Glossary of Trade Terms - A to F
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Aa
Group of 77 countries from the African, Caribbean
and Pacific Region. This Group was officially established in 1975
and included 46 countries. Over time the Group has expanded to 77
members: 48 states from Africa, 15 states from the Caribbean and 14
states from the Pacific. The Group has had an important trade and
aid relationship with the European Union since 1975, first through
the various Lomé Agreements and since 2000 through the Cotonou
Agreement.
For more information on the ACP Group, see the
website of the ACP
secretariat website
On June 3, 1991, the Heads of State and
Government of the Organisation of African Unity (OAU) signed
the Treaty establishing the African Economic Community (AEC).
The objective of the AEC is, inter alia, to
promote economic, social and cultural development and integration of
African economies and to mobilise and utilise human and material
resources of Africa so as to achieve a self-reliant development. It
promotes free trade agreements and customs union among regional
groups that will eventually merge into one African Common Market.
The Asian Development Bank was established in
1966 as a multilateral development finance institution and owned by
56 members. Its headquarters are in Manila. The main objective of
the ADB is to reduce poverty, and in addition it tries to foster
economic growth, support human development, improve the status of
women and protect the environment. ADB's principal tools are loans
and technical assistance, which it provides to governments for
specific projects and programs.
For more information see the ADB
website
Action programme adopted by the European
Commission in July 1997 on EU enlargement, reform of the common
policies and a communication on the European Union's future
financial framework after 31 December 1999. Agenda 2000 is divided
into three parts:
- The European Union's internal operation, particularly the
reform of the common agricultural policy and of the policy of
economic and social cohesion. It also contains recommendations
on how to face the challenge of enlargement in the best possible
conditions and proposes putting in place a new financial
framework for the period 2000-06;
- A reinforced pre-accession strategy, incorporating two new
elements: the partnership for accession and extended
participation of the applicant countries in Community programmes
and the mechanisms for applying the Community acquis;
- A study on the impact of the effects of enlargement on
European Union policies
In 1998 the European Commission made 20
legislative proposals that reflected these priorities. The Berlin
European Council reached an overall political agreement on the
legislative package in 1999 and the measures were adopted the same
year. They cover four closely linked areas for the period 2000 to
2006:
- reform of the common agricultural policy;
- reform of the structural policy;
- pre-accession instruments;
- financial framework.
WTO Agreement (in force from January 1995) that
provides a framework for the long-term reform of agricultural trade
and domestic policies over the years to come. It makes a move
towards the objective of increased market orientation in
agricultural trade. The rules governing agricultural trade are
strengthened which will lead to improved predictability and
stability for importing and exporting countries alike.
The reform programme comprises specific
commitments to reduce support and protection in the areas of
domestic support, export subsidies and market access, and through
the establishment of strengthened and more operationally effective
GATT rules and disciplines. The Agreement also takes into account
non-trade concerns, including food security and the need to protect
the environment, and provides special and differential treatment for
developing countries, including an improvement in the opportunities
and terms of access for agricultural products of particular export
interest to these Members.
For the full text of the Agreement on
Agriculture, see the WTO website
WTO agreement that sets limits to the use of
safeguards actions. A WTO member may take a "safeguard"
action (i.e., restrict imports of a product temporarily) to
protect a specific domestic industry from an increase in imports of
any product which is causing, or which is threatening to cause,
serious injury to the industry.
Safeguard measures were always available under
the GATT (Article XIX). However, they were infrequently used, and
some governments preferred to protect their industries through
"grey area" measures ("voluntary" export
restraint arrangements on products such as cars, steel and
semiconductors).
The WTO Safeguards Agreement prohibits "grey
area" measures and sets time limits ("sunset clause")
on all safeguard actions.
For the full text of the Agreement
of Safeguards, see the WTO
website
WTO Agreement (in force from January 1995) that
aims to integrate the textiles and clothing sector into the GATT
rules. Before this Agreement, textile and clothing quotas were
negotiated bilaterally and governed by the rules of the Multifibre
Arrangement (MFA). This provided for the application of
selective quantitative restrictions when surges in imports of
particular products caused, or threatened to cause, serious damage
to the industry of the importing country. The Multifibre Arrangement
was a major departure from the basic GATT rules and particularly the
principle of non-discrimination.
The ATC is a transitional instrument, built on
the following key elements:
- the product coverage, basically encompassing yarns, fabrics,
made-up textile products and clothing;
- a programme for the progressive integration of these textile
and clothing products into GATT 1994 rules;
- a liberalisation process to progressively enlarge existing
quotas (until they are removed) by increasing annual growth
rates at each stage;
- a special safeguard mechanism to deal with new cases of
serious damage or threat thereof to domestic producers during
the transition period;
- establishment of a Textiles Monitoring Body ("TMB")
to supervise the implementation of the Agreement and ensure that
the rules are faithfully followed;
- other provisions, including rules on circumvention of the
quotas, their administration, treatment of non-MFA restrictions,
and commitments undertaken elsewhere under the WTO agreements
and procedures affecting this sector.
For the full text of the Agreement of Textiles
and Clothing, see the WTO
website
Asociación Latinoamericana de Integración
(Latin American Integration Association) was established in 1980 in
Montevideo, Uruguay. It was signed by 11 Latin American states:
Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico,
Paraguay, Peru, Uruguay, and Venezuela. The organisation aims to
pursue the integration process in the region leading to its
harmonious and balanced socio-economic development. In particular,
ALADI's duties include the promotion and regulation of reciprocal
trade, development of economic complementarity, and support of
actions for economic co-operation to encourage market expansion.
For more information see the ALADI
web-site
WTO Agreement that disciplines anti-dumping
actions. 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.
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.
The AD Agreement includes certain substantive
requirements that must be fulfilled in order to impose an
anti-dumping measure, as well as detailed procedural requirements
regarding the conduct of anti-dumping investigations and the
imposition and maintenance in place of anti-dumping measures. A
failure to respect either the substantive or procedural requirements
can be taken to dispute settlement and may be the basis for
invalidation of the measure.
For the full text of the Anti-Dumping
Agreement, see the WTO
web-site
The Cartgena Agreement of 1969 established the
Andean Pact. In March 1996 the heads of states of the member
countries adopted the Modification Protocol to the Cartagena
Agreement, which created the Andean Community (CAN, Comunidad Andina).
The main objectives of the Andean Community are:
- to promote the balanced and harmonious development of the
member countries under equitable conditions;
- to boost their growth through integration and economic and
social co-operation;
- to enhance participation in the regional integration process
with a view to the progressive formation of a Latin American
common market;
- to strive for a steady improvement in the standard of living
of their inhabitants.
The members of the Andean Community are Bolivia,
Colombia, Ecuador, Peru and Venezuela.
For more information see the on the Andean
Community
Asia-Pacific Economic Co-operation (APEC) was
established in 1989 as an informal dialogue group. APEC is now one
of the main regional vehicles for promoting open trade and practical
economic co-operation. The goal of APEC is to advance Asia-Pacific
economic dynamism and sense of community. The 21 member states of
APEC are Australia, Brunei Darussalam, Canada, Chile , People’s
Republic of China, Hong Kong (China), Indonesia, Japan, Korea,
Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines,
Russia, Singapore, Chinese Taipei, Thailand, United States and
Vietnam.
For more information see the APEC secretariat
website
Association of South East Asian Nations (ASEAN)
is a regional association of all ten South East Asian countries
(Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
the Philippines, Singapore, Thailand and Vietnam) that co-operate
with the objective to ensure peace, stability and development in the
region. Co-operation within ASEAN takes place in several fields:
political and security co-operation, economic co-operation and
functional co-operation.
For more information, see the ASEAN web-site
The Asia-Europe Meeting (ASEM) consists of the
following parties: the European Commission and the EU Member States
and Brunei, China, Indonesia, Japan, South Korea, Malaysia, the
Philippines, Singapore, Thailand and Vietnam. The ASEM process
includes political dialogue and economic, social, cultural and
intellectual co-operation.
Bb
Category of support measures (direct payments) in
agriculture that are linked to factors of production and implemented
under production-limiting programmes. Production is still required
in order to receive the payments, but the actual payments do not
relate directly to the current quantity of that production. Payments
are based on fixed areas and yields, or made on 85 percent or less
of the base level of production, or, for livestock, with payments
made on a fixed number of heads. The blue box is an exemption from
the general rule that all subsidies linked to production must be
reduced or kept within defined minimal (the so-called "de
minimis") levels.
The Bretton Woods institutions cover the World
Bank and the IMF. They are named after the town Bretton Woods (US),
where in 1944 the IMF and World Bank were launched at a conference.
Timetable of future work, as indicated in various
Uruguay Round Agreements. This future work consists of new
negotiations in some areas and an assessment of the situation at the
specified times in other areas.
Cc
Group of agricultural exporting nations, which
met in 1986 in Cairns, Australia, and agreed to present their common
interests and concerns in the agricultural negotiations of the
Uruguay Round. The Group favours much greater liberalisation in
agricultural trade. The current members of the Cairns group are:
Australia, Argentina, Bolivia, Brazil, Canada, Chile, Colombia,
Costa Rica, Guatemala, Fiji, Indonesia, Malaysia, New Zealand,
Paraguay, Philippines, South Africa, Thailand and Uruguay.
For more information, see the Cairns Group
web-site
Caribbean Community. The Treaty establishing the
Caribbean Community and Common Market (CARICOM) was signed by the
Prime Ministers of Barbados, Guyana, Jamaica, and Trinidad and
Tobago at Chaguaramas, Trinidad on July 4, 1973, and entered into
force on August 1, 1973. Over time, membership has expanded to 14
members: Antigua and Barbuda, The Bahamas, Barbados, Belize,
Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis,
St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and
Tobago.
The Caribbean Community has three areas of
activity: economic integration (the Caribbean Common Market);
co-operation in non-economic areas and the operation of certain
common services; and co-ordination of foreign policies of
independent member states.
For more information see the CARICOM
secretariat web-site
In May 1969 Bolivia, Chile, Columbia and Peru
signed the Cartagena Agreement, which established the Andean Pact.
The purpose of this Agreement was to establish a customs union
within a period of ten years. In March 1996 the heads of states of
the member countries adopted the Modification Protocol to the
Cartagena Agreement, which created the Andean Community (CAN).
Common Market for Eastern and Southern Africa,
consisting of 21 countries in Eastern and Southern Africa. COMESA
was established in 1994 to replace the Preferential Trade Area of
Eastern and Southern Africa that was established in 1981. The member
states of COMESA are Angola, Burundi, Comoros, Democratic Republic
of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar,
Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland,
Zambia and Zimbabwe.
The aims and objectives of COMESA as defined in
the Treaty are to facilitate the removal of structural and
institutional weaknesses of member states so that they are able to
attain collective and sustained development.
For more information see the COMESA
web-site
Common Agricultural Policy is the agricultural
policy of the European Union, which came into force in 1962. It aims
to ensure reasonable prices for Europe's consumers and fair incomes
for farmers, in particular by establishing common agricultural
market organisations and by applying the principles of single
prices, financial solidarity and Community preference. A reform
package was adopted in 1999 for the period 2000-2006.
The purpose of the reform of the common
agricultural policy under Agenda 2000, which basically involves
cutting market support prices and increasing direct aid to farmers,
is to preserve the European model of agriculture by ensuring that
farming throughout the Union, even in the regions with special
problems, is:
- sustainable and competitive,
- capable of maintaining the landscape, conserving nature, and
contributing to the vitality of the countryside and
- responding to the concerns and demands of consumers in terms
of food quality and safety, environmental protection and animal
welfare.
The reform involves not only farmers, but also
country-dwellers in general, consumers and wider society.
For further information go to the Agriculture
Directorate-General website
United Nations Convention that was signed in the
1992 Earth Summit and entered into force on 11 December 1993. As of
January 2001, the CBD has been ratified by 178 countries and the
European Union. The objectives of the Convention are the
conservation of biological diversity, the sustainable use of its
components and the fair and equitable sharing of the benefits
arising out of the utilisation of genetic resources. It is the first
global, comprehensive agreement to address all three aspects of
biological diversity: genetic resources, species and ecosystems.
For more information see the CBD
web-site
A partnership agreement between the EU and
the ACP Group, signed in June 2000. The Agreement replaces
the Lomé agreements.
The main objective of the agreement is to reduce
poverty, consistent with the objectives of sustainable development
and the integration of the ACP countries into the world economy. The
Agreement includes political dialogue and in addition civil society
and social and economic actors are actively involved. Regarding
trade, the Agreement provides for setting up a new trade
arrangement, characterised by reciprocal liberalisation in
accordance with WTO rules. The system of financial co-operation has
been reformed to improve its effectiveness. Regional co-operation
between ACP countries is an important aspect of economic and trade
co-operation in the Agreement and is put forward as a development
co-operation strategy.
For the full text of the Cotonou
Agreement, see the EU
Development website
Method by which a customs officer determines the
value of an imported good for the purpose of levying an ad valorem
tariff. When this method is biased against importing, it becomes a
non-tariff-barrier.
A group of countries that eliminate tariffs among
themselves and apply a common external tariff against non-members.
A tariff levied on imports that are subsidised by
the exporting country's government, designed to offset (countervail)
the effect of the subsidy.
Dd
The Dispute Settlement Procedure is a WTO
mechanism to settle disputes between WTO member states by enforcing
multilateral trade rules. The procedure is laid down in the Dispute
Settlement Understanding (DSU).
First, the parties try to settle the dispute by
consultations. If one of the parties does not want to participate in
the consultation process or if the consultations do not bring a
solution, the Dispute Settlement Body (DSB, a meeting of the General
Council to resolve trade disputes) establishes a panel. The panel is
an independent body, consisting of three experts, that examines and
issues recommendations on a particular dispute in the light of WTO
provisions. The panel report can be adopted by the DSB, unless one
of the parties involved notifies its attention to appeal or unless
there is consensus in the DSB not to adopt the report. If a party
involved appeals, an Appellate Body can be established. This is an
independent seven-person body that, upon request by one or more
parties to the dispute, reviews findings in panel reports. The
report of the Appellate Body will be adopted by the DSB, unless
there is consensus in the DSB not to adopt it. The parties involved
have to accept the report unconditionally. The DSB will keep the
implementation under regular surveillance until the issue is
resolved. Further provisions in the DSU set out rules for
compensation or the suspension of concessions in the event of
non-implementation. The DSU contains a number of provisions taking
into account the specific interests of the developing and the
least-developed countries.
For the full text of the Dispute Settlement
Understanding, see the WTO
website
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.
Ee
Economic and Monetary Union is a currency area
that entered into force in January 1999. Members of the EMU
(Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, the Netherlands, Portugal and Spain) share a common
currency: the Euro. The establishment of the EMU was laid
down in the Maastricht Treaty.
The Enabling Clause is officially called the
"Decision on Differential and More Favourable Treatment,
Reciprocity and Fuller Participation of Developing Countries"
and was adopted under GATT in 1979. It enables developed members to
give differential and more favorable treatment to developing
countries. The Enabling Clause is the WTO legal basis for the Generalised
System of Preferences (GSP) and the Global
System of Trade Preferences (GSTP). In addition,
the Enabling Clause is the legal basis for regional arrangements
among developing countries.
For the full text of the Enabling
Clause, see the
WTO web-site
The Central Bank of the Euro Zone, i.e. the group
of countries that use the Euro as their currency (Austria, Belgium,
Finland, France, Germany, Ireland, Italy, Luxembourg, the
Netherlands, Portugal and Spain). The ECB is an independent
institution and its main responsibility is to implement monetary
policy for the Euro Zone.
For more information see the European Central
Bank website
The EU is a common market with 15 member states:
Austria, Belgium, Denmark, Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden
and the United Kingdom. It is a common market, i.e. it allows the
free movement of capital and persons. In addition, member states
have eliminated tariffs among themselves and established a common
external tariff against non-members.
The objectives of the EU are:
- to promote economic and social progress;
- to assert the identity of the European Union on the
international scene;
- to introduce European citizenship;
- to develop an area of freedom, security and justice;
- to maintain and build on established EU law.
For more information on the EU, see the European
Union website
The Euro is the common currency of the members of
the EMU. The Euro was adopted on 1 January 1999.
The Euro will replace the national currencies of the Members of the
EMU starting from 1 January 2002.
The Everything But Arms initiative is a proposal
of the European Commission to the European Council that would grant
duty-free access to the world's 48 least developed countries. The
proposal would cover all goods except the arms trade:
"everything but arms".
The proposal, which would extend duty and quota
free access for a further 919 lines, would come into effect as soon
as it is agreed by the Council. For three products (bananas, sugar
and rice) implementation will take effect in three progressive
stages to be completed within three years. The initiative covers
many products that are not currently imported into the EU at present
because of the high level of protection. The proposed new list
leaves out 25 tariff lines that relate to arms trade.
Ff
Food and Agricultural Organisation (FAO) is an
autonomous agency within the United Nations. FAO was founded in
October 1945 with a mandate to raise levels of nutrition and
standards of living, to improve agricultural productivity, and to
better the condition of rural populations. A specific priority of
FAO is encouraging sustainable agriculture and rural development, a
long-term strategy for the conservation and management of natural
resources. It aims to meet the needs of both present and future
generations through programmes that do not degrade the environment
and are technically appropriate, economically viable and socially
acceptable.
FAO offers direct development assistance,
collects, analyses and disseminates information, provides policy and
planning advice to governments and acts as an international forum
for debate on food and agriculture issues.
For more information see the FAO
website
Investment involving management control of a
resident entity in one economy by an enterprise resident in another
economy. It involves a long-term relationship reflecting an investor’s
lasting interest in a foreign entity.
An area in which member states eliminate tariffs
among themselves but maintain individual tariff schedules on imports
from non-member countries. Because imports could enter through the
country with the lowest tariff and then be exported to other members
in the framework of a FTA, rules of origin are used to
determine whether a good is eligible for tariff-free treatment.
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