The
Modalities require that all tariff lines be bound and the tariff rates
cut. Developed countries are required to implement an average reduction
of 36 per cent from the base tariff rate with a minimum reduction
of 15 per cent per tariff line over a six year period. For developing
countries, the implementation period is ten years and the required
tariff reduction two-thirds of that applying to developed countries:
that is, an average reduction of 24 per cent and a minimum cut of
10 per cent in each tariff line.
Different
approaches to implementing the tariff cuts were provided for products
with duties that are currently bound, and products with duties that
are currently unbound.
Current
bound duties: tariff reductions applied to the present bound rate,
or, where the product concerned is subject to border measures other
than ordinary customs duties, the "tariffication" package
applies. An exception applied to some products that received "special
treatment"
Current
unbound duties: tariff reductions applied to the normally applicable
rate in September 1986. A tariff equivalent, or, in the case of developing
participants, a ceiling binding offer was sometimes used as the basis
for tariff reductions. A ceiling binding is a bound tariff, which
exceeds the applied rate of duty, sometimes by a large amount. Developing
countries were able to offer a ceiling binding across the entire tariff
schedule in lieu of reduction commitments.
The
tariffication package includes the replacement of the non-tariff measure
by a tariff equivalent - that is, by a customs duty designed to provide
a level of protection equivalent to the existing level. The tariff
equivalent was generally calculated using the difference between the
domestic price and the world price for the product concerned in the
1986 to 1988 base period. The tariff equivalent is the base tariff
to which tariff reductions are applied.
Products
subject to the "tariffication" package were those agricultural
products affected by any of the following border measures:
-
quantitative import restrictions
-
variable import levies
-
minimum import prices
-
discretionary import licensing
-
non-tariff measures maintained through state-trading enterprises
-
voluntary export restraints
-
any other schemes that have border effects similar to the measures
listed.
The
obligation to tariffy non-tariff measures does not apply to measures
taken for balance-of-payments reasons or those taken under general
safeguard and exception provisions (Articles XII, XVIII, XIX, XX and
XXI of the General Agreement).
Because
tariff equivalents often resulted in very high tariff rates, the tariffication
package includes current access provisions that require the
maintenance of import opportunities representing at least the quantity
of imports in the 1986-88 base period.
Also,
the package includes and minimum access provisions where current
imports represent less than 5 per cent of domestic consumption in
the base period. In this case, new tariff quotas, provided on a most-favoured-nation
basis, must be implemented at a low or minimal tariff rate. The initial
quantity of the tariff quota will represent 3 per cent of domestic
consumption and will rise to 5 per cent by the end of the implementation
period.
The
special safeguard provisions of the Agreement may be applied to the
tariffication products if a note to this effect is included in a Member's
Schedule (tariff-only products are not eligible for special safeguard
treatment).
