Bound Rate

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Bound Rate

A tariff, expressed as a percentage of the value of an import, that a country has agreed to levy on goods from another country. The tariff may not rise above the bound rate as long as the relevant treaty remains in force. It is also called a bound tariff or tariff binding. See also: World Trade Organization.
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The Economic Report of the President (ERP) that shows a path for continued growth and paints a rosy picture for the American economy, alleges that countries, including India and Brazil - both GATT signatories since 1948 - have been far less open, preserving high bound rates and avoiding universal binding coverage.
According to the data on tariffs provided by the World Trade Organization (WTO), Pakistan ranks amongst the top 20 countries with the highest applied most favoured nation (MFN) tariff rates as well as bound rates on the imports of non-agricultural products.
Better profile customers at the outset, offer more options so that they self select correctly, and ask the right questions so the initially quoted and final bound rates are consistently close.
Exporters seek to lower these bound rates even when there is little immediate impact on market access.
Tariff reduction schemes target bound rates and not applied rates; applied rates are below bound rates in many cases.
The United States also has complained that the additional and extra additional taxes also apply to other imports from the United States such as dairy products and, in some cases, also result in charges that exceed India's WTO bound rates.
Reductions in tariffs from bound rates, or from twice the applied most favoured nation (MFN) rate in the case of unbound tariffs;
For example, the data to be used include the applied levels of tariffs rather than the bound rates.
However, the WTO allows countries to continue offering some measure of protection to these sensitive industries through the replacing of these licences with bound rates, simply referred to as duty rates, which are difficult to change.
For a majority of industrial products, the bound rates are higher than the current applied rates.
USTR also noted that the additional duty and extra additional duty also apply to other imports from the United States such as dairy products and, in some cases, also result in customs duties that exceed India's WTO bound rates.
Reductions would be made from bound rates, with higher tariffs being cut more than lower ones.