import licensing or insurance. See also CFR; CIF; CIP; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FOB; Incoterms.
FCN See Freedom, Commerce, and Navigation Treaty.
FINAL ACT See Uruguay Round; World Trade Organization.
FLOOR PRICES See Buffer Stocks.
FLORENCE AGREEMENT Officially known as the Agreement on the Importation of Educational, Scientific, and Cultural Materials. The Florence Agreement entered into force in 1952. It is sponsored by the United Nations Educational, Scientific, and Cultural Organization (UNESCO), which has a mandate under its charter to facilitate the exchange of publications, objects of artistic and scientific interest, and other materials or information, and to recommend international agreements that will promote the free flow of ideas. The agreement provides for the duty-free entry, under specified conditions, of various categories of materials for educational, scientific, and cultural use.
FMV See Normal Value.
FOB An international commercial term (Incoterm), meaning "free on board," used in international sales contracts. In an FOB contract, a buyer and a seller agree on a designated FOB point. The seller assumes the cost of having goods packaged and ready for shipment from the FOB point, whether this is his/her own place of business or some intermediate point. The buyer assumes the costs and risks from the FOB point, including inland transportation costs and risks in the exporting country, as well as all subsequent transportation costs, including the costs of loading the merchandise on a vessel. If the contract stipulates "FOB vessel," the seller bears all transportation costs to the vessel named by the buyer, as well as the costs of loading the goods on that vessel. The same principle applies to the abbreviations "FOR" ("free on rail") and "FOT" ("free on truck"). See also CFR; CIF; CIP; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; Incoterms.
FOR See FOB.
FOREIGN AGENTS REGISTRATION ACT (FARA) Legislation designed to guard against undue foreign influence on U.S. policy. FARA mandates public disclosure, through various reports to the U.S. Department of Justice, of certain relationships between individuals and entities in the United States and foreign interests. Subject to certain limited exemptions, there are four types of activities that require registration with the Justice Department when performed for a foreign interest by a person or firm in the United States (whether or not U.S. citizens or incorporated in the United States). First, registration is required when engaging in certain political activities, including all attempts to influence U.S. policy or public opinion on behalf of, or even at the request of, a foreign individual or entity. Second, those acting as public relations agents or political consultants in the interests of a foreigner must register. Third, those soliciting or disbursing funds or contributions in the interest of a foreigner must register. Finally, registration is required when representing the interests of a foreigner before the U.S. government.
FOREIGN EXCHANGE Claims on a foreign country held in the form of the currency of that country or interest-bearing bonds. See also Currency; Money.
FOREIGN EXCHANGE CONTROLS See Exchange Controls.
FOREIGN EXCHANGE EARNINGS The proceeds from a country's exports of goods, services, and capital, normally denominated in convertible currencies. See also Currency; Foreign Exchange; Money.
FOREIGN INVESTMENT Direct and portfolio investment. The International Investment and Trade in Services Survey Act defines foreign direct investment as "the ownership or control, directly or indirectly, by one person of 10 percent or more of the voting securities of a foreign incorporated business enterprise or an equivalent interest in a foreign unincorporated business enterprise." It defines portfolio investment as "any international investment which is not direct investment." It would generally represent an interest in a business enterprise that is less than 10 percent of the business enterprise's voting securities or equivalent interest. See Direct Investment.
FOREIGN MARKET VALUE (FMV) See Normal Value.
FOREIGN SALES CORPORATION (FSC) An offshore corporation, authorized by the Deficit Reduction Act of 1984, that is eligible for an exemption from U.S. federal income taxes on part of its related income. An FSC earns export-related trade income by selling or leasing export property or by supplying export-related services. The exempt portion of the FSC's foreign trade income is also not taxed when it is distributed to U.S. corporate shareholders. An FSC must be organized under the laws of a country that has an exchange of information agreement with the United States or in a qualifying U.S. possession. The FSC is the successor to the Domestic International Sales Corporation (DISC), which was authorized by the U.S. Revenue Act of 1971.
FOREIGN TRADE ZONE See Free Zone.
FORWARD MARKET A market in which contracts for future deliveries of goods and securities on a specified date are entered into at fixed prices. The contracts themselves are popularly known as "futures." Many commodity exchanges wool, cotton, and wheat, for example have established forward markets that permit interested parties to hedge against changes in the prices of the raw materials they use or deal in. See also Commodity; Hedge; Market; Spot Market.
FOT See FOB.
FRAMEWORK AGREEMENT A bilateral agreement between the United States and a trading partner that establishes certain principles that apply to that trade and investment relationship and that also establishes a consultative mechanism that can be used to clarify respective trade policies, resolve specific disputes, or negotiate the reduction or removal of trade or investment barriers. The United States signed its first such agreement with Mexico in November 1987, with similar agreements subsequently signed with the Philippines and numerous countries in South America, Central America, and the Caribbean. With reference to the GATT and the WTO, framework agreement refers collectively to four separate decisions concluded during the Tokyo Round and intended to improve the working of some fundamental provisions of the GATT. The four decisions are:
See also Balance of Payments; Bilateral; Bilateral Trade Agreement; Consultations; Dispute Settlement; Enabling Clause; General Agreement on Tariffs and Trade; Generalized System of Preferences; North-South Trade; Part IV of the GATT; Preferences; Quantitative Restrictions; Reciprocity; Safeguards; Special and Differential Treatment; Tokyo Declaration; Tokyo Round.
FREE ALONGSIDE SHIP See FAS.
FREE LIST A list of goods not subject to import duties or import-licensing requirements in a particular country. See also Licensing; Tariff.
FREE ON BOARD See FOB.
FREE PORT See Free Zone.
FREE TRADE A theoretical concept that assumes international trade unhampered by government measures such as tariffs or nontariff barriers. The objective of trade liberalization is to achieve "freer trade" rather than "free trade," it being generally recognized among trade policy officials that some restrictions on trade are likely to remain in effect for the foreseeable future. See also Liberalization; Nontariff Barriers; Protectionism; Tariff.
FREE TRADE AREA See Free Trade Area Agreement.
FREE TRADE AREA AGREEMENT An agreement between two or more countries to eliminate tariff and nontariff barriers affecting trade among themselves, while each participating country applies its own independent schedule of tariffs to imports from countries that are not members. Examples are the European Community, the European Free Trade Association, the North American Free Trade Agreement, the U.S.-Israel Free Trade Area Agreement, and the U.S.-Canada Free Trade Agreement. GATT Article XXIV spells out the meaning of a free trade area in GATT and specifies the applicability of the other GATT provisions to free trade areas. See also Common External Tariff; Customs; Customs Area; Customs Union; European Community; European Free Trade Association; Free Trade Area of the Americas; Free Zone; General Agreement on Tariffs and Trade; Kyoto Convention; MERCOSUR; North American Free Trade Agreement; Tariff; Tariff Schedules; Trade Diversion; U.S.-Canada Free Trade Agreement.
FREE TRADE AREA OF THE AMERICAS (FTAA) A planned hemisphere-wide free trade area, the Free Trade Area of the Americas will consist of North America, Latin America, and the Caribbean, will include nearly 800 million people, and, upon completion no later than 2005, will be the largest free trade market in the world, stretching from the northernmost regions of Canada to Tierra del Fuego, Argentina. The comprehensive trade agreement will cover, inter alia, tariffs, nontariff barriers, customs procedures, rules of origin, agriculture, intellectual property rights, government procurement, subsidies, services, investment, trade remedies, product standards, sanitary and phytosanitary measures, competition policy, and dispute settlement. See also Common External Tariff; Customs; Customs Area; Customs Union; European Community; European Free Trade Association; Free Trade Area Agreement; Free Zone; General Agreement on Tariffs and Trade; Kyoto Convention; MERCOSUR; North American Free Trade Agreement; Summits of the Americas; Tariff; Tariff Schedules; Trade Diversion; U.S.-Canada Free Trade Agreement.
FREE TRADE ZONE (FTZ) See Free Zone.
FREE WAREHOUSE See Free Zone.
FREE ZONE An area within a country (a seaport, airport, warehouse, or any designated area) regarded as being outside its customs territory. Importers may therefore bring goods of foreign origin into such an area without paying customs duties and taxes, pending their eventual processing, transshipment, or re-exportation. Free zones were numerous and prosperous during an earlier period when tariffs were high. Some still exist in capital cities, transport junctions, and major seaports, but their number and prominence have declined as tariffs have fallen in recent years. Free zones may also be known as "free ports," "free warehouses," "free trade zones," and "foreign trade zones." See also Customs; Port of Entry; Tariff; Transit Zone.
FREEDOM, COMMERCE, AND NAVIGATION TREATY (FCN) A bilateral establishment treaty defining the legal and commercial rights of the citizens of each country under the laws of the other.
FREIGHT FORWARDER A person hired to move shipments from a foreign location to a domestic location, or a portion of the way. Freight forwarders handle many of the formalities involved in importing such shipments.
FUSION, TREATY OF See European Community.
FUTURES See Forward Market.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| G-5 G-7 G-77 Gate Price GATT GATT 1947 GATT 1994 GATT Ministerial Meeting of 1982 GATT Panel General Agreement on Tariffs and Trade General Agreement on Trade in Services General Tariff Generalized System of Preferences Global Electronic Commerce Global Information Infrastructure Global Quotas |
Global System of Trade Preferences Goods Government Procurement Policies and Practices Graduation Grandfather Clause Grants Group A Group B Group C Group D Group of 5 Group of 7 Group of 8 Group of 77 Grundy Tariff GSP GSTP |
G-5 See Group of 5.
G-7 See Group of 7.
G-77 See Group of 77.
GATE PRICE See Variable Levy.
GATT See General Agreement on Tariffs and Trade.
GATT 1947 See General Agreement on Tariffs and Trade.
GATT 1994 See General Agreement on Tariffs and Trade.
GATT MINISTERIAL MEETING OF 1982 The first meeting of the GATT contracting parties at the ministerial level since the Tokyo Round in 1973. The 1982 meeting approved a GATT work program for the 1980s looking toward continued liberalization of world trade, with particular attention to trade policy issues that previously received relatively little attention in GATT, such as barriers to agricultural trade, services, and obstacles to developing country exports. See also General Agreement on Tariffs and Trade; Liberalization; Services; Tokyo Round; Williamsburg Summit.
GATT PANEL A group of trade experts convened by the GATT contracting parties to investigate any trade measures in dispute, make findings about the consistency of the measures under the GATT, and provide recommendations as to what, if anything, the contracting parties should request the disputing parties to do to meet their obligations under the GATT. Generally, the contracting parties select three officials of contracting parties that are not participants in the dispute; while they serve on the panel, these officials are expected to act independently of their governments' interests. See also Arbitration; General Agreement on Tariffs and Trade; Dispute Settlement; Panel of Experts.
GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT)
THE GATT ORGANIZATION: Refers both to the de facto international organization headquartered at Geneva, Switzerland, through which the contracting parties consulted on a day-to-day basis regarding the application of GATT provisions, and the 1947 General Agreement on Tariffs and Trade that gave birth to it. Because the U.S. Senate would not ratify the Havana Charter of 1948, which would have created an International Trade Organization (ITO) as a specialized agency of the United Nations system similar to the International Monetary Fund and the World Bank, the GATT organization became the key international institution concerned with multinational trade negotiations. The Interim Commission of the ITO (ICITO), which was established to facilitate the creation of the ITO, subsequently became the GATT Secretariat. By 1993, there were 103 GATT contracting parties, accounting for approximately 85 percent of world trade, and some 30 additional countries and dependencies applied GATT provisions on a de facto basis. The organization provided a framework for negotiations called "rounds" within which contracting parties negotiated to lower tariffs and other barriers to trade and a consultative mechanism that could be invoked by governments seeking to protect their trade interests. Over the years the GATT organization evolved through several rounds of multilateral negotiations. With the Tokyo and Uruguay Rounds, the focus of trade liberalization shifted from lowering tariffs to the elimination of nontariff barriers to trade. The Uruguay Round, which was the most recent round, lasted from 1986 to 1994 and led to the creation of the World Trade Organization, which, on January 1, 1995, replaced the GATT organization.
THE GATT AGREEMENT: A multilateral trade agreement among autonomous economic entities (not limited to countries) aimed at expanding international trade as a means of raising world welfare. The GATT was signed in 1947 as an interim agreement providing the rules for a multilateral trading system. This version is now referred to as "GATT 1947." Provisions of the GATT agreement were applied reciprocally among its contracting parties to reduce uncertainty in connection with commercial transactions across national borders. The cornerstone of the GATT was traditionally the most-favored-nation clause (Article 1 of the General Agreement), but in the 1970s and 1980s, regional and other trade preference systems became pervasive, weakening the role of GATT in ensuring equal market access among GATT members. Prior to the establishment of the WTO, the GATT was the principal point of reference for the conduct of U.S. trade policy. U.S. association with the GATT was implemented through or by an executive order and was not a treaty obligation. U.S. observance of GATT provisions depended on congressional approval of implementing legislation, as well as the policy orientation of the president.
GATT 1994: The major revision of the General Agreement on Tariffs and Trade that was produced by the 1986-94 Uruguay Round negotiations and is the cornerstone of the WTOs rules on trade relations in the area of goods and tariffs. GATT 1994 is an annex to the WTO Agreement and incorporates by reference GATT 1947, as amended. Key obligations of the latter include nondiscrimination through the most-favored-nation principle (Article I); the national treatment of imported products once inside the border (Article III), and the protection of domestic industries essentially through tariffs. Quantitative restrictions are prohibited (Article XI). The binding of tariffs (Article II) provides a stable and predictable basis for trade, since tariffs can be increased only under strict circumstances and provided that compensation is given in the form of bindings on other tariff lines (Article XXVIII). Exceptions to these obligations may be invoked under certain conditions for balance-of-payments purposes (Article XII), for development (Article XVIII, which includes special balance-of-payments provisions), as safeguards from serious injury (Article XIX), for health or safety (Article XX), for national security (Article XXI), and for regional integration agreements (Article XXIV). Differential and more favorable treatment to developing countries and to least developed countries is permitted under the 1979 Enabling Clause with respect to tariffs in the context of the Generalized System of Preferences (GSP) and nontariff measures, notwithstanding the most-favored-nation clause, and with respect to regional or global arrangements concluded by developing countries. GATT 1994 also includes seven understandings on the interpretation of existing GATT articles dealing with schedules of concessions (Article II:1(b)), state-trading enterprises (XVII), balance-of-payments provisions (XII and XVIII:B), customs unions and free trade areas (XXIV), waivers (XXV), modification of GATT schedules (XXVIII), and nonapplication of the General Agreement (XXXV). See also Agreement on Agriculture; Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Implementation of Article VI of GATT 1994; Agreement on Implementation of Article VII of GATT 1994; Agreement on Import Licensing Procedures; Agreement on Preshipment Inspection; Agreement on Rules of Origin; Agreement on Safeguards; Agreement on Subsidies and Countervailing Measures; Agreement on Technical Barriers to Trade; Agreement on Textiles and Clothing; Agreement on Trade-Related Aspects of Intellectual Property Rights; Agreement on Trade-Related Investment Measures; Anti-dumping Code; Articles of GATT; Bretton Woods Conference; Codes of Conduct; Compensation; Consultations; Contracting Party; Dillon Round; GATT Ministerial Meeting of 1982; GATT Panel; Grandfather Clause; International Trade Center UNCTAD/GATT; Kennedy Round; Liberalization; Licensing; Most-Favored-Nation Treatment; Multilateral Trade Negotiations; Part IV of the GATT; Principal Supplier; Protocol of Provisional Application; Quantitative Restrictions; Round; Special and Differential Treatment; Welfare; World Trade Organization.
GENERAL AGREEMENT ON TRADE IN SERVICES (GATS) A WTO agreement that is the first multilateral agreement to provide legally enforceable rules covering all international trade and investment in the service sector (except for those services provided in the exercise of governmental authority). GATS is designed to reduce or eliminate governmental measures that prevent services from being freely provided across national borders or that discriminate against locally established service firms with foreign ownership. Thus, GATS expands generally accepted notions of international trade to place trade in services on the same footing as trade in goods. GATS consists of a framework agreement that lays out the general principles and obligations for trade in services (including most-favored-nation treatment, market access, and national treatment) that apply to all WTO members in much the same way as the GATT does for trade in goods. Attached to this framework agreement are annexes dealing with rules for specific service sector (movement of natural persons, air transport, financial services, maritime, and telecommunications) national schedules negotiated during the Uruguay Round listing each member's specific undertakings with respect to its service sectors. The agreement also provides for exceptions to the principles of national treatment and most-favored-nation treatment. First, governments can choose the services in which they make market access and national treatment commitments; second, they can limit the degree of market access and national treatment they provide; third, they can take exceptions even from the MFN obligation, in principle only for 10 years, in order to give more favorable treatment to some countries than to WTO members in general. Finally, GATS provides a forum for further negotiations to open services markets around the world. See also Aircraft Agreement; Basic Telecommunications Services Agreement; General Agreement on Tariffs and Trade; Government Procurement Policies and Practices; National Treatment; Services; Uruguay Round; World Trade Organization.
GENERAL TARIFF A tariff that applies to imports from countries that do not enjoy either preferential or most-favored-nation tariff treatment. Where the general tariff rate differs from the most-favored-nation rate, the general tariff is usually an older and higher rate. See also Conventional Tariff; Most-Favored-Nation Treatment; Preferences; Tariff.
GENERALIZED SYSTEM OF PREFERENCES (GSP) A concept developed within the United Nations Conference on Trade and Development to encourage the expansion of manufactured and semi-manufactured exports from developing countries by making such goods more competitive in developed country markets through tariff preferences. The GSP reflects international agreement, negotiated at UNCTAD-II (New Delhi, 1968), that a temporary and nonreciprocal grant of preferences by developed countries to developing countries would be equitable and, in the long term, mutually beneficial. To meet its GSP commitment, each industrialized nation determined its own system of preferences, specifying the goods, the margins of preference, and, in some cases, the value or volume of goods that would benefit from preferential treatment. Twenty-seven industrialized countries, including the United States, now maintain GSP programs. Historically, the United States GSP program has been implemented under legislation providing for set terms and, therefore, requiring renewal. The U.S. Trade Act of 1974 authorized the first U.S. GSP arrangement for the period of January 1, 1976, until January 4, 1985. The U.S. program was extended through July 4, 1993, by the Trade and Tariff Act of 1984. Since 1994, legislative renewals have authorized only one-year extensions of the program. Approximately 4,100 categories of articles in the tariff schedule have been designated as eligible for duty-free entry into the United States under GSP. But the 1974 legislation explicitly indicated a number of exceptions, including textiles, clothing, watches, steel, footwear, glass, some electronic articles, and other sensitive products that could not enter the United States duty free under the GSP authority. The Trade Act of 1974 also stated that any country supplying more than 50 percent of total U.S. imports of a particular item in one year, or exceeding a specified dollar amount for that item, would be ineligible for GSP benefits for that product during the following year because it had no "competitive need" for such benefits. The U.S. Trade Agreements Act of 1979 provided that the 50 percent limit could be waived for a product falling below a certain dollar amount that was to be adjusted annually to reflect changes in the U.S. gross national product. Some developing countries are ineligible to receive U.S. GSP benefits those that participate in OPEC or "other cartel-like arrangements"; those that nationalize property of U.S. citizens without providing satisfactory compensation; those that fail to cooperate in international drug control efforts; those that exceed a certain per capita GNP; those that fail to maintain reasonable and equitable market access or adequate intellectual property protection for U.S. goods, services, and investment; those that fail to ensure internationally recognized worker rights. The Enabling Clause, adopted as a consequence of the Tokyo Round, established a legal basis within GATT for extending GSP benefits, notwithstanding GATT's most-favored-nation clause. See also Competitive; Enabling Clause; Framework Agreement; General Agreement on Tariffs and Trade; Graduation; Infant Industry Argument; Lomι Convention; Margin of Preference; North-South Trade; Preferences; Reverse Preferences; Sensitive Products; Special and Differential Treatment; Trade Act of 1974; Trade Agreements Act of 1979; United Nations Conference on Trade and Development.
GLOBAL ELECTRONIC COMMERCE (GEC) See Electronic Commerce.
GLOBAL INFORMATION INFRASTRUCTURE (GII) A concept advanced by U.S. Vice President Al Gore in a speech to the ITU World Telecommunication Development Conference in Buenos Aires, Argentina, in March 1994. Gore outlined an action plan for the GII based on five fundamental principles: encourage private investment, promote competition, create a flexible regulatory framework to keep pace with technological and market changes, provide open access to the network for all network providers, and ensure universal service. The GII will be composed of local, national, and regional telecommunications networks. As a network of networks, the GII will facilitate the global sharing of information, interconnection, and communication, creating a global information marketplace. As a cooperative effort among countries, the GII will afford economic and social benefits to all participants, ranging from job creation, economic growth, and infrastructure improvements to advanced services at lower prices for consumers. See also Electronic Commerce; Informatics; Technology.
GLOBAL QUOTAS See Quantitative Restrictions.
GLOBAL SYSTEM OF TRADE PREFERENCES (GSTP) An objective developed by the Group of 77 within UNCTADs Economic Cooperation Among Developing Countries program looking toward the negotiation of special intra-developing country preferences and the reduction of nontariff barriers impeding South-South trade. See also Economic Cooperation Among Developing Countries; Group of 77; Nontariff Barriers; Preferences; South-South Trade; United Nations Conference on Trade and Development.
GOODS Inherently useful and relatively scarce articles or commodities produced by the manufacturing, mining, construction, and agricultural sectors of the economy. Goods are important economically because they may be exchanged for money or other goods and services. See also Capital Goods; Commodity; Consumer Goods; Demand; Market Economy; Money; Price; Production; Services; Supply; Utility.
GOVERNMENT PROCUREMENT POLICIES AND PRACTICES The means and mechanisms through which official government agencies purchase goods and services. Government procurement policies and practices can constitute nontariff barriers to trade if they discriminate in favor of domestic suppliers when competitive imported goods are cheaper or of better quality. The United States pressed for an international agreement on government procurement during the Tokyo Round to ensure that government purchases of goods entering into international trade should be based on specific, published regulations that prescribe open procedures for submitting bids. Most governments had traditionally awarded such contracts on the basis of bids solicited from selected domestic suppliers or through private negotiations with suppliers that involved little, if any, competition. Other countries, including the United States, gave domestic suppliers a specified preferential margin, as compared with foreign suppliers. The GATT Government Procurement Code negotiated during the Tokyo Round sought to reduce, if not eliminate, the "buy national" bias underlying such practices by improving transparency and equity in national procurement practices and by ensuring effective recourse to dispute settlement procedures. The WTO Agreement on Government Procurement, a plurilateral agreement binding only on WTO members that have signed it, provides competition rules covering purchases by government entities in those member countries. In addition, it extends beyond the scope of the GATT Government Procurement Code by covering services (including construction services) and by opening procurement practices of state, provincial, and departmental authorities, as well as public utilities, to international competition. See also Agreement on Government Procurement; Buy American Act; Codes of Conduct; Conditional Most-Favored-Nation Treatment; Discrimination; Dispute Settlement; Nontariff Barriers; Tokyo Round; Trade Agreements Act of 1979; Transparency.
GRADUATION The presumption that individual developing countries are capable of assuming greater responsibilities and obligations in the international community within the context of the WTO or the World Bank, for example as their economies advance, as through industrialization, export development, and rising living standards. In this sense, graduation implies that donor countries may remove the more advanced developing countries from eligibility for all or some products under the Generalized System of Preferences. Within the World Bank, graduation moves a country from dependence on concessional grants to nonconcessional loans from international financial institutions and private banks. See also Developing Countries; Economic Cooperation Among Developing Countries; Generalized System of Preferences; Group B; Group D; Group of 77; Integrated Program for Commodities; Inter-American Development Bank; International Trade Center UNCTAD/GATT; Loan; Newly Industrializing Countries; Official Development Assistance; United Nations Conference on Trade and Development; United Nations Development Program; World Bank.
GRANDFATHER CLAUSE A provision in a legal instrument, such as GATT, that allows countries that accede to it to maintain preexisting domestic legislation inconsistent with provisions of that instrument. See also Accession; General Agreement on Tariffs and Trade; Protocol of Provisional Application; Residual Restrictions.
GRANTS See Bounties.
GROUP A See Group of 77.
GROUP B Originally, a designation for the developed market economy countries participating in the United Nations Conference on Trade and Development. In recent years, the term has also been used to refer to these same countries when they meet in the OECD and other international organizations to develop positions relevant to North-South economic issues. See also Market Economy; North-South Trade; Organization for Economic Cooperation and Development; United Nations Conference on Trade and Development.
GROUP C See Group of 77.
GROUP D Prior to their 1989-1991 conversion to market-oriented policies, the socialist countries of Eastern Europe participating in UNCTAD, excluding Romania and Yugoslavia (which were considered members of the Group of 77) and Albania (which did not actively participate in UNCTAD and other elements of the United Nations system). Group D countries showed a particular interest in the division of the UNCTAD Secretariat concerned with "Trade Between Countries With Different Economic Systems." See also United Nations Conference on Trade and Development.
GROUP OF 5 (G-5) See Group of 8.
GROUP OF 7 (G-7) The finance ministers from the United States, Japan, Germany, France, Italy, the United Kingdom, and Canada. See Group of 8.
GROUP OF 8 (G-8) The heads of state or government of the leading industrial democracies who have met annually since 1975 to coordinate economic policies to achieve sustained economic growth with price stability, to foster stability in exchange markets, and to promote adjustment in external imbalances. The group also addresses other pressing international economic issues that affect global economic performance. In 1973 and 1974, the finance ministers of the United States, Japan, Germany, France, and the United Kingdom met informally in a group referred to as the Group of 5. In 1975, when the group became a group of heads of state, what was then called the Group of 6 comprised the United States, Japan, Germany, France, Italy, and the United Kingdom. Canada joined the group in 1976, transforming it into the Group of 7. The group has recently come to be known as the Group of 8 because, since the end of the Cold War in 1992, Russia has been attending these meetings where it has participated at an ever higher level. In recent times, representatives of the European Union have also attended as observers. See also Plaza Accord.
GROUP OF 77 Originally, the 77 developing countries represented at UNCTAD-I in 1964. The delegates established the precedent of meeting together to attempt to develop common positions on major conference agenda items in advance of plenary UNCTAD meetings. The Group of 77 comprises UNCTAD Groups A (the African and Asian groups, with the notable exceptions of Israel and South Africa) and C (the Latin American group). As of 1999, 132 developing countries were members of the Group of 77, which seeks to develop common positions on trade and development issues under consideration in UNCTAD and other United Nations bodies. See also Developing Countries; Global System of Trade Preferences; Group D; Non-Aligned Movement; North-South Trade; South-South Trade; United Nations Conference on Trade and Development.
GRUNDY TARIFF See Tariff Act of 1930.
GSP See Generalized System of Preferences.
GSTP See Global System of Trade Preferences.
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| Hard Fibers Harmonization Harmonized Commodity Description and Coding System Harmonized System Harmonized Tariff Schedule of the United States |
Havana Charter Health and Sanitary Controls Hedge Helms-Burton Act Horizontal Reduction of Tariffs HS HTSUS |
HARD FIBERS Sisal, abaca, and coir. See also Integrated Program for Commodities.
HARMONIZATION The process of making procedures or measures applied by different countries especially those affecting international trade more compatible, as by effecting simultaneous tariff cuts applied by different countries so as to make their tariff structures more uniform. Most proposals for harmonizing tariffs envisage relatively large cuts in high tariffs and smaller cuts in lower tariffs, as contrasted with the linear reduction formula used in the Kennedy Round, which called for identical percentage cuts for all applicable tariffs. Tokyo Round tariff cuts increased tariff harmonization among the developed countries. See also Bern Convention; Codes of Conduct; Customs; Customs Classification; Customs Cooperation Council Nomenclature; Customs Harmonization; General Agreement on Tariffs and Trade; Harmonized System; Harmonized Tariff Schedule of the United States; Imports; Kennedy Round; Kyoto Convention; Linear Reduction of Tariffs; Tariff; Tariff Schedules; Tokyo Round; Uruguay Round; Valuation; World Customs Organization; World Intellectual Property Organization; World Trade Organization.
HARMONIZED COMMODITY DESCRIPTION AND CODING SYSTEM See Customs Harmonization; Harmonized System.
HARMONIZED SYSTEM (HS) A complete product classification system, formally known as the Harmonized Commodity Description and Coding System, that is organized in a particular framework and that employs a numbering or coding system consistent with its organizational arrangement. At the international level, the HS comprises approximately 5,000 article descriptions that appear as headings and subheadings, arranged in 97 chapters grouped in 21 sections. Sections of the HS group together articles from branches of industry and commerce (for example, animals and animal products, or textiles and textile articles) or by their functions or use (for example, footwear, arms and ammunition). The HS was developed by the Customs Cooperation Council and has been adopted by most major trading nations. See also Codes of Conduct; Customs; Customs Classification; Customs Cooperation Council Nomenclature; Customs Harmonization; Harmonization; Harmonized Tariff Schedule of the United States; Imports; Kennedy Round; Kyoto Convention; Most-Favored-Nation Treatment; Tariff; Tariff Schedules; Tokyo Round; Valuation; World Customs Organization; World Trade Organization.
HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES (HTSUS) A comprehensive classification of goods specifying the duty that U.S. Customs authorities assess against each imported item. On January 1, 1989, the United States converted its tariff nomenclature structure, known as the Tariff Schedules of the United States, to conform with the Harmonized Commodity Description and Coding System, better known as the Harmonized System, developed by the Customs Cooperation Council. See also Bound Rates; Codes of Conduct; Column 1 Rates; Column 2 Rates; Customs; Customs Classification; Customs Cooperation Council Nomenclature; Customs Harmonization; Harmonization; Harmonized System; Kyoto Convention; Most-Favored-Nation Treatment; Tariff; Tariff Schedules; Tokyo Round; Valuation; World Customs Organization; World Trade Organization.
HAVANA CHARTER See General Agreement on Tariffs and Trade.
HEALTH AND SANITARY CONTROLS See Agreement on the Application of Sanitary and Phytosanitary Measures; Customs and Administrative Entry Procedures; Quarantine, Sanitary, and Health Laws and Regulations; Standards.
HEDGE Action taken by a buyer or seller to protect his or her business or assets against a change in prices. A miller, for example, might buy a quantity of wheat to convert into flour at a given point in time and agree at the same time to sell a similar quantity of wheat that he does not own, at the same price, for delivery at a designated future point in time. If the price of wheat falls, he will lose on the flour while making a profit on the wheat he can later buy at the lower price. But if the price of wheat rises, he will make an extra profit on his flour, which he will have to sacrifice by purchasing wheat at the current high price. In either case, his production profits are protected. See also Forward Market; Risk.
HELMS-BURTON ACT A 1996 U.S. legislative act strengthening international sanctions against the government of Cuba under the leadership of Fidel Castro. The act reaffirms a provision of the Cuban Democracy Act of 1992 that states that the president should encourage foreign countries to restrict trade and credit relations with Cuba, and it features provisions regarding the enforcement of the economic embargo against Cuba. In addition, the act addresses, among other issues, U.S. opposition to Cuban membership in international financial institutions, TV broadcasting to Cuba, importation safeguards against certain Cuban products, withholding of foreign assistance from countries supporting the Juragua nuclear plant in Cuba, and a policy toward a transition government and a democratically elected government in Cuba. As promulgated, this legislation also permits U.S. citizens to sue overseas corporations with investments in property confiscated by the Castro government in Cuba and bans executives from companies owning such property from entering the United States. Both of these provisions, contained in Title IV of the act, were repeatedly waived by President Bill Clinton for periods of six months after a 1997 agreement with the European Union to deter new investment in properties that have been seized illegally worldwide. See also Boycott; Embargo; International Emergency Economic Powers Act.
HORIZONTAL REDUCTION OF TARIFFS See Linear Reduction of Tariffs.
HS See Harmonized System.
HTSUS See Harmonized Tariff Schedule of the United States.
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| IA IADB IBRD ICA ICITO IDA IDB IEEPA IFC Illustrative List IMF Impairment Import Administration Import Licensing Import Quotas Import Relief Import Restrictions Import-Sensitive Products Import Substitution Imports Incoterms Indirect Tax Industrial Policy Industrial Revolution Industrialized Countries Infant Industry Argument Inflation Informatics Information Technology Agreement Infrastructure Inheritance Tax Injury Input Dumping Insurance Integrated Program for Commodities Integrated Tariff Intellectual Property Inter-American Development Bank Inter-American Investment Corporation Interdependence |
Interest Intermediate Goods International Arrangement on Export Credits International Bank for Reconstruction and Development International Commodity Agreement International Convention on the Simplification and Harmonization of Customs Procedures International Development Association International Emergency Economic Powers Act International Finance Corporation International Labor Organization International Monetary Fund International Telecommunication Union International Trade Administration International Trade Center UNCTAD/WTO International Trade Commission International Trade Organization International Union for the Protection of Industrial Property International Union for the Protection of Literary and Artistic Works International Wheat Agreement Investment Performance Requirements Investor Invisible Trade IPC Island Developing Countries ITA ITC-International Trade Center ITC-International Trade Commission ITO |
IA See Import Administration.
IADB See Inter-American Development Bank.
IBRD See World Bank.
ICA See International Commodity Agreement.
ICITO See General Agreement on Tariffs and Trade.
IDA See International Development Association.
IDB See Inter-American Development Bank.
IEEPA See International Emergency Economic Powers Act.
IFC See International Finance Corporation.
ILLUSTRATIVE LIST Contained in Annex I to the WTO Agreement on Subsidies and Countervailing Measures, a list that enumerates certain practices that constitute countervailable export subsidies within the terms of the agreement when provided or mandated by a government or special institution controlled by a government with respect to goods produced for export. These include direct subsidies to a firm or industry contingent upon export performance, currency retention schemes, and other practices that involve a bonus; preferential internal transport and freight charges on export shipments; remission of direct taxes specifically related to exports; provision of services or goods on preferential terms for use in the production of exported goods; and export credit guarantees. See also Agreement on Subsidies and Countervailing Measures; Countervailing Duties; Domestic Subsidy; Export Subsidy; Subsidy; World Trade Organization.
IMF See International Monetary Fund.
IMPAIRMENT See Consultations; Dispute Settlement.
IMPORT ADMINISTRATION (IA) The branch of the International Trade Administration at the U.S. Department of Commerce that is responsible for, among other things, administering the antidumping and countervailing duty laws of the United States. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Countervailing Duties; Domestic Subsidy; Dumping; Export Subsidy; International Trade Administration; Subsidy; Sunset Review; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
IMPORT LICENSING See Licensing.
IMPORT QUOTAS See Quantitative Restrictions.
IMPORT RELIEF Alleviation of competitive pressures on a domestic industry and its employees through restrictions on the inflow of goods into the relevant market from other countries, as through the imposition of tariffs or quantitative restrictions on imports. In U.S. trade law, import relief is most often provided under the authority and procedures of Section 201 of the Trade Act of 1974. See also Adjustment Assistance; Adjustments; Agreement on Safeguards; Article 11 (GATT Article XI); Article 19 (GATT Article XIX); Competitive; Escape Clause; Market; Market Access; Protection; Protectionism; Quantitative Restrictions; Safeguards; Section 22; Section 201; Section 406; Trade Act of 1974.
IMPORT RESTRICTIONS See Nontariff Barriers; Protection; Tariff.
IMPORT-SENSITIVE PRODUCTS See Sensitive Products.
IMPORT SUBSTITUTION An attempt by a country to reduce imports (and hence foreign exchange expenditures) by encouraging the development of domestic industries regardless of domestic inefficiencies. See also Balance of Payments; Balance of Trade; Capital Account; Comparative Advantage; Current Account; Efficiency; Imports; Industrial Policy; Infant Industry Argument; International Monetary Fund; Invisible Trade; Mercantilism; Quantitative Restrictions; Transfer Payments; Visible Trade.
IMPORTS The inflow of goods and services into a country's market for consumption. A country enhances its welfare by importing a broader range of higher-quality goods and services at lower cost than it could produce domestically. The expansion of world trade since the end of World War II has therefore been a principal factor underlying a general rise in living standards in most countries. See also Comparative Advantage; Consumption; Customs; Levy; Market; Price Elasticity of Demand; Protectionism; U.S. International Trade Commission; Welfare.
INCOTERMS An abbreviation of "international commercial terms." Incoterms are a uniform set of international rules, promulgated by the International Chamber of Commerce in Paris, for the interpretation of the terms most commonly used in international contracts for the sale of goods. Incoterms define the obligations of buyer and seller at every stage of an international sale of goods transaction. The Incoterms were first issued in 1953; they were last revised effective January 1, 2000. See also CFR; CIF; CIP; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB.
INDIRECT TAX A tax that is levied on expenditure, such as a sales tax imposed at the retail level, excise tax, or value-added tax. Some economists say indirect taxes are regressive (in that taxes on commodities burden the poor more than the rich) and inflationary (since they raise prices). See also Border Tax Adjustment; Direct Tax; Excise Tax; Inflation; Tax; Value-Added Tax.
INDUSTRIAL POLICY Traditional government policies intended to provide a favorable economic climate for the development of industry in general or specific industrial sectors. Instruments of industrial policy may include tax incentives to promote investments or exports, direct or indirect subsidies, special financing arrangements, protection against foreign competition, worker training programs, regional development programs, assistance for research and development, and measures to help small business firms. Historically the term "industrial policy" has been associated with at least some degree of centralized economic planning or indicative planning, but this connotation is not always intended by its contemporary advocates. See also Infant Industry Argument; Investment Performance Requirements; Managed Trade; Ministry of International Trade and Industry; Mercantilism; Protection; Subsidy.
INDUSTRIAL REVOLUTION The emergence of the factory system of production, in which workers were brought together in one plant and supplied with tools, machines, and materials with which they worked in return for wages. Narrowly speaking, the Industrial Revolution was spearheaded by the rapid changes in the manufacture of textiles, particularly in England, between about 1770 and 1830. More broadly, the term applies to continuing structural economic change in the world economy. Before the Industrial Revolution, the "domestic system" of production prevailed in the 16th and 17th centuries. See also Domestic System of Production; Production; Structural Change; Textiles.
INDUSTRIALIZED COUNTRIES See Developed Countries.
INFANT INDUSTRY ARGUMENT The view that "temporary protection" for a new industry or firm in a particular country through tariff and nontariff barriers to imports can help the industry or firm to become established and eventually competitive in world markets. Historically, new industries that are soundly based and efficiently operated have experienced declining costs as output expands and production experience is acquired. However, industries that have been established and operated with heavy dependence on direct or indirect government subsidies have sometimes found it difficult to relinquish that support. The rationale underlying the Generalized System of Preferences is comparable to that of the infant industry argument. See also Competitive; Efficiency; Generalized System of Preferences; Protection; Special and Differential Treatment; Subsidy.
INFLATION A general increase in the prices of most goods and services within a market, resulting in diminishing purchasing power of a given nominal sum of the currency used in the market. Inflation results when demand increases more rapidly than supply, as when salaries and wages increase more rapidly than production. Since World War II, inflation has been a persistent phenomenon in many countries. See also Currency; Demand; Indirect Tax; Money; Price; Purchasing Power; Supply.
INFORMATICS A term used to describe the complex of industries and products based on digital information processing technologies. This includes computers, computer peripherals, computer software, data processing, and most categories of microelectronic components. See also Electronic Commerce; Knowledge-Based Industry; Technology.
INFORMATION TECHNOLOGY AGREEMENT (ITA) A WTO agreement to eliminate tariffs on a wide range of information technology products. The Information Technology Agreement was concluded at the first ministerial conference of the World Trade Organization at Singapore in December 1996. ITA product coverage includes computers and computer equipment, semiconductors and integrated circuits, computer software products, telecommunications equipment, semiconductor manufacturing equipment, and computer-based analytical instruments. ITA participants were to eliminate tariffs on these products by the year 2000, recognizing that extended staging might be granted in limited circumstances. The ITA is the only global sectoral agreement to date in which participating governments have agreed to eliminate duties on an identical list of products. ITA participants include Australia, Canada, Costa Rica, Czech Republic, El Salvador, Estonia, European Communities (on behalf of 15 member states), Hong Kong, Iceland, India, Indonesia, Israel, Japan, Korea, Kyrgyzstan, Latvia, Macau, Malaysia, New Zealand, Norway, Panama, Philippines, Poland, Romania, Singapore, Slovak Republic, Switzerland and Liechtenstein, Taiwan, Thailand, Turkey, and the United States. Additional countries, including China, Lithuania, Armenia, Georgia, and Moldova, have indicated their intention to join the ITA. In launching the ITA, ministers agreed that the product coverage would be subject to periodic review and expansion to take account of the rapidly changing technology and differences in tariff nomenclature in the sector, and that consultations on nontariff measures would be undertaken during the course of WTO work in this sector. An exercise to update product coverage, known as "ITA II," is ongoing. Participants have also established a WTO Committee on the Expansion of Trade in Information Technology Products to carry out the work program identified at Singapore. See also Consultations; Technology; Uruguay Round; World Trade Organization.
INFRASTRUCTURE The underlying capital of a society embodied in its roads and other transportation and communications systems, as well as its electric power, water supplies, sewage systems, and other public services. Sometimes called social overhead capital, infrastructure may also include health, education, and the skills of a country's population. See also Capital; Economic Development; Welfare.
INHERITANCE TAX See Direct Tax.
INJURY See Countervailing Duties; Dumping; Escape Clause; Market Disruption; Peril Point; Safeguards; U.S. International Trade Commission.
INPUT DUMPING See Downstream Dumping.
INSURANCE An agreement or contract (commonly called a policy) between the insured, who pays a premium, and the insurer, who in return promises to compensate the insured if he suffers specified losses, as through fire, theft, or automobile accident. The premiums are so calculated that the total amount paid by all insured parties will enable the insurer to pay claims of policy holders and administrative costs. In effect, insurance spreads risk so that an individual who suffers loss is compensated at the expense of all those who insure against it. See also Capital Market; Export Credit Insurance; Premium; Reinsurance; Risk; Services; Underwriter.
INTEGRATED PROGRAM FOR COMMODITIES (IPC) A program established by UNCTAD-IV to promote price stabilization for 18 commodities of particular interest to developing countries: bananas, bauxite, cocoa, coffee, copper, cotton and cotton yarn, hard fibers and products, iron ore, jute and jute products, manganese, meat, phosphates, rubber, sugar, tea, tropical timber, tin, and vegetable oils. Of eight active agreements, those on cocoa, coffee, and natural rubber contain price-stabilization measures; five other agreements on tropical timber, jute, sugar, wheat, and olive oil contain no economic provisions.
INTEGRATED TARIFF The system used by a shipping conference to charge agreed upon rates for services.
INTELLECTUAL PROPERTY Ownership as evidenced by patents, trademarks, and copyrights conferring the right to possess, use, or dispose of products created by human ingenuity. See also Bern Convention; Commercial Counterfeiting; Copyright; General Agreement on Tariffs and Trade; Knowledge-Based Industry; Omnibus Trade and Competitiveness Act of 1988; Patent; Process Patent; Property; Section 337; Special 301; Technology; Technology Transfer; Trademark; Trafficking in Counterfeit Goods and Services; Uruguay Round; Uruguay Round Agreements Act; World Intellectual Property Organization; World Trade Organization.
INTER-AMERICAN DEVELOPMENT BANK (IADB or IDB) A regional development institution established in 1959 to help promote and finance economic and social development in Caribbean and Latin American countries by utilizing its own funds to finance member-countries' development; to subsidize private enterprises when private capital is not available; and to provide technical assistance in the preparation, financing, and implementation of development projects. The IADB's membership originally comprised the United States and 19 Latin American and Caribbean countries. Eight other Western Hemisphere countries, including Canada, joined later. In 1974, the Declaration of Madrid allowed the entry of countries from outside the inter-American region, and 18 additional countries joined between 1976 and 1993, bringing the IADB's membership to 46 nations. The IADB has established the autonomous Inter-American Investment Corporation (IIC) to finance small and medium-sized private enterprises, as well as the Multilateral Investment Fund (MIF) to promote investment reforms and to stimulate private sector projects. See also Additionality; Bilateral Aid; Developing Countries; Economic Development; Least Developed Countries; Multilateral Aid; Multilateral Investment Fund; Newly Industrializing Countries; Non-Aligned Movement; North-South Trade; Official Development Assistance; Soft Loan; South-South Trade.
INTER-AMERICAN INVESTMENT CORPORATION (IIC) See Inter-American Development Bank.
INTERDEPENDENCE See Structural Change.
INTEREST A sum paid for the use of borrowed capital, usually expressed in terms of a rate or percentage of the capital involved (the interest rate), which is normally higher when the risk (including both the risk of non-payment and the probability of inflation) is greater. See also Capital; Capital Market; Credit; Inflation; Loan; Profit; Risk.
INTERMEDIATE GOODS See Capital Goods.
INTERNATIONAL ARRANGEMENT ON EXPORT CREDITS An agreement among 22 OECD governments that they will not lower interest rates for export credits below specified levels or offer most tied-aid credits without informing other OECD governments. The arrangement seeks to minimize subsidization of exports through official export credits offered at less than market rates of interest and to curb the use of tied-aid credits that distort trade patterns. It contains no enforcement provisions, but procedures encouraging transparency in official export credit and aid activities encourage compliance. See also Credit; Domestic Subsidy; Export Subsidy; Interest; Organization for Economic Cooperation and Development; Subsidy; Transparency.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD) See World Bank.
INTERNATIONAL COMMODITY AGREEMENT (ICA) An international understanding, usually reflected in a legal instrument, relating to trade in a particular commodity and based on terms negotiated and accepted by most of the countries that export and import commercially significant quantities of the commodity. Some commodity agreements, such as those for coffee, cocoa, natural rubber, and sugar, have centered on economic provisions intended to stabilize the market price within a negotiated price range for the commodity through the use of buffer stocks, export quotas, or both. Of these, only rubber currently has economic provisions as part of the agreement. Other commodity agreements (such as existing agreements for jute and jute products, olive oil, and wheat) seek to promote cooperation among producers and consumers through improved consultations, exchange of information, research and development, and export promotion. See also Buffer Stocks; Commodity; Common Fund; Export Promotion; Export Quotas; Integrated Program for Commodities.
INTERNATIONAL CONVENTION ON THE SIMPLIFICATION AND HARMONIZATION OF CUSTOMS PROCEDURES See Kyoto Convention.
INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) An affiliate of the World Bank, established in 1960, that extends concessional loans to the least developed countries and other relatively poor countries to finance long-term high-priority development projects. IDA resources are contributed by 33 donor countries. The World Bank would not be able to make loans to many of the poorest countries, including most countries in Africa, without IDA resources. See also Least Developed Countries; Official Development Assistance; Soft Loan; World Bank.
INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT (IEEPA) U.S. legislation enacted in 1977 that extends emergency powers previously granted to the U.S. president by the Trading With the Enemy Act of 1917. Specifically, the legislation enables the president, after declaring that a national emergency exists because of a threat from a source outside the United States, to investigate, regulate, compel, or prohibit virtually any economic transaction involving property in which a foreign country or national has an interest. Since its enactment, the authority conferred by the IEEPA has been exercised to impose a variety of economic sanctions on foreign countries and to continue in force the authority of the Export Administration Act during several periods when statutory authority has lapsed. As of 1999, sanctions were in place against Cuba and North Korea under the authority of TWEA and against Burma, Libya, Iraq, Iran, the Federal Republic of Yugoslavia (Serbia and Montenegro), Sudan, the Taliban, and UNITA (including sanctions relating to Middle Eastern terrorism, to narcotics, and to the proliferation of nuclear, chemical, and biological weapons) under the authority of IEEPA.
INTERNATIONAL FINANCE CORPORATION (IFC) An affiliate of the World Bank established in 1956 to promote commercial enterprises in developing countries through loans and equity financing comparable to those extended by investment banks. It also facilitates the establishment of partnerships between private investors, wherever they may be located, and capital markets in the Third World. It does not require government guarantees. See also Capital Market; Developing Countries; Market Economy; Multilateral Investment Guarantee Agency; Private Sector; World Bank.
INTERNATIONAL LABOR ORGANIZATION See Core Labor Standards.
INTERNATIONAL MONETARY FUND (IMF) An international financial institution proposed at the 1944 Bretton Woods Conference and established in 1946 that seeks to stabilize the international monetary system as a basis for the orderly expansion of international trade. Specifically, the IMF monitors exchange rate policies of member countries, lends them foreign exchange resources to support their adjustment policies when they experience balance-of-payments difficulties, and provides them financial assistance through a special "compensatory financing facility" when they experience temporary shortfalls in commodity export earnings. See also Adjustments; Balance-of-Payments Consultations; Bretton Woods Conference; Compensatory Finance; Conditionality; Convertibility; Exchange Rate; Special Drawing Rights.
INTERNATIONAL TELECOMMUNICATIONS UNION (ITU) A United Nations organization, headquartered in Geneva, Switzerland, within which governments and the private sector coordinate global telecommunication networks and services. Its work is performed through three groups or sectors: telecommunication standardization, radio communication, and telecommunication development. See also Basic Telecommunications Services Agreement; General Agreement on Trade in Services; Global Information Infrastructure; Information Technology Agreement; Omnibus Trade and Competitiveness Act of 1988; Services.
INTERNATIONAL TRADE ADMINISTRATION (ITA) An agency within the U.S. Department of Commerce that is tasked with a number of functions that fall within the broad arena of international trade and are carried out in support of the U.S. economy and U.S. companies. The functions of the ITA include the promotion of U.S. exports and companies overseas; the provision of technical and business advice and assistance to U.S. companies doing business in other countries; the administration of the Export Administration Act; the implementation of the U.S. antidumping and countervailing duties laws; the provision of technical and analytical support to commercial offices located at foreign embassies of the United States; coordination with the United States Trade Representative and other U.S. government agencies responsible for international trade negotiations; and the development of a trade-related policy agenda for undertaking efforts aimed at addressing international trade issues of interest to the United States. See also Bureau of Export Administration; Countervailing Duties; Dumping; Export Administration Act of 1979; Export Promotion; Import Administration; United States Trade Representative; Uruguay Round Agreements Act; U.S. Foreign and Commercial Service.
INTERNATIONAL TRADE CENTER UNCTAD/WTO (ITC) A quasi-autonomous, Geneva-based organization within the United Nations system (reporting to both the WTO and to the United Nations Conference on Trade and Development) that provides a wide range of technical assistance to developing countries seeking to develop and promote their export potential. The ITC is the recognized United Nations Development Program executing agency in the field of trade promotion. See also Developing Countries; Export Promotion; General Agreement on Tariffs and Trade; Graduation; Group of 77; United Nations Conference on Trade and Development; United Nations Development Program.
INTERNATIONAL TRADE COMMISSION (ITC) See U.S. International Trade Commission.
INTERNATIONAL TRADE ORGANIZATION (ITO) See General Agreement on Tariffs and Trade.
INTERNATIONAL UNION FOR THE PROTECTION OF INDUSTRIAL PROPERTY See World Intellectual Property Organization.
INTERNATIONAL UNION FOR THE PROTECTION OF LITERARY AND ARTISTIC WORKS See World Intellectual Property Organization.
INTERNATIONAL WHEAT AGREEMENT See Kennedy Round.
INVESTMENT PERFORMANCE REQUIREMENTS Special conditions imposed on direct foreign investment by recipient governments, sometimes requiring commitments to export a certain percentage of the output, to purchase given supplies locally, or to ensure the employment of a specified percentage of local labor and management. See also Agreement on Trade-Related Investment Measures; Bilateral Investment Treaty; Convertibility; Exchange Controls; General Agreement on Tariffs and Trade; Industrial Policy; Investment Performance Requirements; Multilateral Agreement on Investments; Performance Requirements; Restrictive Business Practices; Trade-Related Investment Measures; Uruguay Round; World Trade Organization.
INVESTOR See Entrepreneur; Risk.
INVISIBLE TRADE Items such as freight, insurance, and financial services that are included in a country's balance-of-payments accounts (in the "current" account), even though they are not recorded as physically visible exports and imports. See also Balance of Payments; Capital Account; Current Account; Services; Visible Trade.
IPC See Integrated Program for Commodities.
ISLAND DEVELOPING COUNTRIES See Least Developed Countries.
ITA See International Trade Administration.
ITC See International Trade Center UNCTAD/WTO.
ITC See U.S. International Trade Commission.
ITO See General Agreement on Tariffs and Trade; Multilateral Trade Organization.
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| Japan External Trade Organization |
Joint Venture |
JAPAN EXTERNAL TRADE ORGANIZATION (JETRO) An organization responsible for the day-to-day management and operation of Japans Ministry of International Trade and Industry's (MITI) import promotion programs. Established in 1958 to help Japanese firms export overseas, JETRO now assists foreign firms seeking to export or invest in Japan. JETRO has a network of 33 offices in Japan and 79 offices overseas in 56 countries. See also Ministry of International Trade and Industry.
JOINT VENTURE A form of business partnership involving joint management and the sharing of risks and profits as between enterprises based in different countries. If joint ownership of capital is involved, the partnership is known as an equity joint venture. See also Capital; Equity; Risk.
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| Keiretsu Kennedy Round Key Currencies |
Knocked Down Knowledge-Based Industry Kyoto Convention |
KEIRETSU In the late 20th century, descendants of Japans pre-war zaibatsu, which were characterized by close, long-term business relationships between its members. Keiretsu typically include a bank, a trading company, manufacturing firms, and often an insurance company. Keiretsu firms are linked to one another through a network of formal and informal ties including cross-shareholdings, time-honored buyer-supplier arrangements, interlocking corporate directorates, interchange of personnel between member firms, and the sharing of information concerning product development and distribution. While keiretsu do have some positive aspects such as cost reduction and quality control, their exclusionary nature can act as an impediment to foreign market access. See also Codes of Conduct; Industrial Policy; Managed Trade; Market Access; Restrictive Business Practice.
KENNEDY ROUND The popular name for the sixth and, at that time, most ambitious round of trade negotiations under the aegis of the GATT. The Kennedy Round, which lasted from 1963 to 1967, yielded agreements reducing prevailing tariff levels maintained by developed countries on industrial products by about one-third, an Anti-Dumping Code, and a short-lived International Wheat Agreement that was intended to stabilize world wheat prices. (The Wheat Agreement replaced the latest in a series of International Wheat Agreements going back to the 1950s.) See also Anti-Dumping Code; General Agreement on Tariffs and Trade; Linear Reduction of Tariffs; Round; Special and Differential Treatment; Tariff; Trade Expansion Act of 1962.
KEY CURRENCIES See Currency; Reserve Currency.
KNOCKED DOWN (K.D.) Merchandise that is imported complete with all parts but in an unassembled state (such as oversized machinery), usually to facilitate packing and shipping.
KNOWLEDGE-BASED INDUSTRY An industry that is dependent on the protection of intellectual property, such as computer software, musical recordings, motion pictures, and pharmaceuticals. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Bern Convention; Commercial Counterfeiting; Copyright; Intellectual Property; Patent; Process Patent; Property; Trademark; Trafficking in Counterfeit Goods and Services; World Intellectual Property Organization.
KYOTO CONVENTION The 1973 International Convention on the Simplification and Harmonization of Customs Procedures, whose goal is the development of compatible national customs procedures in different countries as a means of encouraging and facilitating international trade. See also Codes of Conduct; Customs; Customs Classification; Customs Cooperation Council Nomenclature; Customs Harmonization; Customs Union; Harmonization; Harmonized System; Harmonized Tariff Schedule of the United States; Imports; Most-Favored-Nation Treatment; Tariff; Tariff Schedules; Valuation; World Customs Organization; World Trade Organization.
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| Land-Locked Developing Countries Large Aircraft Sector Understanding LASU LDCs Least Developed Countries Less Developed Countries Less Than Fair Value Less-Than-Load Shipments Level of Trade Adjustment Levy Liberal Liberalization Licensing Licensing Code Linear Reduction of Tariffs |
Liquid Hydrocarbons Liquidation LLDCs Loan Logistics Intermediary Logistics Provider Lomι Convention London Club Long-Term Agreement on International Trade in Cotton Textiles Loss LOT LTA LTL |
LAND-LOCKED DEVELOPING COUNTRIES See Least Developed Countries; Transit Zone.
LARGE AIRCRAFT SECTOR UNDERSTANDING (LASU) A 1985 agreement between the United States and the European Community providing for minimum terms and conditions for loans or loan guarantees for the support by government export-credit agencies of the export of aircraft of 70 seats or greater (or the equivalent in freight) and their engines and spare components. This agreement was later broadened to cover all size aircraft and supersedes previously existing "Standstill" and "Common Line" understandings covering government export-financing support for such articles. The understanding has since been incorporated as a sectoral annex into the OECD Arrangement on Guidelines for Officially Supported Export Credits. See also Aircraft Agreement; Domestic Subsidy; European Community; European Union; Export Subsidy; Organization for Economic Cooperation and Development; Market Access.
LASU See Large Aircraft Sector Understanding.
LDCs See Developing Countries; Least Developed Countries.
LEAST DEVELOPED COUNTRIES (LLDCs or LDCs) Some 48 of the world's poorest countries, considered by the United Nations to be the "least developed" of the less developed countries. Most of them are small in terms of area and population, and some are land-locked or small island countries. They are generally characterized by low per capita incomes, low literacy levels and medical standards, subsistence agriculture, and a lack of exploitable minerals and competitive industries. Many suffer from aridity, floods, hurricanes, or excessive animal and plant pests, and most are situated in the zone 10 to 30 degrees north latitude. These countries have low prospect of rapid economic development in the foreseeable future and are likely to remain dependent upon official development assistance for many years. Most are in Africa, but a few are in Asia, the Pacific, and the Western Hemisphere. The abbreviation "LDCs" has increasingly been used in recent years to refer to the least developed countries (although in the 1950s and 1960s, the term "less developed countries" was more or less interchangeable with the term "developing countries"). See also Developing Countries; General Agreement on Tariffs and Trade; International Development Association; Official Development Assistance; Part IV of the GATT; Reciprocity; Soft Loan; Special and Differential Treatment; Substantial New Program of Action; Transit Zone.
LESS DEVELOPED COUNTRIES (LDCs) See Developing Countries; Least Developed Countries.
LESS THAN FAIR VALUE (LTFV) See Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Dumping; Normal Value; United States Price.
LESS-THAN-LOAD SHIPMENTS (LTL) A shipment that has not been loaded to capacity for the particular container type or shipping method.
LEVEL OF TRADE ADJUSTMENT (LOT) Under U.S. antidumping law, an adjustment to the U.S. sales price in an antidumping investigation that compensates for differences in the cost of selling at different commercial levels of trade. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Dumping; United States Price.
LEVY As a verb, to assess or impose a tariff on imported merchandise; as a noun, the charge on imports. See also Customs; Imports; Tariff; Tax.
LIBERAL When referring to trade policy, relatively free of import controls or restraints and/or exhibiting a preference for reducing existing barriers to trade, often contrasted with the protectionist preference for retaining or raising selected barriers to imports. See also Free Trade; Liberalization; Protectionism.
LIBERALIZATION Unilateral or multilateral reductions in tariffs and other measures that restrict trade. Trade liberalization has been the objective of all rounds of the GATT trade negotiations. See also Codes of Conduct; Free Trade; General Agreement on Tariffs and Trade; Liberal; Round; Sensitive Products.
LICENSING The requirement by a country of making formal application for a special permit, usually called a "license," as a prior condition for importing or exporting certain goods. See also ATA Carnet; Consular Formalities and Documentation; Consular Invoice; Customs; Customs and Administrative Entry Procedures; Customs Bond; Customs Classification; Free Zone; Licensing Code; Liquidation; Nontariff Barriers; Port of Entry; Prior Deposits; Quarantine, Sanitary and Health Laws and Regulations; Suspension of Liquidation; Tokyo Round; Transit Zone; Valuation; World Customs Organization.
LICENSING CODE A Tokyo Round code aimed at simplifying import licensing procedures and at ensuring their fair and equitable application. The code also seeks to improve the transparency of such proceedings by requiring the publication of relevant national laws and regulations. A Committee on Import Licensing, under the aegis of GATT, monitors adherence to the code. The WTO Agreement on Import Licensing Procedures, negotiated during the Uruguay Round, is the successor to the Licensing Code. See also Agreement on Import Licensing Procedures; Codes of Conduct; General Agreement on Tariffs and Trade; Licensing; Nontariff Barriers; Tokyo Round; Trade Agreements Act of 1979; Transparency; Uruguay Round; World Trade Organization.
LINEAR REDUCTION OF TARIFFS A reduction by a given percentage in all tariffs maintained by countries participating in a round of trade negotiations, with or without exceptions for products deemed to be "sensitive." It is sometimes called "horizontal reduction of tariffs," "across-the-board reduction of tariffs," or "equal percentage reduction of tariffs." The complexity and implicit limitations in negotiating tariff reductions on an item-by-item basis in the Dillon Round encouraged negotiators to try a linear reduction formula during the Kennedy Round. The U.S. Trade Expansion Act of 1962, while not specifying an across-the-board formula for the negotiations, authorized reductions of up to 50 percent on virtually all items in the U.S. tariff schedules, hence permitting a linear application. See also Dillon Round; Harmonization; Kennedy Round; Sensitive Products; Tariff; Trade Expansion Act of 1962.
LIQUID HYDROCARBONS See Bulk Carrier.
LIQUIDATION Final payment of all duties owing on items imported into the United States. Where the amount of duty is not finally determined at the time that the item is entered, as during the pendency of an antidumping or countervailing duty investigation, liquidation is suspended until the investigation is completed and a final duty determination is issued. See also ATA Carnet; Codes of Conduct; Consular Formalities and Documentation; Consular Invoice; Customs; Customs and Administrative Entry Procedures; Customs Bond; Customs Classification; Imports; Free Zone; Licensing; Nontariff Barriers; Port of Entry; Quarantine, Sanitary, and Health Laws and Regulations; Suspension of Liquidation; Tariff; Tariff Schedules; Transit Zone; Valuation; World Customs Organization; World Trade Organization.
LLDCs See Least Developed Countries.
LOAN A sum of money borrowed by a person, company, government, or other organization. See also Capital Market; Interest; International Monetary Fund; Risk; Security; Soft Loan; Tied Loan; World Bank.
LOGISTICS INTERMEDIARY A person who consolidates several small shipments from various sources into a larger shipment, usually up to a full truck, car, or container load.
LOGISTICS PROVIDER A person who acts as an agent on behalf of the shipper.
LOMΙ CONVENTION An agreement originally signed in 1975 through which the European Community provides financial and technical assistance to approximately 70 Associated Countries of Africa, the Caribbean, and the Pacific (the ACP Countries), as well as tariff preferences for many of their products in European markets. The ACP countries no longer grant reverse preferences, as they were required to under earlier the Yaoundι Convention, as a condition for receiving EC preferences. The Lomι Convention also created a mechanism known as STABEX, which was designed to stabilize the export earnings of individual ACP countries from selected commodities. Compensatory payments from the European Community under STABEX are based on the amount by which a country's earnings from exports of specified commodities fall below designated levels. The Lomι Convention, which is renegotiated periodically, was last renegotiated in 1995. See also ACP Countries; Commodity; Compensatory Finance; Developing Countries; European Community; Managed Trade; Reverse Preferences.
LONDON CLUB An ad hoc group of commercial bank lenders that meets to negotiate debt restructuring agreements with debtor countries.
LONG-TERM AGREEMENT ON INTERNATIONAL TRADE IN COTTON TEXTILES (LTA) See Agreement on Textiles and Clothing; Multi-Fiber Arrangement Regarding International Trade in Textiles.
LOSS See Profit; Risk.
LOT See Level of Trade Adjustment.
LTA See Multi-Fiber Arrangement Regarding International Trade in Textiles.
LTL See Less Than Load Shipments.
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| Maastricht Treaty Machine Tools Managed Trade Man-Made Fibers Manufacturing Processes Margin of Preference Market Market Access Market Disruption Market Economy Market Forces Marshall Plan Medium of Exchange Member Mercantilism Mercantilist Merchandise Exports and Imports MERCOSUR Merger Treaty MFA MFN MIGA Minimum Valuation Ministry of International Trade and Industry MITI Mixed Credits |
Mixed Economies Mixed Tariff MNC Monetary and Financial Conference Money Monopoly Montreal Ministerial Montreal Protocol Most-Favored-Nation (MFN) Treatment MTN MTO Multi-Fiber Arrangement Regarding International Trade in Textiles Multilateral Multilateral Agreement Multilateral Agreement on Investment Multilateral Aid Multilateral Investment Fund Multilateral Investment Guarantee Agency Multilateral Safeguard System Multilateral Trade Negotiations Multilateral Trade Organization Multinational Corporation Mutatis Mutandis Mutual Recognition Agreement Mutuality of Benefits |
MAASTRICHT TREATY See See European Community; European Union.
MACHINE TOOLS See Capital Goods.
MANAGED TRADE Attempts by governments at the national or international level to influence or control exports and imports based on the presumption that government perspectives are more likely to ensure optimal trade than is reliance on unmanaged market forces. Managed trade at the national level often reflects the political influence of protectionist elements in an economy. The term may also describe buffer stock and price stabilization arrangements, such as STABEX or the Integrated Program for Commodities. See also Buffer Stocks; Industrial Policy; Integrated Program for Commodities; Lomι Convention; Market Economy; Market Forces; Ministry of International Trade and Industry; Protectionism.
MAN-MADE FIBERS See Multi-Fiber Arrangement Regarding International Trade in Textiles; Sensitive Products; Textiles.
MANUFACTURING PROCESSES See Production; Property.
MARGIN OF PREFERENCE The difference between the duty payable under a given system of tariff preferences and the duty that would be assessed in the absence of preferences. See also Generalized System of Preferences; Preferences; Special and Differential Treatment; Tariff.
MARKET The area within which buyers and sellers interact to effect economic exchanges. The estimated or realized demand for a good or service may also be referred to as its "market." See also Demand; Distribution; Market Economy; Monopoly; Production; Purchasing Power; Supply.
MARKET ACCESS The ability of domestic providers of goods and services to penetrate a related market in a foreign country. The extent to which the foreign market is accessible generally depends on the existence and extent of trade barriers. See also Market; Market Forces; Nonmarket Economy; Nontariff Barriers; Offer List; Restrictive Business Practices; Special and Differential Treatment.
MARKET DISRUPTION A situation that occurs when a surge of imports of a particular product causes a precipitous decline in sales of similar domestically produced goods. See also Adjustment; Agreement on Safeguards; Agreement on Textiles and Clothing; Dumping; Escape Clause; Multi-Fiber Arrangement Regarding International Trade in Textiles; Orderly Marketing Agreements; Safeguards; Sensitive Products; U.S. International Trade Commission.
MARKET ECONOMY The national economy of a country that relies on market forces to determine levels of production, consumption, investment, and savings without government intervention. See also Demand; Market Forces; Nonmarket Economy; Price; Private Sector; Profit; Supply.
MARKET FORCES Shifts in demand and supply that are reflected in changing relative prices, thus serving as indicators and guides for enterprises that make investment, purchase, and sales decisions. See also Demand; Managed Trade; Market Access; Nonmarket Economy; Price; Private Sector; Supply.
MARSHALL PLAN See European Recovery Program.
MEDIUM OF EXCHANGE Documentary instrument used in commercial transactions between buyers and sellers to measure the value of the goods exchanged. The value of such instruments is usually expressed in terms of a national currency, such as the U.S. dollar. See also Bill; Currency; Euro; Market; Money.
MEMBER See Contracting Party.
MERCANTILISM An economic philosophy prominent in the 16th and 17th centuries that equated the accumulation and possession of gold and other international monetary assets, such as foreign currency reserves, with national wealth. Although this point of view is generally discredited among 20th century economists and trade policy experts, some contemporary politicians still favor policies designed to create trade surpluses, such as import substitution and tariff protection for domestic industries, as essential to national economic strength. See also Balance of Trade; Currency; Import Substitution; Industrial Policy; Managed Trade; Protectionism.
MERCANTILIST A person who believes in or advocates mercantilism. See also Mercantilism.
MERCHANDISE EXPORTS AND IMPORTS See Balance of Trade; Current Account.
MERCOSUR The Spanish abbreviation for Mercado Comϊn del Sur (Southern Common Market). Argentina, Brazil, Paraguay, and Uruguay officially inaugurated MERCOSUR in January 1991. On January 1, 1995, MERCOSUR designated itself as a customs union by establishing a common external tariff covering 85 percent of traded goods. MERCOSUR will gradually phase in coverage of the CET through 2006, when all products should be covered by the customs union. Chile became an associate member of MERCOSUR on October 1, 1996, and Bolivia did the same on April 1, 1997. Neither country participates in the CET. See also Common External Tariff; Customs; Customs Area; Customs Union; European Community; European Free Trade Association; Free Trade Area Agreement; Free Trade Area of the Americas; General Agreement on Tariffs and Trade; Kyoto Convention; North American Free Trade Agreement; Tariff; Tariff Schedules; Trade Diversion; U.S.-Canada Free Trade Agreement.
MERGER TREATY See European Community.
MFA See Multi-Fiber Arrangement Regarding International Trade in Textiles.
MFN See Most-Favored-Nation Treatment.
MIGA See Multilateral Investment Guarantee Agency.
MINIMUM VALUATION Customs valuation of certain low-cost items at a higher-than-actual value. See also Agreement on Implementation of Article VII of GATT 1994; Codes of Conduct; Customs; Customs Classification; Free Zone; Imports; Liquidation; Most-Favored-Nation Treatment; Suspension of Liquidation; Tariff; Tariff Schedule; Valuation; World Customs Organization; World Trade Organization.
MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI) The Japanese ministry that has adopted, for some years, a comprehensive economic growth and development strategy centering on export expansion. See also Export Promotion; Exports; Industrial Policy; Japan External Trade Organization; Managed Trade.
MITI See Ministry of International Trade and Industry.
MIXED CREDITS A financing package that involves official government credit to supplement normal commercial credit, thus enabling an exporter to deliver goods to a buyer in another country on credit terms comparable to those of his competitors. See also Competitive; Credit; Export Credit Guarantee Facility; Exports; International Arrangement on Export Credits.
MIXED ECONOMIES See Nonmarket Economy; State Trading Companies.
MIXED TARIFF See Compound Tariff.
MNC See Multinational Corporation.
MONETARY AND FINANCIAL CONFERENCE See Bretton Woods Conference.
MONEY Any medium of exchange that is widely accepted in payment for goods and services or to settle debts. Money also serves as a standard of value for measuring the relative worth of different goods and services and as a means of storing wealth. The number of units of money required to buy a commodity is its price. Without money, trade would be reduced to barter. The "real" value of money declines during inflationary periods. See also Barter; Capital; Credit; Currency; Inflation; Medium of Exchange; Price; Purchasing Power; Value; Welfare.
MONOPOLY The condition that exists in a market when a single supplier controls the supply of a product to such an extent that it can set quantity and prices for maximum profitability with little or no regard for the pressures of demand and supply that operate in competitive economic markets. A high tariff or nontariff barrier to imports can give a noncompetitive producer a monopoly position for a particular product within a domestic market. See also Antitrust; Cartel; Competition Policy; Competitive; Demand; Efficiency; Market; Nontariff Barriers; Price; Protection; Restrictive Business Practices; Supply; Tariff; Unfair Trade Practices.
MONTREAL MINISTERIAL The mid-term review of progress in the Uruguay Round held in Montreal, Canada, in December 1988. During the ministerial meeting, frameworks for completing the negotiations were agreed in 11 out of the 15 negotiating areas, with no agreement reached on frameworks for agriculture, intellectual property, textiles, and safeguards. See also Brussels Ministerial; GATT Ministerial Meeting of 1982; Montreal Protocol; Punta del Este Ministerial; Round; Seattle Ministerial; Uruguay Round; World Trade Organization.
MONTREAL PROTOCOL A multilateral agreement negotiated in 1988 to reduce and eventually eliminate the use of chlorofluorocarbons and halogens so as to prevent erosion of the ozone layer. The agreement is noteworthy for allowing the use of trade sanctions to enforce its provisions. See also Montreal Ministerial; Trade-Related Environmental Issues; Uruguay Round.
MOST-FAVORED-NATION (MFN) TREATMENT The policy of nondiscrimination in trade policy that provides to all trading partners the same customs and tariff treatment given to the so-called most-favored-nation. This fundamental principle was a feature of U.S. trade policy as early as 1778. Since 1923 the United States has incorporated an unconditional most-favored-nation clause in its trade agreements, binding the contracting governments to confer upon each other all the most favorable trade concessions that either may grant to any other country subsequent to the signing of the agreement. The United States now applies this provision to its trade with all of its trading partners except for those specifically excluded by law. The MFN principle has also provided the foundation for the world trading system since the end of World War II under the GATT and, since 1995, under the WTO Agreement. See also Column 1 Rates; Concession; Conditional Most-Favored-Nation Treatment; Customs; Discrimination; Enabling Clause; General Agreement on Tariffs and Trade; Principal Supplier; Reciprocity; Tariff; Trade Agreements Act of 1934; World Trade Organization.
MTN See Multilateral Trade Negotiations.
MTO See Multilateral Trade Organization.
MULTI-FIBER ARRANGEMENT REGARDING INTERNATIONAL TRADE IN TEXTILES (MFA) An internationally agreed derogation from GATT rules that was in effect from 1974 until the end of the Uruguay Round in 1994. The MFA succeeded the Long-Term Agreement on International Trade in Cotton Textiles (LTA), which had been in effect since 1962. The objective of these agreements was to reconcile the interests of textile-exporting and textile-importing countries by permitting an orderly expansion of trade while avoiding market disruption. Whereas the LTA applied only to cotton textiles, the MFA also applied to wool, man-made (synthetic) fiber, and silk blend and vegetable fiber textiles and apparel products. The MFA allowed an importing signatory country to apply quantitative restrictions on textile imports when it considered such restrictions, even though contrary to GATT rules, necessary to prevent market disruption. MFA rules provided that quantitative restrictions should not reduce imports to levels below those attained during the preceding year, and should, if continued, permit trade to expand by specified percentages. Since an importing country could impose such quotas unilaterally to restrict rapidly rising textiles imports, most important textile-exporting countries considered it advantageous to enter into bilateral agreements with the principal textile-importing countries. The MFA went into effect on January 1, 1974, was renewed in December 1977, in December 1981, in July 1986, and for the last time, in July 1991. In 1995, the WTO Agreement on Textiles and Clothing (ATC) began phasing out the global system of bilateral textile and apparel quotas permitted by the LTA and, later, the MFA. Under the ATC, WTO member countries have agreed to eliminate the MFA quotas in phases between July 1, 1995, and July 1, 2005. At the end of the 10-year transition period, rules on textile trade will be fully integrated into those of the World Trade Organization. All countries that are signatories to the WTO Agreement are now subject to the ATC whether or not they were signatories to the MFA. See also Agreement on Textiles and Clothing; Article 11 (GATT Article XI); Bilateral Trade Agreement; General Agreement on Tariffs and Trade; Market Disruption; Quantitative Restrictions; Residual Restrictions; Sensitive Products; Textiles; Tokyo Round; Uruguay Round; World Trade Organization.
MULTILATERAL Having a number of participating parties, members, or countries. In the context of the World Trade Organization, "multilateral" has a special meaning. Multilateral agreements of the WTO are binding on all member countries, in contrast to plurilateral WTO agreements, which are binding only on those WTO members that have affirmatively acceded to such agreements. See also Bilateral; Multilateral Agreement; Multilateral Trade Negotiations; Unilateral; World Trade Organization.
MULTILATERAL AGREEMENT An international compact involving three or more parties. For example, GATT sought, from its establishment in 1947, to promote trade liberalization through multilateral negotiations. See also Codes of Conduct; General Agreement on Tariffs and Trade; Liberalization; Multilateral Trade Negotiations; Negotiations; World Trade Organization.
MULTILATERAL AGREEMENT ON INVESTMENT (MAI) A draft set of investment principles under consideration by OECD member countries and certain observer countries between 1995 and 1998. OECD consideration of these principles was informally suspended in late 1998. The principles are binding governmental commitments to afford certain basic protections to investors and investment from other OECD members similar to the protections found in a network of bilateral investment agreements, such as the model United States Bilateral Investment Treaty. Protections include commitments to expropriate only in accordance with due process, for a public purpose, and upon payment of compensation; they generally provide nondiscriminatory treatment to all investors to permit transfers associated with an investment. See also Balance of Payments; Bilateral Investment Treaty; Capital Account; Convertibility; Direct Investment; Exchange Controls; Foreign Investment; Industrial Policy; Investment Performance Requirements; Multilateral Investment Fund; Multilateral Investment Guarantee Agency; National Treatment; Organization for Economic Cooperation and Development; Performance Requirements; Restrictive Business Practices; Right of Establishment; Trade-Related Investment Measures.
MULTILATERAL AID Development assistance given by donors to recipient countries through international institutions. See also Additionality; Asia-Pacific Economic Cooperation; Bilateral Aid; Developing Countries; Development Assistance Committee; Economic Development; Framework Agreement; General Agreement on Tariffs and Trade; Generalized System of Preferences; Inter-American Development Bank; International Finance Corporation; International Trade Center UNCTAD/WTO; Multilateral Investment Guarantee Agency; Official Development Assistance; Organization for Economic Cooperation and Development; Part IV of the GATT; Special and Differential Treatment; Tokyo Declaration; Tokyo Round; United Nations Conference on Trade and Development; United Nations Development Program; Uruguay Round; World Bank; World Trade Organization.
MULTILATERAL INVESTMENT FUND (MIF) A special fund administered by the Inter-American Development Bank that was established in 1993 to accelerate private sector development and help improve the climate for private investment in Latin America and the Caribbean. Approved projects have focused on strengthening the policy and regulatory framework for the private sector, increasing worker skills and mobility, broadening the participation of micro and small enterprises, and demonstrating the role of equity as a development tool. See also Additionality; Bilateral Aid; Bilateral Investment Treaty; Developing Countries; Direct Investment; Economic Development; Foreign Investment; Industrial Policy; Inter-American Development Bank; Least Developed Countries; Multilateral Aid; Newly Industrializing Countries; Non-Aligned Movement; North-South Trade; Official Development Assistance; Soft Loan; South-South Trade.
MULTILATERAL INVESTMENT GUARANTEE AGENCY (MIGA) A part of the World Bank Group that began operations in April 1988 to encourage the flow of private foreign investment to its member developing countries by providing insurance against noncommercial risks and by providing promotional and advisory services. MIGA's guarantee program protects investors against losses from currency transfer, expropriation, war, and civil disturbance and from investment-related breaches of contract by host governments. MIGA works in close cooperation with the World Bank, the International Development Association, and the International Finance Corporation to promote sound investment policies, thereby assisting developing countries in creating attractive investment environments for private foreign direct investment. See also Developing Countries; Direct Investment; Economic Development; Foreign Investment; International Development Association; International Finance Corporation; Multilateral Agreement on Investment; Multilateral Aid; Official Development Assistance; World Bank.
MULTILATERAL SAFEGUARD SYSTEM See Safeguards.
MULTILATERAL TRADE NEGOTIATIONS (MTN) Negotiations held under the auspices of the GATT from 1947 to 1994, when the Uruguay Round was concluded. Each of eight rounds held represented a discrete and lengthy series of bargaining sessions among the participating contracting parties in search of mutually beneficial agreements aimed at reducing barriers to world trade. The agreements ultimately reached at the conclusion of each round became new GATT commitments and thus amounted to important steps in the evolution of the world trading system. The Uruguay Round resulted in the establishment in 1995 of the World Trade Organization (WTO). See also Dillon Round; Kennedy Round; Multilateral Trade Organization; Negotiations; Reciprocity; Round; Tokyo Round; Uruguay Round.
MULTILATERAL TRADE ORGANIZATION (MTO) An umbrella organization, replacing GATT, to oversee implementation of the Uruguay Round results. Also known as the World Trade Organization (WTO) or International Trade Organization (ITO). See also Multilateral Trade Negotiations; Uruguay Round; World Trade Organization.
MULTINATIONAL CORPORATION (MNC) A large commercial organization with affiliates operating in a number of different countries; sometimes referred to, especially in the United Nations, as a transnational corporation (TNC). See also Euro-Dollars; Subsidiary.
MUTATIS MUTANDIS Latin phrase signifying "the necessary changes having been made"; "substituting new terms.".
MUTUAL RECOGNITION AGREEMENT (MRA) Agreements that generally allow conformity assessment for example, testing, inspecting, certifying of manufactured goods to be performed in the United States to another country's standards and regulations, and vice versa. An MRA can save manufacturers time and expense by avoiding excessive assessments. It also conserves U.S. regulatory agencies' resources. The United States maintains its current high health and safety standards and can adopt even higher standards without in any way violating an MRA. See also Agreement on Preshipment Inspection; Agreement on Technical Barriers to Trade; Nontariff Barriers; Standards.
MUTUALITY OF BENEFITS See Reciprocity.
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| NAFTA NAM National Trade Data Bank National Trade Estimate Report National Treatment Negotiations Newly Industrializing Countries Newly Industrializing Economies NICs NIEs Nominal Tariff Rate Non-Aligned Movement Non-Discrimination Nonmarket Economy |
Nonreciprocity Nontariff Barriers Nontariff Measures Normal Value North North American Development Bank North American Free Trade Agreement North American Industry Classification System North-South Trade NTBs Nullification NV |
NAFTA See North American Free Trade Agreement.
NAM See Non-Aligned Movement.
NATIONAL TRADE DATA BANK (NTDB) A compilation of international economic and export promotion information supplied by a number of U.S. agencies. Data are updated monthly and are presented in one of three standard formats: text, time series, or matrix. The NTDB contains data from the Departments of Agriculture (Foreign Agricultural Service), Commerce (Bureau of the Census, Bureau of Economic Analysis, International Trade Administration, and National Institute for Standards and Technology), Energy, and Labor (Bureau of Labor Statistics), the Central Intelligence Agency; the Ex-Im Bank; the Federal Reserve System; the U.S. International Trade Commission; the Overseas Private Investment Corporation; the Small Business Administration; and the U.S. Trade Representative; as well as by the University of Massachusetts (MISER data on state origins of exports). The NTDB provides access to country commercial guides, market research reports, and best market reports. The NTDB also provides U.S. import and export statistics, as well as over 75 other various reports and programs. See also Balance of Trade; Electronic Commerce; Exports; Export Promotion; Informatics; Imports; International Trade Administration; U.S. International Trade Commission; Overseas Private Investment Corporation; U.S. Foreign and Commercial Service; United States Trade Representative.
NATIONAL TRADE ESTIMATE REPORT (NTE) An annual series prepared by the Office of the U.S. Trade Representative that surveys significant foreign barriers to U.S. exports in accordance with section 181 of the Trade Act of 1974 (the 1974 Trade Act), as amended. The National Trade Estimate Report on Foreign Trade Barriers is based on information compiled within USTR, the U.S. Departments of Commerce and Agriculture, and other U.S. government agencies, and supplemented with information provided in response to a notice in the Federal Register, and by members of the private sector trade advisory committees and U.S. embassies abroad. The NTE is an inventory of the most important foreign barriers affecting U.S. exports of goods and services, foreign direct investment by U.S. persons, and protection of intellectual property rights. The report also provides a valuable tool in enforcing U.S. trade laws, with the goal of expanding global trade. The report provides, where feasible, quantitative estimates of the impact of these foreign practices on the value of U.S. exports. Information is also included on actions being taken to eliminate any act, policy, or practice identified in the report. See also Omnibus Trade and Competitiveness Act of 1988; Section 301; Special 301; Super 301; Trade Act of 1974; Trade Agreements Act of 1979; Trade Policy Review Mechanism; United States Trade Representative.
NATIONAL TREATMENT A basic principle of international trade rules and policy. The principle of national treatment generally prohibits discrimination on the basis of foreign nationality. This fundamental principle is found in the three WTO agreements: Article 3 of the General Agreement on Tariffs and Trade (incorporated by reference in GATT 1994), Article 17 of the General Agreement on Trade in Services (GATS), and Article 3 of the Agreement on Trade-Related Aspects of Intellectual Property Rights. The national treatment principle prohibits discrimination between imported and domestically produced goods with respect to internal taxation or other government regulation. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Codes of Conduct; General Agreement on Tariffs and Trade; General Agreement on Trade in Services; Restrictive Business Practices; Unfair Trade Practices; Uruguay Round; World Trade Organization.
NEGOTIATIONS Bargaining between and among representatives of governments seeking a mutually beneficial exchange of concessions. See also Concession; Multilateral Trade Negotiations; Offer List; Principal Supplier; Reciprocity; Request List; Round; United States Trade Representative.
NEWLY INDUSTRIALIZING COUNTRIES (NICs) A term coined by the Organization for Economic Cooperation and Development to describe those relatively advanced developing nations that have enjoyed rapid economic growth in recent years and can be described as middle-income countries. Examples include Brazil, Hong Kong, South Korea, Mexico, Singapore, and Taiwan. Newly industrializing countries are sometimes referred to as newly industrializing economies (NIEs). See also Developing Countries; Economic Cooperation Among Developing Countries; Economic Development; Graduation; Organization for Economic Cooperation and Development; Textiles.
NEWLY INDUSTRIALIZING ECONOMIES (NIEs) See Newly Industrializing Countries.
NICs See Newly Industrializing Countries.
NIEs See Newly Industrializing Economies.
NOMINAL TARIFF RATE The rate of duty charged on the gross value of a given product, rather than on the value of its components. See also Effective Tariff Rate; Tariff; Tariff Escalation.
NON-ALIGNED MOVEMENT (NAM) A loose coalition of developing countries that met at the head-of-state level every few years between the 1950s and the 1980s in an attempt to coordinate positions on international political and economic issues. The movement traces its conceptual foundations to the Asian-African Conference at Bandung in 1955, under the inspiration of India (Nehru), Egypt (Nasser), and Yugoslavia (Tito). The first NAM summit conference took place in Belgrade in 1961; the second in Cairo in 1964; the third in Lusaka in 1970; the fourth in Algiers in 1973; the fifth in Colombo in 1976; the sixth in Havana in 1980; and the seventh in New Delhi in 1983. The member countries now meet under the auspices of the Group of 77. See also Developing Countries; Economic Cooperation Among Developing Countries; Economic Development; Global System of Trade Preferences; Group D; Group of 77; North-South Trade; Organization of Petroleum Exporting Countries; South-South Trade; United Nations Conference on Trade and Development.
NON-DISCRIMINATION See Discrimination; General Agreement on Tariffs and Trade; Most-Favored-Nation Treatment; National Treatment.
NONMARKET ECONOMY (NME) A national economy in which the government seeks to determine economic activity largely through a mechanism of central planning, as in the former Soviet Union, in contrast to a market economy, which depends heavily upon market forces to allocate productive resources. In a nonmarket economy, production targets, prices, costs, investment allocations, raw materials, labor, international trade, and most other economic aggregates are manipulated within a national economic plan drawn up by a central planning authority. Hence, the public sector makes the major decisions affecting demand and supply within the national economy. See also Demand; Group D; Industrial Policy; Market Economy; Market Forces; Private Sector; Public Sector; Supply.
NONRECIPROCITY See Framework Agreement; Reciprocity.
NONTARIFF BARRIERS (NTBs) Government measures other than tariffs that restrict imports or that have the potential for restricting international trade, even though they may not always do so. NTBs include import monitoring systems and variable levies, as well as measures that are internationally perceived as trade restrictive, even though a trade-restricting intent or effect cannot objectively be ascribed to them. Such measures have become relatively more conspicuous impediments to trade as tariffs have been reduced during the period since World War II. See also ATA Carnet; Codes of Conduct; Concession; Consular Formalities and Documentation; Consular Invoice; Customs; Customs and Administrative Entry Procedures; Customs Classification; Discrimination; Domestic Subsidy; Exchange Controls; Export Subsidy; Government Procurement Policies and Practices; Imports; Licensing; Liquidation; Packaging, Labeling, and Marking Regulations; Port of Entry; Prior Deposits; Quantitative Restrictions; Quarantine, Sanitary, and Health Laws and Regulations; Road Tax; Safeguards; Services; Special and Differential Treatment; Specific Limitations on Trade; Standards; Subsidy; Suspension of Liquidation; Tariff; Trade Agreements Act of 1979; Transit Zone; Transparency; U.S. International Trade Commission; Valuation; Variable Levy; World Customs Organization; World Trade Organization.
NONTARIFF MEASURES (NTMs) See Nontariff Barriers.
NORMAL VALUE (NV) The price at which merchandise is sold or offered for sale in the principal markets of the country from which it is exported. Under U.S. antidumping law, dumping consists of sales of merchandise exported to the United States at "less than fair value," when such sales materially injure or threaten material injury to producers of like merchandise in the United States. The determination that sales have been made at less than fair value involves a comparison of "normal value" the price at which the merchandise is sold within the exporting country or to third countries (or a "constructed value") and the "U.S. price" the price at which the merchandise is sold in the U.S. market. If foreign home market sales are not usable, the normal value is based on prices to third countries or constructed value. A number of adjustments must be made to those prices to ensure a proper comparison with U.S. prices. Prior to the Uruguay Round Agreements Act, which implemented changes in U.S. trade law that resulted from the WTO Agreement concluded during the Uruguay Round, the equivalent term in U.S. trade law was "foreign market value." See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Constructed Export Price; Dumping; Export Price; United States Price; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
NORTH See Developed Countries.
NORTH AMERICAN DEVELOPMENT BANK (NADBank) An institution established under the auspices of the North American Free Trade Agreement (NAFTA) to finance environmental infrastructure projects along the U.S.-Mexico border, as well as community adjustment and investment in both nations. The bank supports the goals of NAFTA primarily by tackling the problems of raw sewage, unsafe drinking water, and inadequate municipal waste disposal in the border region. The Community Adjustment and Investment Program (CAIP) of the NADBank supports the goals of NAFTA by providing financial assistance to create or retain jobs in communities experiencing temporary NAFTA-related job losses. See also Adjustment Assistance; North American Free Trade Agreement.
NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) A comprehensive free trade agreement, based on the principle of national treatment, between the United States, Canada, and Mexico. The three countries met in June 1991 and initiated negotiations to:
The negotiations were concluded in August 1992, and the draft text was structured along the lines of the U.S.-Canada Free Trade Agreement. The Clinton administration negotiated supplemental agreements on labor and environmental issues, and Congress approved the whole package of NAFTA agreements in November 1993. NAFTA went into effect January 1, 1994. It is being viewed as a testing ground for possible future agreements to be negotiated under the Enterprise for the Americas Initiative. As of 1999, negotiations were under way for Chilean accession to the NAFTA, and other South American countries had expressed interest in acceding to the NAFTA. See also Common External Tariff; Customs Area; Customs; Customs Union; European Community; European Free Trade Association; Free Trade Area Agreement; Free Trade Area of the Americas; General Agreement on Tariffs and Trade; Kyoto Convention; MERCOSUR; Tariff; Tariff Schedules; Trade Diversion; U.S.-Canada Free Trade Agreement.
NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM (NAICS) An economic classification system developed jointly by the United States, Canada, and Mexico and implemented in 1997 to provide a uniform and consistent mechanism for collecting and analyzing industry statistics across North America. The NAICS replaces the 1987 U.S. Standard Industrial Classification (SIC).
NORTH-SOUTH TRADE The exchange of goods and services between developed countries (the North) and developing countries (the South). The Generalized System of Preferences negotiated at UNCTAD-II and the GATT Framework Agreement negotiated in the Tokyo Round were intended to stimulate additional North-South trade. See also Caribbean Basin Initiative; Developed Countries; Developing Countries; Economic Development; Framework Agreement; General Agreement on Tariffs and Trade; Generalized System of Preferences; Group B; Group of 77; International Trade Center UNCTAD/WTO; Reciprocity; Special and Differential Treatment; Tokyo Declaration; Tokyo Round; Trade Agreements Act of 1979; United Nations Conference on Trade and Development; United States Trade Representative.
NTBs See Nontariff Barriers.
NULLIFICATION See Consultations; Dispute Settlement.
NV See Normal Value.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| ODA OECD OECD Agreement on Export Credits Offer List Official Development Assistance Offset Requirements Offshore Manufacturing OMAs Omnibus Trade and Competitiveness Act of 1988 One Hundred Thirteen (113) Committee |
OPEC OPIC Orderly Marketing Agreements Organization for Economic Cooperation and Development Organization for European Economic Cooperation Organization of Petroleum Exporting Countries Overseas Private Investment Corporation |
ODA See Official Development Assistance.
OECD See Organization for Economic Cooperation and Development.
OECD AGREEMENT ON EXPORT CREDITS See International Arrangement on Export Credits.
OFFER LIST A list of measures through which a country participating in trade negotiations proposes to broaden access to its market in exchange for comparable concessions from its trading partners. A country's initial offer list during a given round of negotiations represents its early response to the request lists submitted by its trading partners and may subsequently be lengthened or shortened, depending on the responses of other countries to its request list. In addition to proposals for broadening market access through tariff reductions and expanded coverage under codes of conduct, offer lists may suggest exceptions to an agreed formula for tariff reductions on all other products. See also Codes of Conduct; Concession; Linear Reduction of Tariffs; Market Access; Multilateral Trade Negotiations; Negotiations; Principal Supplier; Request List; Round; Sensitive Products.
OFFICIAL DEVELOPMENT ASSISTANCE (ODA) Economic or technical assistance extended to developing countries by the governments of developed countries and by international organizations, as contrasted with gifts, loans, and investments financed by the private sector. Official development assistance is construed by the OECD Development Committee as including only "concessional" transfers to developing countries, meaning that all or part of each ODA transaction is a grant or is loaned at rate of interest and/or on repayment terms more beneficial to the recipient than market rates and terms. See also Additionality; Agency for International Development; Bilateral Aid; Developing Countries; Development Assistance Committee; Economic Development; European Bank for Reconstruction and Development; Graduation; Interest; Least Developed Countries; Multilateral Aid; Organization for Economic Cooperation and Development; Private Sector; Soft Loan; Transfer Payments.
OFFSET REQUIREMENTS Conditions imposed on certain large exporters in other countries by importing governments, usually to reduce cash outflows, such as by requiring the exporter to purchase goods or services produced in the importing country, to establish manufacturing facilities in the country, or to use locally produced components in manufacturing. Offset requirements are frequently associated with sales of military equipment. See also Countertrade; Nontariff Barriers.
OFFSHORE MANUFACTURING The foreign manufacture of goods by a domestic firm primarily for import into its home market.
OMAs See Orderly Marketing Agreements.
OMNIBUS TRADE AND COMPETITIVENESS ACT OF 1988 Legislation passed by the U.S. Congress in August 1988 and signed into law on August 23, 1988, to enhance the competitiveness of American industry. Its major purposes are to authorize the negotiation of reciprocal trade agreements, strengthen U.S. trade laws, improve development and management of U.S. trade strategy through these actions, and improve standards of living in the world. The act made many changes in U.S. trade law, including significant changes to Section 301 and the adoption of three Section 301 variants:
See also Commercial Counterfeiting; Concession; Copyright; Domestic Subsidy; European Commission; Export Subsidy; Intellectual Property; Patent; Priority Foreign Country; Property; Safeguards; Section 201; Section 301; Section 406; Special 301; Super 301; Technology; Trafficking in Counterfeit Goods and Services; Technology Transfer; Unfair Trade Practices; Welfare; World Intellectual Property Organization.
ONE HUNDRED THIRTEEN (113) COMMITTEE A body of representatives from EC member states that assists the European Commission in trade negotiations with third countries. See also Priority Foreign Country; European Community.
OPEC See Organization of Petroleum Exporting Countries.
OPIC See Overseas Private Investment Corporation.
ORDERLY MARKETING AGREEMENTS (OMAs) International compacts negotiated between two or more governments in which the trading partners agree to restrain the growth of trade in specified "sensitive" products, usually through the imposition of export quotas. Orderly marketing agreements are intended to ensure that future trade increases will not disrupt, threaten, or impair competitive industries or their workers in importing countries. See also Agreement on Safeguards; Escape Clause; Export Quotas; Market Disruption; Quantitative Restrictions; Safeguards; Sensitive Products; Voluntary Restraint Agreements.
ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD) An international agency based in Paris through which some 24 developed countries (the United States, Canada, Japan, Australia, New Zealand, and countries of Western Europe) review international economic issues and coordinate their policies, looking toward the expansion of world trade and investment and the economic development of developing countries. The OECD succeeded the OEEC in 1961, after the post-World War II economic reconstruction of Europe had been largely accomplished. See also Developed Countries; Developing Countries; Development Assistance Committee; Economic Development; Group B; Group D; Group of 7; Group of 77; International Arrangement on Export Credits; Large Aircraft Sector Understanding; Multilateral Agreement on Investment; Newly Industrializing Countries; Official Development Assistance; Organization for European Economic Cooperation.
ORGANIZATION FOR EUROPEAN ECONOMIC COOPERATION (OEEC) An intergovernmental organization created in 1948 by 16 Western European countries to plan and implement the European Recovery Program, better known as the Marshall Plan, following the economic devastation in Europe left by World War II. The OEEC was superseded in 1961 by the OECD. See also European Recovery Program; Organization for Economic Cooperation and Development.
ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC) A cartel comprising 13 leading oil-producing countries that seek to coordinate oil production and pricing policies. See also Cartel; Developing Countries.
OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC) A self-sustaining U.S. government agency whose purpose is to promote economic growth in developing countries by encouraging U.S. private investment in those nations through two principal programs: (1) financing investment projects through direct loans and/or loan guarantees and (2) insuring investment projects against a broad range of risks, such as expropriation. These programs are backed by the full faith and credit of the U.S. government. See also Additionality; Agency for International Development; Bilateral Aid; Developing Countries; Official Development Assistance; North-South Trade; Soft Loan; Transfer Payments.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| Pacific Rim Packaging, Labeling and Marking Regulations Panel of Experts Par Value Paris Club Paris Conference on the Least Developed Countries Paris Union Part IV of the GATT Patent Performance Requirements Peril Point Petition PL 480 Plaza Accord Plurilateral Port of Entry PPA Preferences Premium Price Price Elasticity of Demand Price Elasticity of Supply Price Stabilization |
Primary Commodity Principal Supplier Prior Deposits Priority Foreign Country Priority Watch List Private Sector Process Patent Procurement Producer Goods Production Profit Progressive Tariff Promissory Notes Property Protection Protectionism Protocol of Accession Protocol of Provisional Application Public Law 480 Public Sector Punta Del Este Ministerial Purchase Price Purchasing Power Pure Risk |
PACIFIC RIM An informal, flexible term that generally has been regarded as a reference to countries and economies bordering the Pacific Ocean. At a minimum, the Pacific Rim includes Canada, Japan, the People's Republic of China, Taiwan, and the United States. It may also include Australia, Brunei, Cambodia, Hong Kong/Macau, Indonesia, Laos, North Korea, South Korea, Malaysia, New Zealand, the Pacific Islands, the Philippines, Russia (or the Commonwealth of Independent States), Singapore, Thailand, and Vietnam. As an evolutionary term, it also sometimes includes Mexico, the countries of Central America, and the Pacific coast countries of South America. See also Asia-Pacific Economic Cooperation (APEC).
PACKAGING, LABELING, AND MARKING REGULATIONS The requirement or regulation, usually by an importing country, that imported goods be packaged, labeled, or marked according to particular guidelines. Although ostensibly required to protect consumers, nonstandard packaging, labeling, and marking requirements frequently pose problems for exporters and may function as nontariff barriers. See also Agreement on Technical Barriers to Trade; Nontariff Barriers; Quarantine, Sanitary, and Health Laws and Regulations; Standards.
PANEL OF EXPERTS An ad hoc group of experienced individuals with specialized skills established for a specified purpose. Under WTO dispute settlement procedures, for example, panels composed of three or five trade policy experts may be designated to arbitrate disagreements over trade policy between governments with differing interpretations of their GATT and WTO obligations, examine the evidence, and determine which interpretations are correct or incorrect. See also Arbitration; Bilateral Trade Agreement; Codes of Conduct; Dispute Settlement; General Agreement on Tariffs and Trade; North American Free Trade Agreement; Understanding on Rules and Procedures Governing the Settlement of Disputes; U.S.-Canada Free Trade Agreement; U.S.-Canada Trade Commission; World Trade Organization.
PAR VALUE The official fixed exchange rate between two currencies or between a currency and a specific weight of gold or a basket of currencies. See also Currency; Exchange Rate; International Monetary Fund; Special Drawing Rights.
PARIS CLUB A popular designation for meetings between representatives of a developing country that wishes to renegotiate its "official" debt (normally excluding debts owed by and to the private sector without official guarantees) and representatives of the relevant creditor governments and international institutions. Such meetings normally take place at the initiative of a debtor country that wishes to consolidate all or part of its debt service payments falling due over a specified period. The meetings are traditionally chaired by a senior official of the French Treasury Department. Comparable meetings occasionally take place in London and in New York for countries that wish to renegotiate repayment terms for their debts to private banks. Such meetings are sometimes called "creditor clubs." See also Bilateral Aid; Development Assistance Committee; Economic Development; Graduation; Multilateral Aid; Official Development Assistance.
PARIS CONFERENCE ON THE LEAST DEVELOPED COUNTRIES See Substantial New Program of Action.
PARIS UNION See World Intellectual Property Organization.
PART IV OF THE GATT Articles XXXVI, XXXVII, and XXXVIII of the GATT, added to the General Agreement in 1965, concerning the special needs of developing countries. Part IV outlines principles and objectives for GATT treatment of LDCs, committing contracting parties to assist these countries through trade liberalization and laying down the principle that developed countries should not expect LDCs, in the course of trade negotiations, to make contributions inconsistent with their individual needs. See also Articles of the GATT; Developing Countries; Economic Development; Enabling Clause; Framework Agreement; General Agreement on Tariffs and Trade; Least Developed Countries; Reciprocity; Special and Differential Treatment.
PATENT A 17-year grant by the government to an inventor of the right to exclude others from making, using, or selling his or her invention for a specific period of time, after which the invention passes into the public domain. To be patentable, an invention must represent a new, useful, and non-obvious process, machine, manufacture, or composition of matter, or any new, useful, and obvious improvements thereof. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Intellectual Property; Knowledge-Based Industry; Omnibus Trade and Competitiveness Act of 1988; Process Patent; Property; Section 337; Special 301; Technology; Technology Transfer; World Intellectual Property Organization.
PERFORMANCE REQUIREMENTS Measures that a government imposes on enterprises either as a condition of doing business or making an investment, or in return for a benefit or incentive. Examples include local content requirements, export requirements or incentives, import restrictions, trade-balancing requirements, foreign-exchange-balancing requirements, and measures that are intended to influence a company's decision regarding technology transfer and research and development. It is U.S. policy to seek to eliminate or limit such measures in international trade and investment agreements because of their distorting effects on trade, capital flows, and employment. See also Agreement on Trade-Related Investment Measures; Investment Performance Requirements; Restrictive Business Practices; Trade-Related Investment Measures.
PERIL POINT A hypothetical limit beyond which a reduction in tariff protection would cause serious injury to a domestic industry. U.S. legislation in 1949 that extended the Trade Agreements Act of 1934 required the U.S. Tariff Commission to establish peril points for U.S. industries. This requirement, which was a constraint on U.S. negotiating positions in early GATT rounds, was eliminated by the Trade Expansion Act of 1962. See also Protection; Round; Safeguards; Trade Agreements Act of 1934; Trade Expansion Act of 1962; U.S. International Trade Commission.
PETITION See Countervailing Duties; Dumping; Escape Clause.
PL 480 See Public Law 480.
PLAZA ACCORD An agreement in September 1985 by the G-5 (the United States, Japan, Germany, France, and the United Kingdom) to take concrete actions aimed at reducing external imbalances and achieving exchange rates consistent with underlying economic fundamentals. See also Group of 7.
PLURILATERAL See Multilateral; World Trade Organization.
PORT OF ENTRY Point at which individuals and imported goods enter a country and clear its national customs. See also ATA Carnet; Codes of Conduct; Consular Formalities and Documentation; Consular Invoice; Customs; Customs and Administrative Entry Procedures; Customs Classification; Imports; Free Zone; Licensing; Liquidation; Nontariff Barriers; Quarantine, Sanitary, and Health Laws and Regulations; Suspension of Liquidation; Tariff; Transit Zone; Valuation; World Customs Organization; World Trade Organization.
PPA See Protocol of Provisional Application.
PREFERENCES Special advantages extended by importing countries to exports from particular trading partners, usually by admitting their goods at tariff rates below those imposed on imports from other supplying countries. See also Double-Column Tariff; Framework Agreement; Generalized System of Preferences; Global System of Trade Preferences; Lomι Convention; Margin of Preference; Reciprocity; Single-Column Tariff; Special and Differential Treatment; Tariff.
PREMIUM A regular payment paid for an insurance policy that provides protection against a risk. See also Insurance; Risk.
PRICE The value of something expressed in terms of money, or the amount of money paid for it. Economists define the "equilibrium" price of goods and services in a competitive market economy as the level at which the demand for them will match their supply. See also Demand; Equilibrium; Goods; Inflation; Market Economy; Market Forces; Money; Monopoly; Services; Supply.
PRICE ELASTICITY OF DEMAND The percentage change in demand for a given product likely to result if its price changes by 1 percent. A slight lowering or raising of a tariff will have a larger effect on the volume of imports of a product with a high price elasticity of demand than on a product with a low price elasticity of demand. See also Demand; Price; Price Elasticity of Supply; Purchasing Power.
PRICE ELASTICITY OF SUPPLY The percentage change in supply for a given product likely to result if its price changes by 1 percent. See also Price; Price Elasticity of Demand; Supply.
PRICE STABILIZATION See Buffer Stocks; Managed Trade.
PRIMARY COMMODITY A commodity in its raw or unprocessed state, such as iron ore. In contrast, pig iron is considered a semi-processed product, and a steel girder is a manufactured item. See also Commodity; Integrated Program for Commodities; Production; Tariff Escalation.
PRINCIPAL SUPPLIER The country that is the most important source of a particular product imported by another country. In trade negotiations, a country offering to reduce its tariff or other barriers to imports of a particular item generally expects the country that is the principal supplier of that item to reduce restrictions on its imports of a product for which the first country is the principal supplier. Depending on the trade negotiations, both countries then may grant the same concessions to all other countries to which they accord most-favored-nation treatment. See also Concession; General Agreement on Tariffs and Trade; Most-Favored-Nation Treatment; Negotiations; Offer List; Round; World Trade Organization.
PRIOR DEPOSITS A deposit required by a government of a specified sum, in domestic or foreign currency, usually corresponding to a certain percentage of the value of the imported product. Such deposits are characteristically held without interest, sometimes for many months from the time an order is placed until after the import transaction is completed and hence represent a real cost to the importer. The purpose of prior deposits is usually to discourage imports, particularly for balance-of-payments reasons, and they generally are recognized as nontariff barriers that impede trade. Prior deposits must usually be made at the time an import license is granted. See also Licensing; Nontariff Barriers.
PRIORITY FOREIGN COUNTRY (PFC), PRIORITY WATCH LIST (PWL), WATCH LIST (WL) Designations in the United States under Special 301 that describe the USTR's response to different levels of intellectual property (IP) problems in a given country. Countries having the most serious IP problems are designated as PFCs. If a country is designated a PFC, USTR must immediately initiate a Section 301 investigation and begin negotiations to resolve the IP problems either bilaterally or through initiation of WTO dispute settlement consultations. Should negotiations fail to accomplish this, USTR must decide whether to take trade action (withdraw GSP, raise tariffs, and the like). Countries designated PWL or WL are not necessarily subject to sanctions; however, trade action or dispute settlement proceedings can be launched against countries on the PWL or WL if warranted. See also Omnibus Trade and Competitiveness Act of 1988; Section 301; Special 301; Super 301; United States Trade Representative.
PRIORITY WATCH LIST (PWL) See Priority Foreign Country.
PRIVATE SECTOR The part of a national economy comprising privately owned enterprises and individuals and non-profit-making organizations, as contrasted with the public sector, comprising government and government-controlled entities. See also Market Economy; Public Sector.
PROCESS PATENT A process or method that consists of an act, operation, or step or series thereof performed upon a specified subject matter to produce a physical result. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Commercial Counterfeiting; Copyright; Intellectual Property; Knowledge-Based Industry; Patent; Property; Trademark; Trafficking in Counterfeit Goods and Services; World Intellectual Property Organization.
PROCUREMENT See Government Procurement Policies and Practices.
PRODUCER GOODS See Capital Goods.
PRODUCTION The process of creating or changing the form of commodities, as through fabrication, manufacture, extraction, processing, curing, or aging. See also Commodity; Consumption; Industrial Revolution; Primary Commodity; Profit; Tariff Escalation; Technology; Welfare.
PROFIT The net earnings accruing from the successful production or sale of goods and services: that is, the residual remaining to the entrepreneur after all payments for capital (interest), land (rent), labor (including management costs, salaries, and wages), raw materials, taxes and depreciation. If a business fares poorly, profits may be negative, in which case they become losses. See also Entrepreneur; Market; Production; Risk.
PROGRESSIVE TARIFF See Tariff Escalation.
PROMISSORY NOTES See Commercial Paper.
PROPERTY An asset whose ownership gives the right to present or future material benefits, as protected by law. The term property refers not only to the possession of material goods, such as land, buildings, and production facilities, but also to less tangible assets, such as manufacturing processes, design, and brand names. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Bern Convention; Commercial Counterfeiting; Copyright; Intellectual Property; Knowledge-Based Industry; National Treatment; Patent; Process Patent; Trademark; Trafficking in Counterfeit Goods and Services; World Intellectual Property Organization.
PROTECTION Government measures including tariff and nontariff barriers that raise the cost of imported goods or otherwise restrict their entry into a market and thus strengthen the competitive position of domestic goods. See also Competitive; Import Relief; Infant Industry Argument; Market; Monopoly; Nontariff Barriers; Peril Point; Protectionism; Quantitative Restrictions; Safeguards; Tariff; Tariff Escalation.
PROTECTIONISM The deliberate use or encouragement of restrictions on imports to enable relatively inefficient domestic producers to compete successfully with foreign producers. See also Competitive; Effective Tariff Rate; Escape Clause; Import Relief; Imports; Infant Industry Argument; Liberal; Liberalization; Managed Trade; Mercantilism; Nontariff Barriers; Orderly Marketing Agreements; Protection; Quantitative Restrictions; Safeguards; Tariff; Voluntary Restraint Agreements.
PROTOCOL OF ACCESSION The legal document that records the obligations agreed to as a precondition of accession to an international accord or organization. See also Accession; Concession.
PROTOCOL OF PROVISIONAL APPLICATION (PPA) The agreement among the original GATT contracting parties to exempt from GATT provisions trade measures established by domestic legislation that were in force at the time of the contracting party's acceptance of the GATT. The protocol was intended to be temporary, pending implementation of the Havana Charter or definitive acceptance of GATT provisions by the contracting parties, but it has remained in effect, and countries that signed the GATT in 1947 continue to invoke it to defend certain practices that are otherwise inconsistent with their GATT obligations. Countries that acceded to the GATT after 1947 have similar provisions incorporated in their protocols of accession. See also Accession; Contracting Party; Discrimination; General Agreement on Tariffs and Trade; Grandfather Clause; Protocol of Accession; Residual Restrictions.
PUBLIC LAW 480 A short-hand designation for the Agricultural Trade Development and Assistance Act of 1954, which provides for the disposition of U.S. farm products outside the United States. Title I spells out conditions under which such products can be sold to developing countries for their own currencies and the purposes for which the proceeds of such sales can be used in the purchasing country. Title II authorizes the transfer of U.S. farm products to developing countries for economic development purposes. Title III permits the donation of surplus products through U.S. voluntary agencies that carry out relief operations in other countries. Title IV provides for agreements between the U.S. government and other governments and private organizations purchasing surplus U.S. farm products. See also Agency for International Development; Bilateral Aid; Developing Countries; Economic Development; North-South Trade; Section 22; Surplus.
PUBLIC SECTOR The part of a national economy accounted for by government expenditures and state-owned or state-controlled enterprises. See also Nonmarket Economy; Private Sector.
PUNTA DEL ESTE MINISTERIAL The Uruguay Round of multilateral trade negotiations that was launched in Punta del Este, Uruguay, in September 1986 and that produced the Punta del Este Declaration. The declaration, which included the objectives and agenda for the negotiations, was the result of consultations that began in 1985. See also Round; Uruguay Round.
PURCHASE PRICE (PP) See Export Price.
PURCHASING POWER The ability of consumers to acquire goods and services based on their possession of money and/or their recourse to credit. Aggregate purchasing power within a market or a national economy reflects total disposable income after taxes, and hence the level of employment. See also Consumers; Consumption; Credit; Demand; Inflation; Money; Price Elasticity of Demand.
PURE RISK See Risk.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| QRs Quantitative Restrictions Quarantine, Sanitary and Health Laws and Regulations |
Quid Pro Quo Quotas |
QRs See Quantitative Restrictions.
QUANTITATIVE RESTRICTIONS (QRs) Explicit limits, or quotas, on the quantity of a good that can be imported or exported during a specified time period. Such limits are usually measured by physical quantity but sometimes by value. A quota may be applied on a selective basis, with varying limits set according to the country of origin or destination, or on a global basis that specifies only the total limit and thus tends to benefit more efficient suppliers. Quotas are frequently administered through a system of licensing. GATT Article XI generally prohibits the use of quantitative restrictions, except under conditions specified by other GATT articles. For example, Article XIX permits quotas to safeguard certain industries from damage by rapidly rising imports; Articles XII and XVIII provide that quotas may be imposed for balance-of-payments reasons under circumstances laid out in Article XV; Article XX permits special measures to apply to public health, gold stocks, items of archaeological or historic interest, and several other categories of goods; Article XXI recognizes the overriding importance of national security. Article XIII provides that quantitative restrictions, whenever applied, should be nondiscriminatory. See also Agreement on Agriculture; Agreement on Textiles and Clothing; Agreement on Safeguards; Article 11 (GATT Article XI); Article 15 (GATT Article XV); Article 19 (GATT Article XIX); Balance of Payments Consultations; Discrimination; Export Quotas; Export Restraints; General Agreement on Tariffs and Trade; Import Relief; Licensing; Multi-Fiber Arrangement Regarding International Trade in Textiles; Market Access; Nontariff Barriers; Protection; Protectionism; Residual Restrictions; Safeguards; Section 22; Section 201; Section 406; Sensitive Products; Specific Limitations on Trade; Tariff Quota; Tariff-Rate Quota; World Trade Organization.
QUARANTINE, SANITARY, AND HEALTH LAWS AND REGULATIONS Government measures to protect consumer, animal, and plant health by regulating the use of dangerous preservatives and other additives in foods. The lack of internationally accepted standards makes it difficult to distinguish between legitimate health standards and protectionist measures. The WTO Agreement on the Application of Sanitary and Phytosanitary Measures recognizes norms set by specified international standard-setting bodies as the baseline standards for trade, ensures to the maximum extent possible that standards are scientifically justifiable, and, for the first time, establishes a meaningful dispute settlement procedure for health and sanitary issues. See also Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Technical Barriers to Trade; ATA Carnet; Codes of Conduct; Consular Formalities and Documentation; Consular Invoice; Customs; Customs and Administrative Entry Procedures; Customs Classification; Discrimination; Imports; Licensing; Nontariff Barriers; Packaging, Labeling,and Marking Regulations; Standards; Tariff; Transit Zone; World Trade Organization.
QUID PRO QUO See Reciprocity.
QUOTAS See Quantitative Restrictions; Tariff Quota.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
| RBPs Reciprocal Trade Agreements Act of 1934 Reciprocity Re-Exports Regressive Taxation Reinsurance Relief Reprisals Request List Reserve Currency Reserves Residual Restrictions |
Restitutions Restraints on Trade Restrictive Business Practices Retaliation Retrocession Reverse Preferences Right of Establishment Risk Road Tax Roll On/Roll Off Round Rules of Origin |
RBPs See Restrictive Business Practices.
RECIPROCAL TRADE AGREEMENTS ACT OF 1934 See Trade Agreements Act of 1934.
RECIPROCITY The practice by which governments extend similar concessions to each other, as when one government lowers its tariffs or other barriers impeding its imports in exchange for equivalent concessions from a trading partner on barriers affecting its exports (a "balance of concessions"). Reciprocity was traditionally a principal objective of negotiators in GATT rounds. Reciprocity is also defined as "mutuality of benefits," "quid pro quo," and "equivalence of advantages." The Enabling Clause of the Tokyo Round Framework Agreement, GATT Part IV (especially GATT Article XXXVI), and the WTO Decision on Measures in Favour of Least-Developed Countries exempt developing countries from the rigorous application of reciprocity in their GATT and WTO obligations vis-ΰ-vis developed countries. See also Competitive; Concession; Enabling Clause; Framework Agreement; Most-Favored-Nation Treatment; Multilateral Trade Negotiations; Negotiations; North-South Trade; Preferences; Principal Supplier; Reverse Preferences; Request List; Section 201; Special and Differential Treatment; Tariff Act of 1930; Tokyo Declaration; Trade Agreements Act of 1934; Trade Agreements Act of 1979; Welfare.
RE-EXPORTS Under U.S. trade law, goods of non-U.S. origin that are imported into the United States and then shipped back either to the original country of origin or to a third country. See also ATA Carnet; Drawback; Free Zone; .
REGRESSIVE TAXATION See Indirect Tax.
REINSURANCE The shifting by agreement (known in the insurance industry as a "treaty") of part of the risk (or "exposure") of the original insurer (the ceding company) to another insurer (the reinsurer). Sometimes a reinsurer will, in turn, pass on part of its risk to another reinsurer through a process known as retrocession. International reinsurance is important to developed and developing countries alike. See also Insurance; Risk.
RELIEF See Escape Clause; Import Relief; Safeguards.
REPRISALS See Retaliation.
REQUEST LIST A list submitted by a country to a trading partner at an early stage of trade negotiations identifying the concessions it seeks through the negotiations. See also Concession; Negotiations; Offer List; Reciprocity; Round.
RESERVE CURRENCY A national currency such as the dollar or pound sterling, or international currency such as Special Drawing Rights, used by many countries to settle debit balances in their international accounts. Central banks generally hold a large portion of their monetary reserves in reserve currencies, which are sometimes called "key" currencies. See also CurrencyMercantilism; Special Drawing Rights.
RESERVES See Mercantilism; Reserve Currency.
RESIDUAL RESTRICTIONS Quantitative restrictions maintained by governments since they became contracting parties to GATT or members of the WTO, despite the general GATT and WTO prohibitions against such measures. See also General Agreement on Tariffs and Trade; Grandfather Clause; Protocol of Provisional Application; Quantitative Restrictions; World Trade Organization.
RESTITUTIONS Payments to agricultural exporters in the European Community under the Common Agricultural Policy to cover the difference between internal and world market prices. See also Common Agricultural Policy; Domestic Subsidy; Dual Pricing; European Community; Export Subsidy; Threshold Price; Variable Levy.
RESTRAINTS ON TRADE See Nontariff Barriers; Liberalization; Tariff.
RESTRICTIVE BUSINESS PRACTICES (RBPs) Acts or behavior of enterprises whether private or government controlled that abuse a dominant economic position and limit access to markets or otherwise unduly restrain competition. Such practices include collusion to fix export or import prices, to allocate markets or customers, to practice discriminatory pricing, to set prices at which export goods can be resold, or to otherwise restrict imports and exports. A non-binding (or voluntary) code of conduct negotiated in UNCTAD formally called the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices lists business practices to be avoided and recommends steps that enterprises and governments should take to discourage such activity. See also Antitrust; Cartel; Competitive; Market; Market Access; Monopoly; Price; Protection; Supply; Unfair Trade Practices.
RETALIATION The suspension of concessions or other obligations under a trade agreement, or the imposition of other barriers to trade, by a government in response to the violation of a trade agreement or the imposition of other unfair trade barriers by another government. In U.S. trade law, Section 301 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act, provides the legal authority for the United States to impose retaliatory measures in response to trade agreement violations or other discriminatory foreign trade practices that burden or restrict U.S. commerce. Such authority includes the authority to suspend trade agreement concessions, to impose duties or other import restrictions, to impose fees or restrictions on services, to enter into agreements with the subject country to eliminate the offending practice or to provide compensatory benefits for the United States,and to restrict service sector authorizations. The actions may be taken against all countries or solely against the subject country. Most actions may be taken against any goods or economic sectors, without regard to whether the goods or economic sectors were the subject of the investigation. See also Beggar-Thy-Neighbor Policy; Concession; Omnibus Trade and Competitiveness Act of 1988; Section 301; Special 301; Super 301; Tariff Act of 1930; Trade Act of 1974; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization.
RETROCESSION See Reinsurance.
REVERSE PREFERENCES Tariff advantages once offered by developing countries to imports from certain developed countries that granted them preferences in turn. Reverse preferences characterized trading arrangements between the European Community and some developing countries (the ACP countries) prior to the advent of the Lomι Convention. See also ACP Countries; Caribbean Basin Initiative; Developing Countries; Economic Development; European Community; Generalized System of Preferences; Imports; Lomι Convention; North-South Trade; Preferences; Tariff.
RIGHT OF ESTABLISHMENT A basic concept in bilateral investment treaties is that one party to the agreement will permit nationals and companies of the other party to establish (and maintain) investments on a nondiscriminatory (national/most-favored-nation treatment) basis. A government may not place any special obstacles, such as a screening process or equity limitations, in the way of a foreign investor making an investment. The foreign investor need comply only with the requirements placed on any other investor in that sector. See also Bilateral Investment Treaty; Most-Favored-Nation Treatment; National Treatment; Trade-Related Investment Measures.
RISK The possibility of gain or loss, depending upon the success or failure of the financial or commercial venture in question (speculative risks). Banks also accept risks when they make loans, which may either be repaid or defaulted. Capital investors are sometimes referred to as risk-bearers; their investments may be considered "venture capital" if they appear to be subject to considerable risk, as in the case of new enterprises, or "security capital" if they appear to be subject to little risk. Pure risk is involved when there is no possibility of gain, but only the possibility of loss. Insurance is concerned with pure risks, not speculative risks. See also Credit; Entrepreneur; Insurance; Interest; Loan; Profit; Reinsurance.
ROAD TAX A tax imposed by a government on the operation of motor vehicles, usually based on weight or engine displacement. Some have the effect of discriminating in favor of one type of vehicle over another. See also Discrimination; Excise Tax; Nontariff Barriers; Tax.
ROLL ON/ROLL OFF (RO-RO) Cargo that is rolled on and off a vessel under its own power. Roll on/roll off shipping allows for quick and easy lading/unlading because the cargo does not need to be loaded and unloaded by winch or crane but can be driven on and off a vessel using a tractor trailer, van, or flatbed truck.
ROUND A cycle of multilateral trade negotiations, under the aegis of GATT and now of the WTO, culminating in simultaneous trade agreements among participating countries to reduce tariff and nontariff barriers to trade. The GATT held eight rounds: Geneva, 1947-48; Annecy, France, 1949; Torquay, England, 1950-51; Geneva, 1956; Geneva, 1960-62 (the Dillon Round); Geneva, 1963-67 (the Kennedy Round); Geneva, 1973-79 (the Tokyo Round); Geneva, 1986-1993 (the Uruguay Round). The Uruguay Round resulted in the establishment of the World Trade Organization in 1994. See also Dillon Round; General Agreement on Tariffs and Trade; Kennedy Round; Liberalization; Multilateral Trade Negotiations; Negotiations; Offer List; Peril Point; Reciprocity; Request List; Tokyo Round; Trade Agreement; Trade Agreements Act of 1934; Uruguay Round; Williams Commission; World Trade Organization.
RULES OF ORIGIN See Agreement on Rules of Origin.
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