GLOSSARY OF TERMS (GATT/WTO)

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GLOSSARY OF TERMS
An informal press guide to "WTO speak".
GENERAL

Contracting Parties Refers to the nations which signed the General Agreement on Tariffs and
Trade. When the term is capitalized, it means all Contracting Parties acting jointly.

GATT General Agreement on Tariffs and Trade, which has been superseded by the WTO.

GATT 1947 Refers to the old version of the GATT.

GATT 1994 The new version of the General Agreement, incorporated into the WTO, which governs
trade in goods.

Members WTO governments (first letter capitalized).

MFN Most-favoured-nation treatment (Article I of the GATT 1994) requiring countries not to
discriminate between goods on the basis of their origin or destination.

National treatment Obligation under Article III of the GATT 1994 which requires that imports be
treated no less favourably than domestically-produced goods once they have passed customs.

TPRB, TPRM Trade Policy Review Body - when the General Council meets to review trade
policies and practices of individual WTO members under the Trade Policy Review Mechanism.
Transparency Degree to which trade policies and practices, and the process by which they are
established, are open and predictable.
Uruguay Round Multilateral trade negotiations launched at Punta del Este, Uruguay in September
1986 and concluded in Geneva in December 1993. Signed by Ministers in Marrakesh, Morocco in
April 1994.
WTO World Trade Organization - established on 1 January 1995.

TARIFFS
Free-rider A casual term used to infer that a country which does not make any trade concessions
but profits, nonetheless tariff cuts and concessions made by other countries negotiating under the
most-favoured nation principle.

Harmonized System A international nomenclature developed by the World Customs Organization,
which is arranged in six digit codes allowing all participating countries to classify traded goods on
a common basis. Beyond the six digit level, countries are free to introduce national distinctions for
tariffs and many other purposes.

Schedule of List of bound tariff rates.
Concessions
Tariff binding Commitment not to increase a rate of duty beyond an agreed level. Once a rate of
duty is bound, it may not be raised without compensating the affected parties.

Tariff escalation Higher import duties on semi-processed products than on raw materials, and higher
still on finished products. This practice protects domestic processing industries and discourages the
development of processing activity in the countries where raw materials originate.
Tariff peaks Relatively high tariffs, usually on "sensitive" products, amidst generally low tariff
levels. For industrialized countries, tariffs of 15 per cent and above are generally recognized as
"tariff peaks".

Tariffs Customs duties on merchandise imports. Levied either on an ad valorem basis (percentage of
value) or on a specific basis (e.g. $7 per 100 kgs.). Tariffs give price advantage to similar
locally-produced goods and raise revenues for the government.

WCO World Customs Organization, a multilateral body located in Brussels through which
participating countries seek to simplify and rationalize customs procedures.

NON-TARIFF MEASURES
Anti-dumping duties Article VI of the GATT 1994 permits the imposition of anti-dumping duties
against dumped goods, equal to the difference between their export price and their normal value, if
dumping causes injury to producers of competing products in the importing country.

Circumvention Measures taken by exporters to evade anti-dumping or countervailing duties.

Countervailing Action taken by the importing country, usually in the form of increased duties,
measures to offset subsidies given to producers or exporters in the exporting country.

Dumping Occurs when goods are exported at a price less than their normal value, generally
meaning they are exported for less than they are sold in the domestic market or third country
markets, or at less than production cost.

NTMs Non-tariff measures such as quotas, import licensing systems, sanitary regulations,
prohibitions, etc.

Price undertaking Undertaking by an exporter to raise the export price of the product to avoid the
possibility of an anti-dumping duty.

PSI Preshipment inspection - the practice of employing specialized private companies to check
shipment details of goods ordered overseas - i.e. price, quantity, quality, etc.

QRs Quantitative restrictions - specific limits on the quantity or value of goods that can be
imported (or exported) during a specific time period.

Rules of origin Laws, regulations and administrative procedures which determine a product's country
of origin. A decision by a customs authority on origin can determine whether a shipment falls
within a quota limitation, qualifies for a tariff preference or is affected by an anti-dumping duty.
These rules can vary from country to country.

Safeguard measures Action taken to protect a specific industry from an unexpected build-up of
imports - governed by Article XIX of the GATT 1994.

Subsidy There are two general types of subsidies: export and domestic. An export subsidy is a
benefit conferred on a firm by the government that is contingent on exports. A domestic subsidy is
a benefit not directly linked to exports.

Tariffication Procedures relating to the agricultural market-access provision in which all non-tariff
measures are converted into tariffs.

VRA, VER, OMA Voluntary restraint arrangement, voluntary export restraint, orderly marketing
arrangement. Bilateral arrangements whereby an exporting country (government or industry) agrees
to reduce or restrict exports without the importing country having to make use of quotas, tariffs or
other import controls.

TEXTILES AND CLOTHING
ATC The WTO Agreement on Textiles and Clothing which integrates trade in this sector back to
GATT rules within a ten-year period.

Carry forward When an exporting country uses part of the following year's quota during the
current year.

Carry over When an exporting country utilizes the previous year's unutilized quota.

Circumvention Avoiding quotas and other restrictions by altering the country of origin of a product.

CTG Council for Trade in Goods - oversees WTO agreements on goods, including the ATC.

Integration The phasing out of MFA restrictions in four stages starting on 1 January 1995 and
programme ending on 1 January 2005.

ITCB International Textiles and Clothing Bureau - Geneva-based group of some twenty developing
country exporters of textiles and clothing.

MFA Multifibre Arrangement (1974-94) under which countries whose markets are disrupted by
increased imports of textiles and clothing from another country were able to negotiate quota
restrictions.

Swing When an exporting country transfer part of a quota from one product to another restrained
product.


TMB The Textiles Monitoring Body, consisting of a chairman plus ten members acting in a
personal capacity, oversees the implementation of ATC commitments.

Transitional Allows members to impose restrictions against individual exporting countries safeguard
if the importing country can show that both overall imports of a product and mechanism imports
from the individual countries are entering the country in such increased quantities as to cause - or
threaten - serious damage to the relevant domestic industry.

AGRICULTURE
Border protection Encompasses any measure which acts to restrain imports at point of entry

Cairns Group Group of "free trading" agricultural exporting nations which met in 1987 in Cairns,
Australia, and agreed to present their common interests and concerns in the agricultural negotiations
of the Uruguay Round.

CAP Common Agricultural Policy - comprehensive system of production targets and marketing
mechanisms designed to manage agricultural trade within the EC and with the rest of the world.

Deficiency payment Paid by governments to producers of certain commodities and based on the
difference between a target price and the domestic market price or loan rate, whichever is the less.

EEP Export enhancement programme - programme of US export subsidies given generally to
compete with subsidized agricultural exports from the EC on certain export markets.

Food security Concept which discourages opening the domestic market to foreign agricultural
products on the principle that a country must be as self-sufficient as possible for its basic dietary
needs.

Internal support Encompasses any measure which acts to maintain producer prices at levels above
those prevailing in international trade; direct payments to producers, including deficiency payments,
and input and marketing cost reduction measures available only for agricultural production.

SPS regulations Sanitary and Phytosanitary regulations - government standards to protect human,
animal and plant life and health, to help ensure that food is safe for consumption.

Variable levy Customs duty rate which varies in response to domestic price criterion.

INTELLECTUAL PROPERTY
Appellations of origin Indications of where goods originate with characteristic qualities which are
due exclusively or essentially to the geographical environment (for example, "Bordeaux" of
"Roquefort").

Berne Convention Treaty, administered by WIPO, for the protection of the rights of authors in their
literary and artistic works.

Counterfeit Unauthorized representation of a registered trademark carried on goods similar to goods
for which the trademark is registered, with a view to deceiving the purchaser into believing that
he/she is buying the original goods.

Intellectual property Ownership of ideas, including literary and artistic works (protected by
copyright), inventions (protected by patents), signs for distinguishing goods of an enterprise
(protected by trademarks) and other elements of industrial property.

IPRs Intellectual property rights.

Lisbon Agreement Treaty, administered by WIPO, for the protection of appellations of origin and
their international registration.

Madrid Agreement Treaty, administered by WIPO, for the repression of false or deceptive
indications of source on goods.

Paris Convention Treaty, administered by WIPO, for the protection of industrial intellectual property,
i.e. patents, utility models, industrial designs, etc.

Piracy Unauthorized copying of copyright materials for commercial purposes and unauthorized
commercial dealing in copied materials.

Rome Convention Treaty, administered by WIPO, UNESCO and ILO, for the protection of the works
of performers, broadcasting organizations and producers of phonograms.

TRIPS Trade-Related Aspects of Intellectual Property Rights.

Washington Treaty Treaty for the protection of intellectual property in respect of lay-out designs of
integrated circuits.

WIPO World Intellectual Property Organization.

INVESTMENT
Export-performance Requirement that a certain quantity of production must be exported.
measure
Local-content Requirement that the investor purchase a certain amount of local materials for
measure incorporation in the investor's product.

Product-mandating Requirement that the investor export to certain countries or region.
Trade-balancing Requirement that the investor use earnings from exports to pay for imports.
measure

TRIMS Trade-related investment measures.

DISPUTE SETTLEMENT
Appellate Body An independent seven-person body that, upon request by one or more parties to the
dispute, reviews findings in panel reports.
Automaticity The "automatic" chronological progression for settling trade disputes in regard to panel
establishment, terms of reference, composition and adoption procedures.

DSB Dispute Settlement Body - when the WTO General Council meets to settle trade disputes.

DSU The Uruguay Round Understanding on Rules and Procedures Governing the Settlement of
Disputes.

Nullification and Damage to a country's benefits and expectations from its WTO membership
impairment through another country's change in its trade regime or failure to carry out its WTO
obligations.

Panel Consisting of three experts, this independent body is established by the DSB to examine and
issue recommendations on a particular dispute in the light of WTO provisions.

SERVICES
Commercial presence The possibility of a service provider to be physically present (a branch or
subsidiary, for instance) in the "importing" market.
GATS General Agreement on Trade in Services.

General obligations Obligations which should be applied to all services sector at the entry into force
of the agreement.

Initial commitments Trade liberalizing commitments in services which members are prepared to
make early on.

Modes of delivery Ways in which services may be rendered. They may include sales through
establishment, cross-border sales, and the movement of persons involved in the provision of
services.

National schedules The equivalent of tariff schedules in GATT, laying down the commitments
accepted - voluntarily or through negotiation - by WTO members.

Specific commitments Negotiated commitments on market access and national treatment by countries
in their national schedules.


TRADE AND DEVELOPMENT
ACP African, Caribbean and Pacific countries. About 70 countries with preferential trading relation
with the EC

APEC Asian Pacific Economic Cooperation forum.

ASEAN Association of Southeast Asian Nations. The six ASEAN members of the WTO - Brunei,
Indonesia, Malaysia, the Philippines, Singapore and Thailand - usually speak in the WTO as one
group on general issues.

CTD The WTO Committee on Trade and Development

EC European Communities.

EFTA European Free Trade Association.

G15 Group of 15 developing countries acting as the main political organ for the Non-Aligned
Movement.

G77 Group of developing countries set up in 1964 at the end of the first UNCTAD (originally 77,
but now more than 130 countries).

G7 Group of seven leading industrial countries.

GRULA Informal group of Latin-American members of the WTO.

ITC now operated jointly by the WTO and the UN, the latter acting through UNCTAD. Focal point
for technical cooperation on trade promotion of developing countries.

LDCs Less-developed countries.

LLDCs Least-developed countries.

Quad Canada, EC, Japan and the United States.

S&D "Special and differential treatment" provisions for developing countries. Contained in several
WTO agreements.

UNCTAD The UN Conference on Trade and Development.
TRADE AND ENVIRONMENT
Agenda 21 The Agenda for the 21st Century - a declaration from the 1992 Earth Summit (UN
Conference on the Environment and Development) held in Rio de Janeiro.
Article XX GATT Article listing allowed "exceptions" to the trade rules.

Basel Convention An MEA dealing with hazardous waste.

BTA Border tax adjustment

CITES Convention on International Trade in Endangered Species. An MEA.

CTE The WTO Committee on Trade and Environment.

EST Environmentally-sound technology.

EST&P EST and products.

Ex ante, ex post Before and after a measure is applied.

LCA Life cycle analysis - a method of assessing whether a good or service is environmentally
friendly.

MEA Multilateral environmental agreement.

Montreal Protocol An MEA dealing the depletion of the earth's ozone layer.

PPM Process and production method.

TBT
Waiver Permission granted by WTO members allowing a WTO member not to comply with normal
commitments. Waivers have time limits and extensions have to be justified.

TRADE IN SERVICES
Accounting rate In telecoms, the charge made by one country's telephone network operator for calls
originating in another country.
Cabotage In maritime transport, sea shipping between ports of the same country, usually along
coasts.
Commercial Having an office, branch, or subsidiary in a foreign country.

presence
Conferences In maritime transport, groups of container lines which have anti-trust immunity for the
purpose of collectively setting rates.
GATS The WTO General Agreement on Trade in Services.

Modes of delivery How international trade in services is supplied and consumed. Mode 1: cross
border supply; mode 2: consumption abroad; mode 3: foreign commercial presence; and mode 4:
movement of natural persons.

Multi-modal Transportation using more than one mode. In the GATS negotiations, essentially
door-to-door services that include international shipping.

Natural persons People, as distinct from juridical persons such as companies and organizations.

NGBT Negotiating Group on Basic Telecommunications.

NGMTS Negotiating Group on Maritime Transport Services.

Offer A country's proposal for further liberalization.

Protocols Additional agreements attached to the GATS. The Second Protocol deals with the 1995
commitments on financial services. The Third Protocol deals with movement of natural persons.

Prudence, prudential In financial services, terms used to describe an objective of market regulation
by authorities to protect investors and depositors, to avoid instability or crises.

Schedule "Schedule of Specific Commitments" - A WTO member's list of commitments regarding
market access and bindings regarding national treatment.