I. TERMS RELATED TO TRADE POLICY AND NEGOTIATIONS
Accession. The process by which countries join the General Agreement on Tariffs and Trade, or GATT (see Section 111).1 The length of the accession process varies, depending on the conformity of the applicant country's trade practices with GATT norms.
Individual GATT members and the applicant country also usually negotiate a "price of admission " --tariff concessions or other obligations including the reduction of quotas and other trade-distorting policies --to compensate for benefits that have accrued over the years through multilateral GATT negotiations in which the applicant country did not participate. Accession to GATT does not automatically mean that the new member is bound by the various GATT Codes; members join these arrangements separately. The basic requirement for accession is that the applicant country's trade policies must provide nondiscriminatory and predictable treatment for all other GATT members; in return, the country becomes part of the organization that makes world trade rules, and also enjoys by right of international obligation the benefits of these rules for its exports. An outline of the GATT accession process is provided in Appendix B.
ACP (African, Caribbean, and Pacific) Countries. Refers to 69 countries --most of them former colonies of member states of the European Community (Sec. III) --receiving preferential tariff treatment as well as EC financial and technical assistance under the Lome Convention. See also entry under same heading in Section III.
Administrative Review. In unfair trade cases, a mechanism for parties to a case to appeal a ruling on subsidization, dumping, or injury to an administrative authority in the importing country.
Ad Referendum. Refers to delegations' acceptance of the outcome of a negotiation on a provisional basis, pending final approval by governmental authorities.
Ad Valorem Duty. See duty.
Ad Valorem Equivalent (A VE). A specific duty expressed in terms of a percentage of the value of the product in question. For example, a duty of $5 per ton on a product valued at $50 per ton has an A YE of 10 percent. When tariff negotiations are conducted on a percentage-reduction basis, AVEs must be calculated in order to permit proportional cuts in specific duties-
Agreement on Implementation of Article VI of the GA TT . See Antidumping Code.
Agreement on Implementation of Article VU of the GA TT . See Customs Valuation Code.
Agreement on Technical Barriers to Trade. See Standards Code.
Agreement on Interpretation and Application of Articles VI, XVI, and XXIII. See Subsidies Code.
Aide Memoire. In diplomatic parlance, refers to a written outline or summary of the main points of a proposed agreement.
Andean Trade Preferences Arrangement (ATPA). A non-reciprocal preferential arrangement established by the Andean Trade Preference Act of 1991, under which the United States grants duty-free treatment for a 10-year period to certain imports from Bolivia, Colombia, Ecuador, and Peru. The A TP A is intended to expand economic alternatives available to Andean countries that are engaged in combating drug production and trafficking. Eligible articles are the same as those under the Caribbean Basin Initiative, except rum.
Annecy Round. The second GATT Round of multilateral trade negotiations, held in Annecy, France, from April through October, 1949. The Round dealt with institutional matters and the accession of new members, but did not make significant progress in reducing trade barriers.
Anti-circumvention Duty. A term used by the European Community for penalty charges imposed on the output of Japanese screwdriver assemblies (Sec. 11) in Europe; subsequently found in violation of GATT rules by a dispute settlement panel. See circumvention.
Antidumping Code. Formally known as the Agreement on Anti-Dumping Practices. A code negotiated under the auspices of the GA n during the Kennedy Round and subsequently renegotiated in the Tokyo Round. The code interprets the provisions of GA n Article 6, specifying the procedures signatory countries must follow to verify dumping allegations, and providing the basis for the imposition, collection, and duration of antidumping duties. Parties to the Agreement include Argentina, Australia, Austria, Brazil, Canada, Czech Republic, Egypt, the European Community, Finland, Hong Kong, Hungary, India, Japan, Korea, Mexico, New Zealand, Norway, Pakistan, Romania, Singapore, Slovakia, Spain, Sweden, Switzerland, and the United States.
Antidumping Duty. A penalty charge on imports to protect domestic industry against disruptive pricing practices by foreign firms (see dumping). An antidumping duty is supposed to be set equal to the margin of dumping, defined as the difference between fair value and the actual sales price. GATT Article 6 permits members to levy antidumping duties, while the GATT Antidumping Code attempts to standardize and discipline importing governments' activities in this area. See also circumvention and injury test.
Appellations of Origin. (Also referred to as "geographic indications of origin.") The name of a country, region, or locality designating a product's origin --such as Champagne or Camembert --and having the same function as a trademark or brand name. International negotiations on protection of intellectual property rights seek to resolve differences among countries' eligibility requirements (or lack thereof) for use of appellations or origin.
Applied Tariff Rate. The tariff rate actually used to determine the amount of duty owed on a particular import transaction. Applied rates may differ from bound rates.
Arrangement on Guidelines for Officially Supported Export Credits. See Export Credits Arrangement.
Articles (of GATT). See Appendix A.
Article 22 Consultations or Article 23 Consultations. See consultations.
Assimilation. A term referring to national treatment in the protection of industrial property. See Paris Convention.
Assists. Inputs to production -- including blueprints, designs, tools and dies, and development engineering --provided by an importer to a foreign manufacturer for use in " producing merchandise for purchase by the importer. The value of assists may be subject to import duties on grounds that they would have been reflected in the sale price if they had been obtained commercial by the foreign manufacturer.
Auction Quotas. See import to auctioning.
Authors' Rights. A term used primarily in Latin American countries to refer to copyrights.
Automaticity. In GATT negotiations on dispute settlement procedures, refers to proposals to have reports of dispute panels automatically adopted by the GATT Council if no specific objections to adoption are raised (i.e. without requiring an affirmative decision by the disputing parties). Other proposals would give the country winning a GATT dispute an automatic right to withdraw concessions if, after a specified time, the defending party has neither complied with a panel's recommendations nor agreed to an acceptable timetable for compliance. GATT rules and procedures currently contain no time limits for implementation f panel reports, and implementation may be delayed indefinitely.
Auto Pact. (Formally known as the Automotive Products Trade Agreement) A bilateral agreement signed in 1965 between the United States and Canada, providing duty-free treatment of most automotive products. The Auto Pact was augmented in 1988 by the US-Canada Free Trade Agreement, which required the phase out of remaining auto duties by 1998.
Balance of Concessions. See concessions and reciprocity.
Balance of Payments Consultations. The GA TT permits countries to levy quantitative restrictions in times of acute deficits in their balance of payments. Countries invoking this provision take pan in balance of payments consultations with other GA TT members to justify the restrictions and specify plans to improve the payments deficit (see Committee on Balance-of-Payments Restrictions, Sec. III). Articles 12 and 18 require such restrictions to be temporary, but often they remain in place for years. (Article 18, which provides more flexible and lenient conditions, may only be invoked by LDC members) The 1979 GA TT Framework Agreement legitimized use of non-quantitative restrictions for balance-of-payments purposes (see import surcharge).
Base Price or Basic Price. See Common Agricultural Policy.
Berne Convention. Formally known as the Berne Convention for the International Protection of Copyrights. Signed in 1886 and revised in 1971, the Convention requires national treatment in the protection of intellectual property rights by signatory countries. The Berne Convention specifies rights of authors in more detail than the Universal Copyright Convention (UCC ), and its minimum term of protection is longer than under the UCC. See also Paris Convention. Not to be confused with the Berne Union (Sec. Ill).
Bilateral Investment Treaty (BIT). An agreement between two countries providing for nondiscriminatory treatment of direct investments. A BIT usually contains provisions for prompt and adequate compensation in the event of expropriation; guarantees on free transfers of investment earnings; freedom from performance requirements; and mechanisms for resolving disputes such as third-party arbitration. As of September 1993, the United States had signed 25 BITs --13 of which had entered into force --with another 20 under discussion with foreign countries.
Bilateral Restraint Agreement. See export restraints.
Binding. A formal commitment specifying maximum levels at which a GATT member's tariffs on a given product will be set. Tariff bindings provide a major element of stability to international trade by limiting large, unpredictable changes in tariff levels, since other GATT members may be entitled to compensation if a country raises a tariff above the bound rate. Many LDC members of GATT have bound few of their tariffs, however, and others --applying "ceiling bindings" at rates much higher than prevailing tariff levels -- retain considerable leeway to change tariffs at will.
BISD (Basic Instruments and Selected Documents). A series of documents, updated at irregular intervals in supplemental volumes, containing decisions, waivers, and reports adopted by the GATT Contracting Parties and subsidiary bodies. The BISD comprises the body of GATT "case law."
Blair House Accord. A bilateral agreement between the United States and the EC Commission, concluded in November 1992 at the Blair House in Washington in an effort to resolve longstanding US-EC differences on agricultural trade issues, which had been blocking conclusion of a comprehensive agreement in the GA TT Uruguay Round. Through the accord, an incipient trade war over oil seeds was averted when Brussels effectively froze subsidized soybean production at current levels, while Washington withdrew a threat to impose 200 percent tariffs on European wines. In addition, the accord stipulated that the final Uruguay Round text should require countries to reduce their tonnage of subsidized grain exports by 21 percent over six years.
Blockade. An interdiction of international shipments to or from a particular port or country by the military forces of another country .Any nation seeking to impose a blockade must proclaim its intention to do so in order for the action to be valid under international law. Moreover, the 1856 Declaration of Paris requires that a blockade must be effective and maintained by sufficient force in order to be internationally recognized. See also embargo.
Blocked Exchange. A restriction forbidding the unlicensed purchase of bills of exchange, currency, or negotiable instruments denominated in a foreign currency, in order to prevent depletion of foreign currency reserves. See exchange controls.
Border Tax Adjustments. The remission of taxes on exported goods, including sales taxes and value added taxes (Sec. 11), in order to ensure that national tax systems do not impede exports. The GA n permits such adjustments for indirect taxes --based on the economic assumption that such taxes are largely passed on to consumers --but not for direct taxes (e.g., income taxes assessed on producing firms). The United States makes little use of border tax adjustments since the federal government relies more heavily on income (or direct) taxes than do most other countries.
Bound Rates. Most favored-nation tariff rates resulting from GATT negotiations and thereafter incorporated as integral provisions of a country's tariff schedule. The bound rate may represent either a tariff reduction or a commitment not to raise an existing tariff rate (see binding).
Bounty or Grant. A form of subsidy. As used in US trade legislation, the term refers to an economic inducement by a foreign government to a manufacturer within its territory to encourage exports. Such inducements may include operating subsidies or forgiveness of debt; loans and loan guarantees at below-market rates; provision of goods, services, raw materials, or capital at below-market prices; or absorption of production or distribution costs.
Bovine Meat Arrangement. Formally known as the Arrangement Regarding Bovine Meat. An agreement negotiated in the Tokyo Round to promote expansion, liberalization, and stabilization of international trade in beef, veal, and live cattle, as well as to improve international cooperation regarding such trade. The arrangement is supervised by the International Meat Council (Sec. III). Signatories include Argentina, Australia, Austria, Brazil, Bulgaria, Canada, Colombia, Egypt, the European Community, Finland, Guatemala, Hungary, Japan, New Zealand, Nigeria, Norway, Poland, Romania, South Africa, Sweden, Switzerland, Tunisia, the United States, and Uruguay.
Boycott. A refusal to deal commercially or otherwise with a country, firm, or individual. A party to a "primary boycott" is one, which refrains from trading with the targeted country. A "secondary boycott" is one in which parties to a boycott attempt to induce other countries to adhere to the boycott, often as a condition of continued trade relations with them. See also embargo and sanctions.
Bretton Woods System. The general term for the international monetary and financial system established after World War II to foster full employment and price stability, while allowing individual countries to attain external balance without having to resort to trade restrictions. Takes its name from the July 1944 conference of 44 countries meeting in Bretton Woods, New Hampshire, to plan for postwar reconstruction and economic stability. The Conference laid the foundation for the International Monetary Fund and World Bank (Sec. 111). A third specialized agency envisaged at Bretton Woods --the International Trade Organization (Sec. III) --did not materialize, and the less powerful GATT took its place. See also World Economic Conferences of 1927 and 1933.
Brussels Tariff Nomenclature (BTN). See Harmonized System.
Buyback Arrangements. See Countertrade.
Buyer Credits. See export credits.
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