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 ?
These are a serious breach of the most fundamental and central WTO rules, including most-favored-nation treatment and tariff binding. Such unilateralist and protectionist actions have harmed the interests of China and other WTO members.
Tariff binding coverage is only 38% (in that, only 38% of products in Sri Lanka's list of commitments are legally committed/bound with the WTO).
The maximum tariff binding under GATT Article II (32) has important ramifications for development.
The overestimation of GATT-related obligations derives partly from the presumption, inherent in the method of measurement used in columns 2-9, that the mere existence of a given "tariff binding" invariably abolishes the policymaker's discretion to determine the magnitude of the relevant tariff.
WTO law constitutes an area where commercial retaliation is entirely manageable, and where punishment takes the form of tariff compensation on other goods and/or services or by the suspension of agreed tariff bindings. These can be enforced on an offender up to the amount of the inflicted damage.
Disagreement also remained on the Special Safeguard Mechanism (SSM) under which developing countries making tariff bindings will be allowed to revive or re-impose tariffs if import of the product increases beyond a certain threshold level of imports - points of disagreements are (i) threshold level and (ii) the rate to which the tariff can be revived.
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.
* Support other LDCs for low tariff bindings for LDCs.
What we are looking for is tariff bindings to provide predictability in world trade", she said.
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.