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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All India Co-convener of the SJM, Ashwini Mahajan said that that there is need to work harder to discourage Chinese imports as the group's research reveals that the average tariff being applied on Chinese imports is much lower than bound tariff rates on various commodities.
India has replied that the measure was based on domestic demand and supply and the new duty was within India's bound tariff limit (the maximum permitted tariff in India's WTO schedule of commitments).
'A high bound tariff, and judicious adjustments in applied tariffs, will give government the maximum leeway to handle any situation,' he added.
The bill also does away with "bound tariff rates", which are tariff limits that each WTO member country has agreed to, Axios said, adding that The President was briefed on the draft bill in May.
He said SB 1839 aims to repeal pertinent provisions of the law that prescribe quantitative rice importation and export restrictions on corn and rice, replacing it with a bound tariff system that is aligned with the country's commitment to the World Trade Organization (WTO) Agreement on Agriculture.
Second, final bound tariff rates are significantly higher compared to applied tariff rates.
"Each WTO member country has bound tariff rates and they cannot raise tariff rates higher than they have pledged," Choi Nak-gyoon, a senior research fellow at the Korea Institute for International Economic Policy, said.
Specifically, we instrument tariffs by the bound tariff rates, which are prescribed by the WTO and should be exogenous, and by the lagged tariffs, which are predetermined and should be uncorrelated with current shocks in industry value added.
As part of the Uruguay Round Agreement on Agriculture, countries were to remove trade restrictive nonscience-based SPS barriers and set bound tariff rates--maximum level of tariffs--along with a phase-in period, ranging from six to ten years, depending on the defined level of development of a certain country, to gradually reduce tariff levels (FASFACT SHEET: Sanitary and Phytosanitary Measures and the World Trade Organization, 2006).
According to the Geneva-based organisation, Russia will apply a final bound tariff of 7.8% for goods, down from an average 10%.
Frequently the bound tariff rates are higher than the actual or applied
Currently, under the WTO regime, the industrial goods entering India face on an average, a maximum duty of 34.4% (bound tariff) and actual duty (applied tariff) of 10.1%.