I.TERMS RELATED TO TRADE POLICY AND NEGOTIATIONS
Sanctions. Trade or financial restrictions imposed against an individual country for political purposes, in an effort to influence its conduct or policies. See blockade and embargo.
Sanitary and Phytosanitary Measures. Health and safety standards affecting imports. ("Sanitary" regulations are those applying to human and animal products; "phytosanitary" regulations apply to plants and plant products.) Such standards are established to ensure that animals and plants and their products are safe for consumption and not damaging to the environment. See also Codex Alimentarius.
Schedule of Concessions. A list of import duties applicable to specific goods which a GATT Contracting Party maintains on an MFN basis as a condition of its membership. See tariff schedule and binding.
Sectoral Reciprocity. The objective of equalizing levels of protection applying to international trade in a particular class of products through trade negotiations conducted on a sector-by-sector basis. Sectoral reciprocity contrasts with the customary, across-the- board approach to negotiations aimed at achieving mutually beneficial agreements comprising concessions in one sector exchanged for gains in another. See also selective reciprocity and zero1or-zero.
Selective Reciprocity. (Also known as "contingent reciprocity.") The provision of market access to particular trading partners in particular industries, linked to the granting of comparable access to foreign markets. Examples include the GATT Civil Aircraft Code, Government Procurement Code, and Subsidies Code, in each of which reciprocity is accorded only to other signatories of the Code. In contrast, GATT is based on the premise that members will grant comparable access across a broad range of goods and trading partners (sometimes called "broad-based" or "diffuse reciprocity.") Proponents argue that most major trade policy problems facing the industrial countries concern disputes in specific industries with specific trading partners, where current international trade rules are seen to be either inapplicable or unenforceable. Critics charge that selective reciprocity risks undermining incentives for multilateral trade-liberalizing efforts based on broad-based reciprocity via MFN treatment.
Selectivity. The application of safeguards in such a way as to restrict imports from a particular country or group of countries, in contrast with non-discriminatory actions taken according to the most-favored-nation principle. Proponents of selectivity argue that the disruptive effects of safeguards should be minimized by applying restrictions only to exporting countries that are the source of disruption; opponents argue that selective safeguards effectively penalize "efficient but law-abiding" foreign producers.
Semiconductor Agreement. A bilateral agreement concluded in 1986 between the United States and Japan to open the Japanese market to US integrated circuits and semiconductor devices, and to deter the dumping of Japanese semiconductors in the US market.
Sensitive Products. Goods produced by a domestic industry employing large numbers of workers, for which the costs of production are such that any reduction in import protection would render the industry vulnerable to injury. Products deemed sensitive are most likely to be exempted from tariff reduction formulas in trade negotiations --or subjected to export restraints --since changes in the competitive position of such industries could cause major economic and social dislocations in the importing country.
Serious Injury. See injury.
Service Mark. A distinctive mark used in the sale or advising of services to distinguish them from the services of others. See also trademark.
Service Supply License. A validated export license issued by the US government to a US or foreign firm authorizing the export of spare and replacement pans to controlled purchasers abroad who originally purchased US equipment under license. See export controls.
Seven-Plus-Seven. An informal meeting of GATT delegations from industrial and developing countries (originally seven of each) convened by the Director-General to clarify positions or resolve procedural issues. Sometimes as many as 17 delegations may be invited, with care taken to ensure representation of countries with strongly held views on an issue. See also Green Room consultations.
Sherpa. An official of sub-cabinet rank from each of the major industrial countries responsible for coordinating his or her government's preparatory work for the annual G-7 Economic Summit.
Single-Column Tariff. A tariff schedule specifying only one rate of duty for each imported commodity.
Single Undertaking. See free riders.
Sluice-Gate Price. See Common Agricultural Policy.
Snapback. Provisions in a trade agreement that allow a signatory to temporarily rescind concessions under specified circumstances, such as an import surge or unanticipated balance-of-payments disequilibria.
Social Dumping. An unfair trade practice whereby an exporter achieves a cost advantage over its rivals in foreign markets through inadequate labor laws or lack of human rights protection in its home country .A similar concept, referring to inadequate environmental regulations, is refer-ed to as environmental dumping. Both have been suggested as topics for future multilateral negotiations following the Uruguay Round.
Soft Loan. Refers to interest-free loans granted to developing countries by the International Development Association (Sec. III).
South-South Trade. In the parlance of the 1970s and 1980s, refers to trade among developing countries ("the South").
Sovereign Compulsion. A legal doctrine in the United States, according to which antitrust liability may be avoided when concerted action by private companies is taken at the direction of a government agency, such as price undertakings or voluntary restraint agreements.
Special and Differential Treatment (S&D). Preferential treatment given to industrial countries in a trade agreement, such as providing better access to developed countries' markets, accelerating implementation of tariff cuts on products exported by LDCs, or allowing LDCs longer time periods to phase in trade reforms.
Special Economic Zone. See export processing lone. Specific Duty. See duty.
Specific Limitations on Trade. Measures that limit imports or exports of a product during a specified period to a specific volume or value, or that require specific authorization for each import or export transaction. See import quota, quantitative restrictions, exchange controls, licensing, quantitative restrictions, residual restrictions, .tariff quota, boycott, and embargo.
Standards. See Technical Barriers to Trade.
Standards-Related Activity. An activity undertaken in conjunction with administration or enforcement of technical barriers to trade, including testing and certification of imports for conformity with officially-mandated product standards.
Standards Code. Formally known as the Agreement on Technical Barriers to Trade. A GATT Code negotiated during the Tokyo Round to prevent technical requirements -- including product standards and testing and certification procedures --from functioning as impediments to trade unless they are necessary for advancing a "legitimate domestic objective" such as health, safety, or environmental protection. The Code does not attempt to formulate standards themselves, nor to set up specific testing and certification systems. Signatories include Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Czech Republic, Denmark, Egypt, the European Community, Finland, France, Gern'1any, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Pakistan, Philippines, Portugal, Romania, Rwanda, Singapore, Slovakia, Spain, Sweden, Switzerland, Tunisia, the United Kingdom, and the United States.
Standing Committees. See GATT Standing Committees.
Standstill. A commitment undertaken at the outset of a GATT negotiation to refrain .from legislating or implementing new trade-restricting or distorting actions inconsistent with GATT rules or principles, or actions that would improve a participant's negotiating position.
State Trading Enterprises. Entities established by governments to import, export, or produce certain products. GATT Article 17 requires members to operate such entities on the basis of commercial considerations.
State Trading Nations. Countries that rely on government entities instead of private corporations to conduct their trade with other countries. See nonmarket-economy country.
Stockholm Convention. See European Free Trade Association (Sec. 111). Strategic Trade Policy. See strategic trade policy argument (Sec. 11).
Structural Impediments Initiative (SII). A series of bilateral negotiations begun in 1989 by the United States and Japan to identify and attempt to reduce "structural" impediments to trade between the two countries.
Subsidies Code. Formally known as the Agreement on the Interpretation and Application of Articles VI, XVI, and XXIII of the GATT. A Tokyo Round agreement designed to strengthen GATT rules relating to export subsidies and countervailing duties, and to reduce the distortive effects of subsidies on world trade (see GA1T Codes). The Code prohibits industrial-country signatories from using export subsidies for t manufactured and semi-manufactured goods, and attempts to regulate signatories' use of domestic subsidies that have adverse effects on the economies of trading partners. In addition, signatory countries are required to provide details of their countervailing duty legislation, and of actions taken pursuant to that legislation, to the GATT Committee on Subsidies and Countervailing Measures. Signatories include Australia, Austria, Brazil, Canada, Chile, Colombia, Egypt, the European Community, Finland, Hong Kong, India, Indonesia, Israel, Japan, Korea, New Zealand, Norway, Pakistan, Philippines, Poland, Sweden, Switzerland, Turkey, the United States, and Uruguay.
Subsidy. A payment or economic benefit conferred by a government on a specific industry or enterprise in order to advance an economic objective deemed to be in the public interest. Although escalating use of subsidies may be displacing tariffs as the principal distortion of international trade --as some trade experts assert --there is still no precise definition of the ten "subsidy" in the GATT; see domestic subsidy and export subsidy.
Substantial Supplier. An exporting country accounting for at least 10 percent of a country's imports of a given product. In GA n tariff negotiations, countries with substantial supplier status may take precedence over all other countries except principal & suppliers and countries holding initial negotiating rights in claiming compensation for a change in a bound tariff.
Superdeductive. A customs valuation procedure (also known as the "further processing method") that permits a deduction from the value of imported merchandise to allow for further processing to be undertaken in the importing country prior to final sale. Under US Customs regulations, the super deductive can be applied to goods sold between 90 and 180 days of importation, but may not be applied if the processing destroys the identity of the product as imported. See also deductive value.
Supplementary Levy. An additional duty that may be imposed under the European Community's Common Agricultural Policy on imports of pork, poultry , or eggs when the purchase price falls below the established gate price. See also variable levy.
Supplier Credits. See export credits.
Supply Access. Assurances that importing countries will have fair and equitable access at reasonable prices to supplies of raw materials and other essential imports. Pursuit of supply access commitments usually includes seeking explicit constraints on the use of export restrictions as instruments of foreign policy. US efforts to negotiate supply access commitments, such as during the 1973-79 Tokyo Round, have generally not met with success.
Surcharge. See Import Surcharge.
Surveillance. The monitoring of trade practices to help ensure that governments fulfill their obligations under trade agreements. See Surveillance Body and Trade Policy Review Mechanism.
Surveillance Body. A body created at the outset of the Uruguay Round to monitor participating countries' trade practices and implementation of their standstill and rollback commitments.
Suspension. See duty suspension.
Suspension Agreement. A legal agreement between an exporting firm and the government of an importing country restraining the volume of exports to avoid injury to producers of similar goods in the importing country .Suspension agreements are designed to forestall imposition of antidumping duties or countervailing duties; under US law, countervailing or antidumping proceedings may be suspended when the exporters involved agree to change offending practices, offset subsidies, raise prices, or cease shipments. See also price undertaking .
Swap Schemes. See Countertrade.
Swing. In international textile agreements, refers to the shift of allowable imports from a filled quota to an under-filled quota. Swing provisions usually permit 5 to 10 percent of specified quota levels to be shifted to another product heading.
Switch Trading. See Countertrade.
Target Price. See Common Agricultural Policy.
Tariff. A tax or duty levied upon goods imported into a country or customs area. (The term also refers to a list or "schedule" of articles of merchandise, specifying the rate of duty to be paid to the government of the importing country.) A "protective tariff' is one which is designed to discourage foreign import competition; a "revenue tariff' is primarily intended to raise money for the government of the importing country .Tariffs increase prices paid by domestic purchasers while reducing the total amount imported; domestic producers of the product and the importing country's government gain, but not by as much as domestic purchasers lose (see deadweight loss, Sec. II). See also export duty.
Tariff Anomaly. A situation in which the tariff on raw materials or semi-manufactured goods is higher than the tariff on the finished product. The opposite of tariff escalation.
Tariff Binding. See binding .
Tariff Escalation. The application of tariff rates on raw materials that are lower than on processed versions of the same or derivative products. Exporters of primary commodities argue that tariff escalation in importing countries impedes their efforts to move "upstream" to higher-value-added processing and manufacturing activities.
Tariff Peaks. See harmonization.
Tariff Quota. A two-stage tariff, providing a base tariff rate that applies to goods up to a specified quantity imported during a certain period --usually a calendar year --and a higher tariff rate that "kicks in " once the quota threshold is reached. Because tariff quotas focus their protective effects on import surges, they tend to provide selective protection against highly competitive suppliers.
Tariff Rate Quota (TRQ). Alternative term for tariff quota.
Tariff Schedule. A comprehensive list of the goods, which a country imports, and the import duties applicable to each product. See tariff.
Tariff Surcharge. See import surcharge.
Tariffication. Conversion of a quota or other non-tariff barrier (NTB) to a tariff providing an equivalent amount of protection to domestic producers of the product in question. In principle, conversion of NTBs to a tariff basis enhances transparency, minimizes economic distortions, and facilitates future negotiations aimed at reducing levels of protection.
Technical Barriers to Trade (also referred to as Standards). Government-established specifications of product characteristics --such as levels of quality or purity, performance, safety, environmental impact, or physical dimensions --that must be met in order to receive permission to import the product. The specifications may cover testing and test methods, terminology, symbols, packaging, marking, or labeling requirements. Standards normally reflect policy criteria not purposely established to impede imports, but some standards systems clearly function as disguised trade barriers. See Standards. Code and sanitary and phytosanitary measures.
Third World. See developing countries. The term originated during the Cold War, when it was applied to countries that belonged neither to the Western industrialized countries (the "First World") nor to the Communist bloc (the "Second World").
Threshold Price. See Common Agricultural Policy.
Threshold Value. The monetary value of contracts above which government entities are covered by the Government Procurement Code.
Tied Aid. Foreign assistance that is linked to procurement of goods and services from the donor country.
Tied Loan. A loan made by a government agency that requires a foreign borrower to spend the proceeds in the lender's country.
TIR Convention. An international agreement designed to facilitate international cargo movements across third countries en route to a final destination. Originally established in 1949 as a means of facilitating West European road transportation ("TIR" is a French acronym for Transports Internationaux Routiers, or international long-haul trucking), the convention now applies to other countries and other modes of transport as well.
Tokyo Declaration. The statement signed in September 1973 in Tokyo by ministers representing 105 countries,4 initiating the Tokyo Round of trade negotiations.
Tokyo Round. The seventh GATT Round of multilateral trade negotiations, held from September 1973 to April 1979 with 99 countries participating. The Tokyo Round achieved substantial tariff cuts covering $300 billion of trade, and reduced the industrial countries' average tariff on manufactured goods from 7 percent to 4.7 percent. For the first time, the Round also focused on non-tariff measures, and a series of agreements regulating their use, called GAIT Codes, were negotiated. In addition, the Framework Agreement reforming certain aspects of the GATT system was adopted. Through the various codes and agreements, the Tokyo Round completed a major overhaul of the global trading system; however, the Round did not settle controversial issues of international trade policy so much as it provided ground rules and a mechanism for resolving such issues. The Round derived its name from the site of the ministerial meeting at which it was launched, but negotiations took place in Geneva
Torquay Round. The third GAIT Round of multilateral trade negotiations, held at Torquay, England, from September 1950 to Apri1195l. The Round dealt with institutional matters and the accession of new members, but did not make significant progress in reducing tariffs.
TPM. See trigger price mechanism.
Track I. Designation for consolidated negotiating activities in the final phase of the Uruguay Round concerning market access in goods.
Track II. Designation for consolidated negotiating activities in the final phase of the Uruguay Round concerning market access in services.
Track III. Designation for legal drafting sessions in the final phase of the Uruguay Round.
Track IV. Designation for efforts by the GATT Director General to refine the Draft Final Act (see Dunkel Draft) in the final phase of the Uruguay Round.
Trade and Investment Framework Agreement (TIFA). See Framework Agreement (2).
Trade Bloc. A general term referring to regional arrangements among countries that have established formal mechanisms for cooperation on trade issues. The term does not necessarily imply a protectionist stance with respect to nonmember countries, although it is sometimes used in this way. No widely accepted definition of "trade bloc" exists, but it is commonly understood to include six types of arrangements. In descending order of political-economic integration, these categories are: economic union, common market, customs union, free trade area, preferential arrangement, and regional cooperation organization.
Trade Negotiations Committee (TNC). The body consisting of all countries participating in a GAIT Round, with responsibility for exercising overall supervision over the negotiations and for establishing appropriate plans and negotiating procedures. In the Uruguay Round, the TNC is chaired by the foreign minister of Uruguay when .meeting at the ministerial level; otherwise, it is chaired by the GA TT Director-General.
Trade Opportunities Program. An export promotion service of the US Department of Commerce.
Trade Policy Review Mechanism (TPRM). A process of examination in the GATT Council to provide information on and discuss the trade policy regimes of individual Contracting Parties. Established during the Uruguay Round on a provisional basis, the goal of the TPRM process is to induce compliance with GATT rules rather than to punish wrongdoers. Thirteen country reviews were conducted under the TPRM during 1992. The TPRM is expected to be placed on a permanent basis following conclusion of the Uruguay Round and the pace of examinations increased so that all GATT members' trade regimes can be reviewed at least every six years, with larger countries' regimes reviewed at more frequent intervals.
Trade-Related Aspects of Intellectual Property Protection (TRIPs). Designation for a Uruguay Round negotiating group considering new GATT rules to promote effective protection of intellectual property rights and to ensure that such protection is not implemented in ways that obstruct trade.
Trade-Related Investment Measures (TRIMs). Designation for a Uruguay Round "' negotiating group examining the adequacy of current GATT rules with respect to investment measures that restrict or distort trade --such as local content and export performance requirements --and negotiating new rules to limit their adverse trade effects.
Trade War. An "unwinding" of the liberalization process, in which countries impose trade restrictions for punitive purposes and others retaliate in kind.
Countervailing Duty (CVD). A special duty levied on imports to enable domestic producers to compete on an equal footing with subsidized foreign producers. CVDs are levied in addition to normal tariffs, in an amount necessary to offset government subsidies in the exporting country .US trade law empowers the President to levy CVDs equal in amount to any "bounties or grants" extended by other governments to exporters, although the law does not specify what kinds of government practices should be considered actionable; see export subsidies. GATT Article 6 permits and regulates the use of CVDs; additionally, signatories to the GA 1T Subsidies Code are required to meet an injury test before levying CVDs on imports from another signatory nation. Because foreign subsidies usually reflect broader government policies and programs, countervailing duties are frequently the object of intense and sometimes acrimonious bilateral diplomacy. CVDs are not used as a remedy to dumping, which refers to pricing practices by foreign firms.. The cornerstone of the GATT Customs Valuation Code, which obligates signatory governments to use transaction value, or the price actually paid or payable for goods when sold for export (subject to certain adjustments for costs or charges not reflected in the price), as the principal basis for valuing goods for customs purposes. In cases where the transaction value cannot be used --for example, shipments between corporate affiliates or related entities --the primary alternative method is the transaction value of identical merchandise shipped from the same country of origin; a secondary alternative is the transaction value of similar goods sold from the country of origin. If none of the foregoing methods can be used, the deductive value or the computed value may be employed.
Transition. A term referring to the period of time during which provisions of a trade agreement will be implemented (including, in some cases, phasing out existing trade restrictions) by signatories Transit Zone. A port of entry in a coastal country that is established as a storage and distribution center for a neighboring country lacking adequate port facilities or access to, the sea. Goods in transit to and from the neighboring country are exempt from customs duties, import controls, and many of the entry and exit formalities of the host country. A transit zone is a more limited type of facility than a free trade zone.
Transitional Protection. See pipeline protection.
Transshipment. Shipping goods through one country to another country in order to conceal the true country of origin. Transshipment may occur for circumvention purposes or to take advantage of preferential tariff rates applied to imports from the intermediary country.
Transparency. Openness, clarity, and predictability of a country's trade laws and regulations. Transparency --especially as it connotes freedom from capricious bureaucratic action or manipulation of rules for protectionist purposes --is one of the fundamental tenets of the GATT. Tariffication is regarded by many GATT members as a key to promoting transparency.
Treaty of Rome. The agreement, signed in Rome in 1957 by Belgium, France, Germany, Italy, Luxembourg, and the Netherlands, by which the European Economic Community --forerunner to the present European Community --was established. The Treaty took effect 1 January 1958.
Trigger Price Mechanism (TPM). Refers to a mechanism for controlling imports of sensitive products by establishing a minimum "fair price" for the imported goods. Under , the TPM established by the United States in 1978 for steel imports, the trigger price (or reference price) was pegged to within 5 percent of the cost of production of the most efficient international steel supplier --Japan --plus 8 percent nominal profit plus transportation costs. Imported steel sold below the reference price would automatically "trigger" an investigation of presumed dumping.
TRIMS. See trade related investment measures.
TRIPS. See trade-related aspects of intellectual property protection.
Tropical Products. Agricultural and other products of export interest to countries in tropical regions of Latin America, Africa, Asia, and Oceania. Examples include coffee, tea, cocoa, bananas, spices, rubber, and tropical timber. Liberalizing trade in these products is a high priority for many developing countries, and was the subject of both a Tokyo Round and Uruguay Round negotiating group.
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