World Trade Organization - A Handbook On Reading WTO Goods and Services Schedules-Cambridge University Press (2009)

A Handbook on Reading WTO Goods and
Services Schedules
This is a detailed guide on how to read WTO Schedules of commitments for goods
and services. The Schedules are part of the Legal Texts of the WTO Uruguay
Round Agreements. They comprise about 27,000 pages of specific commit-
ments by members of the WTO on market access conditions for their markets.
Understanding how to interpret the Schedules is essential for anyone wishing
to glean information for academic, official or business purposes. Commissioned
and reviewed by the WTO Secretariat, this is a unique guide to understanding the
Schedules.
A Handbook on Reading WTO Goods and
Services Schedules
A WTO Secretariat Publication

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in this publication, and does not guarantee that any content on such
websites is, or will remain, accurate or appropriate.
This handbook was commissioned, and verified for accuracy, by the WTO Secretariat as a
factual guide to understanding the Schedules of commitments for goods and services. The
text was drafted by Peter Gallagher of Inquit Pty Ltd. Any opinions expressed cannot
necessarily be attributed to the WTO Secretariat or WTO members.
CONTENTS
1 The WTO Schedules page 1

About this book 1
The purpose of the Schedules 2
Schedules are part of the WTO Agreement 3
The Schedules and the ‘contract’ 5
Why the Schedules matter 8
Modifications of the WTO Schedules 16
What is not in the WTO Schedules 18
2 The goods Schedules 21
The overall structure 21
Information Technology Agreement (ITA) 31
Other plurilateral agreements 31
3 The services Schedules: specific commitments under the GATS 33
What is a services Schedule? 34
What are the implications of Scheduled commitments? 34
The content of a services Schedule 36
What is not in a services Schedule? 42
4 A practical guide 45
Three cases 45
Strategies for readers 46
A rough guide to sources 55
Glossary 66
Appendix 1: A closer reading of Article II of the GATT 78
Appendix 2: General Agreement on Tariffs and Trade 1994 97
Appendix 3. General Agreement on Trade in Services 100
Index 135
v
1
THE WTO SCHEDULES
ABOUT THIS BOOK

This book is intended to help you find and interpret for your own purposes the
lists of commitments made by World Trade Organization (WTO) members on the
taxation and regulation of imported goods and on market access and national treat-
ment in services. These documents, known as the goods and services Schedules,
are an important part of the WTO Agreement; the commitments in the Schedules
are negotiated by each WTO member government during rounds of multilateral
trade negotiations or at the time it accedes to the WTO, and updated in various
ways after that.
The WTO Agreement covers all trade in physical goods and, with limited
exceptions, commercial services such as telecommunications, finance, transport
and so on. The Schedules bind the actions of member governments with the same
force as the Agreement; they represent, in some respects, its ‘cash value’. They
deserve careful attention. But their volume (some 27,000 pages), the difficulty of
consulting them, and the challenge of interpreting the meaning of entries in the
Schedules, mean that many non-specialists shy away from consulting them. This
Handbook is meant to help fix that.
‘Non-specialists’ could mean anyone who has not had to deal with the Schedules
in the past, including some government officials. But the people who are likely to
find this book most helpful are:
r business leaders and advisors, especially those with a role in industry or

trade associations;
r importers and exporters who deal with customs matters or regulations
affecting trade in services such as finance, transportation or communica-
tions;
r analysts who follow international trade who need to find the details of a
member government’s legal commitments in the WTO.
In Chapter 1 of the Handbook we discuss the role of the WTO Schedules in the
WTO and describe their content in general terms. We will look at where they come
from and how WTO members modify them. We will consider their economic and
policy significance, and their limits, including a brief discussion of significant
information on duties that is not contained in the WTO Schedules.
1
A Handbook on Reading WTO Goods and Services Schedules
Chapter 2 contains a detailed description of the tables that make up the goods
Schedules, including brief descriptions of the Schedules attached to the Uruguay
Round sector agreements on information technology and pharmaceuticals.
Chapter 3 tries to answer some basic questions readers may have about services
Schedules, such as: What is a service Schedule?; What are its implications?; What
is its main content?; What type of measures are not recorded?
Chapter 4 provides a ‘practical guide’ to finding data from the Schedules in
a format that is useful for the different purposes of non-specialists. A slightly
surprising corollary of the complexity and legal importance of the WTO Schedules
is that it can be difficult to find authoritative, detailed information on Scheduled
commitments in a useful format that is generally available. The most helpful
sources are identified, along with some suggestions and tips for finding the data.
Finally, there is a Glossary at the back of the Handbook that explains the meaning
of some key terms used throughout the book.
THE PURPOSE OF THE SCHEDULES

The WTO is the only global international organization dealing with the rules of
trade between economies. At its heart are the WTO agreements, signed by 151
governments.1
One of the goals of the WTO is to minimize regulatory barriers to doing business
across a border. That does not necessarily mean eliminating all barriers, although,
usually, that is the objective. The Schedules record commitments regarding remain-
ing barriers, including commitments to progressively eliminate a barrier leading
to ‘duty-free’ treatment of imported goods. Where barriers remain, WTO rules
attempt to ensure that they are at least transparent and that governments have an
opportunity to negotiate further reduction of these barriers.
The Schedules serve these WTO objectives by setting an upper limit on the
customs duties a member may charge on each imported product, and by defin-
ing the guaranteed opportunities the member will provide to foreign suppliers
of services. This helps to show importers and exporters where they stand. The
Schedules record the starting point for multilateral negotiations to reduce barri-
ers, and they list the members who may have ‘paid’ for a tariff cut or services
concession that all members enjoy under the most-favoured nation (MFN) rule.
A member may have ‘paid’ for a concession in the sense that it has offered
some reciprocal reduction in a bound tariff in return for the binding listed in the
Schedule.
Under the WTO agreements, the MFN obligation means members cannot nor-
mally discriminate between their trading partners. Grant one member government
1
As of July 2007.
2
The WTO Schedules
Marrakesh
Agreement
Establishing the
WTO
Annex 1 Annex 2 Annex 3 Annex 4
All other Agreement

GATT (1994) GATS TRIPS
agreements on Understanding on Establishing the
Plurilateral
Goods Dispute Trade Policy
agreements
Settlement Review
Mechanism
Other Marrakesh Services
GATT (1947)
understandings Protocol Schedules
on GATT
provisions
Goods
Schedules
Figure 1.1 A chart of the WTO agreements
a special favour (such as a lower customs duty rate for one of their products), and
you have to do the same for all WTO members.
SCHEDULES ARE PART OF THE WTO

AGREEMENT
The Schedules are a part of the WTO Agreement. It is important to understand
what this means, because it explains why members put so much effort into the
negotiation and adoption of the Schedules, and it shows how crucial they are to
the international contract that underlies the WTO. In brief, the Schedules are part
of the Agreement and have the same legal status as any of the WTO agreements,
such as the General Agreement on Tariffs and Trade (GATT) and the General
Agreement on Trade in Services (GATS).
We begin by looking at where the Schedules are incorporated into the Agree-
ment. The legal structure of the WTO Agreement turns out to be something like a
Russian ‘matryoshka’ nesting-doll: we will have some ‘unpacking’ to do to find
the Schedules. But first, you will notice that sometimes we talk of the WTO Agree-
ment (singular) and sometimes of the WTO agreements (plural). The Agreement
(singular) is the Marrakesh Agreement Establishing the World Trade Organiza-
tion to which all the other WTO agreements (plural) and Decisions, such as the
GATT, GATS and TRIPS,2 are annexed. Strictly speaking, there is only one WTO
Agreement (Marrakesh), but we find the ‘meat’ of the rules and the commit-
ments in the individual agreements that are attached as annexes to the Marrakesh
Agreement.
2
The Agreement on Trade Related Aspects of Intellectual Property.
3
The Marrakesh Agreement, which governments adopted in Marrakesh,

Morocco, in 1994 at the end of the Uruguay Round of negotiations, defines the
scope of the WTO. Its four annexes contain the agreements that comprise the main
body of WTO law: three annexes containing ‘multilateral trade agreements’ and a
fourth annex containing ‘plurilateral’ agreements. The first annex contains agree-
ments on goods, services and intellectual property, among which are the GATT
(1994) and the GATS. The second and third annexes contain the Understanding
on Dispute Settlement that applies across all the other areas of agreement, and
the agreement to establish a Trade Policy Review Mechanism. Every member of
the WTO, without exception, is bound by all of the provisions of the multilateral
agreements contained in the first three annexes: that is what is meant when we
say that the WTO is a ‘single undertaking’. The provisions of the plurilateral
agreements in the fourth annex to Marrakesh apply only to those members who
have signed them.
The GATT (1994) is a short agreement that contains, mostly, ‘house-keeping’
details. It imports into the WTO Agreement the provisions of the original GATT
agreed in 1947, the Schedules of concessions on goods that were attached to the
GATT (1947), several ‘decisions’ and ‘understandings’ of the WTO members that
clarify or extend the application of the GATT rules, and the Marrakesh Protocol.
The Marrakesh Protocol to the GATT (1994) attaches members’ goods Schedules
containing concessions negotiated in the Uruguay Round ‘without prejudice to the
rights and obligations of members’ under the agreements on goods, including the
GATT (1947).
GATT ‘1947’ or ‘1994’? Which is which? Thanks to the ‘nested’ structure of

the WTO Agreement, there is really only one body of trade rules known as the
General Agreement on Tariffs and Trade (GATT). But WTO members have
created it using a two-step process over forty-seven years, which involves
two different documents that (now) call themselves the GATT (1994) and
the GATT (1947). In this Handbook, we use the two different names, as the
agreements themselves do, when it is necessary to avoid confusion about
which of the two documents we mean.
The result of this ‘nesting-doll’ structure is that the articles of the GATT (1947)
such as Article II, which has the title ‘Schedules of Concessions’, now apply
to the goods Schedules incorporated by the Marrakesh Protocol, as well as to
the original Schedules to the GATT (1947). It also means that the rights and
obligations incorporated in Schedules to the GATT (1947) remain in force.3 The
3
Article I(b)(i) of the GATT (1994) specifically imports the Schedules of tariff concessions, as well as the
pre-WTO Protocols of Accession that contain Scheduled concessions.
4
The WTO Schedules
Uruguay Round negotiations made changes to most of the concessions in the

GATT (1947) Schedules, recording the new concessions in the Schedules attached
to the Marrakesh Protocol. As we will see later, the WTO Secretariat maintains a
database that consolidates all of the concessions that are currently in force.
The incorporation of the services Schedules is a little more straightforward.
Article XX:3 of the GATS reads: ‘Schedules of specific commitments shall be
annexed to this Agreement and shall form an integral part thereof.’
The most important consequence of making the Schedules an ‘integral part’ of
the agreements is that every line in the thousands of pages of WTO Schedules
is tightly woven into the whole fabric of the WTO Agreement. It has the same
legal status and force as any other line or clause in the agreements, and can only
be changed (or ‘unpicked’) with some difficulty; in effect, by the same kind of
decision that it takes to make changes in the treaty itself. The WTO Appellate
Body puts it this way: ‘Indeed, the fact that members’ Schedules are an integral
part of the GATT 1994 indicates that, while each Schedule represents the tariff
commitments made by one member, they represent a common agreement among
all members.’4 For example, Article II:7 of the GATT (1947) makes the goods
Schedules an integral part of Part I of the GATT, which otherwise contains only
two articles: Article I (MFN) and Article II (Schedules). Article XXX of the GATT
(1947) says that those articles – and by extension, the Schedules – may be changed
only with the agreement of all of the members of the WTO.5 In other words, not a
line of any of the Schedules may be introduced or changed without the approval
of all of the members. This turns out to be a difficult provision to manage because
members propose many changes to their Schedules every year – in particular,
goods Schedules – often to introduce minor technical changes.
THE SCHEDULES AND THE ‘CONTRACT’
There is a logic to this ‘integration’ of the Schedules into the WTO Agreement. The
Schedules record the market access terms of the contract formed by the WTO.
Members therefore interpret and enforce the Schedules just as they would any
other part of the WTO Agreement.
The global trading system that the WTO administers is based on a reciprocal
exchange of rights and obligations among members. When governments join the
WTO it is not sufficient for them merely to undertake to abide by its rules; they
must ‘pay’ for the benefits they receive by opening their markets and by abiding by
the rules. You can think of the WTO as a global contract that records the terms of
4
In their report on EC – Computer Equipment, WT/DS/62ABR para. 109 (http://docsonline.wto.org/imrd/
directdoc.asp?DDFDocuments/t/ WT/DS/62ABR.DOC).
5
The requirement for unanimous agreement to a change in the Schedules is a higher ‘hurdle’ than applies to
other changes, which may be adopted with only a two-thirds majority of members.
5
an exchange of rights and obligations among all of the parties (the members) and
binds each of the parties to abide by its terms. The balance in this exchange might
be struck, at first, in negotiations between just two economies. Country A might
agree to open its market to the exports of Country B in return for a concession
by Country B that benefits the exporters of Country A. The agreement emerging
from this exchange creates an enduring ‘link’ between the two members. If either
A or B later wishes to change the terms of the agreed access, the ‘link’ gives their
trading partner the right to compensation that maintains the balance of benefits
and obligations that the two struck in negotiation.
In large multilateral rounds of negotiation, members assess the balance of their
rights and obligations on a broad scale, considering joint undertakings by many
trading partners in different sectors. Although the scale is different, the nature of
the agreement is the same as it was in our bilateral example: reciprocal exchange.
In these multilateral rounds, the exchange is not limited to rights and obligations
on market access. Members also exchange undertakings on other aspects of their
trade and economic policies. They might agree, for example, to eliminate the use
of subsidies or to simplify industrial standards or requirements for professional
qualifications for a licence or accreditation. A multilateral round of negotiations
results in a whole network of ‘links’.
The MFN principle of the WTO6 ensures that all of the ‘links’ from bilateral
and multilateral negotiations form a single, vast fabric of reciprocal obligations.
Changing the terms of just one exchange begins to affect the flow of benefits
throughout the network. In our bilateral example, Country A must extend to all
other members of the WTO the market access benefits it exchanged on a reciprocal
basis with Country B. The benefit that A receives for this concession to the rest
of the world is the right to similar MFN treatment in the markets of all other
WTO members. So A’s benefits from the WTO include access to B’s market and
access to C’s markets as a consequence of B’s negotiations with C. Furthermore,
the markets of both B and C are richer and growing more quickly because both
enjoy MFN access to the markets of E as a result of a reciprocal agreement that E
negotiated with D . . . and so on.
Since the benefits of every member can be affected, even if only slightly, by
changes in the obligations recorded in any of the Schedules of individual members,
no changes may be made in any of them unless with the agreement of all members.
Later, we will look at the practical implications of this requirement for approval
by the whole membership.
A second effect of the ‘integral’ status of the Schedules is that compliance with
Scheduled obligations may be enforced by the collective action of WTO members.
Although Country A and Country B in the earlier example may have negotiated
6
Defined in Article I of the GATT (1947) for goods, and Article II of the GATS for traded services. The MFN
obligation requires each member of the WTO to extend the same (GATT) or ‘no less favourable’ (GATS)
treatment to imports from all other WTO members.
6
The WTO Schedules
an agreement on a bilateral basis, once the results of the agreement appear in

the Schedules, all of the members of the WTO acquire the benefits of the market
access concession, and may act jointly through the WTO’s Dispute Settlement
provisions to protect the benefit. So, for example, if Country A defaults on the
obligations in its Schedule, any other member has the right to seek redress.
A third consequence of the incorporation of the Schedules as an ‘integral part’
of the WTO agreements is that members must interpret the Schedules in the
same manner as they interpret the agreements. Sometimes, individual members
have different views of the meaning of a concession, especially when they refer
themselves to the circumstances of the negotiation and the beliefs that they may
have had at that time about what the concession covered, or did not cover. The
Appellate Body (AB) of the WTO has clarified the procedure for interpreting
Scheduled concessions, taking account of the ‘integral part’ the Schedules have
in the agreements:
‘The purpose of treaty interpretation under Article 31 of the Vienna

Convention is to ascertain the common intentions of the parties. These
common intentions cannot be ascertained on the basis of the subjective
and unilaterally determined ‘expectations’ of one of the parties to a
treaty. Tariff concessions provided for in a member’s Schedule – the
interpretation of which is at issue here – are reciprocal and result from
a mutually – advantageous negotiation between importing and exporting
members. A Schedule is made an integral part of the GATT 1994 by
Article II:7 of the GATT 1994. Therefore, the concessions provided for
in that Schedule are part of the terms of the treaty. As such, the only rules
which may be applied in interpreting the meaning of a concession are the
general rules of treaty interpretation set out in the Vienna Convention.’7
(Appellate Body Report on EC-Computer Equipment,
WT/DS/62ABR para. 84)
As we will see, this interpretive approach has produced some very important, and
surprising, results.8
A fourth consequence of the ‘integral’ status of the Schedules is that changes are
registered with the United Nations, like other treaties and international obligations,
in accordance with Article 102 of the UN Charter. The registration of the Schedules
and any changes made to them is the final step in their adoption, and ensures that
they figure in the body of international law.
7
The AB is referring here to some GATT (1947) disputes, where members claimed that their ‘legitimate
expectations’ about the meaning of a Scheduled concession at the time of its negotiation should be taken into
account when determining what the concession meant.
8
The AB’s reports contain detailed guidance on the correct interpretation of the agreements. You can
find a summary in the AB Repertory that is available on the WTO website: www.wto.org/english/
tratop_e/dispu_e/repertory_e/i3_e.htm#I.3.7.4.
7
WHY THE SCHEDULES MATTER

The WTO exists, not only because members want to open markets to trade,9 but
also because they want the rule of law in international trade to prevail over power-
based politics. The Schedules are crucial because they record legally binding
commitments made by WTO members on access to their markets for the products
and services and service providers of other WTO members. They are also valuable
for the stability that they bring to trade policies and the greater certainty that the
commitments offer to consumers, traders and investors.
What a Scheduled Commitment Means

WTO Schedules contain the market access ‘concessions’ that a member makes
to other members at the time of accession to the WTO, or in trade negotiations –
such as those in a round of WTO trade negotiations.
In WTO jargon, a ‘concession’ means an undertaking given to another WTO
member to set a level of restriction that is bound in the WTO. We say that
WTO members make concessions in goods or services negotiations in response
to ‘requests’ from their trading partners and in exchange for a reciprocal con-
cession. Concessions on access to goods markets take the form of undertak-
ings to bind duties against increase – usually, but not necessarily, cutting the
duty rate at the same time. Concessions on access to services markets take the
form of commitments that bind the member to allow greater access for a ser-
vice or service supplier or to extend national treatment for services and service
suppliers.
To many people, the word ‘concession’ suggests that the government is reluc-
tantly accepting a loss: removing a tariff or other restriction that was otherwise
to its benefit. However, economists consider that there are few circumstances in
which a border barrier or a restrictive measure adds to the national economic
welfare, so the measure was probably an economic burden in the first place. Why
talk about a ‘concession’ when you stop hurting yourself? The traditional WTO
usage reminds us that at one time there was a positive benefit for someone from
the barrier; that is why the government created the barrier in the first place. But
the true meaning of the ‘concession’ is that the government is accepting a limit
on its future freedom of action. The binding means that neither this government
nor its successors can choose to raise the barrier beyond a certain level without
compensating other WTO member governments.
9
From the Preamble to the Marrakesh Agreement: ‘Being desirous of contributing to these objectives by
entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of
tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade
relations.’
8
The WTO Schedules
The GATT explains what the Scheduling of these concessions means for goods
in Article II. It says:
‘The products described in Part I of the Schedule relating to any con-

tracting party, which are the products of territories of other contracting
parties, shall, on their importation into the territory to which the Schedule
relates, and subject to the terms, conditions or qualifications set forth in
that Schedule, be exempt from ordinary customs duties in excess of those
set forth and provided therein.’
(Article II.1(b))
In other words, the Scheduled rate of duty is the maximum rate of duty that may
be levied on imports of the goods described in the member’s Schedule, subject to
any conditions or qualifications in the Schedule (more about these later).
The provisions of Article XVI of the GATS say something very similar about
the services Schedules of specific commitments: ‘With respect to market access
through the modes of supply identified in Article I, each member shall accord
services and service suppliers of any other member treatment no less favourable
than that provided for under the terms, limitations and conditions agreed and
specified in its Schedule’ (Article XVI.1).
The WTO Schedules list only negotiated concessions, so they are not an inven-
tory of trade barriers or a gazette where changes to barriers might be listed. They
do not necessarily record the applied level of protection because, in goods, they
may list a customs duty, for example, at a higher rate than the member actually
applies to imports. Likewise, in services, they may list a bound foreign equity
level or a binding on a specific number of suppliers allowed to enter the mar-
ket, but the actual equity limits or numerical quotas in place under domestic
law might be more generous. The goods Schedules need not mention tariff lines
where there is no duty binding; nor do the services Schedules need to list services
markets where no commitment has been made. For goods, WTO member govern-
ments have a separate national tariff Schedule, used by their customs agency, that
covers all imports and actual customs duties. National customs tariffs contain the
rates of duty that actually apply at the border (the ‘applied rate’), which may be
lower than the bound rates in the WTO Schedule. Often the customs tariff includes
preferential rates of duty – available, for example, to developing country exports
or to the exports of partners in a ‘free trade’ agreement – that never appear in
the MFN-based WTO Schedules. The national customs Schedule might contain
information on anti-dumping duties and, if the government allows exceptions to
duties on some products, or ‘duty drawbacks’ for products that are re-exported –
for example from an export-processing zone – these may also appear in the national
Schedule.10
10
The last section of this chapter contains a brief guide to help you find copies of national tariff Schedules.
9
Here is an example of the differences between a goods Schedule and a national

customs tariff. It concerns Brazil’s Schedule on motor vehicle tyres. In the Uruguay
Round, Brazil made bound concessions on imports of so-called ‘camel-back’
strips for re-treading rubber tyres (HS 40.06) and on imports of re-treaded rubber
tyres (HS 40.12), but not on the main tariff classification for motor vehicle tyres
(HS 40.11). In its WTO Schedule, which it submitted in the French language,
Brazil cut previously unbound duties (‘NC’) on the strips and re-treads from
85 per cent and 70 per cent to a bound rate of 35 per cent. The Schedule is as
shown in Figure 1.2.11
Brazil’s national customs Schedule, however, covers many more products asso-
ciated with motor vehicle tyres, including many tariff lines that do not appear in
the WTO Schedule because the duty is not bound or, possibly, because of changes
in the structure of the tariff Schedule in the twelve years between the 1994 WTO
Schedule and the 2006 national tariff. Furthermore, the national customs Sched-
ule contains much lower applied rates of duty on the tariff lines that appear with
bound duty concessions in the WTO Schedule: 14 per cent and 16 per cent versus
35 per cent. An extract from Brazil’s 2006 customs Schedule for tyres appears in
Figure 1.3.12
For the sake of simplicity, we have included only the ‘MFN’ rates in Brazil’s
tariff. Because Brazil belongs to the MERCOSUR (a Regional Trade Agree-
ment among Argentina, Brazil, Paraguay and Uruguay) common market, it uses
MERCOSUR’s ‘common external tariff’ as its MFN rate of duty. Brazil also has
preferential rates of duty for its MERCOSUR partners that are not shown in this
illustration, but are included in Brazil’s national customs tariff.
A ‘concession’ made in WTO negotiations does not necessarily mean a reduc-
tion in the level of the barrier. It may include a reduction; it often does. But the
kernel of all WTO ‘concessions’ is the binding of the terms of access to a product
market or services market or of national treatment for services and services sup-
pliers. A binding is a contract to make market access no more restrictive13 than the
level specified in the WTO Schedule without compensation for affected trading
partners as prescribed in the WTO.
It is important to understand, too, that a binding applies to all the terms of mar-
ket access specified in the Schedule of the member offering the binding. The most
important of these terms in most goods Schedules is the bound – or ‘maximum’ –
customs duty. But other access terms in addition to, or modifying, the duty may
be included in a bound ‘concession’. These are the ‘terms, conditions or qual-
ifications’ mentioned in Article II. In practice, the terms and conditions on a
11
This extract is taken from the WTO’s CD-ROM entitled ‘Results of the Uruguay Round’; see Chapter 4
for more details of the CD-ROM.
12
This extract is taken from the Brazil customs Schedule available for download from the International
Customs Tariff Bureau (BITD) at www.bitd.org/.
13
GATT Article II:1 refers to access terms that are ‘no less favourable’.
10
Figure 1.2 Extract from Brazil’s GATT Schedule
Figure 1.3 Extract from Brazil’s national customs tariff (2006)
The WTO Schedules
Scheduled commitment often circumscribe the breadth of the concession by, for
example, applying a rate of duty on imports of a seasonal fruit that is higher during
the harvest season than during the fallow season of the year. The rule is that a
member may include in its Schedule any additional terms on a bound rate of duty
that yield rights or grant a benefit to its trading partners, but it may not make any
additions that diminish its obligations under the agreements.14
Governments sometimes impose duties or charges on imports in addition to the
customs duty. Where these Other Duties or Charges (ODCs) apply to a bound tariff
item, they must be listed in the goods Schedule.15 They become part of the duty
binding: i.e. any increase may result in a breach of the binding. Other conditions,
including benefits that are not in the nature of duties or charges, may also affect a
binding. For example, the seasonal change mentioned above in duties on imports
of fruits must be listed in the column of the GATT Schedules headed ‘Other Terms
and Conditions’.16
We will discuss the rules on bindings for goods (Article II of the GATT) and
services (Articles XVI and XVII of the GATS) in more detail later. For now, we
should note that the rules in Article II prevent circumvention of the bound rate
by the introduction, on top of the bound duty, of additional charges, fees or terms
not listed in the goods Schedule. Naturally, it would be a ‘breach of a binding’ to
apply any duty that is higher than the bound duty. It would also be a breach of a
binding to:
r increase any associated import levies such as an ‘import surcharge’ or a

‘luxury tax’; or
r allow an import monopolist to impose an additional charge or ‘mark-up’
on the price of imports; or
r reduce the rate of excise on competitive domestic products.
A binding of a services commitment protects against adverse changes in the

committed terms of access for services and for service suppliers. Because of the
many different ways that services are traded, it is more complex in the case of
services than it is in the case of goods to categorize ways in which a member
may breach a binding. We will look at the market access and national treatment
14
This clarification derives from a dispute under the GATT (United States – Restrictions on Sugar,
BISD/36S/331 or L/6514 adopted in June 1989, para. 53). It is not yet clear that this rule also applies
to the GATS Schedules, but it probably does.
15
For many years, there was no explicit obligation to list ‘other duties and charges’. But an understanding
incorporated into the WTO obliges members to list them or lose them. Listing an ‘other duty or charge’ does
not, in itself, mean that it is consistent with WTO obligations.
16
The ‘Other Terms and Conditions’ column is included in the proposed Doha Development Round Schedules
but does not appear in the Uruguay Round Schedules; there, terms and conditions are typically listed in a
footnote to the Schedule.
13
obligations and related restrictions that governments are required to list, when
applicable, in more detail in Chapter 3.
The Economic Value of Bindings

Governments often have several different reasons for joining the WTO, but
improved access to foreign markets or higher shares of world trade are not nec-
essarily the main reasons. Government officials and members of the business
community often say something like: ‘We joined the WTO because membership
is the “gold standard” for modern trade policy.’ Rapidly growing and reform-
ing economies, and even small, isolated and poor countries that can scarcely
afford the resources, put huge efforts into joining the WTO as part of their devel-
opment strategies because membership shows that the country has arrived at
a stage of policy and administrative control of its economy where it can deal
on an equal basis with the rest of the world, even with the most powerful
economies.
One benefit of being on the ‘gold standard’ is that foreign business and foreign
investors will be more comfortable about a government’s economic policies. They
read WTO membership – and the WTO Schedules that accompany membership –
as guarantees of basic rights for them and of the direction and stability of trade
policies. They may begin to cut the risk premiums that they formerly expected
for doing business in the economy. Local businesses, in turn, will find it easier to
build profitable links to the rest of the global market.
The domestic economy also benefits from the policy stability of bound terms of
access for foreign competition and supply. Observers often refer to the WTO
concessions as being ‘locked in’, or to the ‘ratchet effect’ of bindings that,
once committed to in the WTO, cannot be reversed or withdrawn, at least not
without compensation. Businesses prefer fixed costs, such as taxes on imported
components and other barriers to market entry, to be lower. But the reality is that
consumers usually end up bearing the fixed costs. What business finds still more
troublesome is when fixed costs become unpredictable. It is difficult to plan a prof-
itable enterprise in those circumstances; business investment may go ‘on strike’.
Analysts note that WTO compliance strengthens national institutions and may
contribute to the security of property rights – including business investments –
that seems to characterize successful economies.17
Bound obligations are an important way to assure the rest of the world and
domestic business of the stability of trade policies. They are highly credible
because the incentive to live up to the obligation – potential reciprocal action
by trading partners – is independent of domestic politics and endures through
17
D. Rodrik, ‘Trade policy reform as institutional reform’, in B. Hoeckman, A. Mattoo and P. English, eds.,
Development, Trade and the WTO: A Handbook (World Bank, Washington, 2002).
14
The WTO Schedules
changes of government. WTO bindings often endure for decades: longer than
most governments and parliaments. Finally, bound WTO commitments contribute
to the transparency and stability of domestic economic policy because they are
necessarily published in the WTO Schedules, and they are considered concrete
because their interpretation is not a matter for any individual WTO member
government – including the government maintaining the commitment – but for the
WTO membership as a whole. In the event of a disagreement leading to a dispute,
the interpretation is determined through the WTO’s impartial dispute settlement
process.
The economic value of the binding is greatest in goods trade when the bound
and applied rates of duty are the same. In that case, the commitment of the mem-
ber maintaining the binding is given effect at the border. But this is often not
the case, especially in agricultural tariff lines. The WTO Secretariat’s 1999 study
entitled Market Access: Unfinished Business examined the state of market access
against commitments that members made in the Uruguay Round, most of which
remain as they were in 1994. It found that ‘Available evidence suggests that for
industrial countries the gap between bound and applied tariff rates on agricul-
tural products is not important, but that for some developing countries it is quite
significant.’18
The gap between a high bound rate of duty and a low applied rate – often
called the ‘overhang’ of the bound rate – is due, in some cases, to the tariff-
cutting formulas for agricultural products that members adopted in the Uruguay
Round.19 Many developing countries took advantage of the opportunity to adopt
‘ceiling’ bindings well in excess of applied duties on previously unbound
agricultural tariffs as an alternative to cutting their tariffs. Table III.5 of the
WTO’s 1999 study illustrates the resulting ‘overhang’ of bound duties – see
Table 1.1.
Although major developed economies, such as Japan, the EC and the United
States, have bound rates and applied rates of duty that are very closely aligned,
they also have bound rates in some tariff-quota products that have large amounts of
‘water’ in these bound rates: that is, the domestic market is priced well below the
level implied by the bound/applied duty. This phenomenon of ‘water’ in the tariff,
which indicates that the bound rate provides ‘excess protection’ to the domestic
industry, also reduces the economic value of the binding.
18
WTO, Market Access: Unfinished Business, Special Studies No. 6, page 51 (but see below for another
view on the ‘gap’ in developed countries).
19
In agriculture, the actual market access ‘formulas’ were rather informal, based on suggestions by the
then Director-General of the GATT (Arthur Dunkel) that were not formally adopted. For detailed informa-
tion, see A. Hoda, Tariff Negotiations And Renegotiations Under The GATT And The WTO: Procedures
And Practices (Cambridge University Press, Cambridge, 2001). The author points out that the practice of
implementing ceiling bindings was common in protocols of accession accepted in the last years of the
GATT.
15
Table 1.1 Average applied and bound tariff rates for agriculture (%)20
Simple average MFN Simple average Apparent bound

Country applied tariff bound tariff rate overhang
Australia 1.2 3.3 2.1

Bangladesh 25.1 188.3 163.2
Bolivia 10.0 40.0 30
Egypt 64.9 84.1 19.2
Indonesia 8.6 47.3 38.7
Jamaica 20.2 100.0 79.8
Kenya 16.7 100.0 83.3
Peru 17.8 31.1 13.3
Poland 34.2 55.5 21.3
Singapore 0.0 9.6 9.6
Trinidad and Tobago 19.1 100 80.9
Thailand 32.1 32.0 –0.1
United States 10.7 8.2 –2.5
Uruguay 13.0 35.2 22.2
Extract from WTO, Market Access: Unfinished Business, Special Studies No. 6, Table III.5.
The ‘overhang’ of bound rates of duty is much smaller in non-agricultural

goods tariff lines, but it is sometimes significant, especially in developing country
markets in Latin America.21
MODIFICATIONS OF THE WTO SCHEDULES

Although the WTO Schedules represent important, binding commitments by WTO
members, most of them are, to some extent, a ‘work in progress’.
Members change their GATT Schedules:
r to reflect the results of negotiations in a multilateral round, such as the
current Doha Development Round (the most common case);
r to make corrections (‘rectifications’) or to record the modifications flow-
ing from a plurilateral negotiation after the completion of a round of
negotiations – for example to implement the changes brought about by
membership of the Information Technology Agreement (ITA) or the
Pharma Agreements;
20
Simple averages must be treated with care. The ‘bound-tariff overhang’ of agricultural tariffs in OECD
countries is also significant in some cases. OECD Economic Study No. 36, 2003/1, shows that European
Free Trade Association (EFTA) countries (Iceland, Norway, Switzerland) and Japan have large bound-tariff
overhangs for nine broad food commodities (meat, dairy, sugar, grains, oilseeds, etc.).
21
See Table II.4 from the WTO market access study cited above.
16
The WTO Schedules
r to reflect the results of bilateral negotiations – undertaken for various
reasons – that require a change in bindings in accordance with the proce-
dures of Article XXVIII of the GATT (see the Glossary for an explanation
of the provisions of Article XXVIII);
r to implement a change in classifications flowing from an update in the
Harmonized System (HS); there were updates requiring some ‘transpo-
sition’ of items in the Schedules in 1992, 1996 and 2002. Article 3 of
the HS Convention requires parties to the Convention to ensure that their
customs and statistical systems are up to date with changes in the HS.
Only 78 members of the WTO were parties to the HS Convention as of
March 2006, but all WTO members apply the HS, even if they are not
parties to the Convention.
Members may modify their GATS Schedules in accordance with Article XXI
of the GATS, which, like Article XXVIII of the GATT, provides for the com-
pensation of other affected members should any member wish to withdraw or
modify a bound commitment. See the Glossary for an explanation of the GATS
Article XXI.
The WTO uses a ‘certification’ procedure to obtain approval of any changes to
a Schedule. The Secretariat of the WTO circulates a member’s proposed changes
to all WTO members, who may notify objections depending on the context in
which the modifications are proposed. For example a member might consider
that its rights to compensation under GATT Article XXVIII have not been met
or that a negotiated concession has not been accurately reflected in the changes
to the Schedule. The concerned members must negotiate a satisfactory basis for
overcoming any objections before the Director-General of the WTO can certify the
proposed changes to a Schedule as final and binding. The results of this negotiation,
if reflected in further proposed changes to the Schedule, must themselves be
submitted to all WTO members for verification prior to certification. Only when
there are no outstanding objections may a change to a Schedule be certified
and become legally ‘binding’. This laborious process is necessary because the
Schedules, as we have seen, are ‘integral’ parts of the WTO Agreement whose
amendment must be approved by a decision of all members.
Fortunately, the WTO website keeps everyone abreast of the current status of
all proposed changes to members’ Schedules in a table that can be accessed at:
www.wto.org/english/tratop_e/Schedules_e/goods_Schedules_table_e.htm. This
table is a valuable reference point because it includes links or references to
the documents containing the pre-Uruguay Round Schedules, the current WTO
Schedules, the status of transpositions due to changes in the HS, and notifica-
tions of ‘rectifications’, ‘modifications’ and ‘renegotiations under GATT Article
XXVIII’.
You can check this table to be sure you know of any outstanding changes
proposed, but not yet certified and included in the Schedules.
17
WHAT IS NOT IN THE WTO SCHEDULES

The Schedules do not tell you everything that a government may be obliged to
do under WTO rules, or even about all its obligations on border barriers. For
example, the goods Schedule focuses on border taxes and on maximum levels of
agricultural subsidies. But it makes no mention of obligations that are triggered
once the import has crossed the border, such as the powerful ‘National Treatment’
rule that prohibits regulations that disadvantage imports competing with goods
produced locally. Goods Schedules make no mention, either, of rules on industrial
standards or intellectual property aspects of trade that might affect the treatment
of goods both at the border and, again, after they have crossed the border. Finally,
they make no mention of services that might also be traded with the goods (such
as after-sales service obligations) or that are usually necessary to complete the
trade (such as transport, information and financial services), where each member
may also have WTO obligations.
Services Schedules are not intended to be a complete description of barriers to
access, or other regulations related to trade in services. A service does not appear
at all in the Schedule unless a member has made some commitment in that sector.
We will look more clearly at what is included and what is left out of services
Schedules in Chapter 3.
Applied duties on goods do not appear in the Schedules but they are subject to
the MFN provisions of the GATT. All goods imports also benefit from the GATT’s
National Treatment rule, whether imports enter under bound or applied rates
of duty, and in cases where there is no bound duty at all. Also, non-reciprocal
tariff preferences for developing countries that do not appear in a member’s
WTO Schedule are governed by the provisions of the Enabling Clause22 of the
GATT.
Preferential Access Concessions

For all practical purposes, preferential rates of duty are applied rates of duty; that
is, they do not constitute bound MFN commitments of the kind found in WTO
Schedules.
Most preferences for developing countries, such as the Generalized System
of Preferences, are unilateral concessions by the preference-giving member to
developing countries. This means that they are not a part of the WTO’s binding
contract, and may be subject to unilateral revision or withdrawal.
22
TheEnablingClause, officially called the ‘Decision on Differential and More Favourable Treatment, Reci-
procity and Fuller Participation of Developing Countries’, was adopted under the GATT in 1979 and enables
developed WTO members to give differential and more favourable treatment to developing countries.
18
The WTO Schedules
In general, non-reciprocal preferences for developing countries are made under

the terms of two broad exceptions to the WTO’s MFN rule, known as the
Enabling Clause and the Waiver on Preferential Tariff Treatment for Least-
Developed Countries. You can find more about these provisions, and about the
decisions of the WTO on how they should apply, by consulting the WTO’s
Analytical Index on-line: www.wto.org/english/res_e/booksp_e/analytic_index_
e/index_e_e.htm (scroll down until you find the heading ‘Enabling clause’).
Most reciprocally negotiated trade preferences are part of a Regional Trade
Agreement (RTA) that has been negotiated outside the WTO. Although members’
participation in RTAs is subject to WTO rules (Article XXIV of the GATT and
Article V of the GATS), the preferences do not appear in a WTO Schedule. Some
preferential arrangements for developing countries – such as the EC’s Cotonou
Agreement with African, Caribbean and Pacific states – may contain a mixture of
reciprocal and non-reciprocal provisions.
Any member may have, in Part II of its WTO Schedule, some commitments
concerning bound preferential rates. But this part of the Schedules refers to his-
torical preferential arrangements – such as colonial trade arrangements – some
of which pre-dated the GATT (1947). All of these preferential agreements have
disappeared or have been replaced.
Significance of Applied Tariff Rates

For commercial and analytical purposes, applied rates of duty matter much more
than the bound rates of duty. This is because the tax impact of a duty on imports,
and the tax revenue collected by government on imports, is determined by the duty
actually applied and not by the commitment made to the WTO.
Competitive analysis of market access – for example, whether your terms of
access to an export market are as good as or better than those of a third-country
competitor – is also based on applied rates. Given the MFN rule, any advantage
or disadvantage on access is probably due to a preference maintained under the
Enabling Clause or GATT Article XXIV or GATS Article V.
Another reason that the applied rate of duty is significant is that all non-WTO
trade negotiations, such as the negotiation of regional trade agreements (RTA) –
‘free trade’ agreements and the like – are based on the elimination of the applied
rate of duty, not the WTO bound rate, unless it happens to be the same rate. The
objective in an RTA is to eliminate duties, so there is no point in starting the
preferential duty cut from any point other than the level that actually applies.
Although applied rates of duty have no contractual significance in the WTO,
the Secretariat tracks applied rates of duty in its Integrated Database (IDB), to
which members contribute data. The modalities for the Non-Agricultural Market
Access (NAMA) negotiations in the Doha Development Round will take applied
19
rates of duty into account in certain circumstances; for example to define a ‘base
rate’ for unbound tariff lines that will be ‘marked-up’ before the application of
a tariff-cutting formula. Under the NAMA modalities for the Doha Develop-
ment Round, these duties would be bound after the application of the agreed
formula.
20
2
THE GOODS SCHEDULES
This chapter considers the structure and content of a member’s WTO Schedules.
It includes a ‘column by column’ description of the four tables that are still in
use in the GATT Schedules. The chapter concludes with more information on the
classification systems and on the system of negotiators’ rights.
The word ‘tariff’ in the English language is borrowed, via Italian, from the
Arabic word for ‘a notice’, ‘ta’riff(a)’ that, in turn, is a form of the Arabic
verb meaning ‘to announce’. We still sometimes use the word ‘tariff’ to mean
any list of published charges, such as a ‘hotel tariff’.
THE OVERALL STRUCTURE

The tables containing the WTO Schedules have special formats, and are organized
using classification systems that can make them difficult to follow at first. But they
are not difficult to understand once you are familiar with the organization of the
content and some of the terms used to describe the different obligations registered
in the Schedules.
Goods Schedules have a format first described in a document issued in December
1993, at the end of the Uruguay Round of trade negotiations (WTO document
MTN.GNG/MA/W/25). They have four parts:
Part I Comprises two sections:

Section I: A Schedule of agricultural tariff concessions in two parts:
A: Tariffs
B: Tariff-quotas
Section II: A Schedule of tariffs on all other products.
Part II A Schedule of preferential tariffs that remained in force from the
early days of the GATT (there are no entries in this part of the
Schedules).
Part III A Schedule of concessions on non-tariff measures on goods other
than agricultural goods (only one or two members, including
21
El Salvador and Indonesia, have any entries in this part of the

Schedules).
Part IV A Schedule of commitments limiting the use of domestic and
export subsidies on agricultural products.
If that looks a little complex, here is the good news: in most cases, you can ignore
Parts II and III, since these Schedules rarely contain any entries. More good news:
if you are interested only in the 90 per cent or more of world trade merchan-
dise that comprises trade in non-agricultural goods, you can ignore Part I.1, and
Part IV too.
Defining ‘agriculture’: when WTO documents talk about ‘agriculture’ they

refer, for the most part, to a set of products defined by HS numbers. In
descriptive terms, ‘agriculture’ means any product whose HS classification
is found in Chapters 01 through 24 minus fish and fish products, plus raw
hides, skins and furs, certain raw fibres (wool, silk, cotton, flax, hemp) and
a half-dozen specialized products found outside Chapters 1–24. The product
group defined this way is mostly consistent with ‘farm products’. But it
contains some surprises: for example, petroleum and fuels are not classified
as ‘agriculture’ (naturally) but one of the most common ‘bio-fuel’ additives
to gasoline, ethanol, is an agricultural product under this definition. This
means that ethanol is subject to the strict rules on subsidies that apply to the
production and export of all agricultural products.
Figures 2.1–2.2 and A1.1–A1.4 show the format for Parts I–III of members’ WTO
Schedules. These tables illustrate the format that members will use following
the Doha Development Round of negotiations.1 They differ in detail from the
Schedules adopted in 1994 at the close of the Uruguay Round; specifically, they
have a more detailed structure of headings. The Uruguay Round formats sought
the same information but used a smaller number of columns, leaving the final
details of the structure of some tables to each member. There is likely to be little
(or no) variation in the structure of the Doha Development Round Schedules,
since members will submit the original data for the Schedules to the Secretariat in
digital files, leaving the Secretariat to produce the published tables.
Figures A1.5–A1.6 show the format of the current Schedules of commitments
on agricultural subsidies. So far, there is no proposed change to this format for the
expected Doha Development Round commitments on agricultural subsidies.
1
WTO document JOB(06)/99 (20 April 2006) specified the formats in preparation for the Hong Kong
Ministerial Meeting of the WTO that was intended to conclude the Doha Development Round negotiations.
22
Figure 2.1 Most-Favoured-Nation tariff
The tables comprising the goods and services Schedules have relatively simple
structures. They can easily be replicated in a spreadsheet or in a simple database
file, or even in a word-processor format. In most cases, the information in each
table is complete, without the need for relationships between the tables. The
exceptions are:
Goods Part I: Section I – A (Agricultural tariffs) and Section I – B (Agricultural

tariff quotas) are linked by an ‘index’ number for tariff quotas. This is
needed because the out-of-quota rate of duty is bound in Section I – A
but the in-quota rate of duty and the quota volume is bound in
Section I – B.
Part IV (commitments limiting agricultural subsidies). The informa-
tion in Sections I and II on the total AMS2 and the commitments on
export subsidies may require additional supporting tables of data.
Through the Goods Schedules

Headnote Members may include, whenever necessary, general information,
details or clarifications concerning their concessions in any part or
section by including headnotes before listing the concessions. Mem-
bers will probably use these headnotes to qualify the whole Schedule
(or section of the Schedule), in the same way that they use entries
in the ‘Terms and Conditions’ column to qualify each line of the
Schedule (see below).
Some Schedules from the Uruguay Round include many footnotes.
The WTO now discourages this practice in favour of the use of the
‘Terms and Conditions’ column, especially for recording the condi-
tions attached to an ‘Other’ rate of duty such as a ‘textual’ rate.
Part I, Section I – A – Agricultural products – tariffs3

Column 1 Tariff Item No. (HS2002) Although GATT Article II does not
specify any particular classification nomenclature that members
must use, the HS has been widely adopted by members. The HS is a
hierarchical system for classifying goods, somewhat like the Dewey
or Library of Congress classification systems for the subject matter
of books. It is represented by a set of digits – usually separated into
‘groups’ by dots, for example in a 2.2 or a 4.2 format – that uniquely
classifies groups of physical goods in world trade and is capable of
classifying every individual merchandise product. See the section
on the HS in the Glossary for a more detailed explanation.
2
Aggregate Measure of Support.
3
See the Glossary for a definition of an ‘agricultural product’.
24
The goods Schedules
Concessions on agricultural products should be listed at the HS

six-digit level at a minimum; members usually adopt bindings at
the eight- or ten-digit level. If members have not yet implemented
the 2002 revision, they may use earlier revisions, such as HS96.
‘Ex-outs’ indicate exceptional treatment that applies to one item
or group of items within a tariff classification. The symbol ‘ex’
should appear in a separate column to identify their use. The remain-
ing part of that classification (i.e. the subset not included by the
ex-out) should also be explicitly identified. Ex-outs are a way to
succinctly identify sub-groups that divide a six-digit classification
into categories at the eight- or ten-digit level.
Column 2 Description of products Only a specialist interested in duties on
a narrow range of products can keep the HS numbers in memory.
Most of us rely on the HS standard description included in WTO
Schedules, which is usually, but not necessarily, in one of the three
official WTO languages (English, French, Spanish). At all levels
of the classification hierarchy down to the six-digit level, these
descriptions are harmonized among WTO members. Below that
level, descriptions of specific products may vary.
In an attempt to reduce the variation, and thereby to make Sched-
ules more comparable and concessions easier to negotiate, the WTO
Secretariat has undertaken to provide members with ‘electronic
files’ of their national WTO Schedules before the final negotia-
tion on the Schedules begins in the Doha Development Round.
These files, drawn from the Consolidated Tariff Schedules (CTS)
database, will contain standardized product descriptions at levels
more detailed than the HS six-digit level.
An important note: the WTO Appellate Body (AB) found, in the
case of EC – Computer Equipment, that, where there is a difference
of view over what is designated by an HS classification, the World
Customs Organization (WCO) ‘Explanatory Notes’ on the Harmo-
nized System are relevant and should be taken into account.4 The
Explanatory Notes are a multi-volume book available for purchase
from the WCO website.
Column 3 Tariff Rate Quota (TRQ) When the tariff line concerns a prod-
uct whose access terms include a tariff rate quota listed in Part I,
Section I – B, of a member’s draft Schedule, you should find a
three-digit number in Column 3, e.g. ‘001’, that identifies the same
product in Section I – B. Otherwise, this column should be empty.
Part I – A contains the binding on the out-of-quota rate of duty. Part
I – B contains bindings on in-quota duties and quota volumes.
4
WTO document WT/DS/62ABR para. 90.
25
Column 4 Base rate of duty The ‘base rate’ of duty is the ‘starting point’ for
a reduction commitment that is expressed as a formula. A tariff-
cutting formula is usually a mathematical expression applied to
the ‘base’ rate of duty to calculate the final rate of duty. It may
also include other ‘modalities’ that qualify the application of the
duty reduction. The base rate is usually defined to be the current
bound rate of duty (but may be an unbound rate, for example in
the case of non-agricultural market access (NAMA) products in
the Doha Development Round). A formula was used to determine
most agricultural duty reductions in the Uruguay Round, and such
a formula will probably do so at the end of the Doha Development
Round.
This column has two sub-columns displaying different forms of
duties. Schedules express the bound duties as either ad valorem or
specific rates of duty, or a combination of the two that we call a
compound rate of duty or, finally, a ‘mixed’ rate of duty in which
the ad valorem or specific rates apply depending on the circum-
stances. You will find all four forms used in the Schedules, although
ad valorem rates, which more transparently indicate the impact of
a duty in proportion to the price of the good, are most frequently
used. Most of the non-ad valorem duties in the Schedules apply
to agricultural products. According to the WTO’s Market Access
Study No. 6, ‘Twenty-five members, both developing and devel-
oped, have non-ad valorem bindings on more than 50 per cent of
their agricultural tariff lines.’5
(A) Ad val. (%) This column shows existing bound rates that are
expressed in ad valorem form.
(B) Other This column shows existing concessions in non-ad val-
orem (NAV) form. This column will be empty in cases where
no such duties are used. Please see the Glossary entry on NAV
rates.
Column 5 Final bound rate of duty This column shows the bound rate of
duty that may be the result of a tariff reduction formula. The rate
of duty will be rounded to the first decimal place. Like Column 4,
this column is divided in two, showing the bound rate of duty as an
ad-valorem rate or as an ‘Other’ (NAV) duty.
When you read this column, you should remember that the bound
rate of duty is the maximum rate of duty, but the binding does not
automatically put a ceiling on the tax impact of the import tariff
unless the binding is expressed in ad valorem terms. The percentage
tax impact of a bound specific rate of duty rises – theoretically to
5
WTO, Market Access: Unfinished Business, Special Studies No. 6, page 3.
26
The goods Schedules
infinite levels – as the price of the imported good falls, without a

breach of binding. For example, a bound specific duty of $1 per kilo
is a tax equal to 5 per cent of the value of a $20/kg product. But if, for
some reason – say, an unexpected increase in world-market supply –
the price of the import drops to $10, then the bound specific rate of
$1 becomes a tax equivalent to 10 per cent of the ‘value-for-duty’
of the import without any variation in the bound rate. The WTO’s
Appellate Body determined, in the case of Argentina – Textiles and
Apparel that, where an ad valorem rate of duty is bound, nothing in
the GATT prevents a member government collecting duties up to the
bound rate, whether by means of an ad valorem or even a specific
tax. But if a specific tax is applied in lieu of a bound ad valorem
duty, the specific rate, e.g. $/kg, must be specified – perhaps subject
to a ‘ceiling’ – so as not to exceed the bound ad valorem impact in
any case.
Column 6 Implementation period This column contains ‘from’ and ‘to’ sub-
columns.
(A) From This column should reflect the first year of implementa-
tion of the concession. This column will be empty when:
(a) there is currently a bound duty-free concession;
(b) no cut will be applied as a result of the modalities.
When a cut will be applied, but the current concession has
not been fully implemented, the ‘From’ column will contain
the date of the full implementation of the current concession
(check the ‘Other Terms and Conditions’ column which may
contain more information).
(B) To This column should reflect the year in which the concession
will be fully implemented in accordance with the modalities.
Again, the column will be empty if:
(a) there is currently a bound duty-free concession; or
(b) no cut will be applied as a result of the modalities.
Column 7 Special provisions for agricultural products The special provi-
sions that will be available for concessions on agricultural mar-
ket access (such as Special Agricultural Safeguard (SSG), Special
Safeguard Mechanism (SSM), Special Products (SP), etc.) were
not decided at the time that this Handbook was drafted. In the
Uruguay Round Schedules there is a column headed ‘Special Safe-
guard’ that may contain the letters ‘SSG’ but is otherwise blank.
These letters designated products whose protection had been ‘tar-
iffied’ – that is, converted from, for example, a quota to a tariff
under the procedures adopted in the Uruguay Round – and that
were eligible for ‘Special Safeguard’ protection in accordance with
Article 5 of the Agreement on Agriculture.
27
Some agricultural products in Schedule 1A or 1B of the Uruguay

Round Schedules have the annotation ‘ST-5’, referring to the ‘spe-
cial treatment’ provisions of Annex 5 of the Agreement on Agri-
culture. These provisions allowed members to maintain non-tariff
(quantitative) protection on limited terms and with provision for
specified levels of ‘minimum market access’ at a bound rate of duty.
Examples of ST-5 products include rice in Japan and certain sta-
ple elements of traditional diet in developing countries. Some of the
quotas that applied to ST-5 products at the end of the Uruguay Round
have since been tariffied (see WTO document G/MA/W/23/Rev.3).
Column 8 Initial Negotiating Right (INR) on the concession In the case
of bindings arising from ‘request-offer’ negotiations – i.e. not the
result of modalities adopted in a round of negotiations – this column
contains a three-digit alphanumeric code identifying the member
with whom a concession was negotiated.6 If the concession does
not represent a reduction in the bound rate, then the INR should
designate the member with whom a bound cut was last agreed. It
should be left blank in all other cases.
Column 9 Other Duties and Charges (ODCs) This column contains infor-
mation on duties and charges over and above the customs duty
that form part of the duty binding. Any additional duties and
charges must comply with Article II:1(b) of the GATT 1994 and
the Uruguay Round Understanding on the application of this article
(see Appendix 1: ‘A closer reading of Article II’). The Understand-
ing stipulates that such duties and charges must be those mandated
by law in the member’s territory and notified as of the date of
the incorporation of the GATT Schedules into the WTO (15 April
1994). Fees or charges not notified on that date may not be applied.
In future, when a tariff line binding is re-negotiated – for example
in the Doha Development Round negotiations – any fees and other
charges may also be varied but only by reducing them from the
initial level.
In most Schedules this column is empty, but the absence of an
entry is significant. In accordance with the Understanding on Arti-
cle II(b), an empty entry signifies a zero ODC binding. You may,
however, find various surcharges listed here that might be called a
‘luxury tax’ or a ‘fiscal surcharge’ or ‘stamp tax’. Governments that
rely on the customs barrier as a principal point of revenue collection
are the most likely to add charges on top of import duties.
Exception categories – Fees and charges that do not need to be
included in this column are:
6
The alphanumeric codes are those used in the WTO Integrated Database (IDB).
28
The goods Schedules
(i) Customs service fees complying with GATT Article VIII (see
the Glossary).
(ii) Anti-dumping duties applied in conformity with Article VI.
(iii) A ‘charge equivalent to an internal tax imposed, consistently
with the provisions of paragraph 2 of Article III, on like domes-
tic products or on a good from which the imported product has
been manufactured or produced in whole or in part’ (Article
II:2(a)). What this means, in practice, is that a member can
levy an excise or value-added tax that also applies to domestic
production on imports at the border and that this tax may vary
from time to time as the rate of excise or value-added tax varies
in the member’s territory. See also the discussion of ODCs in
the section ‘A close reading of Article II’.
Column 10 Other Terms and Conditions Clarifications or comments concern-
ing the scope of a concession for a particular tariff line should be
included in this column. Please see the findings of the AB on the
interpretation of ‘Terms and Conditions’ in the Canada – Dairy
case, in the Appendix entitled ‘A closer reading of Article II’.
The tables in Figure 2.2 show extracts from the 1994 (Uruguay Round) Sched-
ules of the European Communities, Japan and the Republic of Korea showing
commitments in Part I Section I – A on rice (HS 1006).7 The example of a ‘sensi-
tive’ agricultural product shows some of the common and uncommon features of
the Uruguay Round Schedules, including:
NAV tariffs The EC bound duties on rice are, in some cases, an ad valorem
tariff and, in other cases, a specific tariff.
ST Annex 5 Japan has claimed the special treatment available in Annex 5 of the
Agreement on Agriculture for rice. This provision permits Japan to
avoid the tariffication requirements of Article 4 of the Agreement on
certain conditions. These include a larger ‘minimum access’ tariff
quota (see the continued example in the next section). Because there
has been no tariffication of the former rice import prohibition, Japan
has no bound ‘out-of-quota’ duties on rice. The Republic of Korea,
too, claimed ST-5 treatment for rice, but included the annotation in
Section I – B (see below).
SSG The EC has reserved the right to apply a ‘Special Safeguard’ to
imports of rice, under the rules governing tariffication.
Footnotes For convenience, we see the footnotes immediately under the
extract from the Schedules. The material included in footnotes in
the Uruguay Round Schedules should be considered ‘Other Terms
7
The information in the tables has been taken from the WTO CD-ROM ‘Results of the Uruguay Round’.
The column heading ‘U/B/C’ means ‘Bound or Un-bound’. The letter ‘C’ indicates ‘bound’ in the French
and Spanish languages.
29
Figure 2.2 Tariff Schedules: a current example
The goods Schedules
and Conditions’ qualifying the bindings in the Schedules and, in the

proposed Doha Development Round formats described above, will
be included in Column 10 of the Schedule. In most of the Uruguay
Round Schedules, footnotes may be difficult to locate but warrant
the effort.
Information Technology Agreement (ITA)

The Ministerial Declaration on Trade in Information Technology Products (ITA)
adopted at the Singapore Ministerial Conference of the WTO in December 1996
provides for the elimination of ordinary customs duties and ‘other duties and
charges’ on imports of a wide range of goods associated with the IT industry
(computers, telecommunication products, semi-conductors, semi-conductor man-
ufacturing equipment, software and scientific instruments). The original signato-
ries decided that, if participants representing approximately 90 per cent of world
trade accepted the ITA by 1 April 1997, then all members would cut their import
duties and associated charges to zero by the year 2000 (developing countries par-
ticipating in the agreement were offered a longer time-frame to eliminate duties
on some products). This criterion was met and the ITA entered into force with the
first staged reduction in tariffs occurring on 1 July 1997.
There are currently seventy members who have notified the Committee
of the ITA of compliance with the ITA terms. Their Schedules related to
ITA products are available from the WTO website (at www.wto.org/english/
tratop_e/inftec_e/itscheds_e.htm) and have been incorporated into their consol-
idated WTO goods Schedules.
ITA Schedules usually include two additional sections. The first is often referred
to as the ‘implementation matrix’. It provides a detailed illustration of the relevant
bound duties per year, before the phase-out takes place. The second table relates
to ‘Attachment B’ of the ITA. It contains a list of products to be provided with
duty-free treatment ‘wherever they are classified in the HS’.
Other Plurilateral Agreements

The negotiations on non-agricultural goods that took place in the last stages of the
Uruguay Round (after 1993) included agreements among small groups of members
to reduce or eliminate selected barriers to pharmaceuticals, distilled spirits and
some civil aircraft parts. Most of these agreements are not stand-alone documents.
Members incorporated the concessions they made into the Schedules they attached
to the WTO Agreement. An exception to this is the so-called ‘Pharma Agreement’ –
Trade in Pharmaceutical Products. Besides providing for duty-free bindings on
a number of tariff lines (i.e. HS Chapter 30 and subheadings 2936, 2937, 2939
and 2941) that were included in Part I, Section 2 of the Schedules, the Pharma
Agreement provided for the inclusion of four additional annexes to the Schedules.
31
Annex I Lists the pharmaceutical active ingredients that have an ‘international

non-proprietary name’ (INN), as defined by the World Health Orga-
nization. A ‘CAS number’ was also included for each substance.8
Annex II Lists a number of chemical ‘prefixes and suffixes’. These identify
salts or esters of the compound, or hydrates in which the substances
could be suspended without changing the nature of the pharmaceu-
tical active ingredient. The idea was that any active substance listed,
including if in combination with the suffixes or prefixes of Annex II,
would benefit from the duty-free treatment as long as it was classified
in the same HS six-digit heading as the INN active ingredient.
Annex III Lists those salts, esters and hydrates of INN active ingredients that
were not classified in the same HS six-digit heading as the INN active
ingredient, but that were still to be duty-free under the agreements.
Annex IV Lists a number of ‘intermediates’, which are products used for the
production and manufacture of finished pharmaceuticals and that are
also duty-free.
The Pharma Agreement, like the ITA, commits participants to meet under the
auspices of the WTO at least every three years, with a view to eliminating tariffs
on additional pharmaceutical products. Unlike the ITA, the Pharma Agreement
has seen its product coverage increased twice: following the first review in 1996
(implemented on April 1997)9 and again in 1998 (implemented on July 1999).10 A
large number of pharmaceutical products – not tariff lines – has been added in each
review to the duty-free list, bringing current coverage to more than 6,500 pharma-
ceutical substances. All of these additional concessions have been incorporated in
the members’ Schedules.
8
CAS numbers are unique numerical identifiers for chemical compounds, polymers, biological sequences,
mixtures and alloys, assigned by the ChemicalAbstractsService (CAS) to every chemical that has been
described in the literature. The CAS numbers have been added to the Schedules to make database searches
more convenient, as chemicals often have many names.
9 10
WTO document G/MA/W/10. WTO document G/MA/W/18.
32
3
THE SERVICES SCHEDULES: SPECIFIC

COMMITMENTS UNDER THE GATS
Each WTO member is required under the GATS to have a services Schedule, in
the same way that they had a tariff Schedule under the GATT. Taking a glance
at any services Schedule, you will notice that it is quite different from the goods
Schedule. It has four columns, fewer than most goods Schedules, but this does not
make it less complex. In fact, a services Schedule may prove more challenging
to read and interpret. While a goods Schedule, in its simplest form, lists only
one tariff rate per product, a services Schedule contains at least eight entries per
sector. The commitments on any Scheduled sector are recorded with respect to
four modes of supply and two types of actual or potential restrictions: ‘limitations
on market access’ and ‘limitations on national treatment’.
The four modes of supply correspond to the definition of trade in services in
Article I:1 of the GATS. They consist of: cross-border supply (mode 1), consump-
tion abroad (mode 2), commercial presence (mode 3) and presence of natural
persons (mode 4). The limitations inscribed with respect to these four modes often
relate to domestic policy interventions, such as restrictions on foreign investment,
on the form of legal incorporation or on the scale of business operations, which go
far beyond border measures and usually target suppliers rather than services. This
reflects not only the fact that many relevant policy measures apply ‘behind the
border’, but also that they consist of non-tariff interventions that cannot be easily
translated into one single indicator.
In the same vein, while tariff-paid imports of goods automatically qual-
ify for national treatment under the GATT, national treatment may be con-
strained under the GATS. A services Schedule thus indicates not only access
conditions with regard to six types of measures that are defined to constitute
‘market access’, including the existence or otherwise of numerical quotas, but
also any departures from ‘national treatment’. Taking into account these pecu-
liarities, there is, nevertheless, one common rationale behind the scheduling
approach under both the GATS and the GATT: the intention to promote trans-
parency, certainty and predictability in international trade relations, and to estab-
lish a framework for negotiating trade liberalization on a mutually advantageous
basis.
This chapter tries to answer some basic questions readers may have about
services Schedules, such as: What is a Schedule? What are its implications? What
is the main content? What type of measures are not recorded?
33
WHAT IS A SERVICES SCHEDULE?

A services Schedule is a legal document annexed to the GATS, in which a
WTO member inscribes its commitments on market access and national treatment
(Articles XVI and XVII) in specified services sectors. While each member has the
obligation to submit such a Schedule, its sector scope and specific conditions of
treatment are particular to the Scheduling member.
Market access and national treatment commitments are made only in the sectors
listed in the Schedule and subject to the limitations that might have been inscribed
under any of the four modes of supply. In other words, a service does not appear
at all in the Schedule unless the Scheduling member has chosen to make specified
commitments on market access and/or national treatment for that service. This
Scheduling approach is sometimes referred to as ‘bottom up’ or ‘positive listing’;
it implies that sectors or sub-sectors that are not included are not subject to any
access obligations. For each Scheduled service, the member may then inscribe
different limitations with respect to the individual modes. This entails a very
considerable degree of flexibility that allows all governments to customize their
commitments to national policy choices and constraints. As a result, it is virtually
impossible to find identical services Schedules.
While specific commitments vary from one Schedule to another, their legal
nature remains the same: they constitute an integral part of the GATS. This means
that Schedules are common agreements among members, just like the GATS itself,
and that any commitments made are as binding on the Scheduling member as the
provisions of the Agreement. They are subject to the same rules of interpretation
and may be enforced via the WTO dispute settlement system. The clarity of all
Scheduled entries thus has to be ensured. Members are required to specify in their
Schedules the terms, limitations and conditions on market access and national
treatment (Article XX), and they are well advised to precisely clarify the sectoral
scope of the services included.
Given the underlying objective of contributing to stability and predictability in
international trade relations, as well as their legal nature, Scheduled commitments
cannot be easily changed. A member can withdraw or modify a commitment
only with the agreement of affected members, which may insist on compensatory
adjustments (Article XXI). If relevant negotiations remain inconclusive, the GATS
provides for binding arbitration. The ensuing adjustments are to be extended to all
members on a most-favoured-nation basis.
WHAT ARE THE IMPLICATIONS OF SCHEDULED

COMMITMENTS?
As indicated before, a Schedule binds the specified levels of market access and
national treatment and any additional commitments that a member may have
34
The services Schedules: specific commitments under the GATS
undertaken. It thus precludes the imposition of new or additional restrictions on

entry or participation in the market concerned. From the perspective of economic
operators, specific commitments thus have an effect similar to a tariff concession
in merchandise trade.
In many cases, there may be a gap between commitments and actual access
conditions in a sector. For example, the market access column of a services
Schedule may bind a minimum number of suppliers that are allowed to offer
a particular service or a certain level of foreign equity participation, but the
member’s actual regime may be far more liberal. Similarly, a member may have
not undertaken any commitment on national treatment in a Scheduled sector, or
completely omitted a variety of sectors from its Schedule, but the applied regime
does, nevertheless, allow for non-discriminatory participation of foreign suppliers.
Therefore, a services Schedule must not be confused with an inventory of existing
trade barriers.
The existence of market conditions more liberal than those Scheduled may
be attributed to various factors. First, in some sectors (for example telecommu-
nications, financial services, postal services, energy services or transportation),
liberalization has been an ongoing process since the early 1990s. However, most
existing commitments date back to 1994 or, in the case of telecommunications and
financial services, where the Uruguay Round negotiations have been extended, to
1997. They may have been overtaken by actual policy reforms. Second, given the
novelty of the GATS and some of its concepts, governments might have hesitated
to submit sweeping commitments during the Uruguay Round. The absence of
reliable trade data at a disaggregated level may have been an additional deterrent.
Third, not all potentially interested domestic suppliers were aware of the stakes
involved. In the absence of industry inputs, however, governments might have
refrained from adopting an active negotiating stance.
Nevertheless, the general structure of commitments still tends to reflect mem-
bers’ sector choices concerning openness to trade and economic reform. Commit-
ments are more frequent in services that have long been characterized by a liberal
approach towards foreign participation. Thus, for example, almost all Schedules
contain commitments on tourism, an area in which virtually all members have
long maintained comparatively open access regimes. Further, there is an apparent
concentration of commitments on sectors of general infrastructural importance
which provide economy-wide inputs, including financial services, a broad range
of business services, and telecommunications. Liberal access conditions in such
sectors, and the related flows of investment, skills and expertise, might help to pro-
mote overall economic growth and efficiency. This could also explain why several
developing members, which did not initially participate in the extended negotia-
tions on basic telecommunications, nevertheless volunteered deeper commitments
in the wake of these negotiations.
Commitments under the GATS offer an opportunity for governments to secure
domestic policy reforms, once decided, against policy slippages and reversals.
35
Such stabilizing effects are particularly valuable in sectors where large, up-front
investments are necessary for firms to gain a foothold in new markets. More-
over, GATS negotiations can serve as a country-internal catalyst for coordinated
policy reforms, and may enable the governments concerned to seek reciprocal
improvements in access to foreign markets.
THE CONTENT OF A SERVICES SCHEDULE

Each services Schedule contains four main types of information: description of the
sector or sub-sector in which the member has made commitments, limitations on
market access, limitations on national treatment, and any additional commitments
that a member may want to undertake. Accordingly, all Schedules consist of four
columns. While the market access and national treatment columns are organized by
mode of supply, the structure and content of the additional commitments column
are for the individual member to decide.
Entries in the market access and national treatment columns may vary across
modes within a spectrum from full commitments without limitations, commit-
ments with limitations, to no commitments. A member undertakes full commit-
ments in a given sector and mode of supply if it does not inscribe any of the
restrictions outlined in Articles XVI:2 (market access) or XVII of the GATS.
These are explained below. In this case, the relevant entry reads ‘none’, thus sig-
nalling that there are no limitations. In contrast, the absence of any commitment
under a particular mode, which is tantamount to full policy discretion, is indicated
by the entry ‘unbound’. When maintaining limitations, such as numerical ceil-
ings or economic needs tests (market access), or discriminatory taxes or subsidies
(national treatment), WTO members should describe these concisely, and indicate
the elements which are inconsistent with the relevant provisions.
Sectoral Description
The first column of a Schedule lists the sectors or sub-sectors in which commit-
ments are undertaken. Accurate sector descriptions are very important in order to
avoid unintended policy bindings.
The sector definition in most services Schedules is based on a ‘Services Sectoral
Classification List’ (WTO document MTN.GNS/W/120) which was developed
by the then GATT Secretariat in the early 1990s for Scheduling purposes. The
List contains twelve broad services sectors as follows: (1) Business; (2) Com-
munication; (3) Construction and Engineering; (4) Distribution; (5) Education;
(6) Environment; (7) Financial; (8) Health; (9) Tourism and Travel; (10) Recre-
ation, Cultural and Sporting; (11) Transport; and (12) ‘Other’. For each of these
sectors, except the ‘Other’ category, the Classification List specifies further sub-
sectors. It frequently provides cross-references to the UN Provisional Central
36
Table 3.1 How specific commitments are structured (India: Health Services)
Modes of supply: (1) Cross-border supply; (2) Consumption abroad; (3) Commercial
presence; (4) Presence of natural persons
Sector or Limitations on Limitations on Additional

sub-sector market access national treatment commitments
8. HEALTH-RELATED 1) Unbound 1) Unbound

AND SOCIAL
SERVICES
2) Unbound 2) Unbound
A. Hospital Services 3) Only through 3) None
(CPC 9311) incorporation with a
foreign equity ceiling
of 51 per cent
4) Unbound except as 4) Unbound except
indicated in the as indicated in the
horizontal section horizontal section
Product Classification (CPC), which contains relatively detailed explanations of

the activities covered. In most Schedules, the sector names are thus accompanied
by CPC references. For the sake of clarity, WTO members are encouraged to use
the Classification List and these references as far as possible. For some sectors,
such as telecommunications and financial services, alternative classification sys-
tems have been developed. In any event, members remain free to use their own
sub-sectoral classifications or definitions.
Four Modes of Supply

The possibility to inscribe limitations on market access and national treatment
across sectors and modes of supply actually allows members to closely tailor
commitments to their countries’ specific conditions.
The four modes are essentially defined on the basis of the origin of the service
supplier and consumer and/or their territorial presence at the time the service is
supplied. Mode 1 (cross-border supply) refers to the possibility of non-resident
suppliers supplying services cross-border, for example via telecommunications
or mail, into the Scheduling member’s territory. Mode 2 (consumption abroad)
captures the ability of residents to consume services in the territory of another
member, for example as tourists, students or patients. Under mode 3 (commer-
cial presence), a member defines the opportunities for foreign service suppliers
to establish, operate or expand a commercial presence in its territory; if not oth-
erwise specified, this may include any type of establishment, whether through
representative offices, branches, agencies or wholly owned subsidiaries. In turn,
37
mode 4 (presence of natural persons) refers to the conditions governing the entry
and stay of foreign individuals in order to supply a service. They may operate as
independent (self-employed) professionals or as employees of foreign firms that
either operate from abroad or are established in the host country. Virtually all
Schedules precisely circumscribe the range of persons actually covered.
In many cases, a service can be supplied through more than one mode. For
example, architectural services may be provided cross-border (under mode 1) by
a firm located abroad or by its office established in the consumer’s home market
(mode 3). If the foreign director visits the site to monitor progress, his presence
would fall under mode 4. As indicated before, while transactions under individual
modes may be closely economically linked in many cases, members remain free
to vary their commitments or even completely exempt individual modes from
bindings.
Limitations on Market Access

In the second column of the Schedule, a member indicates for each mode of
supply what limitations, if any, it intends to maintain on market access in the
sector concerned. It is important to bear in mind that these ‘access’ restrictions
do not necessarily apply only to market entrants, but may affect the ongoing
operations of established companies as well.
Article XVI:2 of the GATS lists six categories of limitations which may not
be adopted or maintained, unless they are specified in the Schedule. They com-
prise four types of quantitative restrictions, plus limitations on the type of legal
entity, including joint venture requirements, and limitations on foreign equity par-
ticipation. This list is exhaustive. Members are required to Schedule any such
measures in order to be able to use them, even in cases of non-discriminatory
application. (Note that only joint venture requirements and foreign equity ceilings
are discriminatory by nature.)
The Guidelines for the Scheduling of Specific Commitments under the GATS,
circulated as WTO document S/L/92 and available via the WTO website, list the
following typical examples of limitations on market access:
(a) Limitations on the number of service suppliers:

Licence for a new restaurant based on an economic needs test.
Annually established quotas for foreign medical practitioners.
Government or privately owned monopoly for labour exchange agency
services.
Nationality requirements for suppliers of services (equivalent to zero
quota).
(b) Limitations on the total value of transaction or assets:
Foreign bank subsidiaries limited to x per cent of total domestic assets
of all banks.
38
(c) Limitations on the total number of service operations or quantity of

service output:
Restrictions on broadcasting time available for foreign films.
(d) Limitations on the total number of natural persons:
Foreign labour should not exceed x per cent and/or wages y per cent of
total.
(e) Restrictions or requirements regarding type of legal entity or joint ven-
ture:
Commercial presence excludes representative offices.
Foreign companies required to establish subsidiaries.
In sector x, commercial presence must take the form of a partnership.
(f) Limitations on the participation of foreign capital:
Foreign equity ceiling of x per cent for a particular form of commercial
presence.
The market access limitations covered by Article XVI:2 do not carry any quality-
or qualification-related connotations. Thus, while domestic regulatory frameworks
may provide for licensing and qualification requirements, such as financial sound-
ness or membership in a professional association, these do not need to be Scheduled
as long as no inconsistencies with Article XVI:2 are implied. Nevertheless, some
entries in current Schedules refer to the existence of licensing or authorization
procedures, without providing further detail. These entries are probably intended
to mean that licences are granted on a discretionary basis. However, given the
absence of any clear indications, their legal status remains somewhat uncertain.
WTO members are thus encouraged to avoid such entries.
Limitations on National Treatment

The third column of the Schedule indicates the existence of national treatment
limitations, if any, in the sector and mode concerned. While the relevant entries
may vary, again, between full commitments (‘none’) and full policy discretion
(‘unbound’), Article XVII does not list any particular measures that would be
deemed inconsistent with national treatment and, thus, would need to be inscribed
as a limitation. Typical examples that have actually been Scheduled relate to dis-
criminatory subsidies, taxes or other financial measures; nationality requirements
for members of company boards; technology transfer requirements; and prohibi-
tions on foreign suppliers owning land or real estate. Some Schedules also contain
references to discriminatory standards, licensing, qualification or authorization
requirements.
A member grants full national treatment if foreign services and service suppliers
are accorded at least the same conditions of competition as their domestic coun-
terparts. Interestingly, the national treatment standard does not hinge on whether
or not there is an element of deliberate discrimination; what actually matters are
39
‘the conditions of competition’. (A prior-residency requirement for young pro-

fessionals who seek a licence to practice, although generally applicable to both
nationals and foreigners, may thus fail this test.) When setting up a Schedule of
commitments, it is incumbent on the authorities concerned to assess the status of
potentially relevant measures case-by-case.
Limitations on Both Market Access and

National Treatment
Members frequently operate measures that are inconsistent with both market
access and national treatment. Pursuant to Article XX:2, such measures are to be
inscribed only in the market access column. Thus, even full commitments under
national treatment are not necessarily indicative of the absence of all discrimina-
tion. The discriminatory elements may already be reflected in the market access
column, in entries like ‘Only five foreign banks permitted’ (mode 3) or ‘No more
than 10 per cent of staff may be foreigners’ (mode 4).
Additional Commitments
Entries in the fourth column of the Schedule are optional. Members are given
an opportunity to undertake bindings with regard to measures other than those
subject to Scheduling under Articles XVI and XVII. Cases in point are undertak-
ings not to depart from any relevant international standards, to enforce specified
competition rules, or to comply with certain commonly accepted licensing prin-
ciples in a particular sector. Additional commitments played a particular role in
the extended negotiations on basic telecommunications, when many members
subscribed to a so-called ‘Reference Paper’ containing competition disciplines
(see below).
Horizontal Commitments
Nearly all Schedules are structured into a horizontal and a sector-specific section.
The former section contains market access or national treatment limitations that
apply to all sectors covered by the Schedule, unless otherwise specified. Sector-
specific commitments must thus be read in conjunction with these horizontal
entries.
Horizontal limitations often refer to a particular mode of supply, notably com-
mercial presence (mode 3) and the presence of natural persons (mode 4). For
example, they may provide cover for across-the-board restrictions on foreign
equity participation, types of legal entity, or land acquisition by foreigners. The
horizontal entries referring to mode 4 usually indicate the categories of natural per-
sons that, subject to specified conditions, are allowed to enter and stay temporarily
for the purpose of supplying services in Scheduled sectors.
40
Scheduling Terminology
Certain terms and concepts are used by all members in Scheduling commitments:
As noted before, there is a consistent use of ‘none’ and ‘unbound’ to indi-
cate, respectively, the existence of full commitments or the absence of
any bindings on market access or national treatment under a particular
mode. It is important to keep in mind that a ‘none’ in the sector-specific
part of the Schedule must be read in conjunction with any limitations
that might have been inscribed in the horizontal section.
In some cases, an ‘unbound’ under mode 1 is complemented by a footnote
explaining that this particular entry was chosen simply because cross-
border supplies were deemed not to be feasible. (Hotel and restaurant
services may be cases in point.) The legal status of such an entry would
not change even if trade has become technically feasible.
In contrast to the two ends of the ‘Scheduling spectrum’ – unbound and
none – there is no uniform terminology governing the Scheduling of
particular limitations. Members are called upon, however, to indicate
concisely the measures concerned and the elements which make them
inconsistent with Articles XVI or XVII of the GATS. However, in
some cases, members confined themselves to merely inscribing general
references to national laws or regulations; if challenged by trading
partners, such entries may turn out to be legally void. Some members
have thus used the Doha Round also as an opportunity to clarify vague
commitments without changing the intended degree of restrictiveness.
Sector-specific Scheduling Features

Certain services sectors are subject to particular rules or Scheduling conventions.
An Annex on Financial Services contains, inter alia, a particular classification
for this sector which is not fully congruent with the general Classification List
(MTN.GNS/W/120). It was used by a number of members to structure their
commitments, while others relied on the Classification List or adopted an ad hoc
approach. Moreover, a separate document, the Understanding on Commitments
in Financial Services, proposes a set of standardized commitments and other
obligations in this sector that some thirty members have adopted on an optional
basis. The underlying idea is that such a common approach would encourage
higher and more consistent levels of liberalization.
In telecommunications, two Chairman’s Notes produced during the extended
negotiations in this sector provide additional clarification on Scheduling issues.
One of them refers to frequency management and confirms that relevant mech-
anisms, which may limit the number of suppliers, are not per se inconsistent
with Article XVI. Further, a so-called ‘Reference Paper’ contains competition and
regulatory disciplines in this sector. It was negotiated by a group of members in
41
the mid-1990s, with a view to protecting the commercial value of commitments

from being undermined, for example by anti-competitive practices. The Paper has
subsequently been attached by more than half of WTO members as an Additional
Commitment to their Schedules.
An Annex on Air Transport Services excludes from the scope of the Agreement
measures affecting traffic rights and services directly related to the exercise of
traffic rights. By the same token, the Annex, which is subject to regular reviews,
also identifies three activities as being covered: aircraft repair and maintenance
services; the selling and marketing of air transport services; and computer reser-
vation system (CRS) services. Existing commitments on air transport services are
thus limited to these activities.
Maritime transport is another sector where members may use an optional
Scheduling approach. It consists of a so-called ‘Maritime Model Schedule’, which
was developed by the WTO Secretariat to supplement the CPC-based Sectoral
Classification List.
WHAT IS NOT IN A SERVICES SCHEDULE?

As with their counterparts in merchandise trade, services Schedules do not reflect
all commercially relevant facets of the Agreement. Foreign suppliers may also be
protected under, and benefit from, obligations that apply automatically regardless
of a member’s committed levels of liberalization. The GATS contains two sets
of such general obligations, which should not be inscribed in services Schedules.
One set applies to all services falling under the Agreement, including in particular
the obligation to most-favoured-nation (MFN) treatment, while a second one is
contingent on the existence of specific commitments. A common denominator of
most of the latter obligations is the intention to prevent commitments from being
eroded by policy interventions not captured by the market access and national
treatment provisions of the Agreement. Cases in point are the introduction of
excessively restrictive standards, the operation of foreign exchange restrictions,
or distortions created by domestic monopolies in sectors or sub-sectors where
specific commitments are undertaken.
Further, the GATS contains provisions governing economic integration agree-
ments (Article V) and recognition measures (Article VII) in services. Also, there
are equivalents to the exception clauses known from the GATT that allow for depar-
tures from general obligations or specific commitments under specified conditions
(Articles XII, XIV and XIVbis).
MFN and MFN Exemptions

Most-favoured-nation treatment is a general obligation which applies to all mea-
sures affecting trade in services in any sector covered by the GATS, regardless
42
of whether specific commitments have been made or not. However, an annex to

the Agreement provides that inconsistent measures can be maintained – in princi-
ple for periods not exceeding ten years – subject to review. Such measures must
have been specified in a list of MFN exemptions submitted at the time of entry into
force of the Agreement or, in the case of new members, their date of accession.
Subsequent requests for exemptions from Article II (MFN) could be accommo-
dated only under a waiver mechanism foreseen in the Marrakesh Agreement.
There have been no such cases to date.
The MFN Exemption Lists that have been submitted by some eighty members
are largely self-explanatory. They contain the following five types of informa-
tion for each exemption: the sector to which the exemption applies; the measure
concerned and its inconsistency with Article II; the countries to which the mea-
sure applies; the intended duration of the exemption; and, finally, the conditions
creating the need for the exemption.
As a basic principle, members are required to apply their specific commitments
on an MFN basis. Thus, all trading partners are entitled at least to treatment
commensurate with the conditions of market access and national treatment that
are inscribed in a Schedule. However, it would be possible, if covered by an MFN
exemption, to accord more favourable treatment than that bound in the Schedule
to one or more other countries.
Economic Integration Agreements

WTO members are allowed to grant preferential treatment to services and service
suppliers from countries with which they have concluded a preferential trade
agreement in services. GATS Article V (Economic Integration) lays down the
conditions that such agreements must meet in order to qualify for the implied
departures from MFN treatment. The preferences granted would not need to be
listed as MFN exemptions or inscribed in Schedules. Some fifty such economic
integration agreements have hitherto been notified to the WTO.
Domestic Regulation
The Preamble to the GATS expressly recognizes ‘the right of members to regulate,
and to introduce new regulations, on the supply of services . . . in order to meet
national policy objectives’. Accordingly, the Agreement makes a clear structural
distinction between measures subject to Scheduling under Articles XVI and XVII
and other measures that are intended to pursue regulatory purposes, from consumer
protection to financial stability and prevention of market dominance. The latter
group of (‘non-Schedulable’) measures are subject to a particular set of disciplines
contained in Article VI. They are not covered by Article XIX of the GATS,
which commits members to conduct subsequent negotiating rounds with a view
to progressively liberalizing trade in services.
43
Even in markets that have been fully opened under Articles XVI and XVII,
governments are thus not prevented from introducing or maintaining non-
discriminatory regulations to ensure the quality of a service or the supplier’s
compliance with any social or regional policy objectives. And this is regardless
of any restrictive effects on market access or market participation that may ensue
from such measures. At the same time, Article XVIII provides a basis for govern-
ments to undertake additional commitments that may help, inter alia, to reduce
such effects. Relevant commitments could relate, for example, to the application
of widely used international standards, or consist of other ‘positive undertakings’
regarding the scope or content of a member’s regulatory regime.
Nevertheless, the GATS also contains certain disciplines to ensure that, when-
ever specific commitments exist, regulatory measures are administered in a rea-
sonable, objective and impartial manner (Article VI:1) and specific commitments
are not undermined by regulations, including standards or licensing and qualifi-
cation requirements, that are unnecessarily restrictive (Article VI:5). The precise
scope of these disciplines is still under negotiation. Of course, should domestic
regulatory measures contain elements inconsistent with Articles XVI and XVII,
they are still subject to Scheduling.
Exceptions
A further range of GATS provisions provides cover, in specified circumstances,
for departures from general obligations and/or specific commitments: Article XII
(Restrictions to Safeguard the Balance of Payments), Article XIV (General Excep-
tions), Article XIVbis (Security Exceptions), and a prudential carve-out specific
to the financial sector. Measures falling under these provisions are not subject to
Scheduling.
Again, however, it is important for governments to ensure, prior to taking action,
that the relevant conditions are met. For example, while Article XIV allows for
exceptional measures necessary to protect human, animal or plant life and health,
the member concerned is held to ensure, inter alia, that their application does not
constitute ‘a means of arbitrary or unjustifiable discrimination between countries
where like conditions prevail, or a disguised restriction on trade in services’.
44
4
A PRACTICAL GUIDE
You must be reading this book because you want to understand WTO Schedules.
But your reasons for wanting to understand them will affect the way you approach
the task. An exporter or importer will have different needs from a business advisor
or trade association executive. A trade analyst or an official with an incidental
interest in the WTO Schedules – perhaps from a ministry other than Commerce –
will have objectives that are different again from those with a commercial objective.
In order to offer practical advice, we consider three typical cases.
THREE CASES
(A) Business interest You work in a business that imports or exports, or competes
with firms that import products into your market. You want to know what the
actual terms of access are for your products and, possibly, for complementary
or substitute products in export markets and in your own market. In total we
are talking about a small number of products in various configurations, and
only a handful of markets. In the case of export markets you might also want
to know if there is a significant difference between the access terms – tariffs
or, if it is a service you are selling, the regulations on foreign suppliers – for
your third-country competitors and for you. You might also need to know if
access terms are different in your home market from how they are in export
markets.
(B) Industry or trade association executive Given the global nature of compe-
tition in your industry, you have to stay on top of global market trends for
export or supply opportunities in order to advise your members. You need
to have an overview of levels of protection at home and in a range of actual
or potential export markets. The protection that third-country competitors
enjoy in their home market is also of interest. You need to be able to provide
up-to-date information to your members on foreign trade barriers when they
ask; you have discovered there is no point in relying on government officials
to do the research for you. In fact, the government is more likely to ask you
for information. They expect you to advise them if your members have any
special interest in the ‘free trade’ agreements that they have been negotiating
for a few years. Also, once the multilateral trade negotiations reach the final
stage, you will need to check the details to make sure that the ‘modalities’
45
for the new access agreements have been fully implemented in markets of
interest to your members.
(C) Analyst You might be a journalist, or a student or an academic who has a
project, from time to time, related to trade barriers. You want to identify
some information resource that you can tap for up-to-date information on
trade barriers – probably in an aggregate form suitable for analysing broad
trends rather than floods of detail. You need an authoritative source, of
course, but you do not necessarily need to go to primary sources.
STRATEGIES FOR READERS

(A) Business Interest
Your commercial interest as an importer or exporter means you may have a
focussed need for information on:
r what barriers affect your products;
r what competitive impacts, if any, these barriers have on your sales or
input purchases – that is, do your competitors get better treatment in any
market than you do; and
r what guarantees you have about future treatment of your products.
Applied and bound

Remember, as you begin your search, that the WTO goods and services Schedules
tell you only about an economy’s WTO commitments. They do not necessarily
tell you what the current legal barriers are: that is, the applied rates of duty in
the case of goods or the full suite of regulations affecting services imports. In
fact, the services Schedule may contain no entries at all if there are no market
access commitments in that sector. If there are access commitments on trade in
a particular service, the Schedule will detail regulations that affect access only if
they fall into one of the six barrier-categories of GATS Article XVI, or if they
limit national treatment. Measures that do not fit into one of the six categories of
barriers need not be listed in the GATS Schedules.
Commitments in the WTO Schedules are important to you because they are your
guarantee about future trade policies; but they are not what you need to assess the
competitive impacts of trade barriers. For that, you need to know the applied –
including any preferential – terms of access: applied rates are the commercial,
‘on-the-ground’ reality. In most high-income countries the bound and applied rates
of duty are the same, but you should not rely on that rule of thumb. The ‘Market
Access Map’ database from International Trade Centre (ITC) provides full data
on applied (and preferential and anti-dumping) duties on goods.
Unfortunately, there is no easy way to find the equivalent of applied barriers
to services imports. You know that they must be MFN barriers (the exceptions
46
A practical guide
ran out in 2004) unless covered by a WTO-compliant ‘free-trade’ agreement. But

the only way to check whether, for example, an economy offers preferences to
another in services as part of a regional free-trade agreement, is to check with the
national authorities of the economy (or maybe your industry association has more
information).
Services
If your product is a service, the WTO services database at http://tsdb.wto.org is by
far your best source for information on commitments. Download the information
on specific commitments for the markets that interest you – including, possibly,
your own – and do not forget to download the file on horizontal commitments. That
should be all the information you need for the full details on the commitments.
Finding associated trade data by services sector is more difficult; the WTO
provides the most comprehensive data available without charge in its annual pub-
lication on trade statistics, available at http://stat.wto.org. The data on commercial
services trade, however, are not as detailed as the data on goods trade, and are
rarely up to date; such data as are available tend to be in the travel and transport
services. OECD statistics can be purchased in print from the OECD website.
Goods
If you are making or selling goods, it is relatively easy to get full data on applied
rates at tariff-line level from, for example, the Market Access Map database. But
finding precise information about bound duties, without going to the Customs
agency of the WTO member government, is more difficult.
As noted above in the discussion on the Market Access Map, the ITC database
shows business users the range of bound duties (expressed as ad valorem equiv-
alents) on all products classified within each six-digit group of the HS in every
member country. In many cases this will be ‘close enough’ (or will allow an
educated ‘guess’) for your purposes.
For accurate, detailed data on bound rates of duty at the tariff-line level, there
is no substitute for consulting either the WTO CD-ROM or printed versions of
the 1994 Uruguay Round Schedules, or the downloaded ‘spreadsheet’ version of
the Marrakesh Schedules and/or the ‘Access database’ versions of the Schedules
of more recently acceded countries, available from the links provided above.
But it is not very easy to search through the spreadsheet versions; you must be
careful to check that you have all the columns, footnotes, etc., for the items that
interest you. Also, to construct a comprehensive view that will allow you to make
comparisons among markets, you will have to download the spreadsheets for each
of the markets that are of interest – including, possibly, your own market – and
‘copy and paste’ the spreadsheet rows to a comparative sheet you make up for
yourself, remembering to copy any footnotes as well.
You should be aware that these downloaded ‘spreadsheet’ versions of the Sched-
ules – although they are as close as you will come to authoritative data on bound
47
rates at the tariff-line level – have some limitations, too. The spreadsheets have not
been updated since their submission in 1994: they are the data that were officially
annexed to the Uruguay Round agreements. In many cases this does not matter;
most WTO bindings change little, if at all, between rounds of multilateral negoti-
ation. But there are several occasions for a modification of bindings that you must
consider before you can be sure your information is up to date:
(a) Many WTO member countries slightly revised their WTO commitments
when they adopted the 1996 revision of the Harmonized System of tar-
iff classification, and again when they adopted the 2002 revision of the
HS. These revisions typically involve moving a commitment from one
classification to another and, sometimes, changing the nature of the com-
mitment. Where necessary, these members had to negotiate with trading
partners affected by the changes, in accordance with the provisions of
Article XXVIII (see the Glossary). Especially in the case of HS2002
modifications, many of the Scheduling processes are not yet complete.
Several member countries, including the largest industrialized countries,
currently benefit from a waiver from Article II obligations, allowing them
to implement the changes required by HS2002 in their domestic tariff
schedules on an applied basis, possibly affecting bound duties, before
completing the re-negotiation and certification of changes to their WTO
Schedules.
(b) Some members have undertaken a ‘simplification’ of their tariff
Schedules that has resulted in tariff lines being created or merged or
discontinued.
(c) Some members have had to change the classification – and the duty
commitments – of an item as a result of decisions in classification disputes
before their own courts.
(d) Some members have joined the European Communities and have adopted
the common external tariff of the EC, entailing modifications of their
former WTO Schedules under the terms of Article XXIV (and Article
XXVIII of the GATT).
(e) Some members with specific duties may wish to change their bound rates
following a currency depreciation.
The Status of Schedules page on the WTO website provides you with an invalu-
able ‘map’ through this maze.1 It will tell you where members stand on these
revisions. It provides links to the documents recording the steps in the revisions of
Schedules, including the actual changes that have been ‘certified’ (written into the
Schedules). Unfortunately, these documents do not ‘consolidate’ the changes into
1
www.wto.org/english/tratop_e/schedules_e/ goods_schedules_table_e.htm.
48
A practical guide
a single, publicly accessible Schedule.2 In order to have complete data at the eight-
or ten-digit tariff-line level, you will have to make your own consolidation, work-
ing from the Marrakesh or Accession Schedule with amendments as indicated by
the certified changes.
ITC’s Market Access Map database offers a partial solution because the data
it presents are based on the WTO CTS database, updated annually, and are most
likely to contain the correct HS classifications and bound duty information for
every product in every member country. But, as we have seen, it does not directly
provide information on bound duties at tariff-line level to most users, and does not
include information from footnotes or information on ODCs or ‘other terms and
conditions’.
The WTO’s own six-digit tables, now accessible on each member’s ‘country
page’, also provide up-to-date information directly from the CTS database but,
like the Market Access Map, only at the six-digit level and not at the tariff-line
level.
Comparing duties
Once you have found information on applied rates of duty and on the current
bound rates of duty for goods, how do you make comparisons between the rates in
each market – for example to check on the best export opportunities or competitive
impacts, or on the relative value of the guarantees offered by bound duties?
It is easy to do this in the case of ad valorem duties because they can be directly
compared. The tax impact of an ad valorem rate of 6 per cent is greater than the
tax impact of an ad valorem rate of 5 per cent in any market(s) and for any goods.
Problems of comparison arise in the case of non-ad valorem duties (see the Glos-
sary entry for Non-ad valorem (NAV) duties) or when there are non-prohibitive
tariff quotas involved where, under certain conditions of low world-market prices
or high import-market prices, goods can be sold profitably into the import market
at the out-of-quota rate of duty.
NAV duties These are most common in the agriculture and textiles/garments
sectors of members’ Schedules.3
The easiest way to make a comparison of the duty faced by
competitors in the same market is to use the estimated ad valorem
equivalent (AVE) data available in the ITC’s Market Access Map
database, but see the caution in the text box below. ITC has
calculated the AVEs for you, using the methodology adopted by
2
They are ‘consolidated’ in the WTO’s CTS database as members certify the changes. But the public may
not access the CTS database.
3
The CTS contains about 8,000 agricultural tariff lines that are bound in non-ad valorem terms by a total of
34 members, accounting for 20 per cent, on average, of the bound duties of those members. According to the
WTO study, Market Access: Unfinished Business (available for download from WTO), 25 WTO members
have non-ad valorem duties covering more than 50 per cent of their agricultural tariff lines.
49
WTO members. You could calculate competitive AVEs yourself,

using the procedures detailed in the WTO document TN/AG/S/11,
but it is a tricky process.
The AVEs are also useful when comparing your own opportu-
nities in different markets.
Tariff quotas Comparing access under tariff quotas when the out-of-quota rate
is commercially prohibitive is simply a matter of comparing the
in-quota duties – assuming that the administration of the quota
is fair and does not amount to an additional non-tariff barrier.
Some out-of-quota rates may, however, be prohibitive some of
the time but not always – depending on the relationship between
world-market prices and domestic-market prices, or possibly on
the competitive pricing of some exporters. In such cases, the
competitive comparison depends on commercial judgement more
than on simple arithmetic.
Caution when comparing AVEs: AVEs can be directly compared, just like
ad valorem rates – they show the tax impact of a duty. But the same specific
rate of duty can result in different AVEs for goods with the same tariff
classification if the goods have different values-for-duty, for example because
of differences in quality or composition or origin, which affect transport
costs. Conversely, the same AVE on goods of different value-for-duty means
different levels of specific duty. So be very careful when comparing AVEs
that you are comparing ‘apples with apples’.
(B) Industry or Trade Association

Your interest is in being able to provide information to your members on market
access terms in export markets – and your own – and to act on their behalf as an
advocate for action by your government on national trade policy interests through
its membership of the WTO. To accomplish this, information is needed on:
r what barriers affect the products of your industry group and how they
compare with barriers facing complementary or competitive products;
r what changes in global trade barriers and in barriers in your own market
sector might follow from multilateral and regional trade agreements and,
specifically, what changes might bring the best results for your industry;
r what would constitute a reciprocal concession by trading partners in a
multilateral trade negotiation.
50
A practical guide
You share many of the concerns of the ‘business interest’ outlined above. The
essential differences are due to your role as an advocate of the interests of a
specific business sector:
r you may be interested in a wider range of products than any of your

individual business members;
r you may be interested in a wider range of markets than any of your
individual business members;
r you need to understand the details of commitments to a much greater
extent than most of your business members because your government
turns to you for advice on trade negotiations that – in the WTO at least –
are based on negotiated reductions in commitments, such as bound duties
on goods or specific commitments in the services Schedules.
Because you need information on a wider range of products and on commitments

in a wider range of economies, you are likely to be still more dependent than the
members of your association on access to database information that can assemble
the data on bound rates in broad ‘slices’ through WTO Schedules.
You will find, as the business user finds, that the main challenges in the WTO
Schedules are practical ones: where to get the data and how to make sure that
they are up to date. The restrictions on your access to the full information from
the WTO’s CTS database will, however, mean that you will have to supplement
information you obtain from other sources, such as the CD-ROM containing the
‘Results of the Uruguay Round’ or the Market Access Map database, by the same
means as suggested above for the business user – by searching through notification
documents on the WTO website. You may also be able to obtain some assistance
from your own government, which has full access to the CTS database through
the WTO’s Internet Access Facility.
Interpreting trade commitments

Beyond these challenges, however, there are some interpretive questions that both
your business members and your government contacts may expect you to answer.
Your government wants advice from you, as the representative of a business sector,
on the commercial objectives of your members, as well as on the commercial
impacts of proposed changes to duties and specific services commitments in trade
negotiations.
As for objectives: the process of deciding where the best opportunities lie for
your association members is not very different from the processes that individual
businesses sometimes undertake (see the previous section) to decide where their
competitive access terms are best, given the relative growth of different markets.
As an association executive you have to make the same assessments, only for more
businesses and in more markets.
51
As for impacts: there are two steps needed to assess the impact of a potential
trade agreement, whether multilateral or ‘regional’, as in ‘free trade’ agreements.
1. First, you must have accurate details of the current level of access – the
bound duties in a multilateral agreement – and of the proposed changes.
Normally, you can expect your government to provide you with details
of the proposed changes if they are seeking your advice. But finding an
accurate statement of the current bindings may involve some of the chal-
lenges we saw in the previous section. The solution to these challenges,
if they exist, is also the same.
2. Second, to comment on any negotiated agreement you have to have some
yardstick of commercial value: to what extent does the proposed change
offer an advantage to your members? Is there mutual gain in the proposed
deal in your sector on both sides of the negotiation or, if not, is the gain
on your side big enough (whatever that means in your circumstances) to
contribute to overall reciprocal balance in the agreement?
Degrees of reciprocity. Reciprocity is a characteristic of the entire pack-

age of results in a multilateral trade negotiation that can never be achieved
by balancing trade overall or even sector-by-sector. From a commercial
viewpoint, ‘reciprocity’ is little more than the ‘balance’ we describe in this
section. Governments, however, need to take into account many factors when
assessing reciprocity, including the importance of a bilateral relationship and
mutual economic expectations and obligations, including the humanitarian
obligation of high-income countries to assist low-income countries with their
economic growth and development. These considerations led all WTO mem-
bers to decide that, in the Doha Development Round, developing countries
would not be expected to ‘fully’ reciprocate concessions made by developed
countries. Even so, the GATT speaks of ‘mutually satisfactory’ agreement
being the objective of bilateral negotiations on bound rates that usually com-
plement any formulas applied by agreement in a multilateral trade round.
Taking all of these factors into account makes it plain that the assessment of
‘reciprocity’ among WTO members is a judgement call, not bookkeeping.
Your members will expect you to contribute to the government’s determination

of whether a deal is ‘reciprocal’ by identifying the commercial value of the conces-
sions made on your side and by your trading partners. In a commercial association,
the main concern is the real value of the access offered by trading partners, not
the broader aspects of trade policy. What should be taken into account?
52
A practical guide
In a goods negotiation, the most important factors that determine whether a

deal is balanced on a reciprocal basis are the depth of the cut in bound duties, the
breadth of the cut and the trade coverage of the cuts.
1. The depth of cut is most readily determined by comparing the AVEs

before and after the application of the cut.
2. The breadth of the cut may be much harder to determine, especially
if the agreement is to apply a tariff formula to the current bound
duties.
(a) Some tariff formulas cut every single bound duty; for example an
‘across-the-board’ linear cut or ‘Swiss-formula’ cut. Even when these
formulas apply, there is a possibility of exceptions to the formula
(sometimes called ‘carve-outs’). It is crucial to know not only which
formula will be used, but also whether exceptions will be available,
and their product coverage.
(b) Other formulas employ the concept of average cuts, that may result in
some particular duties not being cut at all. One approach is to apply a
cut to the average level of duties: for example, a 30 per cent cut to the
average level of duty in four-digit product groups of the HS, or even
across the whole Schedule. At high levels of aggregation, such as the
four or six-digit level of the HS, you can expect to find a wide range
of duties at the tariff-line level. This means that a lower average level
of duties may be reached while cutting some duties more than others,
and some, perhaps, not at all. Another approach is to apply an average
cut, such as an average cut of 30 per cent in all duties at the four-digit
level of the HS or even across the whole Schedule. But an average
cut of 30 per cent can be achieved by cutting a lot of low duties by
50 per cent and a small number of high duties by much less or not at
all.4
3. Once you know which duties will in fact be cut by a formula, and by
how much they will be cut, the commercial value of the cut is down
to its trade coverage. This has at least two, related, aspects: the value
of the trade that takes place under this item and the growth in the
market – the value over time of the trade – that is likely to take place after
the cut.
(a) Sometimes a cut in a bound rate of duty that is well in excess of the
applied rate of duty will have zero trade coverage because the cut in
4
Although they have in common the use of averages, these are two very different formulas. If there is a
big variation in the levels of duty on different products, the first example is likely to be much more trade-
liberalizing than the second. The second approach was used in the Uruguay Round modalities for cuts in
agricultural products, for example.
53
the bound rate will leave the lower applied rate of duty unaffected.
In this case – often described as ‘binding overhang’ – the commit-
ment has no commercial value because the tax impact of the current
barrier to access will not be reduced at all if there is no change in
the applied rate. A second phenomenon that can lead to zero trade
coverage is the presence of ‘water’ or ‘excess protection’ in the tariff
binding. In this case, the bound and applied rates of duty may be
the same so that a cut in the bound rate may also mean a cut in the
applied rate or, more commonly, the bound duty may be an ‘out-of-
quota’ rate on an item covered by a tariff quota. When, in either case,
the duty-paid value of imports is well above wholesale prices in the
marketplace (as is the case of some agricultural products in large
industrialized economies), the duty reduction may not lead to more
trade. Cutting the ‘water’ in the tariff may leave duty-paid imports
still uncompetitive with domestic production. Of course, in both of
these cases of ‘zero trade coverage’, there will be at least resid-
ual value in the guarantee about future protection that the binding
brings.
(b) Usually, a cut in the bound rate that also cuts the applied rate of duty –
that is, a cut with positive trade coverage – results in lower sales
prices in the import market but higher volumes of import demand
relative to total demand and, possibly, higher total demand. The
actual value of the cut for your business members depends on all
the circumstances, including the degree to which the tax that they
formerly paid for market access was paid, in part, by the consumer.
The assessment must be made on a case-by-case basis. You may
have to take account, too, of the impact of cuts on other substitute or
complementary products in the same market and even the impact of
similar cuts in third countries that might affect world market demand
and therefore import prices everywhere.
(C) Analyst
Your interest in the information in WTO Schedules is frequently still broader
than the interest of either the business executive or the industry/trade association
executive. Sometimes you need to have the details of a binding, but most of the
time the details of the Schedules threaten to overwhelm the ‘big picture’ that is
your main focus.
Access to the details of the Schedules has already been described above. You
face the same challenges as the other non-government users in finding detailed,
up-to-date information, and your sources are likely to be exactly the same as theirs.
However, while the latest information is essential for commercial purposes, it is
54
A practical guide
not always so crucial for your purposes and you are likely to find that the WTO
CD-ROM ‘Results of the Uruguay Round’ which contains both the goods and
services Schedules, as well as the texts of the WTO agreements, is an invaluable
single source.
The Market Access Map, too, will be a very valuable source of data
because – although it does not provide direct access to the Scheduled data at
tariff-line level – it allows easy comparison between countries and groups of
countries for both bound (AVE) and applied (also available in AVE form) rates.
The Market Access Map’s estimates of the revenue generated by applied duties
may also be of interest to you, in the context of analysing the potential revenue
impacts of tariff liberalization in the Doha Development Round negotiations.
If your interest in WTO commitments is linked to the analysis of world
trade flows and the economic impacts of trade policies, you are likely to
know and use the GTAP (Global Trade Analysis Project, of Purdue University:
www.gtap.agecon.purdue.edu), which uses data from the ‘Market Access Map’
database as well as ‘packaged’ tariff-cutting simulations developed for the Market
Access Map.
Other sources that are important for an overview of the Schedules include the
WTO Secretariat’s analysis of the results of the Uruguay Round in Market Access:
Unfinished Business, available free for download from the WTO bookshop at
http://onlinebookshop.wto.org.
A ROUGH GUIDE TO SOURCES

To read the Schedules you first have to find them in a format that is convenient for
your use. This challenge is much more easily met in the case of services Schedules
than it is in the case of goods.
Services
The consolidated services Schedules and MFN exemption lists of all WTO mem-
bers, including recently acceded members, are available from WTO’s Trade in
Services Database at http://tsdb.wto.org/ in the form of ‘predefined’ reports, each
of which is available as an MS Excel 97 file, a Lotus Works file or a PDF
file.
The predefined reports are comprehensive, covering all sectors, all countries,
sectors-by-country, regions, etc. Unfortunately, the predefined reports split the
specific commitments by sector and country from the horizontal commitments
that must be read in conjunction with the specific commitments.
55
The data are current as of March 2005.
√√√
Suitability (out of )
Source: WTO Website http://tsdb.wto.org/ A B C

√ √√ √√√
Strengths Authoritative, complete, free access, compact
web-based downloads, includes all details in
each Schedule.
Limitations Predefined reports split the horizontal and
sector-specific commitments into separate
reports. Details of horizontal commitments
are available only for all countries as a group.
Schedules are drawn from a database in the form
of ‘predefined’ reports. This is not a
‘database’ format but, by downloading a
spreadsheet of all commitments in all
countries (Excel file, about 3.3 Mb) and the
horizontal commitments of all countries, you
can approximate a database of services
commitments. The data in each report is
available as Microsoft Excel, Lotus Works or
PDF files.
Not linked to trade data.
Goods
The original source of WTO goods Schedules are the ‘certified’5 Schedules that
are attached to the Marrakesh Protocol or to a Protocol of Accession or to a pre-
Uruguay Round (GATT) protocol. In practice, the working source of any Sched-
uled commitment is the WTO’s Consolidated Tariff Schedules (CTS) database.
Although the entries in the CTS have no legal force, they are both authoritative
and complete (for Scheduled data), containing data from:
r GATT rounds of negotiations: pre-Uruguay Round lists of concessions
that are still in force;
r Uruguay Round (1994) goods Schedules, including supporting docu-
mentation on concessions in domestic supports, subsidies, continuing
and minimum market access;
r sectoral agreements (some annexed to the Marrakesh Protocol);
5
Certification is the formal process by which a member confirms the commitments recorded in its Schedule(s)
after all the processes of negotiation and adoption are complete. The instrument of Certification is lodged
with the Director-General of the WTO, who provides each WTO member with a ‘certified true copy’ of
the Schedule (or changes to the Schedule), and registers the certification with the UN as an international
treaty.
56
A practical guide
r information technology agreements (ITA);
r agreements on pharmaceuticals;
r agreements on civil aircraft;
r agreements on distilled spirits;
r accession protocols;
r modifications of tariff concessions following Article XXVIII negotia-
tions;
r rectifications and modifications following the adoption of a revision of the
Harmonized System of tariff classification, such as HS96 and HS2002.
The CTS database is also linked, at the tariff-line level (HS6, HS8 or HS10 in some
cases) to the WTO’s Integrated Database (IDB), which collects data on imports
and applied duties by tariff line from all WTO members on a regular basis. The
CTS and the IDB provide the data for the WTO’s Internet Analysis Facility (IAF)
that enables authorized users to examine the status of the consolidated information
on members’ goods Schedules.
Unfortunately, this invaluable data source is closed to most readers of the
Schedules – including most people falling into any of the three categories of
interested readers identified above. Although the data on Scheduled commitments
are in the public domain, the members of WTO have chosen to restrict access to the
CTS/IDB databases to member governments, governments negotiating accession
to WTO, and certain intergovernmental organizations. Authorized users may make
the data available to non-authorized users, but not at any level of aggregation less
than the six-digit level of the Harmonized System. Since the six-digit level is
rarely the tariff-line level of data, private-sector users cannot have access to data
from the CTS database at a commercially meaningful level.
The purpose of this ‘rough guide’ therefore, is to identify the less complete and
less convenient sources of information on goods Schedules that readers in any of
our three categories may be constrained to use.
Sources: The WTO Website

This is the first place to look for copies of the Schedules adopted at the end of the
Uruguay Round. The WTO website provides access to the Schedules as annexed
to the Marrakesh Protocol, and the subsequent amendments certified by members.
Situation The ‘Situation of Schedules’ table is an invaluable resource for track-

ing the current status of a member’s goods Schedule. It provides
access to the original Marrakesh Schedule or, in the case of more
recently acceded members, the Accession Schedule. It also provides
information on changes made as a result of the adoption of later
versions of the HS; rectifications made as a consequence, for exam-
ple, of simplification; and changes certified after Article XXVIII
57
negotiations. You can access the table at www.wto.org/english/

tratop_e/schedules_e/goods_schedules_table_e.htm.
ITA The Schedules of concessions made by members of the Information
Technology Agreement (ITA). These are found on the WTO website
at www.wto.org/english/tratop_e/inftec_e/itscheds_e.htm.
Accession The Schedules of members who acceded to the WTO after the conclu-
sion of the Uruguay Round are also available from the WTO website
at www.wto.org/english/thewto_e/acc_e/completeacc_e.htm.
Six-digit The most convenient presentation of a member’s current Schedule
at the six-digit level is the Tariff Data spreadsheets now published
by the WTO for each member on the member’s ‘country page’.
You can reach this page by navigating to the List of WTO members
(www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm) and sel-
ecting the member’s name from the list. The linked information
gathers many different pieces of data about the member, including
Microsoft Excel spreadsheets of current bound and applied duties at
the six-digit level of the HS. The six-digit classification of the data
reflects members’ decision to restrict access to tariff-line data from
the CTS database to government officials.
These spreadsheets are sometimes quite large (19 columns by
4,000–8,000 rows) but they are downloadable as ‘zip’ files. The data
in the spreadsheets at the six-digit level are comprehensive, with
self-explanatory column headings (roll your cursor over the column
heading in Excel for a short explanation of the data in that column).
The original Marakesh Protocol Schedules are usually in Lotus Works 4 spread-
sheets that should also open in most recent versions of MS Excel on Microsoft
and Apple operating systems and compatible software for the Linux operating
system. If you are using a copy of MS Excel, for example, to open the 1994
Lotus Works spreadsheets, please check that all of the data are translated into
the new version. Sometimes data are lost in the translation process. Subsequent
modifications have been published in a number of different formats, including
MS Word, MS Excel and MS Access. You will need the appropriate program to
open these files. MS Access files will open only on Microsoft Windows operating
systems.
All of the Schedules are in the original language in which they were submitted
(although many were submitted in one of the three official languages of the
WTO).
The Marrakesh goods Schedules available from the ‘Situation’ table are typi-
cally in several parts, reflecting the different parts of the Schedule. This makes
them more difficult to review than the up-to-date six-digit Schedules that are now
available from each member’s ‘country page’. But the data from the Marrakesh
58
A practical guide
Protocol is at tariff-line level, unlike in the six-digit tables that aggregate data to
a level that groups – and therefore ‘hides’ – tariff-line bindings at the eight- or
ten-digit level.6
√√√
Source: WTO Website A B C
Strengths Authoritative, complete, free access, compact

web-based downloads, includes all headers,
footnotes.
√√ √√ √√
The six-digit data are easy to consult and are
up to date at the six-digit level. It includes
current applied (non-bound) duties and
historical applied duties.
Limitations The Marrakesh Goods Schedule is split among
several files. They are difficult to manage,
for example notes may be in a different file
from main entries, wide tables may be
horizontally split among different files.
Documents containing modifications may be
found at different locations on the website.
Difficult to search across files or to compare
the Scheduled commitments of different
members.
Sources: WTO CD-ROM ‘Results of the Uruguay Round’

This CD-ROM contains both the texts of the Uruguay Round agreements and the
goods and services Schedules of WTO members at the end of the Round. The
Schedules are contained in a database-like program on the CD that displays them
in a spreadsheet format; they may be searched and grouped by country or product
or Schedule part.
The data presentation program – which runs only on the MS Windows operating
system – allows users to copy and print parts of the Schedules and to make and
save notes on the Schedules. It should, however, be noted that parts of these
Schedules may not be up to date, and it is advisable to double-check with the
6
Like the ITC’s ‘Market Access Map’ (which shares the same sources as the WTO spreadsheets), the
six-digit spreadsheets provide information on the ‘maximum’, ‘minimum’ and ‘average’ ad valorem duty at
the six-digit level when several bound tariff lines are grouped within. This provides a means of estimating
the distribution and even the level of the duties not directly identified in the spreadsheet. See the text-box on
‘Working around the restrictions on CTS data’ later in this chapter.
59
documents available through the WTO website. The CD is available from the
WTO Bookstore on-line at http://onlinebookshop.wto.org. It costs CHF 1,000
for a stand-alone version and CHF 2,000+ for a network licence. Texts on the
CD-ROM are in the three official languages, but all Schedules are in the original
language.
The content of the CD-ROM is also available in print format from the
WTO Bookshop (http://onlinebookshop.wto.org) for CHF 4,500.
√√√
Source: CD-ROM ‘Results of the
WTO Uruguay Round [UR]’ A B C
√ √√ √√√
Strengths Authoritative. Database-like format that permits
search and comparisons between Schedules.
Easy access to footnotes, etc.
Limitations Expensive: about US$1,000.
Incomplete: includes goods and services
Schedules at the end of the UR but not recent
accessions, not ITA Schedules and not recent
modifications of the Schedules.
No information on unbound tariffs.
Sources: ITC ‘Market Access Map’ Database

The International Trade Centre (ITC) is an agency jointly created by WTO and the
UN Conference on Trade and Development (UNCTAD). In conjunction with the
Centre d’Etudes Prospectives et d’Informations Internationales (CEPII), ITC has
constructed a tariff database that draws on data concerning goods – not services –
from the CTS/IDB, UNCTAD databases, tariff Schedules obtained from national
Customs bureaus and other sources.
The ‘Market Access Map’ is available on-line at www.macmap.org to sub-
scribers, at annual fees ranging from US$600 for a ‘slice’ through each HS Chapter
to approximately US$6,000 for unrestricted access by a developed country institu-
tion. However, international donors have funded ITC to provide unrestricted access
without charge to a wide range of users in most developing countries through, for
example, chambers of commerce, trade support institutions and national ministries.
The ITC database provides on-line access to the information that users may
obtain from the WTO CTS database according to their level of authorization.
Officials of WTO member governments may obtain tariff-line data on bound rates
from the Market Access Map by use of special password access, while non-official
users may have access to bound tariff data at levels down to HS6.
60
A practical guide
The database also provides access to applied tariff data at the most detailed level,
the national tariff line. It contains data on the tariffs applied by 170 countries to the
products exported by 239 countries and territories. It contains data on preferential
duties, anti-dumping duties and tariff quotas, and includes trade flow information
on imports linked to the tariff-line product data.
The Market Access Map displays any ad valorem, specific, compound or mixed
duties for a product or product group (HS classification). In the case of product
groups, it displays an average of the ad valorem equivalents (AVEs) of duties at the
tariff-line level. The database includes an AVE for non-ad valorem duties using
the methodology adopted by WTO members for assessing AVEs in the Doha
Development Round negotiations. This is an invaluable tool for making direct
comparisons between specific duties in different economies.
Working around the restrictions on CTS data. The Market Access Map
may be used to obtain some of the information available on bound duties
at the tariff-line level that is not available to business users directly from
the WTO’s CTS database. The ITC tool displays data on bound duties only
down to the six-digit level for non-authorized users, in compliance with the
restrictions on the use of data from the CTS. But it also provides all users with
an estimate of the minimum, average and maximum AVEs of bound duties
at lower (tariff-line) levels of aggregation that cannot be directly reported to
non-authorized users. In many cases, where there is no variation in bound
rates among products within a six-digit group, this fact is apparent from
the small range of the estimated minimum and maximum AVEs of duties at
tariff-line level.7 Where the variation of bound rates at the tariff-line level is
due to a single ‘peak’ duty on one tariff-line that pushes the ‘average’ AVE
significantly below the median (the arithmetic mid-point of the minimum
and maximum rates), it is often relatively easy to ‘guess’ at the bound rates
of duty for the tariff lines within the six-digit group. Commercial experience
and/or inspection of the Schedules downloaded from the WTO website will
help to confirm your intuition.
You can find a tutorial on the use of the Market Access Map that will help you
to make the most of its facilities at www.macmap.info/. You will need to register
(free) to use the tutorials. They provide three levels of introduction: for ‘Importers
and Exporters’, for ‘Negotiators’ (with access to data on bindings at the tariff-line
level) and for ‘Trade Support Institutions’.
7
The AVE of the same bound rate on slightly different products may vary depending on the actual composition
and origin of imports of that product in the market concerned. This is a consequence of the way in which
AVEs are estimated. See the Glossary for more information on AVEs.
61
Although the Market Access Map is an excellent source of tariff data, it is not
a collection of Schedules. It provides information on bound rates of duty down to
the six-digit level of the HS, but it does not display bound rates at tariff-line level
unless these also happen to be the applied rates of duty. It does not contain the
footnotes that can be crucial to an accurate understanding of a binding. Finally,
the Market Access Map contains no information about services.
√√√
Source: ‘Market Access Map’ database
ITC (Mac Map) www.macmap.org/ A B C
Strengths Authoritative.
Database format that permits search and
comparisons between countries, products,
Scheduled and applied data, including
preferential tariff rates.
Potential ‘work around’ for the limits on access
to CTS data (bound rates at the tariff-line
level).
Provides AVE data using WTO methodology,
allowing ready comparison between non-ad
valorem duties on the same good.
√√ √√√ √√√
Provides comprehensive simulations of formula
tariff cuts with flexibility to use your own
formula.
Limitations CTS restrictions apply to access to information
on bound rates.
Subscription-based (although currently free to
almost all developing country users).
Provides bound tariff data but does not
reproduce other information from the
schedules (Other Duties and Charges,
footnotes, etc.).
Finding Information on National Customs Tariffs

The definitive source for information on applied rates of duty on goods is the cus-
toms tariff of the country concerned, usually available from their customs agency
and frequently available ‘on-line’. This table provides some links to resources
on the Web that you might find helpful. The BITD site and the US Department
of Commerce site are particularly helpful in providing access to current customs
tariffs and direct links to national Customs sites, respectively.
62
Selected sources of information on national customs tariffs
Source Link Comment Rating

√√
World Tariff Database www.worldtariff.com/ Commercial database created and maintained by
FedEx. Up-to-date applied rates, including
preferential rates, in 103 customs territories.
Subscription prices range from US$500 per
country, to US$1,200 per HS Chapter, to
US$8,000 for a product sector, e.g.
electronics, in 98 markets. Limited free trial
available.
√√√
US ITC Trade Dataweb http://dataweb.usitc.gov/ Government database of US tariffs, trade,
preferences. Free registration.
√√
EC Tariff and customs http://ec.europa.eu/taxation customs/dds/en/home.htm Tariff (TARIC) database and full customs
‘gateway’ information on-line. Free access.
√√
Latin and Central America http://ftaa-hdb.iadb.org/chooser.asp?Idioma=Ing Inter-American Development Bank database of
customs duties and preferences for Central
and Latin American countries. Free access.
√√√
Links to global tariff and www.export.gov/logistics/country tariff info.asp US Department of Commerce site containing
tax information sources links to national customs tariffs in 97
countries.
√√
APEC region tariff www.apectariff.org/ Non-definitive database of tariffs of the 25
database member countries of the Asia Pacific
Economic Cooperation (APEC) region.
√√√
International Customs www.bitd.org/ Books and CD-ROMs (€150 each) of members’
Tariff Bureau (BITD) customs tariffs and downloads (free) of PDF
files containing members’ current customs
tariff.
Sources: UNCTAD and World Bank

Two authoritative sources that are based, in part, on the WTO CTS database are
the UNCTAD TRAINS (Trade Analysis and Information System) database at
www.unctad.org/trains and the World Bank’s World Integrated Trade Solutions
(WITS) database at www.worldbank.org/6ZDO37OG4D. There is some limited
Internet access to tariff data at HS6 level through the TRAINS database. But the
more extensive WITS database – although limited to the six-digit HS for non-
government users – is a subscription database and requires the use of a ‘client’
software program that will run only under MS Windows. Subscriptions for non-
government users range from US$1,250 to US$5,000 for the first year.
Source: WTO World Tariff Profiles

The WTO initiated, in 2007, a new annual print publication, World Tariff Profiles,
which provides a comprehensive picture of tariff profiles from around the world
in an abridged format. The publication is a joint effort of the ITC, UNCTAD and
the WTO.
The reader will find the main tariff parameters for each of the WTO’s members
and for other countries and customs territories. The standardized presentation
lends itself to easy analyses and comparisons between countries, between sectors
and between bound and applied duties. The data include ad valorem equivalents,
and enable international comparisons between the indicators. The publication is
presented in three main parts.
The first part shows summary tables for all WTO members and other countries
and customs territories for all products, as well as broken down by agricultural
products and non-agricultural products. It is designed to allow a cross-country
comparison as well as a comparison of the levels of bound and applied duties.
Apart from the standard indicators like tariff averages, maxima, percentage of
duty-free tariff lines, peaks and non-ad valorem duties, it also contains indicators
of tariff dispersion, such as the number of distinct duties and the coefficient of
variation.
The second part contains country pages covering the domestic market access
protection and the protection faced in the six major export markets. Information
on bound and applied duties is presented by duty ranges and by sectors. In addi-
tion, there are indicators on the occurrence of special safeguards and on tariff
quotas. Detailed information on bound and applied duties and imports is shown
for ten agricultural and twelve non-agricultural sectors. Trade diversification and
market access conditions in the major export markets are depicted on a bilateral
basis. Taking into account preferential schemes as available in any of the three
organizations’ databases, trade-weighted preferential margins are also estimated.
The third part contains the data sources and two articles that discuss in more
detail issues related to the calculation of ad valorem equivalents and to different
64
A practical guide
aggregation methods for tariff averages. A glossary, which briefly explains some
of the most commonly used terms, concludes the publication.
The publication can be purchased on-line from the WTO website. A free,
downloadable version is available in PDF format. Each of the WTO members
listed in the publication has its own page on the WTO website, containing a link
to its tariff profile. The PDF download can be found at: www.wto. org/english/
res_e/reser_e/publications_e.
The individual country tariff profiles can be accessed through the WTO mem-
bership list on the WTO website at: www.wto.org/english/thewto_e/whatis_e/
tif_e/org6_e.htm.
More detailed tariff data (bound and applied rates) can also be downloaded from
the WTO website as Excel files. These are at the six-digit HS subheading level of
detail.
Information can be accessed separately for each WTO member through the
membership list at www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm.
65
GLOSSARY
Why a glossary? The WTO, like any specialized environment, has its own ‘jargon’.
To understand the Schedules you need to understand some of these specialized
terms.
Ad valorem duties
‘Ad valorem’ means ‘according to the value’. Ad valorem duties are taxes levied
at a rate proportional to the value-for-duty of the imported product. The ‘value-
for-duty’ is the value assessed by the customs agency. The WTO Agreement on
Customs Valuation contains rules on how customs may value a good when, for
example, they have reason not to believe the declared value. The most common
means of valuing imports is on the basis of an invoice provided by the importer.
See Non-ad valorem (NAV) duties, too.
Agricultural products
What products should be listed in the agriculture parts of the WTO goods Sched-
ules? The WTO definition, taken from Appendix 2 of the Agreement on Agricul-
ture is:
(i) HS Chapters 1 to 24 less fish and fish products, plus

(ii) HS Code 29.05.43 (mannitol)
HS Code 29.05.44 (sorbitol)
HS Heading 33.01 (essential oils)
HS Headings 35.01 to 35.05 albuminoidal substances,
modified starches, glues
HS Code 38.09.10 (finishing agents)
HS Code 38.23.60 (sorbitol n.e.p.)
HS Headings 41.01 to 41.03 (hides and skins)
HS Heading 43.01 (raw furskins)
HS Headings 50.01 to 50.03 (raw silk and silk waste)
HS Headings 51.01 to 51.03 (wool and animal hair)
HS Headings 52.01 to 52.03 (raw cotton, waste and
cotton carded or combed)
HS Heading 53.01 (raw flax)
HS Heading 53.02 (raw hemp)
66
Glossary
Note that these are HS92 codes, some of which have changed with the 1996
and 2002 amendments of the HS.
Article VIII of the GATT (Customs fees)

The GATT requires that any fees collected by Customs (or any other agency
mandated to conduct inspections or supply services at the border) must ‘approx-
imate the cost’ of service delivery and must not be used as a disguised tax;
otherwise, they may be held to breach a binding. The article says, by way of
illustration, that this rule applies to all border service fees, such as those for the
administration of:
(a) consular transactions, such as consular invoices and certificates;

(b) quantitative restrictions;
(c) licensing;
(d) exchange control;
(e) statistical services;
(f) documents, documentation and certification;
(g) analysis and inspection; and
(h) quarantine, sanitation and fumigation.
Article XXI of the GATS (Modification of

GATS Schedules)
The GATS, like the GATT, provides for the withdrawal or modification of a bound
commitment, but only after it has been in place for at least three years. Article
XXI of the GATS is a model of clarity compared to GATT Article XXVIII (see
below), probably because of the experience gained in managing the complexities
of INRs, Principal Supplier Rights, etc., under the GATT.
The rule in GATS Article XXI is that, if one member wants to withdraw
or modify a concession, then it must compensate any affected members with a
‘compensatory adjustment’ that must be offered on an MFN basis once accepted
by the affected members. The members concerned must first attempt to reach a
negotiated ‘mutually acceptable’ decision on the nature of the adjustment, but
if agreement is not reached then the matter may be referred to arbitration for
a decision. If a member modifies or withdraws a concession in contravention
of an arbitral award, then the affected member(s) may withdraw ‘equivalent’
concessions, in accordance with the arbitral award, aimed at the member’s trade.
67
Glossary
Article XXVIII of the GATT (Renegotiation of

a binding)
The GATT provides for the renegotiation of commitments so that members may
increase a duty beyond the bound rate or withdraw a binding.
Article XXVIII, entitled ‘Modification of Schedules’, is the main GATT provi-
sion dealing with the renegotiation of a tariff concession. A 1957 Note by the GATT
Secretariat, concerning arrangements for negotiations under Article XXVIII, set
out the procedural guidelines that were used until November 1980, when the cur-
rent guidelines for procedures were adopted. Although the early practice makes it
difficult to determine the exact number of renegotiations that took place under the
GATT, the Secretariat’s records show that at least 42 contracting parties initiated
approximately 300 renegotiations between 1951 and 1994. Owing to the failure
of members to report their outcome, however, the precise status of the majority of
these pre-Uruguay Round negotiations remains unclear.
There have been 24 renegotiations under GATT Article XXVIII since the
establishment of the WTO in 1995, 4 of which have been certified, 3 have been
withdrawn, 4 have been concluded but have not been certified for various reasons,
and 2 relate to procedures under GATT Article XXIV:6 (Adjustments of bindings
following the expansion of a customs union). The remaining 13 renegotiations
are still ongoing.
The ‘Status of Schedules’ page on the WTO website1 shows the Secretariat’s
understanding of the status of all renegotiations at 1 January 1981, when the
current procedures started being implemented.
In recent years, the most common occasion for Article XXVIII negotiations has
been the modification of bindings following changes to the Harmonized System.
When the HS is updated, as it was in 1992, 1996 and 2002, members who adopt the
changes often have to ‘split’ a tariff heading or move goods from one classification
to another. Frequently, this means some change in existing tariff bindings, even if
it means no change in the applied rate of duty.
The procedures stipulated by Article XXVIII include notifications sent to the
most affected trading partners, and negotiation over a three-year period to reach
‘mutually satisfactory’ agreements that usually include compensating reductions
(and bindings) in duties on other products of interest to those same trading partners.
The provisions for renegotiation and compensation are not unlike the rules for
an elaborate game of Monopoly, in which a member must satisfy a number of
other members who hold different degrees of interest in the binding that has been
changed. Among the WTO membership, certain countries may have ‘superior’
rights to compensation in the course of the Article XXVIII renegotiation. These
priority rights are known as Initial Negotiator Rights, Principal Supplier Rights
and Substantial Supplier Rights.
1
www.wto.org/english/tratop_e/Schedules_e/goods_Schedules_ table_e.htm.
68
Glossary
To explain these rights (briefly) in order of priority:

r The member with whom the binding was first negotiated holds Initial
Negotiator Rights (INR). This member may be designated in the tariff
Schedule against the bound rate in the INR column. However, in the case
of bindings that result from multilateral negotiations, where there is no
bilateral history of negotiation, the INR is described as a ‘floating INR’,
which defaults to the member that was the biggest import supplier over
a previous representative period (normally the previous three years or
a ‘reasonable’ period of time), or would have been the biggest import
supplier but for the operation of a quantitative restriction.
r Members with Principal Supplier interests are those who had, over a
reasonable period of time prior to the negotiations, a larger share in
the market of the applicant member than another party with which the
concession was initially negotiated, or who would have had it in the
absence of discriminatory quantitative restrictions. The member that has
the highest proportion of exports affected by the proposed change in the
binding is also accorded Principal Supplier status unless it already has
INR. The WTO Council can also accord principal supplying interest to
any member, the majority of whose exports would be affected by the
proposed change.
r Other members who must be compensated or ‘satisfied’ are the Substan-
tial Suppliers; that is, generally, any member whose share of the market
for the product concerned exceeded 10 per cent over a previous represen-
tative period, or would have done so but for the operation of a quantitative
restriction.
Where explicit INRs exist, members must record them in the Schedule, since
they are a bound obligation.
Ceiling bindings
The Agreement on Agriculture requires that WTO members bind 100 per cent of
their duties on agricultural imports, including those duties that were the result of a
negotiated tariff cut. At the close of the Uruguay Round, developing countries were
concerned that binding then-unbound duties, including the duties that resulted from
the ‘tariffication’ process, would hamper their ability to flexibly manage future
agricultural policies. So they were permitted initially to bind their duties at ‘ceiling’
rates, sometimes well in excess of the applied rates of duty (see the ‘modalities’ in
WTO document MTN.GNG/MA/W/24). The reduction commitments that these
countries accepted – in general to implement an average tariff cut of 24 per cent –
applied to the ceiling bound rate of duty. Of course, if the ceiling rate exceeded
the applied rate by more than the margin of reduction, there was no effective
liberalization due to the duty reduction commitments.
69
Glossary
CPC classification (services)

There is no completely satisfactory classification of the services sector, and there
may never be, because:
1. The sector is vast, in a special – we could say ‘fractal’ – way. Classifica-
tion systems seek to be both exhaustive and complete. But the services
sector is almost infinitely divisible, particularly in intermediate and per-
sonal services, because services activities are ‘needs’-specific (how many
‘needs’ are there?), and so variable in character that they defy categoriz-
ing. What, for example, should be the basis of a classification distinction
between a ‘courier’ and a ‘freight’ service? – the weight or dimensions
of the parcel, the mode of delivery, whether a government postal ser-
vice may compete (they are frequently excluded from offering ‘courier’
services) or other services typically offered in association?
2. The sector constantly changes at a rapid pace. Many services that exist
today, related to the Internet or to mobile telephony, for example, did not
exist, or could not be meaningfully identified in a classification system,
as recently as 1995.
The Provisional Central Product Classification (CPC) of the UN – on which
the WTO Secretariat’s services classification recommendation is based – is under
continuous review. But it may never catch up with the marketplace. For example,
the CPC offers only sparse and ambiguous classifications for crucial intermedi-
ate and so-called ‘back office’ services that are inputs into other services and
goods production. This is important because these services are often suitable for
‘outsourcing’ – that is, acquisition outside the firm or even offshore via modes 1
and 2 – and comprise sectors in which developing countries may have comparative
advantage.2
For these and other reasons, the WTO guidelines warn that members must ensure
that the descriptions in the Schedules are sufficiently clear and un-ambiguous to
identify the precise commitment being made, with reference to the CPC classifi-
cation(s) but not necessarily relying on the CPC to complete the identification.
The order of the sectors in most national Schedules follows the order of listing
in the Secretariat classification (WTO document MTN.GNS/W/120), which lists
twelve broad sectors as follows:
1. Business
2. Communication
3. Construction and Engineering
4. Distribution
2
For more details of this example, see A. Mattoo and S. Wunsch, Pre-empting Protectionism in Ser-
vices: The GATS and Outsourcing, Institute for International Economics (Washington, D.C.: 2004;
www.iie.com/publications/papers/wunsch0204.pdf).
70
Glossary
5. Education
6. Environment
7. Financial
8. Health
9. Tourism and Travel
10. Recreation, Cultural and Sporting
11. Transport
12. ‘Other’
A detailed structure of the CPC with explanatory notes is available on-line from
the UN at: http://unstats.un.org/unsd/cr/registry.
Customs fees
See Article VIII of GATT.
Harmonized System
The Harmonized Commodity Description and Coding System (the ‘HS’) is an
international product nomenclature developed by the World Customs Organization
(WCO). It comprises about 5,000 commodity groups, each identified by a six-digit
code and by a uniform description. The system is used by more than 177
economies as a basis for their Customs tariffs and for the collection of international
trade statistics. The HS classifies over 98 per cent of international merchandise
trade.
The official interpretation of the HS is contained in the Explanatory Notes
published by the WCO. They are also available on CD-ROM, as part of a com-
modity database giving the HS classification of more than 200,000 commodities
actually traded internationally. The HS requires maintenance to update the clas-
sifications in light of developments in technology and changes in trade patterns.
The WCO manages this process through the Harmonized System Committee (rep-
resenting the Contracting Parties to the HS Convention), which examines policy
matters, takes decisions on classification questions, settles disputes and prepares
amendments to the Explanatory Notes. Updates are published every four to six
years. Decisions concerning the interpretation and application of the Harmonized
System, such as classification decisions and amendments to the Explanatory Notes
or to the Compendium of Classification Opinions, become effective two months
after approval by the HS Committee. These are reflected in the amending sup-
plements of the relevant WCO publications and can also be found on the WCO
website at www.wcoomd.org/.
Within the HS, over 1,200 headings are grouped in 97 Chapters that are dis-
tributed among 21 Sections. Each heading is identified by a four-digit code, the
first two digits of which indicate the Chapter where the heading appears, while the
71
Glossary
latter two indicate the position of the heading in the Chapter. So, heading 10.01
(‘wheat and meslin’) is the first heading of Chapter 10, which, in its entirety, covers
‘cereals’. Most of the headings are further subdivided into two or more two-digit
subheadings that create a six-digit code (HS code). At the six-digit level, there are
more than 5,000 HS codes. A zero in the fifth or sixth place indicates the absence
of a subheading.
You may find it easier to read the HS codes backwards. For example:
HS 0803.00 Means the third heading of Chapter 8, which has not been subdi-
vided;
HS 0101.10 Means the first subheading of the first heading of Chapter 1, which
has not been further subdivided;
HS 0303.21 Means the first sub-subheading of the second subheading of the
third heading of Chapter 3.
Summary of the Harmonized System classifications

Section I (Chapters 1–5, live animals and animal products);
Section II (Chapters 6–14, vegetable products);
Section III (Chapter 15, animal or vegetable fats and oils);
Section IV (Chapters 16–24, prepared foodstuffs, beverages and spirits,
tobacco);
Section V (Chapters 25–7, mineral products);
Section VI (Chapters 28–38, chemical products);
Section VII (Chapters 39–40, plastics and rubber);
Section VIII (Chapters 41–3, leather and travel goods);
Section IX (Chapters 44–6, wood, charcoal, cork);
Section X (Chapters 47–9, wood pulp, paper and paperboard articles);
Section XI (Chapters 50–63, textiles and textile products);
Section XII (Chapters 64–7, footwear, umbrellas, artificial flowers);
Section XIII (Chapters 68–70, stone, cement, ceramics, glass);
Section XIV (Chapter 71, pearls, precious metals);
Section XV (Chapters 72–83, base metals);
Section XVI (Chapters 84–5, electrical machinery);
Section XVII (Chapters 86–9, vehicles, aircraft, vessels);
Section XVIII (Chapters 90–2, optical instruments, clocks and watches,
musical instruments);
Section XIX (Chapter 93, arms and ammunition);
Section XX (Chapters 94–6, furniture, toys, miscellaneous manufactured
articles);
Section XXI (Chapter 97, works of art, antiques).
72
Glossary
Initial Negotiator Rights (INR)

See the entry on Article XXVIII of the GATT.
Modes of supply (services)

One of the features of a service that distinguishes it from a merchandise product is
that delivery from the supplier to the consumer requires contact between the two,
although not necessarily co-location. Contact can be made by telephone or video
or by an Internet connection, for example. Furthermore, the same service can be
supplied in different ways involving different forms of contact; for example legal
advice might be provided in person, or by telephone or by video-link, etc. The
requirement for some form of contact in services trade means that the GATS takes
a different approach to specifying members’ obligations from the ones we find in
the GATT that deals with merchandise which is delivered ‘at arm’s length’ and
only by physical fulfilment.
Both treaties are about exchanges across the borders between the different
customs territories of WTO members but the GATS recognizes that, in services,
the relationship between the trade exchange and the member’s territory can take
four different forms, depending on whether the service supplier is located on the
member’s territory at the time of supply, and whether the service is delivered
inside or outside the member’s territory.
Supplier presence Other criteria Mode
Service supplier not present Service delivered within the (1) Cross-border supply
within the territory of the territory of the member,
member from the territory of another
member
Service delivered outside the (2) Consumption abroad
territory of the member, in
the territory of another
member, to a service
consumer of the member
Service supplier present Service delivered within the (3) Commercial
within the territory of the territory of the member, presence
member through the commercial
presence of the supplier
Service delivered within the (4) Presence of natural
territory of the member, person
through the presence of a
natural person
73
Glossary
Non-ad valorem (NAV) duties

Schedules express the bound duties as either ad valorem or specific rates of duty,
or a combination of the two, known as a compound or mixed rate of duty or
sometimes as an ‘other’ duty. The word ‘specific’ is the adjective of specie: that
is, a unit of currency. A ‘specific duty’ is a tax on imports expressed as a unit of
currency per unit of the import. ‘Mixed’ rates are specified as an ad valorem rate or
a specific rate according to different conditions – usually according to which is the
greater. A ‘compound’ rate includes both an ad valorem and a specific component
at all times. An ‘other’ duty is frequently a mixed-rate duty that has complex
provisions, such as a minimum import price or a product-composition provision
that determines the bound rate.
The examples of ad valorem and NAV duties in the following table are drawn
from the WTO CTS database. They appear in WTO document TN/AG/S/11,
a document that describes the WTO procedures for calculating ad valorem
equivalent duties (AVEs).
Formulation Examples of non-ad valorem duties
Specific ‘35,00 fr/100 kg, ‘Rs.55/kg’ ‘$2.44/kg’ ‘$1.34/1000’

duties brut’
Switzerland, maize India, cashew nuts Australia, United States,
cigarettes narcissus
bulbs
Mixed duties ‘7.36 NOK/kg [or] ‘55 per cent or ‘360 dol/Ton ‘204 per cent
125 per cent.’ 280 yen/l but no less [or] 1,92
‘The applicable whichever is the than 125.1 SDR.’ ‘For
bound duty rate less, subject to a per cent’ tariff lines
shall be specific minimum with a
rate or ad customs duty of specific duty
valorem rate, 150 yen/l’ and an ad
whichever is valorem
highest.’ duty the
highest of
these duties
can be
applied.’
Norway, peas Japan, sherry Mexico, Iceland,
beans tomatoes
74
Glossary
Formulation Examples of non-ad valorem duties
Compound ‘12.8 per cent + ‘10 per cent + ‘5 per cent + ‘29.8 per cent +
duties 1713 ECU/T’ €125.0/100 kg.’ $661.40’ 400 yen/kg.’
EC, sheep meat Croatia, cattle Malaysia, Japan, whey
melons
Other non-ad ‘3.6606 c/ /kg. less ‘13.0 per cent∗ ‘48 min ‘10.4 per cent +
valorem 0.020668 c/ /kg. MAX 20.7 per 14 ECU/hl + 71 ECU/T’
duties For each degree cent + AD F/M" 1.3 ECU per (20) [(20)
under 100 [∗ refers to cent/hl’ ‘The specific
degrees (and Annex 1 which duty shall be
fractions of a gives bound reduced to
degree in tariffs for zero if the
proportion) but composite entry price
not less than agri-goods’ – in per tonne is
3.143854 c/ /kg.’ this case goods not less than
containing flour 372 ECU.’]
(AD F/M) in
various
proportions.]
United States, EC, waffles and Poland, EC, sweet
sugar wafers vermouth oranges
Where NAV rates of duty are bound, both the ad valorem and specific parts of
the duty are bound.
Tariff-cutting ‘modalities’
Members have used a variety of methods for reaching agreement on tariff cuts over
the sixty years of the GATT/WTO. In a multilateral round of tariff negotiations
among many economies – such as the 153 economies of the WTO – most of the
negotiations on market access are about the ‘modality’ or ‘method’ for cutting
tariffs using a tariff ‘formula’. There are different variations within each of these
approaches.
Bilateral item-by-item/country-by-country negotiations Sometimes

called the request–offer procedure: two or more members exchange a
list of requests for tariff concessions, followed by a list of offers of
concessions. They keep doing this until they consider that the requests
and offers on each side represent a ‘mutually advantageous’ deal,
at which point the offers must be Scheduled as MFN commitments.
Obviously, members undertake such request–offer procedures with
75
Glossary
their most important export and import partners first. After agreement
is reached on a reciprocal basis with your biggest supplier or market,
the additional trade impact of offering a concession on an MFN basis
is small – perhaps zero.
This was the only negotiating approach used in the GATT negotiations
through the Dillon Round (1961–2); it is still used for any bilateral
negotiations during a round on goods or services, for Article XXVIII
renegotiations, and in the process of accession of new WTO members.
Linear reduction This is a ‘formula’ approach to tariff cuts. All bound
duties, whatever their initial levels, are reduced by the same agreed
method. The most typical method is a cut in average tariffs or an aver-
age cut in tariffs (as used in the Uruguay Round agriculture modalities).
This method was first applied to industrial products in the 1960s during
the Kennedy Round.
Harmonization formula The effect of applying a harmonization formula
is to reduce high tariffs more than low tariffs, with the effect, across
each member’s Schedule, of compressing the range of duties, as well
as cutting the average duty to a lower level. It can only be applied on ad
valorem duties, and ad valorem equivalents need to be calculated for
non-ad valorem duties. The impact among the participating countries is
also to compress the range of average duty levels, thus ‘harmonizing’
barriers. Such a reduction formula was first used during the Tokyo
Round of the 1970s at the suggestion of the Swiss delegation: it has
been known since as a ‘Swiss’ formula. One impact of the ‘Swiss’
formula is that the final ‘top rate’ of duty is always less than the
coefficient of reduction.
Sector approach This approach aims at the harmonization or complete
elimination of duties in a given sector among a group of members.
This was the method employed by members of the 1997 Information
Technology Agreement: see WTO document TN/MA/S/13.
Tiered cuts A means of ‘harmonizing’ duties that does not have the
uniform application of the ‘Swiss’ formula. A ‘tiered’ cut divides
duties into bands or tiers according to their ad valorem equivalent.
Duties in the highest tier would normally be cut by an amount greater
than the duties in the second-highest tier, and so on. Duties in the lowest
tier would be cut by the smallest amount. The cuts applied within each
tier may be in any form: linear, ‘Swiss’, etc., and calculated as average
cuts or cuts in the average level. In general, the impact of higher cuts
in higher tiers is to ‘harmonize’ overall average duties at lower levels.
Formulas for unbound duties WTO negotiations typically follow the approach
of GATT negotiations since the Kennedy Round of the 1960s in applying formula
tariff cuts to current commitments; that is, to bound rates of duty. Where, however,
76
Glossary
a sector contains a large number of unbound duties – such as is the case in non-
agricultural goods sectors in developing countries – the formula may include a
provision to cut these duties as well (and to bind the resulting rates). For example,
the formula that ministers agreed at the Hong Kong Ministerial Conference, which
should eventually apply in the non-agricultural market access (NAMA) decisions
in the Doha Development Round, would cut every single NAMA duty in most
member economies (not in the least-developed economies), including unbound
duties in developing countries.
77
APPENDIX 1
A CLOSER READING OF ARTICLE II

OF THE GATT
The Handbook makes many references to Article II of the GATT entitled ‘Sched-
ules of Concessions’. This informal guide discusses the interpretation of the Arti-
cle, paragraph by paragraph, relying on the guidance of the WTO’s Appellate
Body.
1. (a) Each Contracting Party shall accord to the commerce of the other
Contracting Parties treatment no less favourable than that provided for in
the appropriate Part of the appropriate Schedule annexed to this Agree-
ment.
The first provision of Article II requires that each member gives effect to its
commitments to treat imports no less favourably than its GATT Schedule provides.
Part I of every member’s WTO Schedule contains MFN commitments on duties
affecting agricultural and non-agricultural goods.
(b) The products described in Part I of the Schedule relating to any Con-
tracting Party, which are the products of territories of other Contracting
Parties, shall, on their importation into the territory to which the Schedule
relates, and subject to the terms, conditions or qualifications set forth in
that Schedule . . .
Sub-paragraph 1(b) is a more specific instance of the obligation in sub-paragraph

(a) to accord ‘treatment no less favourable’ than is found in the Schedules. Any
measure inconsistent with (b) is necessarily inconsistent with (a), according to the
AB in the case of Argentina – Textiles and Apparel.1
The AB has determined some bounds for the terms, conditions and qualifications
that may apply to a concession in a Schedule in the EC – Bananas case.2 members
may incorporate into their Schedules acts yielding rights under the agreements,
but not acts diminishing obligations under the agreements. Specifically in that
case, the AB decided that a member might not place conditions on the bound
rates of an agricultural tariff quota that applied the benefits of the concession to
some members and not to others in contravention of Article XIII of the GATT.
1 2
WTO document WT/DS/56ABR para. 45. WTO document WT/DS/27ABR para. 154.
78
A closer reading of Article II of the GATT
It has confirmed (in the EC – Poultry case) that this interpretation applies also to
modifications of the Schedules that arise from Article XXVIII negotiations.
In the Canada – Dairy case,3 the AB added further clarifications about the
‘terms and conditions’, noting that they should not be read simply as a description
of the provisions in the other columns of the Schedule. The AB did not see why
any such terms, conditions or qualifications would be included unless they were
intended to have legal impact on the substantive concession in the Schedule –
that is, as qualifying or limiting the scope of the concession. It ruled that the
qualifications in that case should be read accordingly.
In a footnote to its report on the Canada – Dairy case, the AB suggested
that a qualification might yield further concessions as well as limit an existing
concession. But it did not rule on this point.
. . . be exempt from ordinary customs duties in excess of those set forth
and provided therein.
In GATT jurisprudence, an ‘ordinary customs duty’ was a duty distinguished from
various supplementary duties and charges on imports. The AB reversed an attempt
by the Panel in the Chile – Price Band case to define ordinary customs duties as
either ad valorem or specific duties that are levied without regard to ‘exogenous’
factors (such as current market prices). The AB pointed out that many applied
duties that must be considered ‘ordinary customs duties’ take ‘exogenous’ fac-
tors into account, including the needs of producers and consumers. They did
not accept, either, that observations of duties in members’ Schedules justified a
rule characterizing ‘ordinary customs duties’ as either ad valorem or specific.
The observations in this case did not amount to a proof of ‘subsequent practice’
(one of the Vienna Convention rules of treaty interpretation) that would give the
characterization ‘normative’ value. The AB did not decide, finally, whether the
Chilean price band duties were ‘ordinary customs duties’, because they consid-
ered they were, in any case, inconsistent with the ‘tariffication’ requirements of
Article 4:2 of the Agreement on Agriculture.
The meaning of ‘in excess of’ arose in the case of Argentina – Textiles and
Apparel. Argentina applied a specific duty to imports under a tariff line where its
Schedule provided a bound ad valorem rate of duty. The AB did not find a problem
with the variation in the form of the applied duty. But it found that any duty –
whether or not in the same form as the Scheduled duty – that could give rise to a
levy on imports that exceeds the rate bound in the Schedule, is inconsistent with
a member’s obligations. In some circumstances, such as a change in international
prices or exchange rates, the AB found, the Argentine applied specific rate could
breach the ad valorem level bound in its Schedule. The AB noted that it would
have been open to the Argentine government to legislate to prevent the application
of the specific duty breaching the ad valorem binding. But it had not done so.
3
WTO document WT/DS/103ABR para. 7.151.
79
Appendix 1
Such products shall also be exempt from all other duties or charges of any
kind imposed on or in connection with the importation in excess of those
imposed on the date of this Agreement or those directly and mandatorily
required to be imposed thereafter by legislation in force in the importing
territory on that date.
There is guidance from the GATT on the nature of other duties and charges
(ODCs). A Decision of the former GATT Council in 1980 on the ‘Introduction of
a loose-leaf system for the Schedules of Tariff Concessions’ states: ‘such “duties or
charges” are in principle only those that discriminate against imports’. That is, they
do not include charges applied to imports and domestic goods alike. The Decision
continues, ‘such “other duties or charges” concern neither charges equivalent to
internal taxes, nor anti-dumping or countervailing duties, nor fees or other charges
commensurate with the cost of services rendered.’4
Some historical examples of ODCs include ‘temporary import surcharges’,
‘revenue taxes’ and charges imposed by import monopolies (see also Article II:4).
The provision on ODCs has been elaborated in the Understanding on The
Interpretation of Article II:1 (b)5 to require the explicit incorporation of ‘other
duties and charges’ into the Schedules and to set the ‘date of this agreement’ as
the date of the incorporation of the WTO Schedules into the WTO Agreement
(15 April 1994). Until the adoption of this agreement there was no obligation to
record the ODCs in place or the legislation mandating ODCs that was in force on
‘the date of the agreement’. All bound tariffs must now include a rate for ODCs.
If no ODC is recorded for a bound item, then the bound ODC level is zero.
Following adoption of the understanding in 1994, when concessions are rene-
gotiated or new concessions are introduced, the ‘date of the agreement’ is to be
the date of the incorporation of the new or revised concession into the Schedule.
If the concession is a revised concession, however, there is an additional rule that
preserves members’ rights under the GATT (1947).
Members must always record the date of the first incorporation of a concession
on a tariff item in Column 6 of a WTO Schedule. ODCs recorded in the Schedules
after the date of the first scheduling – including those recorded for the first time
in 1994 under the provisions of this understanding and any future revisions of
Scheduled concessions – must not exceed those that applied or were mandated
on the date of first scheduling identified in Column 6. In other words, any future
increase in an ODC above the level that applied on the date of first scheduling,
including a ‘zero’ level, will breach a binding and must be compensated like any
other breach.
Members had three years – until 15 April 1997 – originally, and then three
years after any subsequent renegotiation, to challenge the level of ODCs recorded
4
WTO document C/107/Rev.1 adopted 26 March 1980 27/S22,24.
5
Details at www.wto.org/English/docs_e/ legal_e/07–2-1-b_e.htm on the WTO’s website.
80
against any tariff item if they considered that the level was greater than applied at
the date of first incorporation in the WTO Schedules.
(c) The products described in Part II of the Schedule relating to any Con-
tracting Party which are the products of territories entitled under Article I
to receive preferential treatment upon importation into the territory to
which the Schedule relates shall, on their importation into such territory,
and subject to the terms, conditions or qualifications set forth in that
Schedule, be exempt from ordinary customs duties in excess of those set
forth and provided for in Part II of that Schedule. Such products shall
also be exempt from all other duties or charges of any kind imposed on or
in connection with importation in excess of those imposed on the date of
this Agreement or those directly or mandatorily required to be imposed
thereafter by legislation in force in the importing territory on that date.
Nothing in this Article shall prevent any Contracting Party from main-
taining its requirements existing on the date of this Agreement as to the
eligibility of goods for entry at preferential rates of duty.
This provision is now irrelevant to the extent that members have discontinued their
historical Part II preferences.
2. Nothing in this Article shall prevent any Contracting Party from impos-
ing at any time on the importation of any product: . . .
(c) charge equivalent to an internal tax imposed consistently with the
provisions of paragraph 2 of Article III in respect of the like domestic
product or in respect of an article from which the imported product
has been manufactured or produced in whole or in part;
(d) any anti-dumping or countervailing duty applied consistently with
the provisions of Article VI;
(e) fees or other charges commensurate with the cost of services ren-
dered.
Some taxes not included in the Schedules may be levied without a breach of the
obligations in the previous clause on bound rates.
This provision permits a member to levy at the border a domestic tax that does
not discriminate between imports and the like domestic product (the Article III:2
requirement). For example, members may levy imports at a rate equivalent to the
rate of a direct tax on domestic products, such as a VAT, as long as the rate of the
tax either on the final good that is imported, or on the intermediate products used in
the manufacture of the imported final good, is no greater than the rate of tax on the
same products on the domestic market and the domestic tax is non-discriminatory
in the sense of Article III:2 (‘National Treatment’).
Anti-dumping duties, countervailing (anti-subsidy) duties and fees for customs
inspections may be charged without a breach of the binding. There are detailed
81
Appendix 1
rules in Article VI governing the application of dumping charges and dispute

settlement cases.
Article VIII of the GATT clarifies the rule on ‘commensurate’ fees. It requires
that any fees collected by Customs (or other agency mandated to conduct inspec-
tions or supply services at the border) must ‘approximate the cost’ of service
delivery and must not be used as a disguised tax; otherwise they may be held to
breach a binding. The article says by way of illustration that this rule applies to all
border service fees, such as those for the administration of:
r consular transactions, such as consular invoices and certificates;
r quantitative restrictions;
r licensing;
r exchange control;
r statistical services;
r documents, documentation and certification;
r analysis and inspection; and
r quarantine, sanitation and fumigation.
3. No Contracting Party shall alter its method of determining dutiable
value or of converting currencies so as to impair the value of any of
the concessions provided for in the appropriate Schedule annexed to this
Agreement.
Valuation is crucial in the determination of the sum payable by virtue of an ad
valorem duty and for other purposes, such as the investigation of dumping. The
benefit of a binding can be eliminated or circumvented by an arbitrary or unfair
valuation.
The Uruguay Round adopted a detailed Agreement on Customs Valuation6
elaborating the procedures to be followed.
4. If any Contracting Party establishes, maintains or authorizes, formally
or in effect, a monopoly of the importation of any product described
in the appropriate Schedule annexed to this Agreement, such monopoly
shall not, except as provided for in that Schedule or as otherwise agreed
between the parties which initially negotiated the concession, operate
so as to afford protection on the average in excess of the amount of
protection provided for in that Schedule. The provisions of this para-
graph shall not limit the use by Contracting Parties of any form of
assistance to domestic producers permitted by other provisions of this
Agreement.
State-designated trading enterprises that are given import monopoly powers may
affect the value of a binding in a number of ways, particularly by adding a
6
See www.wto.org/English/docs_e/legal_e/20-val_01_e.htm.
82
‘mark-up’ to import prices. Article XVII of the GATT and the findings of dis-
putes panels detail the obligations of state-trading importers in this respect. An
Understanding on State Trading Enterprises7 reached during the Uruguay Round
requires that members report to the GATT on the activities of these enterprises.
Note that an enterprise need not be owned by the state to be designated as a
‘state-trading’ enterprise.
5. If any Contracting Party considers that a product is not receiving from
another Contracting Party the treatment which the first Contracting Party
believes to have been contemplated by a concession provided for in the
appropriate Schedule annexed to this Agreement, it shall bring the matter
directly to the attention of the other Contracting Party. If the latter agrees
that the treatment contemplated was that claimed by the first Contracting
Party, but declares that such treatment cannot be accorded because a
court or other proper authority has ruled to the effect that the product
involved cannot be classified under the tariff laws of such Contracting
Party so as to permit the treatment contemplated in this Agreement,
the two Contracting Parties, together with any other Contracting Parties
substantially interested, shall enter promptly into further negotiations
with a view to a compensatory adjustment of the matter.
Reclassification of goods within a tariff may effectively remove the benefit of a
binding. A member whose rights are affected by another member’s reclassification
of bound duties may seek compensation and, ultimately, may bring a dispute
settlement case to have its rights upheld.
6. [Provision on exchange rates for the calculation of specific duties].
Paragraph 6 relates to the regime of fixed exchange rates that existed during
the first three decades of the GATT (1947). In 1980, after the system of fixed
exchange parities was abandoned, the GATT adopted a Decision that permit-
ted adjustment of a bound specific rate of duty if the trade-weighted value
of a currency drifted more than 20 per cent from a representative ‘basket’ of
currencies.
7. The Schedules annexed to this Agreement are hereby made an integral
part of Part I of this Agreement.
The incorporation of the national Schedules into the WTO as an ‘integral part’ of
the WTO Agreement means, in effect, that a national Schedule must be approved
by the decision-making processes that are formally the same as those that apply
to all other WTO agreements, must be interpreted using the same interpretive
processes as apply to the agreements, and has the same legal force as all the
agreements.
7
Details at www.wto.org/English/docs_e/legal_e/08–17_e.htm.
83
Appendix 1
The approval processes for changes in the Schedules, such as those that follow
technical changes in the Harmonized System, or those that are the result of minor
revisions or re-negotiation are, as a matter of practice, based on the circulation of
written notices from the Secretariat. Members have an opportunity to query the
proposed change or to object.
Part I, Section I – B – Agricultural Products – Tariff Rate Quotas

In practice, Part I – B of the current (Uruguay Round) goods Schedules consists of
complex documents because the structure of protection for some agricultural prod-
ucts was complex before the Uruguay Round reforms, and was sometimes even
more complex afterwards. It can be especially difficult to identify commitments
in the Uruguay Round Schedules on agricultural tariff quotas.
There are two varieties of tariff quotas in Section I – B of the current goods
Schedules.
(i) Minimum access tariff quota

The procedures used by members in the Uruguay Round to ‘tariffy’ and liberalize
agricultural market access barriers resulted in the creation of some very high rates
of duty for products that had formerly been protected by, for example, quantitative
barriers. Some of the resulting tariffs were too high to permit commercial access
for imports, even after being cut by the target rates of 36 per cent on average
in developed country markets and 24 per cent in developing country markets.
The procedures for liberalization of agricultural market access (found in WTO
document MTN.GNG/MA/W/248 ) therefore required the creation of a ‘two-part’
tariff, called a ‘tariff quota’, for these products at the four-digit (or lower) level of
the HS. The tariff quotas provided for a small volume (a ‘quota’) of trade access –
specified to increase over the implementation period from at least 3 to at least
5 per cent of domestic consumption of the product concerned – to access the
market at a ‘low or minimal’ MFN duty rate, called the ‘in-quota’ rate. Any
imports in excess of that volume would be liable to the full, bound duty, called the
‘out of quota’ rate.
(ii) Current access tariff quota

In some cases, the quantitative barriers, ‘voluntary’ import and export restraints,
variable levies, etc., that applied to agricultural imports before the Uruguay Round
provided for a volume of access to the protected market on a discriminatory
(bilateral) basis. The modalities for agricultural reform stipulated that any ‘current’
levels of access in excess of the minimum levels provided by the new tariff quotas
must also be maintained in the new Schedules of commitments. In effect, these
8
The GATT Director-General proposed these procedures or ‘modalities’ in a ‘Draft Final Act’ of the
Uruguay Round in December 1991. They were never formally adopted but were followed, nonetheless, in the
recommended procedures.
84
‘current access’ arrangements could be maintained as discriminatory tariff-quota

‘windows’ in the new ‘tariffied’ MFN duties that replaced the former quotas,
voluntary restraints, etc. In most cases, ‘current access’ is not expanded in the
Schedules, but where any expansion does take place it must be on an MFN
basis.
Current access is frequently defined in terms of very narrow, specific product
descriptions and sometimes ‘seasonal’ access provisions. These details should
be included in the Schedules, possibly in footnotes or in the ‘Other Terms and
Conditions’ column of Part I – B.
Unfortunately, owing to members’ failure to agree on detailed ‘modalities’, the
Uruguay Round procedures for binding current access and for providing minimum
access were not specific on several points. Members estimated the tariff equiv-
alents of prohibited barriers and calculated the volumes of minimum access for
themselves, following the guidelines. Their proposed commitments were subject
to ‘verification’ by their trading partners, but only six weeks were formally allowed
for this process, between the dates for submission of draft Schedules (15 February
1994) and the date for finalization of the draft Schedules to be included in the
Final Act of the Uruguay Round (end of March 1994). Many practical questions
were left for the parties most interested to negotiate among themselves during this
period, including, for example, the level of the ‘low or minimal’ in-quota tariff
rate and any other conditions that might apply to ‘current’ or ‘minimum’ mar-
ket access. The ‘Other Terms and Conditions’ column, or possibly the footnotes,
should reflect these agreements (see table in Figure A1.2).
The following description of Part I – B of the GATT Schedules refers to
A1.1.
Column 1 TRQ No. This column contains a three-digit number for each of
the bound tariff rate quotas (TRQs) maintained by a member. The
identifier links the data in this table to the data in Section I – A,
where the ‘out-of-quota’ rate of duty is bound. Because there may
be several tariff lines covered by one TRQ, this identifier may link to
multiple tariff lines in Section I – A.
Column 2 General description of the TRQ and product descriptions of the
tariff lines covered Agricultural tariff quotas may cover a range
of product lines, with a corresponding range of HS classifications:
for example, ‘fresh cheeses’. This column should provide a gen-
eral description of the agricultural product or group of agricultural
products covered by the tariff rate quota.
Column 3 Tariff item No. (HS2002) This column lists the tariff items for which
the in-quota duties are bound, preferably using the latest nomencla-
ture (but any HS nomenclature may be used). Tariff items relating
to out-of-quota duties are listed in Section I – A of the Schedules.
Members may have different tariff lines for the in-quota duties and
85
Figure A1.1 Tariff quota Schedules: a current example
Figure A1.2 Tariff rate quotas
Appendix 1
the out-of-quota duties on the same products. In that case, they should
supply a ‘concordance’ between the two sets of tariff lines, possibly
in the Headnote.
Column 4 TRQ commitment (quantity) This column has three sub-divisions:
(A) Initial quota The initial amount of product that may enter at the
in-quota rate of duty for each of the TRQs being offered.
(B) Final quota The final quota amount for each of the TRQs being
offered.
(C) Unit of Measure For example, kg, tonnes, units, metres, etc.
Column 5 In-quota duty This two-part column shows the ‘base rate’ and the
‘final bound rate’ of the in-quota duty for each of the TRQs.
Column 6 Implementation period A two-part column showing the period of
implementation of the final concession.
Column 7 Initial negotiating right on the TRQ The three-digit alphanumeric
code (from the IDB database) of any member with whom the
new TRQ concession was negotiated bilaterally. No INR should be
recorded for other cases.
Column 8 Other terms and conditions Clarifications or comments concerning
the scope of the TRQ concession should be included in a separate
column.
The tables in Figure A1.2 show extracts from the 1994 (Uruguay Round) Sched-
ules of Japan and the Republic of Korea (ROK) showing commitments in Part I,
Section I – B on rice (HS 1006).9 The EC did not have any entries in its Schedule
for rice in Section I – B.
Text tariff The Japan entry for rice, on which it has claimed ST-5 treatment
(see above), contains quantitative bindings on the ‘minimum access’
quota but ‘zero’ duties in the duty columns for the initial quota and
the final quota. In this case, Japan has bound a ‘text’ or ‘descriptive’
tariff in the ‘Other Terms and Conditions’ column that relates to
the operation of the ‘mark-up’ imposed by the monopoly importer,
a ‘State Trading Enterprise’ (STE). Such mark-ups on imports by
STEs are an ODC that always affects the binding.
ROK, too, has indicated, in a footnote, the possibility of a ‘mark-
up’ by a state trading entity, although it has not specified the size of
the mark-up at the time of Scheduling.
Part I, Section II – Non-agricultural Products (‘NAMA’ Products)

The following description of Section II, Concerning non-agricultural products,
refers to Figure A1.3.
9
88
Figure A1.3 Non-agricultural products
Appendix 1
Column 1 Tariff item No. (HS2002) An HS classification, preferably from the

latest revision, at the six-digit level or lower. For further details, see
Section I – A, Column 1.
Column 2 Description of products Descriptions at the HS six-digit level should
follow the HS nomenclature. Descriptions at the eight-digit level or
lower will usually be based on descriptions prepared by the WTO
Secretariat and provided to members in ‘electronic files’.
Column 3 Base rate of duty This two-part column includes:
(A) Ad val. (%) duties For tariff lines that were bound before the base
date for the Doha Development Round negotiations, this column
contains the existing concession in ad valorem form. For those
tariff lines that were not bound by the base date, the base rate will
be determined by an agreed means. The column is blank where
no binding is offered. According to the modalities for NAMA
cuts agreed at the Hong Kong Ministerial Conference, bindings
will be set in ad valorem terms. Ad valorem equivalents (AVEs)
are shown in this column for any duties in non-ad valorem form.
(B) U/B This column should identify with a ‘B’ the tariff lines which
are currently bound, and with a ‘U’ the tariff lines which are
currently unbound. In the Spanish and French languages, the
designations are ‘C’ and ‘N/C’.
Column 4 Final bound rate of duty (%) For each non-agricultural tariff line,
this column contains one of the following:
(a) the new bound rate of duty, in ad valorem form, resulting from
the application of the formula or participation in a sectoral nego-
tiation, or a new binding as a result of a request-offer negotiation.
The rate is rounded to one decimal place;
(b) the letter ‘U’ should be used to identify those tariff lines being
left unbound in accordance with the modalities. This is an inno-
vation in the new format for the GATT Schedules. Formerly, the
Schedules contained only bound final commitments, and said
nothing about tariff lines where no commitments were made.10
Since the adoption of the ‘100 per cent bound’ rule for agricul-
tural tariff lines in the Uruguay Round, agricultural Schedules are
comprehensive with respect to agricultural tariff lines: there is a
commitment on every line. There is no equivalent rule for NAMA
products. But the Scheduling of ‘unbound’ tariff lines will make
the NAMA Schedules also comprehensive with respect to non-
agricultural products;11
10
The Uruguay Round Schedules did, however, provide for the identification of unbound ‘base rates’.
11
The GATS modalities have provided for the Scheduling of unbound concessions since 1994. The GATS
Schedules are not, however, comprehensive with respect to commercially traded services; this may not be a
feasible goal for services.
90
(c) the same level as the base rate of duty where the tariff line has
been exempted from the formula cuts and has not been bound in
any other negotiation.
Column 5 Implementation period This column contains two sub-columns:
(A) From This column should reflect the first year of implementation
of the concession. This column will be empty when:
(b) no cut will be applied as a result of the modalities; or
(c) the tariff line will be left unbound.
When a cut will be applied, but the current concession has not
been fully implemented, the ‘From’ column will contain the date
of the full implementation of the current concession (check the
‘Other Terms and Conditions’ column which may contain more
information).
(B) To This column should reflect the year in which the concession
will be fully implemented in accordance with the modalities.
Again, the column will be empty if:
(b) no cut will be applied as a result of the modalities; or
(c) the tariff line will be left unbound.
Column 6 Initial Negotiating Right (INR) on the concession This column
should reflect the three-digit alphanumeric code (from the IDB
database) of the member with whom the new concession was nego-
tiated.
Column 7 Other Duties and Charges (ODCs) This column should reflect com-
mitments under Article II:1(b) of the GATT 1994 and the Uruguay
Round Understanding on this issue.
Column 8 Other Terms and Conditions Clarifications or comments concerning
the scope of a concession in a particular tariff line should be included
in this column.
Part II – Preferential Tariffs
This Part of the Schedule is applicable only in the case of historical preferences
under Article I:2 of the GATT 1994.
Part III – Non-tariff Measures

The WTO prohibits non-tariff measures except in narrowly defined circumstances.
Few members have listed any obligations in this part of the WTO Schedules. The
following description of Part III refers to Figure A1.4.
91
PART III – NON-TARIFF CONCESSIONS
Figure A1.4 Non-tariff concessions

Column 1 Tariff item No. (HS2002) Concessions relating to non-tariff measures

listed at the Chapter (i.e. two-digit) level of the HS2002 or some other
HS revision, as indicated.
Column 2 Description of products
Column 3 Non-tariff concessions This column should reflect the non-tariff
concession granted by the member. Few members included any con-
cessions in this Schedule following the Uruguay Round.
Part IV – Agricultural Products: Commitments Limiting Subsidization
Members added Part IV to the Schedules at the end of the Uruguay Round to
register the commitments of some of them to limit domestic and/or export supports
for agricultural products, in accordance with the provisions of the Agreement on
Agriculture. The modalities for a future agreement in the Doha Development
Round on these issues were not defined at the time this Handbook was drafted.
We have included, instead, brief descriptions of the main tables from the current
(Uruguay Round) Schedules.
Section I – Domestic support: total AMS commitments

The following description of Section I of Part IV refers to Figure A1.5.
Column 1 Base total AMS The total AMS (Aggregate Measure of Support)
is the sum across all agricultural products of product-specific and
non-product-specific support that is not exempt from reduction – that
is, neither ‘blue’ nor ‘green’ nor subject to the developing country
exceptions – minus the de minimis levels of support, if any. The AMS
is determined, in most cases, by estimating the value of price support
to domestic production. But it may be estimated as the ‘equivalent
measurement of support’ – that is, by the value of budget outlays on
direct support to production.
An explanation of the composition and estimation of the AMS and
of the calculation of the export subsidy commitment is contained in
the ‘modalities’ document (WTO document MTN.GNG/MA/W/24).
Twenty-eight members had non-exempt domestic support levels
subject to reduction in the Uruguay Round. Their obligations were
expressed as bound, progressive cuts in the ‘Base’ levels of total
AMS.
Column 2 Annual and final bound commitment levels Although not explicit
in the model for the Uruguay Round Schedule, this column contains
six sub-columns showing the annual bound level of total AMS for
each member with AMS reduction commitments.
93
Figure A1.5 Agricultural products, commitments limiting subsidization
Figure A1.6 Commitments limiting support: a current example
95
Appendix 1
Column 3 Relevant supporting tables There are typically several tables identi-
fied in this column. They contain data on the components of the total
AMS calculation including the product-specific support estimates
and the non-product-specific support estimates. Full details of the
calculations and the data required can be found in WTO document
MTN.GNG/MA/W/24.
The tables in Figure 2.8 show extracts from the 1994 (Uruguay Round) Sched-
ules of the European Communities, Japan and the Republic of Korea, show-
ing commitments in Part IV, Section 1 on domestic support expenditure.12 The
Uruguay Round Schedules are very similar to the proposed format for the Doha
Development Round Schedules.
Agriculture Supporting The supporting documentation for the calculation of

Tables (AGST) the total AMS commitment is extensive and long.
The Secretariat made a compilation of the support-
ing documentation presented during the ‘verification’
phases of the Uruguay Round that is available (in four
parts: WTO document G/AG/AGST Vols. 1–4) from
the WTO’s ‘Docs-on-Line’ website.13
Sections II and III – Budgetary, Quantity and Scope Commitments on

Export Subsidies
The following description of Section II and III of Part IV refers to Figure A1.5.
Column 1 Description of product The identification of the products using

HS 92 (in the case of the Uruguay Round commitments) or later.
Columns 2–7 Progressive reductions Details of budget outlays and quantities
exported with export subsidies in the base years (1986–8) of the
Uruguay Round; annual final quantity and budget commitments
in accordance with the Uruguay Round modalities.
Column 8 Relevant supporting tables Details of budget and quantity calcu-
lations.
12
13
Visit the website at http://docsonline.wto.org/, choose the ‘Simple Search’ option and enter the term
‘AGST’ as the ‘Document Symbol’ in the search form.
96
APPENDIX 2
GENERAL AGREEMENT ON TARIFFS AND

TRADE 1994
1. The General Agreement on Tariffs and Trade 1994 (‘GATT 1994’) shall consist
of:
(a) the provisions in the General Agreement on Tariffs and Trade, dated
30 October 1947, annexed to the Final Act Adopted at the Conclusion of
the Second Session of the Preparatory Committee of the United Nations
Conference on Trade and Employment (excluding the Protocol of Pro-
visional Application), as rectified, amended or modified by the terms of
legal instruments which have entered into force before the date of entry
into force of the WTO Agreement;
(b) the provisions of the legal instruments set forth below that have entered
into force under the GATT 1947 before the date of entry into force of the
WTO Agreement:
(i) protocols and certifications relating to tariff concessions;
(ii) protocols of accession (excluding the provisions (a) concerning pro-
visional application and withdrawal of provisional application and
(b) providing that Part II of GATT 1947 shall be applied provision-
ally to the fullest extent not inconsistent with legislation existing on
the date of the Protocol);
(iii) decisions on waivers granted under Article XXV of GATT 1947 and
still in force on the date of entry into force of the WTO Agreement;1
(iv) other decisions of the CONTRACTING PARTIES to GATT
1947;
(c) the Understandings set forth below:
(i) Understanding on the Interpretation of Article II:1(b) of the General
Agreement on Tariffs and Trade 1994;
(ii) Understanding on the Interpretation of Article XVII of the General
1
The waivers covered by this provision are listed in footnote 7 on pages 11 and 12 in Part II of document
MTN/FA of 15 December 1993 and in MTN/FA/Corr.6 of 21 March 1994. The Ministerial Conference shall
establish at its first session a revised list of waivers covered by this provision that adds any waivers granted
under GATT 1947 after 15 December 1993 and before the date of entry into force of the WTO Agreement,
and deletes the waivers which will have expired by that time.
97
Appendix 2
(iii) Understanding on Balance-of-Payments Provisions of the General

(iv) Understanding on the Interpretation of Article XXIV of the General
(v) Understanding in Respect of Waivers of Obligations under the Gen-
eral Agreement on Tariffs and Trade 1994;
(vi) Understanding on the Interpretation of Article XXVIII of the General
Agreement on Tariffs and Trade 1994; and
(d) the Marrakesh Protocol to GATT 1994.
2. Explanatory Notes
(a) The references to “contracting party” in the provisions of GATT 1994
shall be deemed to read “Member.” The references to “less-developed
contracting party” and “developed contracting party” shall be deemed
to read “developing country Member” and “developed country Member”.
The references to “Executive Secretary” shall be deemed to read “Director-
General of the WTO”.
(b) The references to the CONTRACTING PARTIES acting jointly in
Articles XV:1, XV:2, XV:8, XXXVIII and the Notes Ad Article XII and
XVIII; and in the provisions on special exchange agreements in Articles
XV:2, XV:3, XV:6, XV:7 and XV:9 of GATT 1994 shall be deemed to be
references to the WTO. The other functions that the provisions of GATT
1994 assign to the CONTRACTING PARTIES acting jointly shall be
allocated by the Ministerial Conference.
(c) (i) The text of GATT 1994 shall be authentic in English, French and
Spanish.
(ii) The text of GATT 1994 in the French language shall be subject
to the rectifications of terms indicated in Annex A to document
MTN.TNC/41.
(iii) The authentic text of GATT 1994 in the Spanish language shall be the
text in Volume IV of the Basic Instruments and Selected Documents
series, subject to the rectifications of terms indicated in Annex B to
document MTN.TNC/41.
3. (a) The provisions of Part II of GATT 1994 shall not apply to measures
taken by a Member under specific mandatory legislation, enacted by
that Member before it became a contracting party to GATT 1947, that
prohibits the use, sale or lease of foreign-built or foreign-reconstructed
vessels in commercial applications between points in national waters or
the waters of an exclusive economic zone. This exemption applies to:
(a) the continuation or prompt renewal of a non-conforming provision of
such legislation; and (b) the amendment to a non-conforming provision
of such legislation to the extent that the amendment does not decrease the
conformity of the provision with Part II of GATT 1947. This exemption is
98
General Agreement on Tariffs and Trade 1994
limited to measures taken under legislation described above that is notified

and specified prior to the date of entry into force of the WTO Agreement.
If such legislation is subsequently modified to decrease its conformity
with Part II of GATT 1994, it will no longer qualify for coverage under
this paragraph.
(b) The Ministerial Conference shall review this exemption not later than
five years after the date of entry into force of the WTO Agreement and
thereafter every two years for as long as the exemption is in force for the
purpose of examining whether the conditions which created the need for
the exemption still prevail.
(c) A Member whose measures are covered by this exemption shall annually
submit a detailed statistical notification consisting of a five-year moving
average of actual and expected deliveries of relevant vessels as well as
additional information on the use, sale, lease or repair of relevant vessels
covered by this exemption.
(d) A Member that considers that this exemption operates in such a manner as
to justify a reciprocal and proportionate limitation on the use, sale, lease
or repair of vessels constructed in the territory of the Member invoking
the exemption shall be free to introduce such a limitation subject to prior
notification to the Ministerial Conference.
(e) This exemption is without prejudice to solutions concerning specific
aspects of the legislation covered by this exemption negotiated in sec-
toral agreements or in other fora.
99
APPENDIX 3
GENERAL AGREEMENT ON TRADE

IN SERVICES
PART I SCOPE AND DEFINITION

Article I Scope and Definition
PART II GENERAL OBLIGATIONS AND DISCIPLINES
Article II Most-Favoured-Nation Treatment
Article III Transparency
Article III bis Disclosure of Confidential Information
Article IV Increasing Participation of Developing Countries
Article V Economic Integration
Article V bis Labour Markets Integration Agreements
Article VI Domestic Regulation
Article VII Recognition
Article VIII Monopolies and Exclusive Service Suppliers
Article IX Business Practices
Article X Emergency Safeguard Measures
Article XI Payments and Transfers
Article XII Restrictions to Safeguard the Balance of Payments
Article XIII Government Procurement
Article XIV General Exceptions
Article XIV bis Security Exceptions
Article XV Subsidies
PART III SPECIFIC COMMITMENTS
Article XVI Market Access
Article XVII National Treatment
Article XVIII Additional Commitments
PART IV PROGRESSIVE LIBERALIZATION
Article XIX Negotiation of Specific Commitments
Article XX Schedules of Specific Commitments
Article XXI Modification of Schedules
PART V INSTITUTIONAL PROVISIONS
Article XXII Consultation
Article XXIII Dispute Settlement and Enforcement
Article XXIV Council for Trade in Services
100
General Agreement on Trade in Services
Article XXV Technical Cooperation

Article XXVI Relationship with Other International Organizations
PART VI FINAL PROVISIONS
Article XXVII Denial of Benefits
Article XXVIII Definitions
Article XXIX Annexes
Annex on Article II Exemptions

Annex on Movement of Natural Persons Supplying Services under the Agreement
Annex on Air Transport Services
Annex on Financial Services
Second Annex on Financial Services
Annex on Negotiations on Maritime Transport Services
Annex on Telecommunications
Annex on Negotiations on Basic Telecommunications
GENERAL AGREEMENT ON TRADE IN SERVICES

Members,
Recognizing the growing importance of trade in services for the growth and
development of the world economy;
Wishing to establish a multilateral framework of principles and rules for trade in
services with a view to the expansion of such trade under conditions of transparency
and progressive liberalization and as a means of promoting the economic growth
of all trading partners and the development of developing countries;
Desiring the early achievement of progressively higher levels of liberalization
of trade in services through successive rounds of multilateral negotiations aimed
at promoting the interests of all participants on a mutually advantageous basis and
at securing an overall balance of rights and obligations, while giving due respect
to national policy objectives;
Recognizing the right of Members to regulate, and to introduce new regula-
tions, on the supply of services within their territories in order to meet national
policy objectives and, given asymmetries existing with respect to the degree of
development of services regulations in different countries, the particular need of
developing countries to exercise this right;
Desiring to facilitate the increasing participation of developing countries in
trade in services and the expansion of their service exports including, inter alia,
through the strengthening of their domestic services capacity and its efficiency
and competitiveness;
Taking particular account of the serious difficulty of the least-developed coun-
tries in view of their special economic situation and their development, trade and
financial needs;
Hereby agree as follows:
101
Appendix 3
PART I
SCOPE AND DEFINITION
Article I
Scope and Definition
1. This Agreement applies to measures by Members affecting trade in services.
2. For the purposes of this Agreement, trade in services is defined as the supply
of a service:
(a) from the territory of one Member into the territory of any other Member;
(b) in the territory of one Member to the service consumer of any other
Member;
(c) by a service supplier of one Member, through commercial presence in the
territory of any other Member;
(d) by a service supplier of one Member, through presence of natural persons
of a Member in the territory of any other Member.
3. For the purposes of this Agreement:
(a) “measures by Members” means measures taken by:
(i) central, regional or local governments and authorities; and
(ii) non-governmental bodies in the exercise of powers delegated by
central, regional or local governments or authorities;
In fulfilling its obligations and commitments under the Agreement, each
Member shall take such reasonable measures as may be available to it to
ensure their observance by regional and local governments and authorities
and non-governmental bodies within its territory;
(b) “services” includes any service in any sector except services supplied in
the exercise of governmental authority;
(c) “a service supplied in the exercise of governmental authority” means any
service which is supplied neither on a commercial basis, nor in competition
with one or more service suppliers.
PART II
GENERAL OBLIGATIONS AND DISCIPLINES
Article II
Most-Favoured-Nation Treatment
1. With respect to any measure covered by this Agreement, each Member shall
accord immediately and unconditionally to services and service suppliers of any
other Member treatment no less favourable than that it accords to like services and
service suppliers of any other country.
102
2. A Member may maintain a measure inconsistent with paragraph 1 provided

that such a measure is listed in, and meets the conditions of, the Annex on Article II
Exemptions.
3. The provisions of this Agreement shall not be so construed as to prevent any
Member from conferring or according advantages to adjacent countries in order to
facilitate exchanges limited to contiguous frontier zones of services that are both
locally produced and consumed.
Article III
Transparency
1. Each Member shall publish promptly and, except in emergency situations, at
the latest by the time of their entry into force, all relevant measures of general
application which pertain to or affect the operation of this Agreement. International
agreements pertaining to or affecting trade in services to which a Member is a
signatory shall also be published.
2. Where publication as referred to in paragraph 1 is not practicable, such infor-
mation shall be made otherwise publicly available.
3. Each Member shall promptly and at least annually inform the Council for
Trade in Services of the introduction of any new, or any changes to existing, laws,
regulations or administrative guidelines which significantly affect trade in services
covered by its specific commitments under this Agreement.
4. Each Member shall respond promptly to all requests by any other Member for
specific information on any of its measures of general application or international
agreements within the meaning of paragraph 1. Each Member shall also establish
one or more enquiry points to provide specific information to other Members, upon
request, on all such matters as well as those subject to the notification requirement
in paragraph 3. Such enquiry points shall be established within two years from
the date of entry into force of the Agreement Establishing the WTO (referred to
in this Agreement as the “WTO Agreement”). Appropriate flexibility with respect
to the time-limit within which such enquiry points are to be established may be
agreed upon for individual developing country Members. Enquiry points need not
be depositories of laws and regulations.
5. Any Member may notify to the Council for Trade in Services any measure,
taken by any other Member, which it considers affects the operation of this Agree-
ment.
Article IIIbis
Disclosure of Confidential Information
Nothing in this Agreement shall require any Member to provide confidential
information, the disclosure of which would impede law enforcement, or otherwise
103
Appendix 3
be contrary to the public interest, or which would prejudice legitimate commercial

interests of particular enterprises, public or private.
Article IV
Increasing Participation of Developing Countries
1. The increasing participation of developing country Members in world trade
shall be facilitated through negotiated specific commitments, by different Members
pursuant to Parts III and IV of this Agreement, relating to:
(a) the strengthening of their domestic services capacity and its efficiency and
competitiveness, inter alia through access to technology on a commercial
basis;
(b) the improvement of their access to distribution channels and information
networks; and
(c) the liberalization of market access in sectors and modes of supply of
export interest to them.
2. Developed country Members, and to the extent possible other Members,
shall establish contact points within two years from the date of entry into
force of the WTO Agreement to facilitate the access of developing country
Members’ service suppliers to information, related to their respective markets,
concerning:
(a) commercial and technical aspects of the supply of services;
(b) registration, recognition and obtaining of professional qualifications; and
(c) the availability of services technology.
3. Special priority shall be given to the least-developed country Members in the
implementation of paragraphs 1 and 2. Particular account shall be taken of the
serious difficulty of the least-developed countries in accepting negotiated specific
commitments in view of their special economic situation and their development,
trade and financial needs.
Article V
Economic Integration
1. This Agreement shall not prevent any of its Members from being a party to
or entering into an agreement liberalizing trade in services between or among the
parties to such an agreement, provided that such an agreement:
(a) has substantial sectoral coverage1 , and
1
This condition is understood in terms of number of sectors, volume of trade affected and modes of supply.
In order to meet this condition, agreements should not provide for the a priori exclusion of any mode of
supply.
104
(b) provides for the absence or elimination of substantially all discrimination,

in the sense of Article XVII, between or among the parties, in the sectors
covered under subparagraph (a), through:
(i) elimination of existing discriminatory measures, and/or
(ii) prohibition of new or more discriminatory measures, either at the
entry into force of that agreement or on the basis of a reasonable
time-frame, except for measures permitted under Articles XI, XII,
XIV and XIVbis.
2. In evaluating whether the conditions under paragraph 1(b) are met, consid-
eration may be given to the relationship of the agreement to a wider process of
economic integration or trade liberalization among the countries concerned.
3. (a) Where developing countries are parties to an agreement of the type
referred to in paragraph 1, flexibility shall be provided for regarding
the conditions set out in paragraph 1, particularly with reference to
subparagraph (b) thereof, in accordance with the level of development
of the countries concerned, both overall and in individual sectors and
subsectors.
(b) Notwithstanding paragraph 6, in the case of an agreement of the type
referred to in paragraph 1 involving only developing countries, more
favourable treatment may be granted to juridical persons owned or con-
trolled by natural persons of the parties to such an agreement.
4. Any agreement referred to in paragraph 1 shall be designed to facilitate trade
between the parties to the agreement and shall not in respect of any Member
outside the agreement raise the overall level of barriers to trade in services within
the respective sectors or subsectors compared to the level applicable prior to such
an agreement.
5. If, in the conclusion, enlargement or any significant modification of any agree-
ment under paragraph 1, a Member intends to withdraw or modify a specific
commitment inconsistently with the terms and conditions set out in its Schedule,
it shall provide at least 90 days advance notice of such modification or with-
drawal and the procedure set forth in paragraphs 2, 3 and 4 of Article XXI shall
apply.
6. A service supplier of any other Member that is a juridical person consti-
tuted under the laws of a party to an agreement referred to in paragraph 1
shall be entitled to treatment granted under such agreement, provided that it
engages in substantive business operations in the territory of the parties to such
agreement.
7. (a) Members which are parties to any agreement referred to in paragraph 1
shall promptly notify any such agreement and any enlargement or any
significant modification of that agreement to the Council for Trade in
Services. They shall also make available to the Council such relevant
information as may be requested by it. The Council may establish a
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working party to examine such an agreement or enlargement or modifi-

cation of that agreement and to report to the Council on its consistency
with this Article.
(b) Members which are parties to any agreement referred to in paragraph 1
which is implemented on the basis of a time-frame shall report periodically
to the Council for Trade in Services on its implementation. The Council
may establish a working party to examine such reports if it deems such a
working party necessary.
(c) Based on the reports of the working parties referred to in subparagraphs (a)
and (b), the Council may make recommendations to the parties as it deems
appropriate.
8. A Member which is a party to any agreement referred to in paragraph 1 may
not seek compensation for trade benefits that may accrue to any other Member
from such agreement.
Article Vbis
Labour Markets Integration Agreements
This Agreement shall not prevent any of its Members from being a party to an
agreement establishing full integration2 of the labour markets between or among
the parties to such an agreement, provided that such an agreement:
(a) exempts citizens of parties to the agreement from requirements
concerning residency and work permits;
(b) is notified to the Council for Trade in Services.
Article VI
Domestic Regulation
1. In sectors where specific commitments are undertaken, each Member shall
ensure that all measures of general application affecting trade in services are
administered in a reasonable, objective and impartial manner.
2. (a) Each Member shall maintain or institute as soon as practicable judicial,
arbitral or administrative tribunals or procedures which provide, at the
request of an affected service supplier, for the prompt review of, and where
justified, appropriate remedies for, administrative decisions affecting trade
in services. Where such procedures are not independent of the agency
2
Typically, such integration provides citizens of the parties concerned with a right of free entry to the
employment markets of the parties and includes measures concerning conditions of pay, other conditions of
employment and social benefits.
106
entrusted with the administrative decision concerned, the Member shall

ensure that the procedures in fact provide for an objective and impartial
review.
(b) The provisions of subparagraph (a) shall not be construed to require a
Member to institute such tribunals or procedures where this would be
inconsistent with its constitutional structure or the nature of its legal
system.
3. Where authorization is required for the supply of a service on which a specific
commitment has been made, the competent authorities of a Member shall, within
a reasonable period of time after the submission of an application considered com-
plete under domestic laws and regulations, inform the applicant of the decision
concerning the application. At the request of the applicant, the competent author-
ities of the Member shall provide, without undue delay, information concerning
the status of the application.
4. With a view to ensuring that measures relating to qualification requirements
and procedures, technical standards and licensing requirements do not constitute
unnecessary barriers to trade in services, the Council for Trade in Services shall,
through appropriate bodies it may establish, develop any necessary disciplines.
Such disciplines shall aim to ensure that such requirements are, inter alia:
(a) based on objective and transparent criteria, such as competence and the
ability to supply the service;
(b) not more burdensome than necessary to ensure the quality of the service;
(c) in the case of licensing procedures, not in themselves a restriction on the
supply of the service.
5. (a) In sectors in which a Member has undertaken specific commitments, pend-
ing the entry into force of disciplines developed in these sectors pursuant
to paragraph 4, the Member shall not apply licensing and qualification
requirements and technical standards that nullify or impair such specific
commitments in a manner which:
(i) does not comply with the criteria outlined in subparagraphs 4(a), (b)
or (c); and
(ii) could not reasonably have been expected of that Member at the time
the specific commitments in those sectors were made.
(b) In determining whether a Member is in conformity with the obligation
under paragraph 5(a), account shall be taken of international standards of
relevant international organizations3 applied by that Member.
3
The term “relevant international organizations” refers to international bodies whose membership is open to
the relevant bodies of at least all Members of the WTO.
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6. In sectors where specific commitments regarding professional services are

undertaken, each Member shall provide for adequate procedures to verify the
competence of professionals of any other Member.
Article VII
Recognition
1. For the purposes of the fulfilment, in whole or in part, of its standards or
criteria for the authorization, licensing or certification of services suppliers, and
subject to the requirements of paragraph 3, a Member may recognize the education
or experience obtained, requirements met, or licenses or certifications granted in
a particular country. Such recognition, which may be achieved through harmo-
nization or otherwise, may be based upon an agreement or arrangement with the
country concerned or may be accorded autonomously.
2. A Member that is a party to an agreement or arrangement of the type referred
to in paragraph 1, whether existing or future, shall afford adequate opportu-
nity for other interested Members to negotiate their accession to such an agree-
ment or arrangement or to negotiate comparable ones with it. Where a Member
accords recognition autonomously, it shall afford adequate opportunity for any
other Member to demonstrate that education, experience, licenses, or certifica-
tions obtained or requirements met in that other Member’s territory should be
recognized.
3. A Member shall not accord recognition in a manner which would constitute
a means of discrimination between countries in the application of its standards or
criteria for the authorization, licensing or certification of services suppliers, or a
disguised restriction on trade in services.
4. Each Member shall:
(a) within 12 months from the date on which the WTO Agreement takes effect
for it, inform the Council for Trade in Services of its existing recognition
measures and state whether such measures are based on agreements or
arrangements of the type referred to in paragraph 1;
(b) promptly inform the Council for Trade in Services as far in advance as
possible of the opening of negotiations on an agreement or arrangement of
the type referred to in paragraph 1 in order to provide adequate opportunity
to any other Member to indicate their interest in participating in the
negotiations before they enter a substantive phase;
(c) promptly inform the Council for Trade in Services when it adopts new
recognition measures or significantly modifies existing ones and state
whether the measures are based on an agreement or arrangement of the
type referred to in paragraph 1.
5. Wherever appropriate, recognition should be based on multilaterally agreed
criteria. In appropriate cases, Members shall work in cooperation with relevant
108
intergovernmental and non-governmental organizations towards the establishment

and adoption of common international standards and criteria for recognition and
common international standards for the practice of relevant services trades and
professions.
Article VIII
Monopolies and Exclusive Service Suppliers
1. Each Member shall ensure that any monopoly supplier of a service in its
territory does not, in the supply of the monopoly service in the relevant market,
act in a manner inconsistent with that Member’s obligations under Article II and
specific commitments.
2. Where a Member’s monopoly supplier competes, either directly or through an
affiliated company, in the supply of a service outside the scope of its monopoly
rights and which is subject to that Member’s specific commitments, the Member
shall ensure that such a supplier does not abuse its monopoly position to act in its
territory in a manner inconsistent with such commitments.
3. The Council for Trade in Services may, at the request of a Member which has
a reason to believe that a monopoly supplier of a service of any other Member is
acting in a manner inconsistent with paragraph 1 or 2, request the Member estab-
lishing, maintaining or authorizing such supplier to provide specific information
concerning the relevant operations.
4. If, after the date of entry into force of the WTO Agreement, a Member
grants monopoly rights regarding the supply of a service covered by its spe-
cific commitments, that Member shall notify the Council for Trade in Services
no later than three months before the intended implementation of the grant of
monopoly rights and the provisions of paragraphs 2, 3 and 4 of Article XXI shall
apply.
5. The provisions of this Article shall also apply to cases of exclusive service
suppliers, where a Member, formally or in effect, (a) authorizes or establishes
a small number of service suppliers and (b) substantially prevents competition
among those suppliers in its territory.
Article IX
Business Practices
1. Members recognize that certain business practices of service suppliers, other
than those falling under Article VIII, may restrain competition and thereby restrict
trade in services.
2. Each Member shall, at the request of any other Member, enter into consulta-
tions with a view to eliminating practices referred to in paragraph 1. The Mem-
ber addressed shall accord full and sympathetic consideration to such a request
and shall cooperate through the supply of publicly available non-confidential
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Appendix 3
information of relevance to the matter in question. The Member addressed shall

also provide other information available to the requesting Member, subject to
its domestic law and to the conclusion of satisfactory agreement concerning the
safeguarding of its confidentiality by the requesting Member.
Article X
Emergency Safeguard Measures
1. There shall be multilateral negotiations on the question of emergency safe-
guard measures based on the principle of non-discrimination. The results of such
negotiations shall enter into effect on a date not later than three years from the
date of entry into force of the WTO Agreement.
2. In the period before the entry into effect of the results of the negotiations
referred to in paragraph 1, any Member may, notwithstanding the provisions of
paragraph 1 of Article XXI, notify the Council on Trade in Services of its intention
to modify or withdraw a specific commitment after a period of one year from the
date on which the commitment enters into force; provided that the Member shows
cause to the Council that the modification or withdrawal cannot await the lapse of
the three-year period provided for in paragraph 1 of Article XXI.
3. The provisions of paragraph 2 shall cease to apply three years after the date
of entry into force of the WTO Agreement.
Article XI
Payments and Transfers
1. Except under the circumstances envisaged in Article XII, a Member shall not
apply restrictions on international transfers and payments for current transactions
relating to its specific commitments.
2. Nothing in this Agreement shall affect the rights and obligations of the mem-
bers of the International Monetary Fund under the Articles of Agreement of
the Fund, including the use of exchange actions which are in conformity with
the Articles of Agreement, provided that a Member shall not impose restric-
tions on any capital transactions inconsistently with its specific commitments
regarding such transactions, except under Article XII or at the request of the
Fund.
Article XII
Restrictions to Safeguard the Balance of Payments
1. In the event of serious balance-of-payments and external financial difficulties
or threat thereof, a Member may adopt or maintain restrictions on trade in ser-
vices on which it has undertaken specific commitments, including on payments
110
or transfers for transactions related to such commitments. It is recognized that

particular pressures on the balance of payments of a Member in the process of
economic development or economic transition may necessitate the use of restric-
tions to ensure, inter alia, the maintenance of a level of financial reserves adequate
for the implementation of its programme of economic development or economic
transition.
2. The restrictions referred to in paragraph 1:
(a) shall not discriminate among Members;
(b) shall be consistent with the Articles of Agreement of the International
Monetary Fund;
(c) shall avoid unnecessary damage to the commercial, economic and finan-
cial interests of any other Member;
(d) shall not exceed those necessary to deal with the circumstances described
in paragraph 1;
(e) shall be temporary and be phased out progressively as the situation spec-
ified in paragraph 1 improves.
3. In determining the incidence of such restrictions, Members may give priority to
the supply of services which are more essential to their economic or development
programmes. However, such restrictions shall not be adopted or maintained for
the purpose of protecting a particular service sector.
4. Any restrictions adopted or maintained under paragraph 1, or any changes
therein, shall be promptly notified to the General Council.
5. (a) Members applying the provisions of this Article shall consult promptly
with the Committee on Balance-of-Payments Restrictions on restrictions
adopted under this Article.
(b) The Ministerial Conference shall establish procedures4 for periodic con-
sultations with the objective of enabling such recommendations to be
made to the Member concerned as it may deem appropriate.
(c) Such consultations shall assess the balance-of-payment situation of the
Member concerned and the restrictions adopted or maintained under this
Article, taking into account, inter alia, such factors as:
(i) the nature and extent of the balance-of-payments and the external
financial difficulties;
(ii) the external economic and trading environment of the consulting
Member;
(iii) alternative corrective measures which may be available.
(d) The consultations shall address the compliance of any restrictions with
paragraph 2, in particular the progressive phaseout of restrictions in accor-
dance with paragraph 2(e).
4
It is understood that the procedures under paragraph 5 shall be the same as the GATT 1994 procedures.
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Appendix 3
(e) In such consultations, all findings of statistical and other facts presented by
the International Monetary Fund relating to foreign exchange, monetary
reserves and balance of payments, shall be accepted and conclusions shall
be based on the assessment by the Fund of the balance-of-payments and
the external financial situation of the consulting Member.
6. If a Member which is not a member of the International Monetary Fund wishes
to apply the provisions of this Article, the Ministerial Conference shall establish
a review procedure and any other procedures necessary.
Article XIII
Government Procurement
1. Articles II, XVI and XVII shall not apply to laws, regulations or requirements
governing the procurement by governmental agencies of services purchased for
governmental purposes and not with a view to commercial resale or with a view
to use in the supply of services for commercial sale.
2. There shall be multilateral negotiations on government procurement in services
under this Agreement within two years from the date of entry into force of the
WTO Agreement.
Article XIV
General Exceptions
Subject to the requirement that such measures are not applied in a manner which
would constitute a means of arbitrary or unjustifiable discrimination between
countries where like conditions prevail, or a disguised restriction on trade in
services, nothing in this Agreement shall be construed to prevent the adoption or
enforcement by any Member of measures:
(a) necessary to protect public morals or to maintain public order;5

(b) necessary to protect human, animal or plant life or health;
(c) necessary to secure compliance with laws or regulations which are not
inconsistent with the provisions of this Agreement including those relating
to:
(i) the prevention of deceptive and fraudulent practices or to deal with
the effects of a default on services contracts;
(ii) the protection of the privacy of individuals in relation to the pro-
cessing and dissemination of personal data and the protection of
confidentiality of individual records and accounts;
(iii) safety;
5
The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to
one of the fundamental interests of society.
112
(d) inconsistent with Article XVII, provided that the difference in treatment
is aimed at ensuring the equitable or effective6 imposition or collection of
direct taxes in respect of services or service suppliers of other Members;
(e) inconsistent with Article II, provided that the difference in treatment is the
result of an agreement on the avoidance of double taxation or provisions
on the avoidance of double taxation in any other international agreement
or arrangement by which the Member is bound.
Article XIVbis
Security Exceptions
1. Nothing in this Agreement shall be construed:
(a) to require any Member to furnish any information, the disclosure of which
it considers contrary to its essential security interests; or
(b) to prevent any Member from taking any action which it considers neces-
sary for the protection of its essential security interests:
(i) relating to the supply of services as carried out directly or indirectly
for the purpose of provisioning a military establishment;
(ii) relating to fissionable and fusionable materials or the materials from
which they are derived;
(iii) taken in time of war or other emergency in international relations; or
(c) to prevent any Member from taking any action in pursuance of its obli-
gations under the United Nations Charter for the maintenance of interna-
tional peace and security.
6
Measures that are aimed at ensuring the equitable or effective imposition or collection of direct taxes include
measures taken by a Member under its taxation system which:
(i) apply to non-resident service suppliers in recognition of the fact that the tax obligation of non-
residents is determined with respect to taxable items sourced or located in the Member’s territory;
or
(ii) apply to non-residents in order to ensure the imposition or collection of taxes in the Member’s
territory; or
(iii) apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including
compliance measures; or
(iv) apply to consumers of services supplied in or from the territory of another Member in order
to ensure the imposition or collection of taxes on such consumers derived from sources in the
Member’s territory; or
(v) distinguish service suppliers subject to tax on worldwide taxable items from other service sup-
pliers, in recognition of the difference in the nature of the tax base between them; or
(vi) determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons
or branches, or between related persons or branches of the same person, in order to safeguard the
Member’s tax base.
Tax terms or concepts in paragraph (d) of Article XIV and in this footnote are determined according to
tax definitions and concepts, or equivalent or similar definitions and concepts, under the domestic law of the
Member taking the measure.
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Appendix 3
2. The Council for Trade in Services shall be informed to the fullest extent
possible of measures taken under paragraphs 1(b) and (c) and of their ter-
mination.
Article XV
Subsidies
1. Members recognize that, in certain circumstances, subsidies may have dis-
tortive effects on trade in services. Members shall enter into negotiations with a
view to developing the necessary multilateral disciplines to avoid such trade-
distortive effects.7 The negotiations shall also address the appropriateness of
countervailing procedures. Such negotiations shall recognize the role of subsi-
dies in relation to the development programmes of developing countries and take
into account the needs of Members, particularly developing country Members,
for flexibility in this area. For the purpose of such negotiations, Members shall
exchange information concerning all subsidies related to trade in services that they
provide to their domestic service suppliers.
2. Any Member which considers that it is adversely affected by a subsidy of
another Member may request consultations with that Member on such matters.
Such requests shall be accorded sympathetic consideration.
PART III
SPECIFIC COMMITMENTS
Article XVI
Market Access
1. With respect to market access through the modes of supply identified in
Article I, each Member shall accord services and service suppliers of any other
Member treatment no less favourable than that provided for under the terms,
limitations and conditions agreed and specified in its Schedule.8
2. In sectors where market-access commitments are undertaken, the measures
which a Member shall not maintain or adopt either on the basis of a regional
7
A future work programme shall determine how, and in what time-frame, negotiations on such multilateral
disciplines will be conducted.
8
If a Member undertakes a market-access commitment in relation to the supply of a service through the
mode of supply referred to in subparagraph 2(a) of Article I and if the cross-border movement of capital is
an essential part of the service itself, that Member is thereby committed to allow such movement of capital.
If a Member undertakes a market-access commitment in relation to the supply of a service through the mode
of supply referred to in subparagraph 2(c) of Article I, it is thereby committed to allow related transfers of
capital into its territory.
114
subdivision or on the basis of its entire territory, unless otherwise specified in its
Schedule, are defined as:
(a) limitations on the number of service suppliers whether in the form of
numerical quotas, monopolies, exclusive service suppliers or the require-
ments of an economic needs test;
(b) limitations on the total value of service transactions or assets in the form
of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity
of service output expressed in terms of designated numerical units in the
form of quotas or the requirement of an economic needs test;9
(d) limitations on the total number of natural persons that may be employed in
a particular service sector or that a service supplier may employ and who
are necessary for, and directly related to, the supply of a specific service
in the form of numerical quotas or the requirement of an economic needs
test;
(e) measures which restrict or require specific types of legal entity or joint
venture through which a service supplier may supply a service; and
(f) limitations on the participation of foreign capital in terms of maximum
percentage limit on foreign shareholding or the total value of individual
or aggregate foreign investment.
Article XVII
National Treatment
1. In the sectors inscribed in its Schedule, and subject to any conditions and
qualifications set out therein, each Member shall accord to services and service
suppliers of any other Member, in respect of all measures affecting the supply of
services, treatment no less favourable than that it accords to its own like services
and service suppliers.10
2. A Member may meet the requirement of paragraph 1 by according to services
and service suppliers of any other Member, either formally identical treatment or
formally different treatment to that it accords to its own like services and service
suppliers.
3. Formally identical or formally different treatment shall be considered to be
less favourable if it modifies the conditions of competition in favour of services
or service suppliers of the Member compared to like services or service suppliers
of any other Member.
9
Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of services.
10
Specific commitments assumed under this Article shall not be construed to require any Member to com-
pensate for any inherent competitive disadvantages which result from the foreign character of the relevant
services or service suppliers.
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Appendix 3
Article XVIII
Additional Commitments
Members may negotiate commitments with respect to measures affecting trade in
services not subject to scheduling under Articles XVI or XVII, including those
regarding qualifications, standards or licensing matters. Such commitments shall
be inscribed in a Member’s Schedule.
PART IV
PROGRESSIVE LIBERALIZATION
Article XIX
Negotiation of Specific Commitments
1. In pursuance of the objectives of this Agreement, Members shall enter into
successive rounds of negotiations, beginning not later than five years from the
date of entry into force of the WTO Agreement and periodically thereafter, with a
view to achieving a progressively higher level of liberalization. Such negotiations
shall be directed to the reduction or elimination of the adverse effects on trade
in services of measures as a means of providing effective market access. This
process shall take place with a view to promoting the interests of all participants
on a mutually advantageous basis and to securing an overall balance of rights and
obligations.
2. The process of liberalization shall take place with due respect for national
policy objectives and the level of development of individual Members, both overall
and in individual sectors. There shall be appropriate flexibility for individual
developing country Members for opening fewer sectors, liberalizing fewer types of
transactions, progressively extending market access in line with their development
situation and, when making access to their markets available to foreign service
suppliers, attaching to such access conditions aimed at achieving the objectives
referred to in Article IV.
3. For each round, negotiating guidelines and procedures shall be established.
For the purposes of establishing such guidelines, the Council for Trade in Services
shall carry out an assessment of trade in services in overall terms and on a sectoral
basis with reference to the objectives of this Agreement, including those set out
in paragraph 1 of Article IV. Negotiating guidelines shall establish modalities
for the treatment of liberalization undertaken autonomously by Members since
previous negotiations, as well as for the special treatment for least-developed
country Members under the provisions of paragraph 3 of Article IV.
4. The process of progressive liberalization shall be advanced in each such round
through bilateral, plurilateral or multilateral negotiations directed towards increas-
ing the general level of specific commitments undertaken by Members under this
Agreement.
116
Article XX
Schedules of Specific Commitments
1. Each Member shall set out in a schedule the specific commitments it undertakes
under Part III of this Agreement. With respect to sectors where such commitments
are undertaken, each Schedule shall specify:
(a) terms, limitations and conditions on market access;
(b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments;
(d) where appropriate the time-frame for implementation of such commit-
ments; and
(e) the date of entry into force of such commitments.
2. Measures inconsistent with both Articles XVI and XVII shall be inscribed in
the column relating to Article XVI. In this case the inscription will be considered
to provide a condition or qualification to Article XVII as well.
3. Schedules of specific commitments shall be annexed to this Agreement and
shall form an integral part thereof.
Article XXI
Modification of Schedules
1. (a) A Member (referred to in this Article as the “modifying Member”) may
modify or withdraw any commitment in its Schedule, at any time after
three years have elapsed from the date on which that commitment entered
into force, in accordance with the provisions of this Article.
(b) A modifying Member shall notify its intent to modify or withdraw a
commitment pursuant to this Article to the Council for Trade in Services
no later than three months before the intended date of implementation of
the modification or withdrawal.
2. (a) At the request of any Member the benefits of which under this Agreement
may be affected (referred to in this Article as an “affected Member”) by
a proposed modification or withdrawal notified under subparagraph 1(b),
the modifying Member shall enter into negotiations with a view to reach-
ing agreement on any necessary compensatory adjustment. In such negoti-
ations and agreement, the Members concerned shall endeavour to maintain
a general level of mutually advantageous commitments not less favourable
to trade than that provided for in Schedules of specific commitments prior
to such negotiations.
(b) Compensatory adjustments shall be made on a most-favoured-nation
basis.
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Appendix 3
3. (a) If agreement is not reached between the modifying Member and any
affected Member before the end of the period provided for negotiations,
such affected Member may refer the matter to arbitration. Any affected
Member that wishes to enforce a right that it may have to compensation
must participate in the arbitration.
(b) If no affected Member has requested arbitration, the modifying Member
shall be free to implement the proposed modification or withdrawal.
4. (a) The modifying Member may not modify or withdraw its commitment until
it has made compensatory adjustments in conformity with the findings of
the arbitration.
(b) If the modifying Member implements its proposed modification or with-
drawal and does not comply with the findings of the arbitration, any
affected Member that participated in the arbitration may modify or with-
draw substantially equivalent benefits in conformity with those findings.
Notwithstanding Article II, such a modification or withdrawal may be
implemented solely with respect to the modifying Member.
5. The Council for Trade in Services shall establish procedures for rectification
or modification of Schedules. Any Member which has modified or withdrawn
scheduled commitments under this Article shall modify its Schedule according to
such procedures.
PART V
INSTITUTIONAL PROVISIONS
Article XXII
Consultation
1. Each Member shall accord sympathetic consideration to, and shall afford
adequate opportunity for, consultation regarding such representations as may be
made by any other Member with respect to any matter affecting the operation of
this Agreement. The Dispute Settlement Understanding (DSU) shall apply to such
consultations.
2. The Council for Trade in Services or the Dispute Settlement Body (DSB) may,
at the request of a Member, consult with any Member or Members in respect of
any matter for which it has not been possible to find a satisfactory solution through
consultation under paragraph 1.
3. A Member may not invoke Article XVII, either under this Article or
Article XXIII, with respect to a measure of another Member that falls within
the scope of an international agreement between them relating to the avoidance of
double taxation. In case of disagreement between Members as to whether a mea-
sure falls within the scope of such an agreement between them, it shall be open to
118
either Member to bring this matter before the Council for Trade in Services.11 The
Council shall refer the matter to arbitration. The decision of the arbitrator shall be
final and binding on the Members.
Article XXIII
Dispute Settlement and Enforcement
1. If any Member should consider that any other Member fails to carry out its
obligations or specific commitments under this Agreement, it may with a view
to reaching a mutually satisfactory resolution of the matter have recourse to the
DSU.
2. If the DSB considers that the circumstances are serious enough to justify such
action, it may authorize a Member or Members to suspend the application to any
other Member or Members of obligations and specific commitments in accordance
with Article 22 of the DSU.
3. If any Member considers that any benefit it could reasonably have expected
to accrue to it under a specific commitment of another Member under Part III of
this Agreement is being nullified or impaired as a result of the application of any
measure which does not conflict with the provisions of this Agreement, it may have
recourse to the DSU. If the measure is determined by the DSB to have nullified
or impaired such a benefit, the Member affected shall be entitled to a mutually
satisfactory adjustment on the basis of paragraph 2 of Article XXI, which may
include the modification or withdrawal of the measure. In the event an agreement
cannot be reached between the Members concerned, Article 22 of the DSU shall
apply.
Article XXIV
Council for Trade in Services
1. The Council for Trade in Services shall carry out such functions as may be
assigned to it to facilitate the operation of this Agreement and further its objectives.
The Council may establish such subsidiary bodies as it considers appropriate for
the effective discharge of its functions.
2. The Council and, unless the Council decides otherwise, its subsidiary bodies
shall be open to participation by representatives of all Members.
3. The Chairman of the Council shall be elected by the Members.
Article XXV
11
With respect to agreements on the avoidance of double taxation which exist on the date of entry into force
of the WTO Agreement, such a matter may be brought before the Council for Trade in Services only with the
consent of both parties to such an agreement.
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Technical Cooperation
1. Service suppliers of Members which are in need of such assistance shall have
access to the services of contact points referred to in paragraph 2 of Article IV.
2. Technical assistance to developing countries shall be provided at the multilat-
eral level by the Secretariat and shall be decided upon by the Council for Trade in
Services.
Article XXVI
Relationship with Other International Organizations
The General Council shall make appropriate arrangements for consultation and
cooperation with the United Nations and its specialized agencies as well as with
other intergovernmental organizations concerned with services.
PART VI
FINAL PROVISIONS
Article XXVII
Denial of Benefits
A Member may deny the benefits of this Agreement:
(a) to the supply of a service, if it establishes that the service is supplied from
or in the territory of a non-Member or of a Member to which the denying
Member does not apply the WTO Agreement;
(b) in the case of the supply of a maritime transport service, if it establishes
that the service is supplied:
(i) by a vessel registered under the laws of a non-Member or of a Member
to which the denying Member does not apply the WTO Agreement, and
(ii) by a person which operates and/or uses the vessel in whole or in part
but which is of a non-Member or of a Member to which the denying
Member does not apply the WTO Agreement;
(c) to a service supplier that is a juridical person, if it establishes that it is not
a service supplier of another Member, or that it is a service supplier of a
Member to which the denying Member does not apply the WTO Agreement.
Article XXVIII
Definitions
For the purpose of this Agreement:
(a) “measure” means any measure by a Member, whether in the form of a law,
regulation, rule, procedure, decision, administrative action, or any other
form;
120
(b) “supply of a service” includes the production, distribution, marketing, sale

and delivery of a service;
(c) “measures by Members affecting trade in services” include measures in
respect of
(i) the purchase, payment or use of a service;
(ii) the access to and use of, in connection with the supply of a service,
services which are required by those Members to be offered to the
public generally;
(iii) the presence, including commercial presence, of persons of a Member
for the supply of a service in the territory of another Member;
(d) “commercial presence” means any type of business or professional estab-
lishment, including through
(i) the constitution, acquisition or maintenance of a juridical person, or
(ii) the creation or maintenance of a branch or a representative office,
within the territory of a Member for the purpose of supplying a
service;
(e) “sector” of a service means,
(i) with reference to a specific commitment, one or more, or all, subsec-
tors of that service, as specified in a Member’s Schedule,
(ii) otherwise, the whole of that service sector, including all of its sub-
sectors;
(f) “service of another Member” means a service which is supplied,
(i) from or in the territory of that other Member, or in the case of maritime
transport, by a vessel registered under the laws of that other Member,
or by a person of that other Member which supplies the service
through the operation of a vessel and/or its use in whole or in part; or
(ii) in the case of the supply of a service through commercial presence or
through the presence of natural persons, by a service supplier of that
other Member;
(g) “service supplier" means any person that supplies a service;12
(h) “monopoly supplier of a service” means any person, public or private,
which in the relevant market of the territory of a Member is authorized or
established formally or in effect by that Member as the sole supplier of
that service;
(i) “service consumer” means any person that receives or uses a service;
(j) “person” means either a natural person or a juridical person;
12
Where the service is not supplied directly by a juridical person but through other forms of commercial
presence such as a branch or a representative office, the service supplier (i.e. the juridical person) shall,
nonetheless, through such presence be accorded the treatment provided for service suppliers under the
Agreement. Such treatment shall be extended to the presence through which the service is supplied and need
not be extended to any other parts of the supplier located outside the territory where the service is supplied.
121
Appendix 3
(k) “natural person of another Member” means a natural person who resides
in the territory of that other Member or any other Member, and who under
the law of that other Member:
(i) is a national of that other Member; or
(ii) has the right of permanent residence in that other Member, in the case
of a Member which:
1. does not have nationals; or
2. accords substantially the same treatment to its permanent resi-
dents as it does to its nationals in respect of measures affect-
ing trade in services, as notified in its acceptance of or acces-
sion to the WTO Agreement, provided that no Member is obli-
gated to accord to such permanent residents treatment more
favourable than would be accorded by that other Member to
such permanent residents. Such notification shall include the
assurance to assume, with respect to those permanent resi-
dents, in accordance with its laws and regulations, the same
responsibilities that other Member bears with respect to its
nationals;
(l) “juridical person” means any legal entity duly constituted or otherwise
organized under applicable law, whether for profit or otherwise, and
whether privately-owned or governmentally-owned, including any corpo-
ration, trust, partnership, joint venture, sole proprietorship or association;
(m) “juridical person of another Member” means a juridical person which is
either:
(i) constituted or otherwise organized under the law of that other Mem-
ber, and is engaged in substantive business operations in the territory
of that Member or any other Member; or
(ii) in the case of the supply of a service through commercial presence,
owned or controlled by:
1. natural persons of that Member; or
2. juridical persons of that other Member identified under subpara-
graph (i);
(n) a juridical person is:
(i) “owned” by persons of a Member if more than 50 per cent of the
equity interest in it is beneficially owned by persons of that Member;
(ii) “controlled” by persons of a Member if such persons have the power
to name a majority of its directors or otherwise to legally direct its
actions;
(iii) “affiliated” with another person when it controls, or is controlled by,
that other person; or when it and the other person are both controlled
by the same person;
(o) “direct taxes” comprise all taxes on total income, on total capital or
on elements of income or of capital, including taxes on gains from the
122
alienation of property, taxes on estates, inheritances and gifts, and taxes

on the total amounts of wages or salaries paid by enterprises, as well as
taxes on capital appreciation.
Article XXIX
Annexes
The Annexes to this Agreement are an integral part of this Agreement.
ANNEX ON ARTICLE II EXEMPTIONS

Scope
1. This Annex specifies the conditions under which a Member, at the entry into
force of this Agreement, is exempted from its obligations under paragraph 1 of
Article II.
2. Any new exemptions applied for after the date of entry into force of the
WTO Agreement shall be dealt with under paragraph 3 of Article IX of that
Agreement.
Review
3. The Council for Trade in Services shall review all exemptions granted for a
period of more than 5 years. The first such review shall take place no more than
5 years after the entry into force of the WTO Agreement.
4. The Council for Trade in Services in a review shall:
(a) examine whether the conditions which created the need for the exemption
still prevail; and
(b) determine the date of any further review.
Termination
5. The exemption of a Member from its obligations under paragraph 1 of Article II

of the Agreement with respect to a particular measure terminates on the date
provided for in the exemption.
6. In principle, such exemptions should not exceed a period of 10 years. In any
event, they shall be subject to negotiation in subsequent trade liberalizing rounds.
7. A Member shall notify the Council for Trade in Services at the termination
of the exemption period that the inconsistent measure has been brought into
conformity with paragraph 1 of Article II of the Agreement.
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Appendix 3
Lists of Article II Exemptions

[The agreed lists of exemptions under paragraph 2 of Article II will be annexed
here in the treaty copy of the WTO Agreement.]
ANNEX ON MOVEMENT OF NATURAL PERSONS SUPPLYING

SERVICES UNDER THE AGREEMENT
1. This Annex applies to measures affecting natural persons who are service
suppliers of a Member, and natural persons of a Member who are employed by a
service supplier of a Member, in respect of the supply of a service.
2. The Agreement shall not apply to measures affecting natural persons seeking
access to the employment market of a Member, nor shall it apply to measures
regarding citizenship, residence or employment on a permanent basis.
3. In accordance with Parts III and IV of the Agreement, Members may negotiate
specific commitments applying to the movement of all categories of natural persons
supplying services under the Agreement. Natural persons covered by a specific
commitment shall be allowed to supply the service in accordance with the terms
of that commitment.
4. The Agreement shall not prevent a Member from applying measures to regulate
the entry of natural persons into, or their temporary stay in, its territory, including
those measures necessary to protect the integrity of, and to ensure the orderly
movement of natural persons across, its borders, provided that such measures are
not applied in such a manner as to nullify or impair the benefits accruing to any
Member under the terms of a specific commitment.13
ANNEX ON AIR TRANSPORT SERVICES

1. This Annex applies to measures affecting trade in air transport services,
whether scheduled or non-scheduled, and ancillary services. It is confirmed that
any specific commitment or obligation assumed under this Agreement shall not
reduce or affect a Member’s obligations under bilateral or multilateral agreements
that are in effect on the date of entry into force of the WTO Agreement.
2. The Agreement, including its dispute settlement procedures, shall not apply
to measures affecting:
(a) traffic rights, however granted; or
(b) services directly related to the exercise of traffic rights, except as provided
in paragraph 3 of this Annex.
13
The sole fact of requiring a visa for natural persons of certain Members and not for those of others shall
not be regarded as nullifying or impairing benefits under a specific commitment.
124
3. The Agreement shall apply to measures affecting:

(a) aircraft repair and maintenance services;
(b) the selling and marketing of air transport services;
(c) computer reservation system (CRS) services.
4. The dispute settlement procedures of the Agreement may be invoked only
where obligations or specific commitments have been assumed by the concerned
Members and where dispute settlement procedures in bilateral and other multilat-
eral agreements or arrangements have been exhausted.
5. The Council for Trade in Services shall review periodically, and at least every
five years, developments in the air transport sector and the operation of this Annex
with a view to considering the possible further application of the Agreement in
this sector.
6. Definitions:
(a) “Aircraft repair and maintenance services” mean such activities when
undertaken on an aircraft or a part thereof while it is withdrawn from
service and do not include so-called line maintenance.
(b) “Selling and marketing of air transport services” mean opportunities for
the air carrier concerned to sell and market freely its air transport services
including all aspects of marketing such as market research, advertising
and distribution. These activities do not include the pricing of air transport
services nor the applicable conditions.
(c) “Computer reservation system (CRS) services” mean services provided by
computerised systems that contain information about air carriers’ sched-
ules, availability, fares and fare rules, through which reservations can be
made or tickets may be issued.
(d) “Traffic rights” mean the right for scheduled and non-scheduled services
to operate and/or to carry passengers, cargo and mail for remuneration or
hire from, to, within, or over the territory of a Member, including points
to be served, routes to be operated, types of traffic to be carried, capacity
to be provided, tariffs to be charged and their conditions, and criteria for
designation of airlines, including such criteria as number, ownership, and
control.
ANNEX ON FINANCIAL SERVICES

1. Scope and Definition
(a) This Annex applies to measures affecting the supply of financial services.
Reference to the supply of a financial service in this Annex shall mean
the supply of a service as defined in paragraph 2 of Article I of the
Agreement.
125
Appendix 3
(b) For the purposes of subparagraph 3(b) of Article I of the Agreement,

“services supplied in the exercise of governmental authority” means the
following:
(i) activities conducted by a central bank or monetary authority or by any
other public entity in pursuit of monetary or exchange rate policies;
(ii) activities forming part of a statutory system of social security or
public retirement plans; and
(iii) other activities conducted by a public entity for the account or with
the guarantee or using the financial resources of the Government.
(c) For the purposes of subparagraph 3(b) of Article I of the Agreement, if
a Member allows any of the activities referred to in subparagraphs (b)(ii)
or (b)(iii) of this paragraph to be conducted by its financial service sup-
pliers in competition with a public entity or a financial service supplier,
“services” shall include such activities.
(d) Subparagraph 3(c) of Article I of the Agreement shall not apply to services
covered by this Annex.
2. Domestic Regulation
(a) Notwithstanding any other provisions of the Agreement, a Member shall
not be prevented from taking measures for prudential reasons, including
for the protection of investors, depositors, policy holders or persons to
whom a fiduciary duty is owed by a financial service supplier, or to ensure
the integrity and stability of the financial system. Where such measures
do not conform with the provisions of the Agreement, they shall not be
used as a means of avoiding the Member’s commitments or obligations
under the Agreement.
(b) Nothing in the Agreement shall be construed to require a Member to
disclose information relating to the affairs and accounts of individual
customers or any confidential or proprietary information in the possession
of public entities.
3. Recognition
(a) A Member may recognize prudential measures of any other country in
determining how the Member’s measures relating to financial services
shall be applied. Such recognition, which may be achieved through har-
monization or otherwise, may be based upon an agreement or arrangement
with the country concerned or may be accorded autonomously.
(b) A Member that is a party to such an agreement or arrangement referred
to in subparagraph (a), whether future or existing, shall afford adequate
opportunity for other interested Members to negotiate their accession to
such agreements or arrangements, or to negotiate comparable ones with it,
under circumstances in which there would be equivalent regulation, over-
sight, implementation of such regulation, and, if appropriate, procedures
concerning the sharing of information between the parties to the agreement
126
or arrangement. Where a Member accords recognition autonomously, it

shall afford adequate opportunity for any other Member to demonstrate
that such circumstances exist.
(c) Where a Member is contemplating according recognition to prudential
measures of any other country, paragraph 4(b) of Article VII shall not
apply.
4. Dispute Settlement
Panels for disputes on prudential issues and other financial matters shall have the
necessary expertise relevant to the specific financial service under dispute.
5. Definitions
For the purposes of this Annex:
(a) A financial service is any service of a financial nature offered by a financial

service supplier of a Member. Financial services include all insurance and
insurance-related services, and all banking and other financial services
(excluding insurance). Financial services include the following activities:
Insurance and insurance-related services
(i) Direct insurance (including co-insurance):

(A)
(B) non-life
(ii) Reinsurance and retrocession;
(iii) Insurance intermediation, such as brokerage and agency;
(iv) Services auxiliary to insurance, such as consultancy, actuarial, risk assess-
ment and claim settlement services.
Banking and other financial services (excluding insurance)

(v) Acceptance of deposits and other repayable funds from the public;
(vi) Lending of all types, including consumer credit, mortgage credit, fac-
toring and financing of commercial transaction;
(vii) Financial leasing;
(viii) All payment and money transmission services, including credit, charge
and debit cards, travellers cheques and bankers drafts;
(ix) Guarantees and commitments;
(x) Trading for own account or for account of customers, whether on an
exchange, in an over-the-counter market or otherwise, the following:
(A) money market instruments (including cheques, bills, certificates of
deposits);
(B) foreign exchange;
(C) derivative products including, but not limited to, futures and
options;
127
Appendix 3
(D) exchange rate and interest rate instruments, including products such
as swaps, forward rate agreements;
(E) transferable securities;
(F) other negotiable instruments and financial assets, including
bullion.
(xi) Participation in issues of all kinds of securities, including underwriting
and placement as agent (whether publicly or privately) and provision of
services related to such issues;
(xii) Money broking;
(xiii) Asset management, such as cash or portfolio management, all forms of
collective investment management, pension fund management, custo-
dial, depository and trust services;
(xiv) Settlement and clearing services for financial assets, including securi-
ties, derivative products, and other negotiable instruments;
(xv) Provision and transfer of financial information, and financial data pro-
cessing and related software by suppliers of other financial services;
(xvi) Advisory, intermediation and other auxiliary financial services on all
the activities listed in subparagraphs (v) through (xv), including credit
reference and analysis, investment and portfolio research and advice,
advice on acquisitions and on corporate restructuring and strategy.
(b) A financial service supplier means any natural or juridical person of a
Member wishing to supply or supplying financial services but the term
“financial service supplier” does not include a public entity.
(c) “Public entity” means:
(i) a government, a central bank or a monetary authority, of a Member,
or an entity owned or controlled by a Member, that is principally
engaged in carrying out governmental functions or activities for
governmental purposes, not including an entity principally engaged
in supplying financial services on commercial terms; or
(ii) a private entity, performing functions normally performed by a cen-
tral bank or monetary authority, when exercising those functions.
SECOND ANNEX ON FINANCIAL SERVICES

1. Notwithstanding Article II of the Agreement and paragraphs 1 and 2 of the
Annex on Article II Exemptions, a Member may, during a period of 60 days
beginning four months after the date of entry into force of the WTO Agreement,
list in that Annex measures relating to financial services which are inconsistent
with paragraph 1 of Article II of the Agreement.
2. Notwithstanding Article XXI of the Agreement, a Member may, during a
period of 60 days beginning four months after the date of entry into force of
128
the WTO Agreement, improve, modify or withdraw all or part of the specific
commitments on financial services inscribed in its Schedule.
3. The Council for Trade in Services shall establish any procedures necessary
for the application of paragraphs 1 and 2.
ANNEX ON NEGOTIATIONS ON MARITIME TRANSPORT SERVICES

1. Article II and the Annex on Article II Exemptions, including the requirement
to list in the Annex any measure inconsistent with most-favoured-nation treatment
that a Member will maintain, shall enter into force for international shipping,
auxiliary services and access to and use of port facilities only on:
(a) the implementation date to be determined under paragraph 4 of the Min-
isterial Decision on Negotiations on Maritime Transport Services; or,
(b) should the negotiations not succeed, the date of the final report of the
Negotiating Group on Maritime Transport Services provided for in that
Decision.
2. Paragraph 1 shall not apply to any specific commitment on maritime transport
services which is inscribed in a Member’s Schedule.
3. From the conclusion of the negotiations referred to in paragraph 1, and before
the implementation date, a Member may improve, modify or withdraw all or
part of its specific commitments in this sector without offering compensation,
notwithstanding the provisions of Article XXI.
ANNEX ON TELECOMMUNICATIONS
1. Objectives
Recognizing the specificities of the telecommunications services sector and, in
particular, its dual role as a distinct sector of economic activity and as the under-
lying transport means for other economic activities, the Members have agreed
to the following Annex with the objective of elaborating upon the provisions of
the Agreement with respect to measures affecting access to and use of public
telecommunications transport networks and services. Accordingly, this Annex
provides notes and supplementary provisions to the Agreement.
2. Scope
(a) This Annex shall apply to all measures of a Member that affect access to
and use of public telecommunications transport networks and services.14
14
This paragraph is understood to mean that each Member shall ensure that the obligations of this Annex are
applied with respect to suppliers of public telecommunications transport networks and services by whatever
measures are necessary.
129
Appendix 3
(b) This Annex shall not apply to measures affecting the cable or broadcast
distribution of radio or television programming.
(c) Nothing in this Annex shall be construed:
(i) to require a Member to authorize a service supplier of any other
Member to establish, construct, acquire, lease, operate, or supply
telecommunications transport networks or services, other than as
provided for in its Schedule; or
(ii) to require a Member (or to require a Member to oblige service sup-
pliers under its jurisdiction) to establish, construct, acquire, lease,
operate or supply telecommunications transport networks or services
not offered to the public generally.
3. Definitions
For the purposes of this Annex:
(a) “Telecommunications” means the transmission and reception of signals
by any electromagnetic means.
(b) “Public telecommunications transport service” means any telecommuni-
cations transport service required, explicitly or in effect, by a Member to
be offered to the public generally. Such services may include, inter alia,
telegraph, telephone, telex, and data transmission typically involving the
real-time transmission of customer-supplied information between two or
more points without any end-to-end change in the form or content of the
customer’s information.
(c) “Public telecommunications transport network” means the public
telecommunications infrastructure which permits telecommunications
between and among defined network termination points.
(d) “Intra-corporate communications” means telecommunications through
which a company communicates within the company or with or among
its subsidiaries, branches and, subject to a Member’s domestic laws and
regulations, affiliates. For these purposes, “subsidiaries,” “branches” and,
where applicable, “affiliates” shall be as defined by each Member. “Intra-
corporate communications” in this Annex excludes commercial or non-
commercial services that are supplied to companies that are not related
subsidiaries, branches or affiliates, or that are offered to customers or
potential customers.
(e) Any reference to a paragraph or subparagraph of this Annex includes all
subdivisions thereof.
4. Transparency
In the application of Article III of the Agreement, each Member shall ensure
that relevant information on conditions affecting access to and use of public
telecommunications transport networks and services is publicly available, includ-
ing: tariffs and other terms and conditions of service; specifications of technical
interfaces with such networks and services; information on bodies responsible for
130
the preparation and adoption of standards affecting such access and use; condi-
tions applying to attachment of terminal or other equipment; and notifications,
registration or licensing requirements, if any.
5. Access to and use of Public Telecommunications Transport Networks and
Services
(a) Each Member shall ensure that any service supplier of any other Mem-
ber is accorded access to and use of public telecommunications trans-
port networks and services on reasonable and non-discriminatory terms
and conditions, for the supply of a service included in its Schedule.
This obligation shall be applied, inter alia, through paragraphs (b)
through (f).15
(b) Each Member shall ensure that service suppliers of any other Member have
access to and use of any public telecommunications transport network or
service offered within or across the border of that Member, including
private leased circuits, and to this end shall ensure, subject to paragraphs
(e) and (f), that such suppliers are permitted:
(i) to purchase or lease and attach terminal or other equipment which
interfaces with the network and which is necessary to supply a sup-
plier’s services;
(ii) to interconnect private leased or owned circuits with public telecom-
munications transport networks and services or with circuits leased
or owned by another service supplier; and
(iii) to use operating protocols of the service supplier’s choice in the sup-
ply of any service, other than as necessary to ensure the availability
of telecommunications transport networks and services to the public
generally.
(c) Each Member shall ensure that service suppliers of any other Member
may use public telecommunications transport networks and services for
the movement of information within and across borders, including for
intra-corporate communications of such service suppliers, and for access
to information contained in data bases or otherwise stored in machine-
readable form in the territory of any Member. Any new or amended
measures of a Member significantly affecting such use shall be notified
and shall be subject to consultation, in accordance with relevant provisions
of the Agreement.
(d) Notwithstanding the preceding paragraph, a Member may take such mea-
sures as are necessary to ensure the security and confidentiality of mes-
sages, subject to the requirement that such measures are not applied in
15
The term “non-discriminatory” is understood to refer to most-favoured-nation and national treatment as
defined in the Agreement, as well as to reflect sector-specific usage of the term to mean “terms and conditions
no less favourable than those accorded to any other user of like public telecommunications transport networks
or services under like circumstances.”
131
Appendix 3
a manner which would constitute a means of arbitrary or unjustifiable

discrimination or a disguised restriction on trade in services.
(e) Each Member shall ensure that no condition is imposed on access to and
use of public telecommunications transport networks and services other
than as necessary:
(i) to safeguard the public service responsibilities of suppliers of public
telecommunications transport networks and services, in particular
their ability to make their networks or services available to the public
generally;
(ii) to protect the technical integrity of public telecommunications trans-
port networks or services; or
(iii) to ensure that service suppliers of any other Member do not supply
services unless permitted pursuant to commitments in the Member’s
Schedule.
(f) Provided that they satisfy the criteria set out in paragraph (e), conditions
for access to and use of public telecommunications transport networks
and services may include:
(i) restrictions on resale or shared use of such services;
(ii) a requirement to use specified technical interfaces, including inter-
face protocols, for inter-connection with such networks and services;
(iii) requirements, where necessary, for the inter-operability of such ser-
vices and to encourage the achievement of the goals set out in para-
graph 7(a);
(iv) type approval of terminal or other equipment which interfaces with
the network and technical requirements relating to the attachment of
such equipment to such networks;
(v) restrictions on inter-connection of private leased or owned circuits
with such networks or services or with circuits leased or owned by
another service supplier; or
(vi) notification, registration and licensing.
(g) Notwithstanding the preceding paragraphs of this section, a developing
country Member may, consistent with its level of development, place
reasonable conditions on access to and use of public telecommunica-
tions transport networks and services necessary to strengthen its domestic
telecommunications infrastructure and service capacity and to increase its
participation in international trade in telecommunications services. Such
conditions shall be specified in the Member’s Schedule.
6. Technical Cooperation
(a) Members recognize that an efficient, advanced telecommunications infras-
tructure in countries, particularly developing countries, is essential to the
expansion of their trade in services. To this end, Members endorse and
encourage the participation, to the fullest extent practicable, of developed
132
and developing countries and their suppliers of public telecommunica-

tions transport networks and services and other entities in the develop-
ment programmes of international and regional organizations, including
the International Telecommunication Union, the United Nations Devel-
opment Programme, and the International Bank for Reconstruction and
Development.
(b) Members shall encourage and support telecommunications cooperation
among developing countries at the international, regional and sub-regional
levels.
(c) In cooperation with relevant international organizations, Members shall
make available, where practicable, to developing countries informa-
tion with respect to telecommunications services and developments in
telecommunications and information technology to assist in strengthen-
ing their domestic telecommunications services sector.
(d) Members shall give special consideration to opportunities for the least-
developed countries to encourage foreign suppliers of telecommunications
services to assist in the transfer of technology, training and other activities
that support the development of their telecommunications infrastructure
and expansion of their telecommunications services trade.
7. Relation to International Organizations and Agreements
(a) Members recognize the importance of international standards for global
compatibility and inter-operability of telecommunication networks and
services and undertake to promote such standards through the work of
relevant international bodies, including the International Telecommuni-
cation Union and the International Organization for Standardization.
(b) Members recognize the role played by intergovernmental and non-
governmental organizations and agreements in ensuring the efficient
operation of domestic and global telecommunications services, in par-
ticular the International Telecommunication Union. Members shall make
appropriate arrangements, where relevant, for consultation with such orga-
nizations on matters arising from the implementation of this Annex.
ANNEX ON NEGOTIATIONS ON BASIC TELECOMMUNICATIONS

1. Article II and the Annex on Article II Exemptions, including the requirement
to list in the Annex any measure inconsistent with most-favoured-nation treatment
that a Member will maintain, shall enter into force for basic telecommunications
only on:
(a) the implementation date to be determined under paragraph 5 of the Min-
isterial Decision on Negotiations on Basic Telecommunications; or,
133
Appendix 3
(b) should the negotiations not succeed, the date of the final report of the
Negotiating Group on Basic Telecommunications provided for in that
Decision.
2. Paragraph 1 shall not apply to any specific commitment on basic telecommu-
nications which is inscribed in a Member’s Schedule.
134
INDEX
ad valorem duties, 26, 66 Column 6, 27

agriculture Column 7, 27–8
anti-dumping duties, 29 Column 8, 28
ceiling bindings, 69 Column 9, 28–9
definition of agricultural products, 22, 66–7 Column 10, 29
special treatment, 28 description of products, 25
subsidies final bound rates of duty, 26–7
aggregate measure of support, 93 goods Schedules, 21, 24
AGST, 96 implementation periods, 27
annual and bound final commitments, 93 Initial Negotiating Rights, 28
domestic support, 93–6 Other Duties and Charges, 28–9
export subsidies, 96 Other Terms and Conditions, 29
Schedules, 22, 24 special provisions, 27–8
supporting tables, 93–6 Tariff Item No., 25
tariff-quotas, 25, 84–8 tariff rate quotas, 25
Column 1, 85 AGST, 96
Column 2, 85 air transport services, 42
Column 3, 85–8 analysts, 46, 54–5
Column 4, 88 anti-dumping duties, 29, 81
Column 5, 88 APEC, 62
Column 6, 88 Argentina – Textiles, 79
Column 7, 88 AVEs, 50, 61
Column 8, 88
current access, 84–8 balance of payments exception, 44
implementation periods, 88 bindings
in-quota duties, 88 ceiling bindings, 2, 9, 69
index number, 24 circumvention, 13
Initial Negotiation Rights, 88 economic value, 14–16
minimum access, 84 meaning, 10–13
Other Terms and Conditions, 88 overhang, 15
product descriptions, 85 stability, 14–15
quantities, 88 transparency, 15
Tariff Item No., 85–8 ‘water’, 15, 54
TRQ No., 85 BITD, 62
tariffs Brazil
base rate of duty, 25–6 motor vehicle tyres, 10
bound v. applied rates, 15 national tariffs, 10
Column 1, 24 business interests, 45, 46–50
Column 2, 25
Column 3, 25 Canada – Dairy case, 29, 79
Column 4, 25–6 ceiling bindings, 2, 9, 69
Column 5, 26–7 Central Product Classification, 37, 70–1
135
Index
Chile – Price Band, 79 Article XXI (Modification of Schedules), 67

classification exceptions, 44
Central Product Classification, 37, 70–1 negotiation commitments, 43
HS.See Harmonized System Schedules. See services Schedules
reclassification of goods, 83 text, 100–31
services, 36–7 GATT
compound rates, 26 Appendix 2 to WTO Agreement, 4
concessions, meaning, 8 Article II (MFN treatment), 78
Cotonou Agreement, 19 Article VIII (Customs fees), 67
countervailing duties, 81 Article XXVIII (Renegotiation of bindings),
CPC, 37, 70–1 68–9
CTS database, 51, 56–7, 61, 74 contents, 4
customs duties. See tariffs GATT (1947) and GATT (1994), 4–5
customs fees, 29, 67, 81–2 GATT (1994), text, 78–99
customs valuation, 66, 82 Schedules. See goods Schedules
general systems of preferences, 18–20
dates of agreements, 80 Global Trade Analysis Project (GTAP), 55
developing countries goods Schedules
ceiling bindings, 69 applied v. bound rates, 9, 15, 46–7
general systems of preferences, 18–20 concessions, meaning, 9
reciprocity and, 52 contents overview, 24
staple diet products, 28 dating, 80
domestic regulation, services, 43–4 electronic files, 25
DSU, application, 4 GATT (1994) and (1947), 4
headnotes, 24
economics incorporation into GATT, 5, 83
benefits of lower tariffs, 8 information technology, 31
value of bindings, 14–16 MFN treatment, 78
El Salvador, 22 modifications, 5, 16–17, 48, 68–9, 84
electronic files, 25 Part I, Section I, 21
Enabling Clause, 19 Part I, Section I – A (tariffs), 24
enforcement, collective enforcement, 6–7 base rate of duty, 25–6
European Communities Column 1, 24
agricultural tariffs, 29 Column 2, 25
Cotonou Agreement, 19 Column 3, 25
rice, 29 Column 4, 25–6
TARIC database, 62 Column 5, 26–7
ex-outs, 25 Column 6, 27
exchange rates, 83 Column 7, 27–8
export subsidies, agriculture, 96 Column 8, 28
Column 9, 28–9
financial services, 41 Column 10, 29
fiscal surcharges, 28 description of products, 25
floating INRs, 69 final bound rates of duty, 26–7
free-trade agreements footnotes, 29
negotiations, 19 implementation periods, 27
services, 43 Initial Negotiating Rights, 28
WTO rules, 19, 43 Other Duties and Charges, 28–9, 80–1
Other Terms and Conditions, 29
GATS special provisions, 27–8
Appendix 2 to WTO Agreement, 4 Tariff Item No., 25
136
Index
tariff rate quotas, 25 harmonization of tariffs, 76

Part I, Section I – B (tariff-quotas), 84–8 Harmonized System
Column 1, 85 adoption, 24–5
Column 2, 85 agriculture, 22, 66–7
Column 3, 85–8 Explanatory Notes, 25, 71
Column 4, 88 organization, 24
Column 5, 88 overview, 71–2
Column 6, 88 structure, 71–2
Column 7, 88 summary, 72
Column 8, 88 updates, 17, 48, 68, 71
current access, 84–8 headnotes, 24
implementation periods, 88
in-quota duties, 88 implementation periods
Initial Negotiating Rights, 88 agricultural tariff-quotas, 88
minimum access, 84 agricultural tariffs, 27
Other Terms and Conditions, 88 NAMA tariffs, 91
product descriptions, 85 import surcharges, 13, 80
quantities, 88 India, health services, 37–44
Tariff Item No., 85–8 Indonesia, 22
TRQ No., 85 industry associations, 45–6, 50–4
Part I, Section II (NAMA products), 21–2, information. See sources of information
88–91 information technology
base rate of duties, 90 Agreement, 31
Column 1, 90 membership of ITA, 31
Column 2, 90 Schedules, 31, 58
Column 3, 90 Initial Negotiating Rights
Column 4, 90–1 agriculture, 28, 88
Column 5, 91 floating INRs, 69
Column 6, 91 meaning, 68
Column 7, 91 NAMA products, 91
Column 8, 91 intellectual property, 18
final bound rates of duties, 90–1 International Customs Tariff Bureau (BITD),
implementation periods, 91 62
Initial Negotiating Rights, 91 international non-proprietary names (INNs),
Other Duties and Charges, 91 32
Other Terms and Conditions, 91 International Trade Centre (ITC), 60, 64
product descriptions, 90 interpretation rules
Tariff Item No., 90 Schedules, 7
Part II (preferential tariffs), 21, 22, 91 subsequent practice, 79
Part III (non-tariff measures), 21, 22, 91 ITC ‘Market Access Map’ database, 46, 47, 49,
Part IV (agricultural subsidies), 22, 93–6 51, 55, 60–2
domestic support, 93–6
export subsidies, 96 Japan, rice, 28, 29, 88
Section I, 93–6
Section II, 96 Korea
Section III, 96 agricultural subsidies, 96
Pharma Agreement, 31–2 rice, 29, 88
sources of information, 47–9, 56–9, 62
Status of Schedules, 48, 57–8, 68 languages
structure, 21–2 official languages, 25
Tariff Data spreadsheets, 58 Schedules, 58
137
Index
Latin America, 16, 62 national customs tariffs, 9–10, 62–5

least-developed countries, 19 national treatment
licensing, services, 44 internal taxation, 81
luxury taxes, 13, 28 meaning, 18
services Schedules, 33, 39–40
maritime transport, 42 NAV duties
market access comparisons, 49–50
competitive analysis, 19 compound duties, 74
NAMA. See NAMA products meaning, 74–5
services Schedules, 38–9, 40 mixed duties, 26, 74
‘Market Access Map’ database, 46, 47, 49, 51, specific duties, 26, 74
55, 60–2 negotiations, tariff-cutting, 75–7
Marrakesh Agreement. See WTO Agreement non-ad valorem. See NAV duties
MERCOSUR, 10 non-tariff barriers, goods Schedules, 21, 22,
MFN treatment 91
anti-dumping duties and, 81
Argentina – Textiles, 79 OECD, statistics, 47
Canada – Dairy case, 29, 79 ordinary customs duties, 79
Chile – Price Band, 79 Other Duties and Charges, 13, 28–9, 80–1,
countervailing duties and, 81 91
customs services fees and, 81–2
customs valuation and, 82 Pharma Agreement, 31–2
exchange rates and, 83 pharmaceuticals, international non-proprietary
GATT, 78 names (INNs), 32
meaning, 2–3 preferential tariffs, 21, 22, 91
monopolies, 82–3 preferential trade agreements. See free-trade
reciprocity, 6 agreements
reclassification of goods, 83
services, 42–3 qualifications, services, 44
mixed duties, 26, 74 quotas. See tariff-quotas
monopolies, 82–3
reciprocity, 6, 52
NAMA products regional integration. See free-trade agreements
base rate of duties, 90 ‘Results of the Uruguay Round’ CD-ROM,
Column 1, 90 59–60
Column 2, 90 revenue taxes, 80
Column 3, 90 rule of law, 8
Column 4, 90–1
Column 5, 91 Schedules
Column 6, 91 bindings
Column 7, 91 applied v. bound rates, 9, 15, 35, 46–7
Column 8, 91 circumvention, 13
final bound rates of duties, 90–1 economic value, 14–16
implementation periods, 91 meaning, 10–13
Initial Negotiating Rights, 91 collective enforcement, 6–7
negotiations, 19–20, 77 concessions, meaning, 8–14
Other Duties and Charges, 91 excluded matters, 18
Other Terms and Conditions, 91 GATS. See services Schedules
product descriptions, 90 GATT. See goods Schedules
Schedules, 21–2, 88–91 global contract, 5–7
Tariff Item No., 90 interpretation rules, 7
138
Index
legal status, 1, 3–5 modifications, 17, 34, 67

modifications, 6, 16 positive listing, 34
certification procedure, 17 sectoral descriptions, 36–7
consensus, 17 telecommunications, 41–2
on-line information, 17 terminology, 41
registration, 7 sources of information
negotiations, 1 analysts, 54–5
Other Duties or Charges, 13, 28–9, 80–1, 91 applied v. bound rates, 46–7
part of WTO Agreement, 3–5, 83 CTS database, 51, 56–7, 61, 74
purpose, 2–3 goods, 47–9, 56–62
significance, 8 guide, 55–65
Situation of Schedules table, 57–8 industry associations, 51
seasonal changes, 13 national customs tariffs, 62–5
security exceptions, 44 ‘Results of the Uruguay Round’ CD-ROM,
services 59–60
classification, 36–7, 70–1 services, 47, 55–6
domestic regulation, 43–4 UNCTAD, 64
GATS exceptions, 44 World Bank, 64
MFN treatment, 42–3 WTO website, 17, 57–9, 65
modes of supply, 33, 37–8, 73 specific duties, 26, 74
negotiations, 43 SSG, 27, 29
preferential trade agreements, 43 ST-5, 28, 29
sources of information, 47, 55–6 stamp taxes, 28
strategies, 47 standards, 18, 44
services Schedules state trading enterprises, 82–3
additional commitments, 40 statistics, trade, 47
air transport services, 42 Status of Schedules table, 48, 57–8, 68
bindings, 13 strategies
implications, 34–6 see also sources of information
practice v. bindings, 9, 35, 46–7 analysts, 46, 54–5
characteristics, 34 business interests, 45, 46–50
classification, 36–7, 70–1 applied v. bound, 46–7
concessions, meaning, 9 comparing duties, 49–50
contents, 36–42 goods, 47–9
database, 47 services, 47
economic benefits, 35–6 generally, 46–55
excluded matters, 42–4 industry associations, 45–6, 50–4
financial services, 41 interpreting trade commitments, 51–4
flexibility, 34 issues, 50–1
horizontal commitments, 40 sources of information, 51
incorporation into GATS, 5, 34 subsidies. See agriculture
limitations, 33 Swiss formula, 76
market access, 38–9, 40
national treatment, 33, 39–40 tariff-quotas
maritime transport, 42 agriculture, 84–8
modes of supply, 33, 37–8, 73 comparisons, 50
mode 1 (cross-border supply), 37, 73 meaning, 84
mode 2 (consumption abroad), 37, 73 tariffs
mode 3 (commercial presence), 37, 73 see also goods Schedules
mode 4 (presence of natural persons), 38, ad valorem, 26, 66
73 agriculture. See agriculture
139
Index
tariffs (cont.) UNCTAD, 60, 64

applied rates, significance, 19 United Nations, CPC, 37, 70–1
applied v. bound rates, 9, 15, 46–7 United States
bindings, 8–14 national customs tariffs, 62
ceiling bindings, 2, 9, 69 registration of Schedules, 7
comparisons, 49–50
AVEs, 50, 61 Vienna Convention on the Law of Treaties, 79
NAV duties, 49–50
compound rates, 26, 74 Waiver on Preferential Tariff Treatment, 19
economics of lower tariffs, 8 ‘water’, 15, 54
etymology, 21 website, WTO, 17, 57–9, 65
interpretation of commitments, 53–4 World Bank, 64
mixed rates, 26, 74 World Customs Organization, 25, 71
national customs tariffs, 9–10, World Tariff Database, 62
62–5 World Tariff Profiles, 64–5
non-agricultural products. See NAMA WTO
products agreements, 2, 3
ordinary customs duties, 79 CTS database, 51, 56–7, 61, 74
seasonal changes, 13 goals, 2
sources of information, 62–5 Integrated Database (IDB), 57
specific duties, 26, 74 languages, 25
tariff-cutting modalities, 75–7 membership, 2, 14, 58, 65
Tariff Data spreadsheets, 58 negotiation procedures, 75–7
taxation, national treatment, 81 ‘Results of the Uruguay Round’ CD-ROM,
telecommunications, 35, 41–2 59–60
temporary import surcharges, 80 single undertaking, 4
tourism, 35–6 website, 17, 57–9, 65
trade associations, 45–6, 50–4 World Tariff Profiles, 64–5
trade barriers, reduction, 2 WTO Agreement
Trade Policy Review Mechanism, 4 annexes, 4
trade statistics, 47 meaning, 3
transparency, 15 structure, 3–5
140

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A Handbook on Reading WTO Goods and

A WTO Secretariat Publication

Cambridge University Press

This publication is in copyright. Subject to statutory exception

First published 2009

Printed in the United Kingdom at the University Press, Cambridge

ISBN 978-0-521-88059-6 hardback

Cambridge University Press has no responsibility for the persistence or

1 The WTO Schedules page 1

THE WTO SCHEDULES

ABOUT THIS BOOK

r business leaders and advisors, especially those with a role in industry or

THE PURPOSE OF THE SCHEDULES

Annex 1 Annex 2 Annex 3 Annex 4

All other Agreement

Figure 1.1 A chart of the WTO agreements

SCHEDULES ARE PART OF THE WTO

The Marrakesh Agreement, which governments adopted in Marrakesh,

GATT ‘1947’ or ‘1994’? Which is which? Thanks to the ‘nested’ structure of

Uruguay Round negotiations made changes to most of the concessions in the

THE SCHEDULES AND THE ‘CONTRACT’

an agreement on a bilateral basis, once the results of the agreement appear in

‘The purpose of treaty interpretation under Article 31 of the Vienna

WHY THE SCHEDULES MATTER

What a Scheduled Commitment Means

‘The products described in Part I of the Schedule relating to any con-

Here is an example of the differences between a goods Schedule and a national

r increase any associated import levies such as an ‘import surcharge’ or a

A binding of a services commitment protects against adverse changes in the

The Economic Value of Bindings

Simple average MFN Simple average Apparent bound

Australia 1.2 3.3 2.1

The ‘overhang’ of bound rates of duty is much smaller in non-agricultural

MODIFICATIONS OF THE WTO SCHEDULES

WHAT IS NOT IN THE WTO SCHEDULES

Preferential Access Concessions

In general, non-reciprocal preferences for developing countries are made under

Significance of Applied Tariff Rates

THE GOODS SCHEDULES

THE OVERALL STRUCTURE

Part I Comprises two sections:

El Salvador and Indonesia, have any entries in this part of the

Defining ‘agriculture’: when WTO documents talk about ‘agriculture’ they

Goods Part I: Section I – A (Agricultural tariffs) and Section I – B (Agricultural

Through the Goods Schedules

Part I, Section I – A – Agricultural products – tariffs3

Concessions on agricultural products should be listed at the HS

infinite levels – as the price of the imported good falls, without a

Some agricultural products in Schedule 1A or 1B of the Uruguay

and Conditions’ qualifying the bindings in the Schedules and, in the

Information Technology Agreement (ITA)

Other Plurilateral Agreements

Annex I Lists the pharmaceutical active ingredients that have an ‘international

THE SERVICES SCHEDULES: SPECIFIC

WHAT IS A SERVICES SCHEDULE?

WHAT ARE THE IMPLICATIONS OF SCHEDULED

undertaken. It thus precludes the imposition of new or additional restrictions on

THE CONTENT OF A SERVICES SCHEDULE

Sector or Limitations on Limitations on Additional