TERMS RELATED TO TRADE POLICY AND NEGOTIATIONS
East-West Trade. In the parlance of the 1970s and 1980s,
trade between the former East Bloc countries ("the East") and industrial and
developing countries outside the East Bloc ("the West").
Eco-labeling. Government or privately-sponsored labels
or markings (also known as eco-seals or green seals) signifying
that products or packaging are "environment- friendly,"
allowing consumers to discriminate among products in terms of
their environmental impact Labels signifying "dolphin safe"
tuna are an example. See also eco-packaging.
Eco-packaging. Refers to national regulations and programs
to encourage recycling or reuse of product packaging and containers,
together with associated labeling designed to promote use of
"environment-friendly" packaging. Discussions in the
GA TT Group on Environmental Measures and International Trade
(Sec. III) have addressed application of eco-packaging
and labeling requirements in ways that do not discriminate against
Economic Summit. Although the term can be used more generally,
its most prominent use is in referring to the annual meetings
of leaders of the seven leading industrial countries (see Group
of Seven, Sec. III).
Economic Union. The highest level of economic integration
between sovereign countries, in which members proceed beyond
the requirements of a common market to
unify their fiscal, monetary, and socioeconomic policies. Belgium
and Luxembourg, for example, have been joined in an economic
union since 1921.
Embargo. A prohibition upon exports or imports,
either with respect to specific products, or to specific countries.
An embargo is usually applied for political reasons, although
it may also be intended for economic or regulatory (e.g., environmental
or sanitary) purposes. The term also applies to an official
edict prohibiting entry or departure from the nation's ports
of vessels flying the flag of a particular country. In cases
where ports are closed only to commercial vessels of the targeted
nation, a "civil embargo" exists; when ports are closed
to military or public vessels as well, the condition is a "hostile
embargo." Both an embargo and a blockade are
particular forms of a broader category of economic countermeasures
known as sanctions.
Enabling Clause. Pan of the 1979 Framework Agreement
providing a legal basis in GATT for industrial
countries to grant tariff preferences to LDCs. The enabling
clause amounted to a permanent waiver of the GA TT most favored-nation
provision for the Generalized System
of Preferences (GSP ).
LDCs sought agreement on the enabling clause as a key objective
in the Tokyo Round, but
were obliged to accept inclusion of language in the agreement
that also recognized the graduation principle.
Enterprise for the Americas Initiative.
A program launched in 1990 as a vehicle for defining a new US
economic relationship with Latin America, including eventual
free trade within the Western Hemisphere. The three pillars
of the EAI are trade, debt, and investment. See Framework
Enterprise Zones. See export processing zone.
Entities. In the context of the GA TT Government
Procurement Code, refers
to government departments or ministries and their subsidiary
agencies, as well as state-owned monopolies or other state
Environmental Dumping. Refers to an unfair trade practice whereby
an exporter achieves a cost advantage over its rivals in foreign
markets through inadequate environmental protection in its home
country .A similar concept, referring to inadequate labor regulations,
is referred to as social dumping. Both
have been suggested as topics for future multilateral negotiations
following the Uruguay Round.
Environmental Trade Measures. Trade measures applied by importing or
exporting countries in conjunction with environmental policies.
In 1987, parties to the Montreal Protocol enacted
a series of restrictions to curtail trade in products employing
ozone- damaging chemicals. Within GA TT , international discussions
on such measures are conducted in the Group on Environmental
Measures and International Trade (Sec. III). See
also Green Round.
Escape Clause. A provision in a bilateral or multilateral
commercial agreement permitting a signatory temporarily to suspend
concessions it has granted when imports threaten harm to its
domestic workers or firms producing competing goods or services
(see safeguards). Also used in reference to procedures in
the United States for applying for import relief.
Exceptions. Products specifically exempted from an
international agreement to liberalize trade through multi-product
duty reductions or other commitments. Exceptions are usually
made by importing countries to protect workers and firms engaged
in production of sensitive products.
Exchange Controls. The rationing of foreign currencies and
other instruments for settling international financial obligations
by a country facing balance of payments difficulties. Exchange
controls require importers to apply for prior government authorization
to obtain the foreign currency needed to bring in designated
amounts and types of goods. Since such measures can easily be
manipulated by governments to restrict imports, they are often
viewed as non-tariff barriers to
Exhaustion. Refers to the doctrine that protection
of intellectual property rights (IPR) is "exhausted" or confined to the country in which
protection is granted. The exhaustion principle specifically
implies that IPR holders may not seek to curb parallel imports
from other countries. In Uruguay Round
some LDCs have demanded international extension of the exhaustion
principle in order to ensure access to industrial- country markets
for goods they produce under license.
Exonerated Cargo. Otherwise dutiable merchandise permitted
duty-free entry into certain countries in furtherance of a particular
government policy. The exonerations are, in effect, licenses
to import specified quantities of the desired articles --usually
raw materials or unfurnished goods not available locally but
deemed essential to local industry. Imports in excess of the
quantities authorized in the exoneration may be prohibited or
may be permitted only at high rates of duty.
Export Controls. Regulations or restrictions applied to
exports by the government of the exporting country to limit
foreign access to sensitive technologies, or to protect domestic
producers and consumers from temporary shortages of certain
materials. See: COCOM List and export restrictions; see also Export Administration Acts of
and 1977 (Sec. IV).
Export Credits. Deferred payment arrangements provided
by exporters for goods or services sold internationally. Official
export credits are deferred payment arrangements financed or
underwritten by an exporter's government, and can have the same
effect as an outright export subsidy. Export credits are generally
divided into short term (less than two years), medium term (two
to five years), and long-term (over five years) credits. They
may take the form of "supplier credits" extended by
the exporter, or "buyer credits," in which the exporter's
bank or other financial institution lends to the buyer. Export
credit agencies may give official support to both supplier and
buyer credits; such support may be limited to "pure cover"
--insurance or guarantees given to exporters or lending institutions
--or it may take the form of "financing support,"
including direct credits, refinancing, and interest subsidies.
All major industrialized countries are signatories to the OECD
Export Credits Arrangement. See
Group on Export Credits and Credit Guarantees (Sec.I/l).
Export Credits Arrangement. Formal title is the Arrangement on Guidelines
for Officially Supported Export Credits. An international understanding
negotiated under the auspices of the OECD, providing the institutional
framework for an orderly export credit market. Its purpose is to prevent an "export
credit race" in which exporting countries compete for sales
to third-country markets on the basis of their financing terms
rather than on the basis of providing competitively priced goods.
The Arrangement deals, with actions and policies of official
export credit and insurance agencies, covering only the conditions
or terms of insurance or guarantees. It limits trade finance
subsidies, setting standards for minimum interest rates, maximum
repayment periods, and down payments. The Arrangement took effect
in April 1978, and includes all OECD member countries except
Turkey. It replaced a less elaborate understanding that had
been in effect among a more limited number of countries since
1976. See also Berne Union (Sec. III).
Export Duty. A tax imposed on exports. Although export
duties are sometimes a convenient source of revenue, in some
circumstances they can discourage exports and place producers
at a competitive disadvantage in world markets. The United States
is constitutionally proscribed from imposing export duties;
resource-exporting countries such as Canada, Australia, and
many LDCs tend to favor them. See also export restrictions.
Export Enhancement Program (EEP). A system of agricultural export subsidies
by the United States. The EEP, which is linked to stock disposal
policies, is partial and discretionary in nature. Payments are
not automatically accorded to all exports of a given commodity
or to all commodities, and payment rates may vary widely from
sale to sale. Congress restored $1 billion in EEP export subsidies
in mid- 1992 as a result of failure to conclude a Uruguay
Round agreement covering foreign agricultural
Export Guarantees. Assurances by an exporter's government that
financing provided by a private lender will be repaid with official
funds if a buyer defaults.
Export Performance Requirements. See performance requirements.
Export Processing Zone. A special form of free trade zone in which certain exemptions from duties
and regulations are granted as an inducement to export-oriented
manufacturing. Usually a manufacturer within the zone may import
equipment and raw materials free of duty for goods that are
ultimately exported as finished products. Other inducements
may include abatement of taxes on profits derived from export
sales or relaxation of minimum wage regulations. Also known
as "special economic zones," "enterprise zones,"
and "industrial free zones."
Export Quota. A specific restriction or ceiling imposed
by an exporting country on the value or volume of certain exports.
Some international commodity agreements explicitly
indicate when producers should apply such restrictions. Export
quotas are also often applied in orderly marketing agreements
and voluntary restraint agreements.
Export Quota Agreement. An arrangement arising under an international
commodity agreement whereby
each participating exporting country is allocated a portion
of the global market for the commodity. The purpose of the arrangement
is to maintain price stability and ensure producer incomes.
Export Restraints. Also referred to as bilateral restraint
agreements. Quantitative restrictions applied by exporting countries
to curtail shipments of sensitive products to
a specified foreign market for a fixed time period, usually
pursuant to a formal or informal agreement with the importing
country (see voluntary restraint agreements and
orderly marketing agreements.) Their
economic effects --unlike those of "traditional" trade
restrictions such as tariffs or import quotas --include significant
benefits to established foreign producers. VRAs and OMAs have
no explicit sanction under GA TI' (see grey area measures).
Export Restrictions. While usage varies, this term is often
used to denote quantitative limits or charges on exports purely
for domestic purposes, such as protecting producers and consumers
from temporary shortages of certain materials, promoting processing
of raw materials within the producing country, or bolstering
export prices by limiting supplies in world markets. They are
thus distinguished from export restraints, which are designed primarily to forestall
frictions with the exporting country's major trading partners.
US efforts in the Tokyo Round to
have GATT rules and disciplines extended to export restrictions
were largely unsuccessful. See also export controls and supply access.
Export Subsidy. Any form of government payment or other
benefit provided to domestic producers of goods destined for
sale in foreign markets. Examples include preferential government
financing, income tax holidays, and rebates of direct taxes
on exported products. Reflecting the belief among the founders
of GA TT that export subsidies can distort normal trading patterns,
GATI' Article 16 proscribes export subsidies on non-primary
products that result in lower prices in foreign markets than
prices charged for the "like product" in the domestic
market. The Tokyo Round yielded an agreement that extended Article
16 by banning all export subsidies by industrial countries on
manufactured and semi-manufactured goods (see Subsidies Code).
See also domestic subsidy and countervailing duty.