I. TERMS RELATED TO TRADE POLICY AND NEGOTIATIONS
Gate Price. See Common Agricultural Policy.
GATT Codes. Agreements negotiated under GATT auspices to remove or lessen the trade-distorting effects of non-tariff measures by prescribing signatories' rights and obligations concerning use of such measures as well as countermeasures that may be applied in response. Only the signatories of a GATT Code are bound by its terms. During the Tokyo Round, codes were negotiated governing subsidies and countervailing duties; standards and technical barriers to trade; import licensing procedures; customs valuation; and government purchasing policies. In addition, the existing GA TT antidumping code was revised.
GATT Panel. See Panel of Experts.
GATT Round. A cycle of multilateral trade negotiations conducted under the auspices of the GATT. Each Round has constituted a series of interrelated bargaining sessions among the participating countries to achieve mutually beneficial agreements reducing, tariffs and other trade barriers. The agreements reached at the conclusion of each Round become new GATT commitments and thus amount to an important step in the progressive liberalization of the world trading system. Eight Rounds have been initiated under GATT auspices since 1947:
Geneva Round (1) 1947 ("First Round")
Annecy Round 1949 ("Second Round")
Torquay Round 1950-51 ("Third Round")
Geneva Round (2) 1956 ("Fourth Round")
Dillon Round 1959-62
Kennedy Round 1963-67
Tokyo Round 1973- 79
Uruguay Round 1986-present
Since 1956, all GATT Rounds have taken place at GATT headquarters in Geneva, although the more recent Rounds have been named after the city or country in which the ministerial declaration launching the negotiations was signed.
GATT Standing Committee. A permanent body of GATT members dealing with a specific area of trade policy. Includes the Committee on Trade in Industrial Products and the Agriculture Committee (both currently subsumed by the Uruguay Round negotiations under Track 1); the Committee on Tariff Concessions; the Committee on Balance of Payments Restrictions; the Committee on Trade and Development; the Textile Surveillance Board; and various the GATT Code Committees (see entries in Sec. III).
General Tariff. A tariff that applies to countries that do not enjoy either preferential or most-favored-nation tariff treatment. Where the general tariff rate differs from the r..1FN rate, the general tariff is usually the higher rate. See Column 1 rate and Column 2 rate.
Generalized System of Preferences (GSP). A system of tariff preferences applied by industrial countries to selected manufactured and semi-manufactured goods from developing countries, in order to facilitate LDC exports and economic development. GSP was originally propounded by UNCTAD (Sec. III), and was sanctioned by GATT in 1971 despite contravening the most-favored-nation principle of equal treatment for all GATT members. The United States began according GSP treatment to most LDCs in 1976 --the last of the major industrial countries to do so. GSP was given permanent standing in GATT by the 1979 Framework Agreement. GSP tariff treatment is not subject to either binding or reciprocity, and thus represents an autonomous, unilateral grant by the preference-giving country .In accordance with the graduation principle, GSP treatment is also intended to be temporary, with individual LDCs expected to relinquish benefits as they develop.
Geneva Rounds. The first and fourth GATT Round of multilateral trade negotiations, held in Geneva, Switzerland. The "First Round" involved the actual drafting of the GATT itself as well as tariff negotiations among the original contracting parties; the Preparatory Committee met in October and November of 1946, drafting of the General Agreement took place between 20 January and 28 February, 1947, and tariff negotiations lasted from April to October, 1947.3 The "Fourth Round" took place from January to May, 1956.
Geographic Indications. See appellations of origin.
Global Quotas. Explicit limits set by a country on the overall value or quantity of goods, which may be imported from or exported to all countries during a given period.
Government Procurement. Government policies and procedures for purchasing goods and services. Procurement policies can be construed as non-tariff barriers if they discriminate in favor of domestic suppliers when imported goods are price-competitive and are of comparable quality.
Government Procurement Code. A GATT Code negotiated during the Tokyo Round, prohibiting signatories from discriminating against or among the products of other signatories in certain types of government procurement covered by the Code --i.e., purchases valued at more than 150,000 special drawing rights, or SDRs (Sec. 11) by specified government entities listed in the Agreement. Exceptions include contracts for most services, construction, procurement related to national security, and purchases by political subdivisions. The Code seeks to increase transparency in signatories' regulations and practices regarding government procurement, and to ensure that they do not discriminate against foreign suppliers or products. It contains detailed rules on the way in which tenders should be invited and awarded. Signatories include Austria, Canada, the European Community, Finland, Hong Kong, Israel, Japan, Norway, Singapore, Sweden, Switzerland, the United Kingdom, and the United States.
Graduation. The principle that an individual developing country --as it advances economically and becomes more developed, such as through industrialization, increased production and export earnings, and rising living standards --should assume greater responsibilities and obligations within GATT. As enunciated by the GATT enabling clause, graduation specifically implies that donor countries will remove or "graduate" the more advanced developing countries from eligibility for preferential treatment under the Generalized System of Preferences (GSP). The United States has graduated Hong Kong, Taiwan, Singapore, and South Korea from the US asp program accordingly.
Grandfather Clause. A provision in the GATT and other trade agreements permitting signatories to retain domestic legislation that was in effect before the agreement was signed, even though it may be inconsistent with certain provisions of the agreement. Only charter members of GATT may take advantage of its grandfather clause; they are, however, expected to bring their legislation into conformity with GATT provisions as soon as possible.
Green Box. A term used in the context of GA TT negotiations on agriculture and on export subsidies to refer to a category of official support measures that are deemed to be permissible, and hence are not subject to countervailing duties by an importing country. Measures often proposed for inclusion in a Green Box include development subsidies and privatization subsidies.
Green Room Consultations. Informal meetings of heads of delegations to the GATT Uruguay Round negotiations. Such meetings, usually convened to resolve procedural problems, take their name from a conference room adjacent to the Director-General's office at GATT Headquarters in Geneva.
Green Round. A term referring to a proposed new GATT Round of multilateral negotiations that would address environmental trade measures.
Grey Area Measures. Import relief measures taken outside the scope of GATT rules by countries seeking to protect domestic industries from injury arising from factors other than foreign unfair trade practices. The main forms are voluntary restraint agreements (VRAs) and orderly marketing arrangements (OMAs). Negotiations on safeguards in the Uruguay Round have aimed at bringing grey area measures within the scope of GATT rules and disciplines.
Group on Negotiations of Goods (GNG) and Group on Negotiations of Services (GNS). See negotiating group. The establishment of separate GNG and GNS groups was agreed at the outset of the Uruguay Round to maintain the formal appearance -- insisted upon by developing countries --that negotiations in the areas of goods and services were not linked.
Guide Price. See Common Agricultural Policy.
Harmonization. Cutting tariffs in a way that results in greater uniformity in rates applied to most items within each country's tariff schedule. Most harmonization negotiations have employed a formula approach for achieving relatively large cuts in high "tariff peaks" and smaller cuts in lower tariffs. This approach contrasts with linear reduction formulas, which call for equal percentage cuts in all tariffs.
Harmonized System (HS). A system of tariff nomenclature for customs classification negotiated within the Customs Cooperation Council (Sec.III). Participating countries classify goods for customs purposes on the HS basis up to a level of product specificity denoted by six-digit codes. Countries are free to introduce national distinctions --for tariff or statistical purposes --for more detailed product breakdowns beyond the six-digit level. The United States adopted the Harmonized System in the Trade Act of 1988 (Sec. IV). The Harmonized System superseded the Brussels Tariff Nomenclature (BTN) classification system.
Havana Charter. A multinational agreement concluded at Havana in 1948, which called for establishment of an International Trade Organization (ITO) to govern world trade. The ITO never came into force, primarily because of opposition in the US Congress, leaving the "provisional" GATT as the sole institution providing a foundation for the multilateral trading system. See entry under International Trade Organization in Section III.
High-Technology Trade. See high technology (Sec. 11).
Horizontal Reduction. Negotiated cuts in tariff rates by the same percentage for all parties to an agreement. Also known as equal-percentage of linear reduction.
Impairment. See nullification or impairment. Import Deposits. See prior deposits.
Import Licensing. Procedures requiring the submission of an application or other documentation (other than those normally required for customs purposes) to an administrative body for approval as a prior condition for importation into the customs territory of a country. See also prior deposits.
Import Licensing Code. Formally known as the Agreement on Import Licensing Procedures. A GAIT Code negotiated during the Tokyo Round to simplify and harmonize import licensing procedures of signatory governments, and to ensure that they do not in themselves restrict imports. Signatories are required to submit details of their licensing procedures and laws for examination by the Committee on Import Licensing. Signatories include Argentina, Australia, Austria, Canada, Chile, Czech Republic, Egypt, the European Community, Finland, Hong Kong, Hungary, India, Japan, Mexico, New Zealand, Nigeria, Norway, Pakistan, Philippines, Poland, Romania, Singapore, Slovakia, South Africa, Sweden, Switzerland, the United Kingdom, and the United States.
Import Quota. A means of restricting or controlling imports by specifying the quantity or value of a commodity, which may be imported during a specified period. Such restrictions may take the form of "global" or "basket quotas" --limiting total imports from all sources, without differentiating among originating countries --or of country-specific, "allocated quotas" in which producing countries may be assigned a portion of the total quantity permitted to be imported. Some global quotas contain sub-quotas designating individual limits for various supplier countries. Import quotas result in protection that tends to be more predictable than with a tariff, and can thus be "fine- tuned" by governments. As with a tariff, domestic producers protected by a quota are able to charge higher prices, and there are some efficiency losses --but these are not offset by the additional government revenue that a tariff provides, so that a greater deadweight loss (Sec.ll) results. See also quantitative restrictions and tariff quota.
Import Quota Auctioning. The process of allocating the right to import a product subject to quantitative restrictions by auctioning the quota among potential importers. Through the auction proceeds, the importing government can extract some of the revenue it might otherwise obtain by levying a tariff on the goods in question.
Import Relief. Governmental action to temporarily restrict imports in order to prevent or remedy injury to domestic workers or firms producing goods competitive with those being restricted. See safeguards.
Import Restrictions. Measures to limit or control the volume of imports by means of tariffs or non-tariff barriers --including import quotas, exchange controls, import licensing, requirements for prior deposits, levies of import surcharges, or prohibitions of various categories of imports.
Import Sensitivity. The vulnerability of a domestic industry to injury from foreign competition. See also sensitive products .
Import Surcharge. A temporary tax on imports over and above established tariffs, usually enacted in times of economic crisis. The United States, for example, imposed a 10 percent import surcharge when the dollar-gold linkage was severed in 1971. The Tokyo Round Framework Agreement legitimized use of surcharges for balance-of- payments purposes, provided they do not provide special protection for particular products and do not discriminate among individual exporting countries.
Import Surge. A substantial and usually unforeseen increase in imports above recent trends for a particular product or class of goods, presenting serious adjustment costs (Sec . II) for domestic workers and firms producing such goods. When an import surge is due to economic or commercial factors other than unfair trade practices, governments may resort to safeguards to provide temporary import relief to the domestic industry.
Indirect Tax. A tax levied on expenditures --such as a sales tax, excise tax, or value- added tax --rather than a direct tax on individual or corporate earnings. GA TT rules permit countries to rebate indirect taxes on goods destined for export, but not direct taxes.
Industrial Countries or Industrialized Countries. (Also known as developed countries) A term used to distinguish the more industrialized nations from developing countries (LDCs) as well as the newly-industrializing economies (NIEs) and countries in transition. The International Monetary Fund categorizes as industrial countries the United States, Canada, Japan, Australia, New Zealand, and the member states of the EC and EFT A --i.e., all OECD member states except Turkey. South Africa in the past has been categorized as an industrial country, but its status is unclear at present. The industrial countries are sometimes collectively designated as the "North" because most of them are in the Northern Hemisphere.
Industrial Property. Encompasses most forms of intellectual property with the exception of copyrights --e.g., patents, trademarks, and trade secrets (Sec. II). See intellectual property rights.
Initial Negotiating Right (INR). A right held by a GA TT member to be compensated by another member if a given bound tariff rate is raised by the latter. INRs stem from past negotiating concessions and allow the holder to seek compensation for an impairment of tariff concessions whether or not the country holds status as a principal supplier of the product in question.
Injury. In the GATT context, refers to economic damage sustained by workers or firms in an industry as a consequence of foreign competition or unfair trade practices. Under GATT rules and various GATT Codes as well as under US law, mechanisms are established for determining whether injury has occurred or is threatened, as a prerequisite for taking countermeasures (see injury test). Different gradations of injury are referred to in US law and international discussions; the two most prominent are:
* Material injury --Antidumping and countervailing duty cases are based on findings of "material" injury (including the threat of material injury, and the "material retardation" of a new, emerging industry). Rather than define material injury, the GATT Subsidies Code lists factors that may be taken into account in determining its existence, including an actual or potential decline in output, sales, market share, profits, prices, or employment, and in the case of agricultural subsidies, whether there has been an increased burden on government support programs. Material injury is defined by the US Trade Act of 1979 (Sec.IV) as "harm which is not inconsequential, immaterial or unimportant."
* Serious injury --Safeguard or escape clause actions require a finding of "serious" injury to a domestic industry .GA n jurisprudence is ambiguous on the meaning of this term, but GATT legal experts assert that it is meant to be a higher standard than material injury --reasoning that the escape clause is designed to respond to situations which do not involve allegations of unfair action by foreign exporters, so that its standard for establishing injury should be the most rigorous. Under US trade law (see escape clause, Sec.IV), factors mentioned in determinations of serious injury include the significant idling of productive facilities of an industry; the inability of a significant number of firms in the industry to operate at a reasonable level of profit; and significant unemployment or underemployment within the industry.
Injury Test. An administrative determination establishing that injury to a domestic industry has occurred as a result of an import surge or foreign unfair trade practices. Such a test is a prerequisite for imposition of safeguards, countervailing duties, or antidumping duties. By requiring an industry seeking trade relief to establish that it has been injured by foreign competition --a significant burden-of-proof threshold --the injury test is intended to prevent abuse of unfair-trade laws for protectionist purposes.
Intellectual Property Rights (IPRs). The right to possess and use intellectual property, conferred by means of patents, trademarks, and copyrights. Even though IPR laws are enacted and enforced on a strictly national basis, once a patent or copyright has been granted in one country and disclosure of an invention or creative work has been made, information technology makes it available throughout the world. As a result, cross- country differences in patent and copyright laws can result in inadequate IPR protection. In the Uruguay Round, negotiations on trade-related intellectual property rights (referred to as TRIPs) seek to balance goals of facilitating technology diffusion with the objective of promoting innovation through more effective IPR protection.
International Atomic Energy List. See COCOM List.
International Commodity Organization. An organization of nations engaged in international trade involving a particular commodity. Principal motives for such an organization, such as price collaboration among producers, may be similar to those of a producer cartel (Sec. II); the organization may also establish buffer stocks to prevent wide swings in the market price of the commodity. Some international commodity organizations, established to implement a commodity agreement, include both producing and consuming nations. The principal international commodity organizations (descriptive details of which may be found in Section III) include:
* Association of Natural Rubber Producing Countries
* Intergovernmental Council of Copper Exporting Countries
* International Bauxite Association
* International Cocoa Organization
* International Coffee Organization
* International Cotton Advisory Committee
* International Jute Organization
* International Lead and Zinc Study Group
* International Natural Rubber Organization
* International Olive Oil Council
* International Sugar Organization
* International Tropical Timber Organization
* International Wheat Council.
See also International Rice Commission; International Tea Committee; International Tin Council; International Wool Secretariat; and Organization of Petroleum Exporting Countries (Sec. III).
International Convention on the Simplification and Harmonization of Customs Procedures. See Kyoto Convention.
International Dairy Arrangement. A Tokyo Round agreement covering trade in dairy products, consisting of three protocols establishing minimum prices for milk powder , milk fats (including butter), and certain cheeses. The arrangement is overseen by the International Dairy Products Council (Sec. III). Signatories include Argentina, Australia, Botswana, Bulgaria, Egypt, the European Community, Finland, Hungary, Japan, New Zealand, Norway, Poland, Romania, South Africa, Sweden, Switzerland, and Uruguay.
International Import Certificate-Delivery Verification System. See COCOM List.
International Munitions List. See COCOM List.
Intervention Price. See Common Agricultural Policy.
Investment Performance Requirements. See Performance Requirements.
Item-by-Item Negotiations. A method of tariff negotiations in which the expected trade effects of each proposed tariff cut is evaluated separately. At the end of the negotiations, participants are expected to have achieved approximate balance in the total effect of tariff cuts offered and received. The first five GATT Rounds used the item-by-item approach, but by the rnid-1960s it had become too cumbersome for multilateral negotiations with increasing numbers of participating countries. See formula approach.
J-List. A list originally established under the US Tariff Act of 1930, indicating products that are exempted from requirements that imported goods be marked to show country of origin. Items on the list are difficult or impossible to mark. See marks of origin.
Judicial Review. In unfair trade cases, a mechanism for parties to a case to appeal a finding of subsidization, dumping, or injury to a court of law in the importing country.
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