2 management - School of International Business and ...

Günter S. Heiduk
– reciprocity: lower your tariffs as I lower mine,
– nondiscrimination: firstly most-favored-nation (MFN) treatment means treating the trading
partners equally, secondly treating imported and locally-produced goods equally,
– transparency: replace non-tariff trade barriers (NTBs) by tariffs,
– gradual liberalization: from time to time initiating negotiations on reducing tariffs.
Since 1947 the average level of tariffs in industrial products had been reduced from 40 percent in
1940 to 3 percent after the eighth trade round (Uruguay Round) had been finished in 1994. The
liberalization of trade in agricultural products is lagging behind because large importers such as
the U.S.A., the EU and Japan could not agree on reducing their protectionist measures. Their
share of duty-free imports of fruits, vegetables, plants is still low compared to other product
groups, except textiles (Figure 7). This holds to an even larger degree for China. The disagree-
ment on tariff reductions in agricultural trade is the main reason for the stalemate of the current
Doha Round which had been opened in 2001 but not yet finished.
Figure 7 | Duty-Free Imports by Selected Product Groups, China, EU-27, Japan, U.S.A. (in %)
Source: WTO, World Tariff Profiles 2011.
In addition to tariff reductions the Uruguay Round resulted in the acceptance of three new agree-
ments that form together with the GATT the legal framework of the WTO:
142