Binding a Tariff

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Binding a Tariff

A promise by a country not to raise its tariffs for the foreseeable future. Binding a tariff is considered favorable for international trade because it gives potential exporters and importers a level of certainty they otherwise would not have. The World Trade Organization encourages tariff binding.
References in periodicals archive ?
This occurs when a country is alleged to have failed to carry out its GATT/WTO obligations, as when a tariff binding is broken.
Broadly speaking, these provisions define an obligation to concentrate national protective measures into the form of tariffs, to apply them on a non-discriminatory basis, and to honor any tariff bindings made in a GAIT/WTO negotiation.
This was a process which involved making tariff bindings and concessions as requested by the more developed countries.
The actual level of tariffs is also substantially lower than the tariff bindings of the World Trade Organisation.
The market access proposals currently on the table are for tariff bindings well above these levels and allowances can, and will be made for sensitive sectors in the economy.
In particular, the developing countries pressed for the inclusion of several further proposals and demanded abolition of the non-linear formula, wanted the sectoral tariff component to be voluntary; and asked for more flexibility in tariff cuts and tariff bindings.
Presently, the NAMA negotiations are focused on a number of issues including product coverage, the formula for tariff cuts, tariff bindings, conversion of specific duties into ad-valorem duties, the sectoral approach to tariff cuts, flexibilities for developing countries, non-tariff barriers, and preference erosion.
It may also be noted that, on average, the portion of an industry's imports that were subject to tariff bindings introduced by the 1948 agreement, the Kennedy round, and the Tokyo round corresponded to 11.
In its submission to the WTO last year, Russia proposed transition periods of from three to eight years until final import tariff bindings will come into effect.
The architects of GATT triumphed: They had put GATT into place precisely to throw sand in the gears, through tariff bindings and procedures, to avoid the outbreak of competitive beggar-my-neighbor protectionist policies.
Tariff bindings also assure importers that their importing costs will not be increased by higher customs duties.
The main contribution of developing countries in the market access area is the big leap in the level of tariff bindings.