Renegotiation Of Tariffs

Renegotiation of tariffs in Global Commerce Policy

In this regard, renegotiation of tariffs is: most tariff negotiations are now conducted as part of multilateral trade negotiations or as sectoral negotiations like those resulting in the Information Technology Agreement, but the GATT sets out several ways of renegotiating tariffs during other periods. The listing provided by John Jackson and William Davey in Legal Problems of International Economic Relations is particularly useful. First, Article XXVIII:1 permits parties with a principal supplying interest or parties who have had earlier bilateral tariff negotiations to reopen these negotiations every three years. The period of three years originally reflected the United States practice of renewing the President’s negotiating authority for three years at a time, and this was adopted as the period during which bindings could not be changed. Second, Article XXVIII:4 allows parties to request another party for special circumstance renegotiations. These would be small-scale negotiations confined to a few items resulting in a speedy conclusion, and they are meant to help countries relying on a relatively small number of primary commodities to diversify their economies. Third, Article XXVIII:5 envisages reserved renegotiations. This means that parties can reserve the right to modify their tariff schedules during the next three-year period in accordance with normal procedures, including the obligation to offer compensation to affected parties. Fourth, whenever two or more countries agree to form a customs union resulting in a common external tariff, part of the tariff schedules of participating members must necessarily be changed. Tariff renegotiations are therefore required under Article XXIV:6 to ensure that the overall level of tariffs of the members of the customs area does not exceed the levels in force when there were separate tariffs. Fifth, developing countries have the right under Article XVIII:7 to change, under defined conditions, a tariff schedule as part of promoting an infant industry. Sixth, Article XXVII gives parties the right to change a tariff concession negotiated with a country that either did not become a member of GATT or ceased to be one. Seventh, renegotiations of tariffs are possible also in the form of minor technical rectifications where clearly a mistake was made. WTO members tend to very careful to ensure that such technical changes do not amount to disguised substantive tariff increases which might entitle others to compensation. See also tariff negotiations.[1]

Renegotiation of tariffsin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Renegotiation of tariffs” entry (OAS)

See Also