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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Japan has alleged that India's duties on ICT products infringe on WTO norms, because the country has implemented zero percent bound tariffs on the products in question, reports Business Standard.
Compared with the average applied tariffs of 12%, Pakistan's average bound tariffs are 61%.
Second, many countries have very high bound tariffs and other barriers, and it is difficult to see how pressure can be created to get them to reduce either.
However, if Mexico were to impose 'bound tariffs,' which are permissible under WTO rules, then tariffs on pork could be 37% and poultry could reach 75%.
The authority to set bound tariffs is vested in Congress.
As argued in "Tariffs' endogeneity" section, the results obtained in Table 4 could be criticized for the possibility that the bound tariffs are set taking into consideration the level of development of individual industries, invalidating the tariffs' strict exogeneity.
If we compare the actual tariff level in Pakistan in the context of WTO rules, Table 1 shows that Pakistan tends to have relatively moderate MFN applied tariffs while it has a relatively high bound tariffs under the WTO.
Based on 2012 data Nepal's average applied tariffs were 12.3 percent including 13.9 percent for agricultural products and 12 percent for industrial goods well below the bound tariffs.
We note with great concern the Secretariat's assessment that nearly 50% of Kyrgyzstan's bound tariffs do not align with the Customs Union and would require re-negotiation and compensation to WTO Members," the Attache concluded.
* Bound tariffs of World Trade Organization members;
After these cuts under the 'Swiss Formula' most of the bound tariffs in developing countries will be brought down to around 11%, and will in no case exceed 20%.
However, the cuts in those newly bound tariffs were minimal, 36% on average for developed countries, but, in effect, rather less.