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October 10, 2021

Tariff System Agreement


Due to their relative lack of participation in previous trade rounds, developing countries have tended to retain fewer tariff lines than industrialized countries. During the Uruguay Round, countries committed to commit tariffs on all agricultural products. New WTO members were invited to attach all established customs lines as well. Each national tariff plan defines products in slightly different ways. Countries generally base their tariffs on the World Customs Organization`s Harmonized System (HS) nomenclature, created by international cooperation in the 1970s and 1980s as a trade facilitation measure. One of the most important achievements of GATT has been trade without discrimination. Each signatory member of the GATT must be treated in the same way as another. This is called the most-favoured-nation principle, which has been taken up in the WTO. One of the practical results was that once a country negotiated a tariff reduction with certain other countries (usually its major trading partners), the same reduction would automatically apply to all GATT signatories. There were alternative clauses that allowed countries to negotiate waivers when their domestic producers were particularly harmed by tariff reductions. Tariff reductions in industrialized countries were introduced, mostly over five years, from 1 January 1995. The result is a 40% reduction in tariffs on industrial products, which averages 6.3% to 3.8%.

The value of imported industrial products treated duty-free in industrialized countries will increase from 20% to 44%. The General Agreement on Tariffs and Trade (GATT), adopted on 30.