LDCs. See developing countries.

Least Developed Countries (LLDCs). Refers to those developing countries experiencing no significant economic growth, very low per capita incomes, and low literacy rates. The UN General Assembly has designated 46 countries as LLDCs: Afghanistan, Bangladesh, Benin, Bhutan, Botswana, Burkina Faso, Burma, Burundi, Cambodia, Cape Verde, Central African Republic, Chad, Comoros, Djibouti, Equatorial Guinea, Ethiopia, The Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Sao Tome and Principe, Sierra Leone, Solomon Islands, Somalia, Sudan, Tanzania, Togo, Tuvalu, Uganda, Vanuatu, Western Samoa, Yemen, Zaire, and Zambia.

Less-Developed Countries (LDCs). An alternative term for developing countries.

Less- Than-Fair- Value. See fair value and dumping.

Licensing. See import licensing. See also cross-licensing (Sec.II). Licensing Code. See Import Licensing Code.

Linear Reduction. A tariff negotiating procedure based on reduction of tariffs by a specified percentage on an entire range of goods (also known as horizontal reduction). A linear reduction in tariff negotiations is the simplest form of a formula approach, and is far broader than an item-by-item approach.

Liner Code. Formal name is the United Nations Code of Conduct for Liner Conferences. Adopted in 1974, the Code seeks to allocate international shipping among ship owners in industrial and developing countries. The 59 signatories of the Code account for about 30 percent of world liner tonnage; the United States is not a signatory. See also liner conference (Sec.II).

Local Content Requirements. Government-imposed conditions on inward direct investments, requiring that a minimum proportion of value-added of the resulting output be derived from host-country goods or services. See performance requirements. Similar measures applying to imports are referred to as domestic content requirements.

Lome Convention. A series of preferential trade and economic assistance agreements -- the first of which was signed in 1975 in Lome, Togo --between the European Community and 69 former colonies of the EC member states (the ACP countries). Superseded the Yaounde Conventions of 1963 and 1969.

Madrid Agreement. Formal name is the Madrid Agreement Concerning the International Registration of Marks. An international agreement signed in 1891 establishing a system for standardized registration of and protection for trademarks and service marks (see intellectual property rights). The agreement is administered by the World Intellectual Property Organization (Sec.lll) and is open to all states adhering to the Paris Convention.

Madrid Union. Formal name is the Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods. An international agreement, signed in 1891 and revised several times subsequently, concluded for the purpose of suppressing false or misleading origin markings on internationally traded goods. Signatories are obligated to seize and deny importation to merchandise bearing false markings indicating origin in any other signatory country. The agreement is administered by the World Intellectual Property Organization (Sec.III) and is open to all states adhering to the Paris Convention. See also commercial counterfeiting.

Margin of Preference. The difference between the duty paid under a system of tariff preferences and the duty payable on an MFN basis. Some LDCs have complained that as average tariff levels in the industrial countries have been lowered through successive GATT Rounds, the margin of preference enjoyed by GSP beneficiaries has been eroded.

Market Access. The ability of foreign flnI1s to compete in a country's markets for given products, reflecting the extent of formal trade barriers --including tariffs as well as nontariff barriers --and the government's willingness to tolerate unimpeded foreign competition with domestic firms (see national treatment).

Market Access Negotiations. In the context of the Uruguay Round as well as bilateral trade negotiations, refers broadly to efforts to lower tariffs and nontariff barriers on manufactured and agricultural goods.

Market Disruption. A situation arising when a surge of imports of a particular product causes sales of domestically produced goods to decline to such an extent that the domestic producers and their employees suffer major economic reversals. The existence of market disruption is the basis for escape clause actions providing temporary import relief. As specified in Section 406 of the Trade Act of 1974 (Sec.lV), market disruption is considered to exist within a US industry whenever imports "are increasing rapidly, either absolutely or relatively, so as to be a significant cause of material injury, or threat thereof' to that industry.

Market Reserve Policies. See Law of Similars.

Marketing Orders. Official directives concerning the size and quality of fresh fruits and vegetables, which may be marketed during specified periods within a given region. The effect of marketing orders is to maintain prices at high levels by restricting supply. In the United States, marketing orders are issued by regional boards established by the Department of Agriculture, and including agricultural producers as members.

Marking Duties. A special charge on imported good, in addition to normal duties, imposed on merchandise not properly marked so as to indicate the country of origin. Under US law, marking duties are not considered to be penalty duties, and are not eligible for drawback should the foreign article be re-exported.

Marks of Origin. Physical markings indicating where an article was produced, as required by most countries' customs regulations (see rules of origin).

Material Injury. See injury.

Material Retardation. See injury.

Minimum Import Price. See variable levy.

Minimum Valuation. A form of valuation for tariff purposes in which all items below a certain threshold value in an import category are valued as if they were of the minimum value.

Ministerial Declaration. A decision by trade ministers of GATT members to launch a GATT Round of multilateral trade negotiations, establishing the agenda for the negotiations and setting out general objectives.

Mixed Credits. Exceptionally liberal financing terms for an export sale. Ostensibly provided for foreign aid purposes, mixed credits can have effects similar to export subsidies.

Mixed Tariff. See compound tariff.

Modifications. Alteration or withdrawal of trade concessions previously made within GATT. Contracting Parties are permitted by Article 28 to modify concessions in their tariff schedules every three years by renegotiating changes with those GATT members that would be primarily affected. By introducing some flexibility to the structure of GATT obligations, this provision allows members to adapt to changing conditions in world trade while proscribing frequent tariff changes that would create uncertainty and instability. See also rectifications.

Montreal Protocol. Full title is the Montreal Protocol on Substances That Deplete the Ozone Layer. Signed in 1987, the Montreal Protocol was the first major international agreement to establish environmental trade measures. Under the Protocol, trade with non-signatory countries of products containing chlorofluorocarbons (CFCs) --principally used in refrigerators and air conditioners --and fire-extinguishing halons is to be limited or banned. The Protocol also discouraged relocation of CFC plants to non-signatory countries. As of September 1993,94 industrial countries and LDCs were parties to the Protocol.

Moral Rights. An artist's ability to control use of creative works such as books and films, even after relinquishing economic rights to another copyright holder such as a publisher or producer. Differences in countries' treatment of moral rights pose obstacles to international negotiations on protection of intellectual property rights.

Most-Favored-Nation (MFN). The principle according to which each signatory of a trade agreement will apply its trade restrictions or concessions equally among all other signatories. MFN is the fundamental principle of the GATT; all Contracting Parties agree to apply MFN treatment to one another, although exceptions exist --for example, in granting preferential treatment to developing countries, or for members of a customs union or free trade area (see waiver). When a country agrees to reduce tariffs on a particular product imported from one country, the tariff reduction automatically applies to imports of that product from any other country eligible for MFN treatment. Because of this, MFN serves as a powerful inducement for countries to join GA 1T , as well as a facilitator of trade liberalization generally. MFN terminology dates from the sixteenth century --when it was used in commercial agreements according the most advantageous customs treatment extended by a government to any trading partner, i.e., to the "most- favored nation" --but in modern usage it refers to nondiscrimination in international trade relations. Despite occasional misinterpretation in press reports, MFN does not entail "favored" (i.e., preferential) treatment of a trading partner.

MTN Codes. See multilateral trade negotiations.

Multifiber Arrangement (MFA). (See textiles, Sec. II.) Full name is the Multifiber Arrangement Regarding International Trade in Textiles. An international arrangement under which GATT members apply quantitative restrictions on imports of textiles and clothing when importing countries consider them necessary to prevent market disruption. The MFA --covering cotton, wool, and man-made fiber textiles and apparel products -- establishes a framework for negotiating bilateral voluntary export restraints (VERs) or orderly marketing agreements (OMAs) among textile exporting and importing countries to prevent market disruption or to counter market-disruptive import surges originating from low-wage producing countries. It provides standards for determining market disruption, minimum levels of import restraints, and annual growth of imports. The MFA also provides that restrictions should not reduce imports to levels below those of the preceding year; because of this --and the fact that an importing country may impose quotas unilaterally to restrict rapidly rising textile imports from countries with which it .has no bilateral agreements --most important textile exporting countries consider it advantageous to negotiate bilateral agreements under the MFA with the principal textile importing countries. Critics claim that the MFA amounts to a bureaucratically rigged market that distorts prices; proponents argue that it is the only realistic alternative to more draconian protection of a politically sensitive sector. Under the proposed Uruguay Round agreement, the MFA would be phased out over a 10-year period.

The MFA was negotiated under GATT auspices even though its provisions for quantitative import restrictions would otherwise be illegal under GATT. It went into effect in 1974, superseding the Long-term Agreement on International Trade in Cotton Textiles, which had been in effect since 1962. As of September 1993,43 countries were participating in the MFA: Argentina, Austria, Bangladesh, Brazil, Canada, China, Colombia, Costa Rica, Czech Republic, Dominican Republic, the European Community, Egypt, El Salvador, Fiji, Finland, Guatemala, Honduras, Hong Kong, Hungary, India, Indonesia, Jamaica, Japan, Korea, Lesotho, Macau, Malaysia, Mexico, Norway, Pakistan, Panama, Peru, Philippines, Poland, Romania, Singapore, Slovakia, Sri Lanka, Switzerland, Thailand, Turkey, the United States, and Uruguay. See also Textiles Surveillance Board and International Textiles and Clothing Bureau (Sec. /V).

Multilateral Acceptance of Test Data. Recognition by signatories of the GATT Standards Code of test data and certification markings from other signatories. The Code recognized that governments may require prior consultations with other signatories to arrive at mutually acceptable understanding of testing methods and results. Negotiations in the Uruguay Round to strengthen and expand the Code are considering ways to improve arrangements for acceptance of foreign-generated test data.

Multilateral Steel Agreement (MSA). A proposed agreement that would phase out tariffs, eliminate nontariff barriers, and end direct state subsidies to the steel sector. MSA negotiations collapsed in March 1992 and resumed in mid-1993 among 37 steel-producing nations.

Multilateral Trade Negotiations. See GATT Round. The 1974-79 Tokyo Round was referred to formally as the Multilateral Trade Negotiations (MTN). As a result, the various GATT Codes negotiated during the Tokyo Round are sometimes referred to as "MTN Codes."

Multilateral Trade Organization (MTO). A proposed organizational arrangement that would implement the results of the Uruguay Round, including agreements in areas such as services and intellectual property rights that would go beyond the scope of the existing GATT .See discussion under Multilateral Trade Organization in Section Ill.

Multiple Exchange Rates (also known as Differential Exchange Rates). A system of officially prescribed rates of exchange for a country's currency that varies depending on the type of transaction involved. For example, a government may assign its currency a given value for capital transfers, but provide for a less favorable rate of exchange for imports of luxury items, thereby increasing the price of the latter and discouraging their importation. As with other forms of exchange controls, multiple exchange rates can function as a disguised trade barrier, and their use is discouraged by the IMP.

National Trade Estimate (NTE) Report. A report on significant foreign trade barriers published in the spring of each year by the Office of the US Trade Representative, with contributions from other Executive Branch departments and agencies and US embassies overseas. The NTE Report is required by the Trade Act of 1974, as amended by the Trade Acts of 1984 and 1988 (Sec.IV), and inventories the most important barriers affecting US exports of goods and services, US direct investment in other countries, and foreign protection of intellectual property rights. The NTE Report covers barriers deemed to have a significant bearing on US interests, whether or not they are consistent with international trading rules. Many countries are excluded from the NTE Report, due either to the relatively small size of their markets or to the lack of major complaints from US industry and agriculture groups.

National Treatment. The principle that foreign goods, services, or investment are to be treated "no less favorably" within a nation's domestic markets than competing products or services produced locally, once import duties have been paid and applicable customs regulations are satisfied. National treatment is one of the fundamental principles of the GATT.

Natural Resource-Based Products. Designation for one of the negotiating groups in the Uruguay Round that focused on trade barriers affecting non-agricultural primary products, including forestry products, fishery products, and nonferrous metals and minerals.

Negotiating Group. A group of country delegates in a GATT Round charged with planning and managing multilateral negotiations concerning a particular issue or product sector. At the outset of the Uruguay Round, two major groups were established --the Group on Negotiations of Goods (GNG) and the Group on Negotiations of Services (GNS) --with 14 issue-oriented subgroups. In Apri11991, these activities were consolidated into seven negotiating groups; work in the final phase of the Round has been organized within four major issue-clusters or Tracks.

Net Subsidy Test. A proposed modification of rules governing application of countervailing duties, whereby an importing country could impose duties on the margin by which export subsidies exceed subsidies provided to producers of competing goods in the importing country.

New Economic Partnership. See Framework Initiative.

New International Economic Order (NIEO). An agenda for discussions between industrial and developing countries focusing on restructuring of the world's economy to permit greater participation by and benefits to LDCs (also known as the "North-South Dialogue"). The term is derived from the Declaration for the Establishment of a New International Economic Order, adopted by the United Nations General Assembly in 1974, and refers to a wide range of trade, financial, commodity, and debt-related issues. While the term continues to have currency in academia, it has fallen into disuse in policy-related discussions.

Newly Industrialized Countries (NICs). Now generally obsolete term; has been superseded by NIEs, since inclusion of Taiwan and Hong Kong made use of the word "countries" inappropriate.

Newly Industrializing Economies (NIEs). A subgroup of developing countries that have experienced particularly rapid industrialization of their economies, with industrial production and exports expanding accordingly. Current usage tends to limit the term NIEs to Hong Kong, South Korea, Singapore, and Taiwan, although texts dating from the early 1980s often extended the related term NICs to Mexico and Brazil, and sometimes India and Argentina. The East Asian NIEs are sometimes referred to as the Four Tigers or Four Dragons. See also Dynamic Asian Economies (DAEs).

Newly Independent States (NIS). The successor states to the former Soviet Union, i.e., Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

Nomenclature. See customs classification.

Non-application. In the context of Uruguay Round discussions of a proposed Multilateral Trade Organization, refers to a signatory's right to "non-apply" portions of the MTO agreements to any other country at the time it becomes a member. Preservation of such a right can have an important effect on ongoing negotiations in various areas that would be incorporated in an MTO --e.g., on market access for goods and services, and on intellectual property protection --because it prevents free-riders and maintains incentives for countries to exchange reciprocal concessions within each area.

Nondiscrimination. Equal application of tariffs, quotas, or other trade restrictions to products from different trading partners. The principle of nondiscrimination is enshrined in Article 1 of the GATT (see most-favored-nation principle). See also national treatment.

Nondumping Certificate. A document or notation on a shipper's invoice attesting that the merchandise described is being sold at a price no lower than that applying to sales of ~ similar products in the country of origin.

Nonmarket-Economy Country. A country in which economic activity is regulated by central planning, in contrast to a market economy that relies principally upon market- based prices to allocate productive resources. In such a country, tariffs have no meaningful impact on import decisions. In GATT contexts, the term applies to members that were not market economies at the time of their accession --i.e., Poland, Hungary, and Romania. These countries joined under special provisions designed to prevent disruption of other members' trade, together with arrangements to ensure steady expansion of the nonmarket-economy country's imports from other GATT members. Poland is renegotiating its accession protocol in light of its abandonment of central planning, and Hungary has announced its intention to follow suit. See also State Trading Nation.

Non-Paper. In GATT parlance, a proposed agreement or negotiating text circulated informally among delegations for discussion without committing the originating delegation's country to the contents.

Nontariff Barriers (NTBs). Measures other than tariffs that burden or restrict international trade. NTBs may be financial (e.g., internal taxes and customs fees) or nonfinancial (e.g., quantitative restrictions and excessive documentation requirements). The term is sometimes used in reference to nongovernmental actions or impediments to trade, such as internal distribution systems that discourage imports, but in GATT contexts the term refers to measures imposed by governments. Negotiations involving reduction of NTBs are generally more difficult than tariff negotiations since NTBs are almost always closely linked to other national policies or programs.

Nontariff Measures (NTMs). A broader term than NTBs, including not only import-restricting barriers but also measures that distort trade by stimulating exports. See GATT Codes.

Nonviolation Complaints. In GATT dispute settlement negotiations, refers to provisions allowing the Contracting Parties to investigate and rule upon complaints concerning measures that are not in violation of GATT or are outside its scope, but which may affect the balance of a member's rights and benefits under the General Agreement. Because any country that considers itself harmed by such measures would claim the right to alter its GATT legal obligations in response, Article 23 provides a way of adjudicating such situations in a multilateral forum. Nevertheless, GATT supervision of nonviolation complaints has proven difficult to implement since it implies altering GATT legal relationships already consented to among contracting parties.

Norm Price. See Common Agricultural Policy.

Normal Value. An alternative term for fair value.

North-South Dialogue. See New International Economic Order (NIEO ).

North-South Trade. In the parlance of the 1970s and 1980s, trade between the developed market economies ("the North") and developing countries ("the South").

Note Verbale. A formal diplomatic communication delivered orally to an official representative of another country. The written form is a demarche.

Notification. In the context of GATT, refers to the procedure of informing the GATT Secretariat of a change in a country's trade policies, such as application of a new or revised trade-restrictive measure, and of subsequently informing other member countries of the change by the Secretariat.

Nullification or Impairment. The adverse effect on a GA TI member's trade interests caused by changes in the trade regime of another member, or by another member's failure to carry out its obligations under GATI .In GATT parlance, "nullification or impairment" is the basis for initiating formal action under the dispute settlement procedures.

Obligations. In the context of GATT, the principal obligations of contracting parties are; (a) to use only approved instruments of protection, primarily tariffs; (b) to use those instruments in a nondiscriminatory way, extending any opening of a market to all GATT trading partners; and (c) to submit all protection to a long-term process of non-reversible reductions through negotiations with other GATT members. For specific substantive obligations, see disciplines.

Observer. An observer to the GATT is a country or international organization that has been authorized by the GATT Council (Sec. Ill) to attend but not participate in sessions of the Council and various GATT committees and negotiating groups. Most countries in transition have been accepted as observers to GATT, which allows officials from these countries to familiarize themselves with Western trade practices and consultation procedures. The International Monetary Fund and UNCTAD (Sec. Ill) are among the institutional observers to GATT.

Offer List. Concessions offered by a country in trade negotiations, or a list of selected commodities on which a country proposes to make concessions. An offer list may cover proposed exceptions if a formula approach is being used in a tariff negotiation, or it may offer to accept expanded coverage under a proposed GATT Code.

Offsets or Offset Requirements. Requirements imposed by governments on foreign exporters as a condition for approval of major sales agreements. Offsets can be intended either to reduce the adverse trade-balance impact of a major sale or to "leverage" specific industrial benefits for the importing country .In one type of offsets, an exporter may be required to purchase a specified amount of locally-produced goods or services from the importing country .In a second form, the exporter may be required to establish manufacturing facilities in the importing country or to secure a specified percentage of the components used in manufacturing the product from producers based in the importing country.

Orderly Marketing Agreement (OMA). A contractual agreement between two or more governments to restrain the export growth of specific products. OMAs are supposed to ensure that export surges do not disrupt, threaten, or impair sensitive sectors in the importing country or countries. OMAs usually entail establishment of an export licensing system and export or import quotas for the goods in question. The economic effect of an OMA is similar to that of a quota --with the important difference that real income is also transferred from consumers in the importing country to established producers in the exporting country. See also Voluntary Restraint Agreements.

Packaging, Labeling, and Marking Regulations. National requirements that importers must package their goods in certain kinds of containers or identify the contents in a particular way. Such measures are normally intended to meet domestic policy objectives, such as consumer protection, but may be regarded as a nontariff barrier to the extent that they pose more problems for producers of imported goods than for domestic producers.

Panel of Experts. In the GATT dispute settlement process, an ad hoc group of impartial and knowledgeable trade experts --usually three to five, serving in their personal capacity and not as representatives of governments --commissioned by the GATT Council to hear opposing arguments and investigate the facts involved in a dispute, and to issue findings and make recommendations as appropriate. Although a GATT dispute panel may superficially resemble an international tribunal, its findings have no legal force; rather, its essential function is to set the stage for the disputing parties to achieve a negotiated resolution between themselves.

Parallel Imports. Goods, which are authorized by the owner of intellectual properly rights for sale in one country, but which are then subsequently shipped to another country without the owner's permission. Traders who engage in such activities are known as parallel traders. Parallel imports are likely to occur when a trader can purchase a particular good in one country and resell the good in another country at a price which is sufficiently higher to cover the costs of the operation; such activities take place at the expense of the rights owner and of authorized licensees. Many LDCs have laws that prevent intellectual property owners from enforcing restrictions on licensees' exports (see compulsory licensing and the exhaustion principle).

Paris Convention. Formally known as the Paris Convention for the Protection of Industrial Property. An international agreement on protection of industrial property such as patents, trademarks, and appellations of origin, concluded in 1883 and administered by the World Intellectual Property Organization (Sec. III). The Convention provides for national treatment (also known as "assimilation") in signatories' patent and trademark laws, and provides a means of determining priority between competing claims (see right of priority). LDC participants in the Uruguay Round negotiations on intellectual property rights (IPR) generally prefer the Paris Convention to the Berne Convention because the former permits exception from patent coverage for foods, drugs, and chemicals, and because it allows them autonomy in establishing national IPR systems in accordance with their development objectives and strategies.

Part Four of GATT. Articles 36, 37, and 38, added to the GATT in 1966 to address the development needs of less-developed contracting parties. These Articles are essentially exhortative, as they contain no binding obligations on GATT members.

Patent Cooperation Treaty. An international agreement which permits nationals and residents of a signatory country to seek patent protection in any or all of the signatories by means of a single patent application. See intellectual property rights.

Performance Requirements. Government-imposed rules or conditions requiring foreign investors to serve particular national objectives. Trade-related performance requirements --such as commitments to export a specified amount of the output of a new plant, or to incorporate a minimum share of local content in its production --can have the same effect as export-stimulating or import-restricting nontariff measures, but without being subject to GA TT rules. Nearly all major trading partners of the United States, impose performance requirements on at least some local affiliates of foreign corporations. See Trade Related Investment Measures.

Petition. A request to investigate alleged dumping by foreign companies or export subsidies by a foreign government. Petitions are usually filed with a designated governmental agency of the importing country by private firms or industry associations, although sometimes governments independently initiate unfair trade investigations.

Phytosanitary Measures. See Sanitary and Phytosanitary Measures.

Pipeline Protection. In international negotiations on protection of intellectual property rights, refers to the protection of patents for products that are still in the testing phase. Because pharmaceuticals require up to 10 years to test, many drugs that are 'tin the pipeline" would not otherwise qualify for patent protection because they would no longer be considered novel at the time laws pursuant to a Uruguay Round IPR agreement come into force. Also known as transitional protection.

Plurilateral. In GATT parlance, refers to a consultation or negotiating session involving more than two countries (bilateral) but less than the full membership of GATT (multilateral).

Preemption. The prerogative of customs authorities to seize and sell merchandise that an importer has deliberately undervalued to avoid payment of duties.

Preferences. Special trade advantages granted by an importing country to certain trading partners, in contrast to nondiscriminatory treatment conforming to the most-favored- nation principle. Most preferences are granted to LDCs by industrial countries to promote export growth and development (see GSP). In addition to preferential tariff rates, preferential application of other measures such as licensing practices, quotas, or taxes may also be granted. The term is not normally applied to special trade treatment granted by a country to its partners in a free trade area, customs union, or common market.

Preferential Arrangement. A group of countries that grant each other special trade advantages, such as preferential tariff rates, in order to promote member countries' export growth. Special licensing practices, quotas, or preferential application of taxes and other measures are sometimes granted. Many such arrangements are non-reciprocal, in which beneficiary members --usually LDCs --are accorded preferential access to markets of preference-granting countries without making similar market access commitments themselves. Because preferential arrangements violate the most favored-nation principle, a waiver is required for establishing any such arrangement in which GATT members participate.

Preliminary Duties. Duties imposed on a provisional basis during the course of an antidumping investigation, following a preliminary finding of dumping and injury to domestic industries.

Previously Centrally Planned Economies. See countries in transition.

Price Bands. A form of variable levy linked to a system of domestic price controls. Countries such as Chile and Colombia allege that their price-band systems are a more transparent alternative to high import duties and quotas for stabilizing prices and protecting domestic producers.

Price Undertaking. An agreement by an exporting firm with the government of an " importing country to raise the price of its products to a level sufficient to avoid injury to producers of similar goods in the importing country, in order to forestall imposition of antidumping duties. See also suspension agreement.

Principal Supplier. The country that accounts for the largest portion of total GATT trade in a product imported into a given country. In multilateral GATT negotiations, a country offering to reduce import duties or other barriers on a particular item will generally expect the principal supplier of that item to reciprocate by offering reductions of barriers on some other item. Any tariff concessions exchanged through such negotiations are extended automatically to all other countries, which enjoy MFN status. The principal supplier --along with any country holding initial negotiating rights --has first claim to negotiate compensation in the event that an importing country raises a tariff above its bound rate (see binding and modification). See also substantial supplier.

Prior Deposits. A requirement as a condition for importing that an importer deposit a specified sum of money --in domestic or foreign currency, and usually a percentage of the value of the imported goods --in a commercial bank or central bank for a specified length of time. Prior deposits are usually administered in conjunction with import licensing, with deposits required at the time a license is granted. Since such funds are often held without interest from the time an order is placed until the import transaction has been completed, prior deposits are usually regarded as nontariff barriers to trade.

Procedural Protectionism. Abusive administration of import control procedures allowed under GATT (especially those related to unfair trade practices) so that domestic industries are protected in ways never intended by signatories to the GATT or the relevant GATT Codes.

Process and Production Methods (PPMs). In the context of environmental trade measures, refers to factors other than a commodity's physical characteristics --such as processes and methods used in its production --that have an impact on pollution levels or loss of endangered species, and that are regulated by national product standards or other restrictions in order to meet environmental objectives.

Producer Subsidy Equivalent (PSE). The share of a producer's total revenue that is attributable to direct or indirect government transfers.

Prohibitive Duty. A tariff rate that is sufficiently high that it effectively precludes most or all imports. Prohibitive duties are usually intended to protect infant or ailing industries from foreign competition or to retaliate against another country's trade practices.

Protection. Government measures --including tariffs and non-tariff barriers --that raise the cost of imported goods or otherwise restrict their entry, and thus strengthen the competitive position of domestic producers vis-a-vis foreign producers. See protectionism (Sec. II).

Protective Tariff. See tariff

Protocol of Accession. A legal document that recognizes the rights and obligations agreed to as a consequence of a country's signing an international agreement or joining an organization, such as the GATT.

Protocol of Provisional Application. The legal device that enabled the original Contracting Parties of the GATT to accept general GATT obligations and benefits, despite the fact that some of their existing domestic legislation discriminated against imports in a manner that was inconsistent with certain GATT provisions (see grandfather clause). Although the protocol was intended to be temporary, it has remained in effect since 1947 (see International Trade Organization, Sec. III). Countries that acceded to the GATT after 1947 do not have recourse to the protocol.

Protocol Relating to Trade Negotiations Among Developing Countries. An agreement negotiated under GATT auspices in 1973, providing for reciprocal tariff and other trade concessions among developing countries.

Punta del Este Declaration. A declaration adopted by trade ministers of GATT member countries in September 1986 at Punta del Este, Uruguay, launching the Uruguay Round of multilateral trade negotiations.

Quadrilateral ("Quad"). In GATT parlance, a meeting involving senior trade officials or ministers from the United States, Japan, the European Community, and Canada, convened to discuss trade policy matters and review the status of multilateral negotiations. In trade policy, a Quad meeting at the ministerial level is the equivalent of a 0-7 finance ministers' meeting, since the EC speaks for Germany, France, Italy, and the United Kingdom on trade matters.

Quantitative Restriction (QR). A term that applies to a quota or other administratively determined ceiling on irnports or exports, usually expressed in volume terms, and sometimes specifying the amount that may be imported from each supplying country. QRs are distinguished from trade restrictions that operate through the price mechanism, "T such as a tariff or surcharge. GATT Article 11 generally prohibits QRs, although several exceptions are made.

Quota. See import quota.

Quota Auctioning. See import quota auctioning.

Rebalancing. A term used in GATT agriculture negotiations, referring to the ability to shift import protection from one product sector to another following an international agreement to cut overall subsidy levels.

Reciprocity. The principle traditionally underlying GATT negotiations, according to which trading partners exchange comparable concessions by negotiating mutually advantageous reductions in import barriers. GATT rules specify that LDC Contracting Parties are not expected to offer fully reciprocal concessions in negotiations with industrial countries. The term "relative reciprocity" is sometimes used to characterize the practice by industrial countries to seek less than full reciprocity from LDCs in trade negotiations. See also sectoral reciprocity and selective reciprocity.

Rectifications. Changes made in a country's schedule of GATT concessions, usually .involving correction of errors but occasionally involving duty changes or withdrawal of items from a schedule as a result of the negotiated settlement of a dispute with another country .See also modifications.

Reference Price. See Common Agricultural Policy.

Regional Cooperation Organization. A group of countries that have established a mechanism for trade-related discussions and negotiations with outside countries and regional groupings, and for ongoing consultation and cooperation on economic and trade issues of mutual concern. Such organizations sometimes serve as a forum for negotiating trade liberalization or policy harmonization among members.

Regional Trade Arrangement. See trade bloc.

Related Specificity. A rule of customs law that when two or more tariff provisions might be applied to an imported item, the one that most specifically describes the article shall be applied.

Relative Reciprocity. See reciprocity. Remission. See duty remission.

Request/Offer Approach. A tariff negotiating procedure whereby specific requests (e.g., cuts of a specified amount in the tariff on particular products) are submitted to a trading partner identifying the concessions sought and those proposed to be given in return. Counter-offers are exchanged and negotiated by the countries involved and, once the deal is struck, results are extended to all other GATT members in accordance with the MFN principle. In contrast with the formula approach, the request/offer approach tends to concentrate negotiating efforts in areas of primary commercial interest to participating countries. A potential drawback is that it may forego opportunities to achieve broad, across-the-board trade liberalization.

Residual Restrictions. Quantitative restrictions maintained since before 1947 by governments that were original signatories of the GATT, and hence were permitted under the grandfather clause. Most residual restrictions were maintained by industrial countries against imports of agricultural products.

Restitutions. Certain payments made under the European Community's Common Agricultural Policy (CAP) to exporters of processed agricultural products made from raw materials for which the processor paid higher than world prices. In principle, restitution payments are not supposed to subsidize exports, but only to lower their selling prices to the levels that would have prevailed in the absence of CAP price distortions.

Retaliation. Punitive action taken to limit imports from a trading partner that has violated or reneged on a trade agreement. The GATT Council may authorize retaliation if the dispute settlement process has been exhausted without success. In principle, the value of trade subjected to retaliation should approximately equal the value of trade affected by the offending action, but there are no accepted guidelines in GATT practice for determining the extent of trade damage suffered by an injured contracting party. Although the threat of retaliation --especially by a major trading country --can have considerable persuasive force, actual imposition offers little economic remedy to the injured party; in some cases it can provoke counter-retaliation (see trade war). US authority for taking retaliatory trade actions is provided by Section 301 of the Trade Act .of 1974, as amended (see Section IV).

Revenue Tariff. See tariff.

Reverse Consensus. A proposed modification of the GATT dispute settlement procedures establishing the principle that the report and recommendations of a GATT panel would be adopted by the GATT Council unless consensus existed to reject them. Reverse consensus would thus remove a major weakness inherent in current consensus-based procedures, which allow a disputing party to block adoption of a panel report with which it disagrees.

Reverse Countertrade. See Countertrade.

Reverse Preferences. Tariff advantages once offered by LDCs to imports from certain industrial countries that have granted them preferences. Reverse preferences have largely been superseded by the GSP system.

Review. See administrative review and judicial review.

Right of Priority. The principle according to which an owner of industrial property applying for protection in any country adhering to the Paris Convention is permitted -- within a prescribed period of time (twelve months for patents, six months for industrial designs and trademarks) --to apply for protection in any other signatory country and have that application treated as though it were filed at the time of the first application.

Road Taxes. Excise taxes imposed on the sale or operation of motor vehicles, which have the effect of discriminating in favor of one type of vehicle over another.

Rollback. A commitment to phase out all trade restrictions or policies that distort trade or bring them into conformity with GATT rules. Under the rollback commitment made at the outset of the Uruguay Round, participants are not to seek compensatory concessions for rollback measures.

Round (of trade negotiations). See GATT Round

Rules of Origin. The laws, regulations, and administrative practices that are applied to ascribe a country of origin to goods in international trade. Rules of origin include those applicable for administering country-based quotas and for establishing eligibility for preferential tariff programs, as well as for statistical reporting Safeguards. Import restrictions to prevent commercial injury to a domestic industry from a sudden surge in imports, providing temporary protection while workers and firms in the importing country adjust to the increased foreign competition. Safeguards can take the form of tariffs or quotas. Unlike antidumping duties or countervailing duties, safeguard measures are not based on a claim of unfair trade actions on the pan of exporters; their economic effects are similar, however. Article 19 of the GATT sets important limits on the use of safeguards --especially that they must be temporary, degressive, and applied equally to imports from all sources --and requires the country imposing safeguard measures to extend compensatory trade benefits to exporting countries adversely affected by the action. Critics charge that excessive strictures of Article 19 have resulted in few countries applying GATT -sanctioned safeguards, resorting instead to more distortive grey area measures. Because safeguards usually involve imports from rapidly-growing, export-oriented developing countries, however, efforts to reform or modify the provisions of GATT Article 19 have been among the most divisive areas of negotiation between industrial countries and LDCs. See selectivity.

Sanctions. Trade or financial restrictions imposed against an individual country for political purposes, in an effort to influence its conduct or policies. See blockade and embargo.

Sanitary and Phytosanitary Measures. Health and safety standards affecting imports. ("Sanitary" regulations are those applying to human and animal products; "phytosanitary" regulations apply to plants and plant products.) Such standards are established to ensure that animals and plants and their products are safe for consumption and not damaging to the environment. See also Codex Alimentarius.

Schedule of Concessions. A list of import duties applicable to specific goods which a GATT Contracting Party maintains on an MFN basis as a condition of its membership. See tariff schedule and binding.

Sectoral Reciprocity. The objective of equalizing levels of protection applying to international trade in a particular class of products through trade negotiations conducted on a sector-by-sector basis. Sectoral reciprocity contrasts with the customary, across-the- board approach to negotiations aimed at achieving mutually beneficial agreements comprising concessions in one sector exchanged for gains in another. See also selective reciprocity and zero1or-zero.

Selective Reciprocity. (Also known as "contingent reciprocity.") The provision of market access to particular trading partners in particular industries, linked to the granting of comparable access to foreign markets. Examples include the GATT Civil Aircraft Code, Government Procurement Code, and Subsidies Code, in each of which reciprocity is accorded only to other signatories of the Code. In contrast, GATT is based on the premise that members will grant comparable access across a broad range of goods and trading partners (sometimes called "broad-based" or "diffuse reciprocity.") Proponents argue that most major trade policy problems facing the industrial countries concern disputes in specific industries with specific trading partners, where current international trade rules are seen to be either inapplicable or unenforceable. Critics charge that selective reciprocity risks undermining incentives for multilateral trade-liberalizing efforts based on broad-based reciprocity via MFN treatment.

Selectivity. The application of safeguards in such a way as to restrict imports from a particular country or group of countries, in contrast with non-discriminatory actions taken according to the most-favored-nation principle. Proponents of selectivity argue that the disruptive effects of safeguards should be minimized by applying restrictions only to exporting countries that are the source of disruption; opponents argue that selective safeguards effectively penalize "efficient but law-abiding" foreign producers.

Semiconductor Agreement. A bilateral agreement concluded in 1986 between the United States and Japan to open the Japanese market to US integrated circuits and semiconductor devices, and to deter the dumping of Japanese semiconductors in the US market.

Sensitive Products. Goods produced by a domestic industry employing large numbers of workers, for which the costs of production are such that any reduction in import protection would render the industry vulnerable to injury. Products deemed sensitive are most likely to be excepted from tariff reduction formulas in trade negotiations --or subjected to export restraints --since changes in the competitive position of such industries could cause major economic and social dislocations in the importing country.

Serious Injury. See injury.

Service Mark. A distinctive mark used in the sale or advising of services to distinguish them from the services of others. See also trademark.

Service Supply License. A validated export license issued by the US government to a US or foreign firm authorizing the export of spare and replacement pans to controlled purchasers abroad who originally purchased US equipment under license. See export controls.

Seven-Plus-Seven. An informal meeting of GATT delegations from industrial and developing countries (originally seven of each) convened by the Director-General to clarify positions or resolve procedural issues. Sometimes as many as 17 delegations may be invited, with care taken to ensure representation of countries with strongly held views on an issue. See also Green Room consultations.

Sherpa. An official of sub-cabinet rank from each of the major industrial countries responsible for coordinating his or her government's preparatory work for the annual G-7 Economic Summit.

Single-Column Tariff. A tariff schedule specifying only one rate of duty for each imported commodity.

Single Undertaking. See free riders.

Sluice-Gate Price. See Common Agricultural Policy.

Snapback. Provisions in a trade agreement that allow a signatory to temporarily rescind concessions under specified circumstances, such as an import surge or unanticipated balance-of-payments disequilibria.

Social Dumping. An unfair trade practice whereby an exporter achieves a cost advantage over its rivals in foreign markets through inadequate labor laws or lack of human rights protection in its home country .A similar concept, referring to inadequate environmental regulations, is refer-ed to as environmental dumping. Both have been suggested as topics for future multilateral negotiations following the Uruguay Round.

Soft Loan. Refers to interest-free loans granted to developing countries by the International Development Association (Sec. III).

South-South Trade. In the parlance of the 1970s and 1980s, refers to trade among developing countries ("the South").

Sovereign Compulsion. A legal doctrine in the United States, according to which antitrust liability may be avoided when concerted action by private companies is taken at the direction of a government agency, such as price undertakings or voluntary restraint agreements.

Special and Differential Treatment (S&D). Preferential treatment given to industrial countries in a trade agreement, such as providing better access to developed countries' markets, accelerating implementation of tariff cuts on products exported by LDCs, or allowing LDCs longer time periods to phase in trade reforms.

Special Economic Zone. See export processing lone. Specific Duty. See duty.

Specific Limitations on Trade. Measures that limit imports or exports of a product during a specified period to a specific volume or value, or that require specific authorization for each import or export transaction. See import quota, quantitative restrictions, exchange controls, licensing, quantitative restrictions, residual restrictions, .tariff quota, boycott, and embargo.

Standards. See Technical Barriers to Trade.

Standards-Related Activity. An activity undertaken in conjunction with administration or enforcement of technical barriers to trade, including testing and certification of imports for conformity with officially-mandated product standards.

Standards Code. Formally known as the Agreement on Technical Barriers to Trade. A GATT Code negotiated during the Tokyo Round to prevent technical requirements -- including product standards and testing and certification procedures --from functioning as impediments to trade unless they are necessary for advancing a "legitimate domestic objective" such as health, safety, or environmental protection. The Code does not attempt to formulate standards themselves, nor to set up specific testing and certification systems. Signatories include Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Czech Republic, Denmark, Egypt, the European Community, Finland, France, Gern'1any, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Pakistan, Philippines, Portugal, Romania, Rwanda, Singapore, Slovakia, Spain, Sweden, Switzerland, Tunisia, the United Kingdom, and the United States.

Standing Committees. See GATT Standing Committees.

Standstill. A commitment undertaken at the outset of a GATT negotiation to refrain .from legislating or implementing new trade-restricting or distorting actions inconsistent with GATT rules or principles, or actions that would improve a participant's negotiating position.

State Trading Enterprises. Entities established by governments to import, export, or produce certain products. GATT Article 17 requires members to operate such entities on the basis of commercial considerations.

State Trading Nations. Countries that rely on government entities instead of private corporations to conduct their trade with other countries. See nonmarket-economy country.

Stockholm Convention. See European Free Trade Association (Sec. 111). Strategic Trade Policy. See strategic trade policy argument (Sec. 11).

Structural Impediments Initiative (SII). A series of bilateral negotiations begun in 1989 by the United States and Japan to identify and attempt to reduce "structural" impediments to trade between the two countries.

Subsidies Code. Formally known as the Agreement on the Interpretation and Application of Articles VI, XVI, and XXIII of the GATT. A Tokyo Round agreement designed to strengthen GATT rules relating to export subsidies and countervailing duties, and to reduce the distortive effects of subsidies on world trade (see GA1T Codes). The Code prohibits industrial-country signatories from using export subsidies for t manufactured and semi-manufactured goods, and attempts to regulate signatories' use of domestic subsidies that have adverse effects on the economies of trading partners. In addition, signatory countries are required to provide details of their countervailing duty legislation, and of actions taken pursuant to that legislation, to the GATT Committee on Subsidies and Countervailing Measures. Signatories include Australia, Austria, Brazil, Canada, Chile, Colombia, Egypt, the European Community, Finland, Hong Kong, India, Indonesia, Israel, Japan, Korea, New Zealand, Norway, Pakistan, Philippines, Poland, Sweden, Switzerland, Turkey, the United States, and Uruguay.

Subsidy. A payment or economic benefit conferred by a government on a specific industry or enterprise in order to advance an economic objective deemed to be in the public interest. Although escalating use of subsidies may be displacing tariffs as the principal distortion of international trade --as some trade experts assert --there is still no precise definition of the ten "subsidy" in the GATT; see domestic subsidy and export subsidy.

Substantial Supplier. An exporting country accounting for at least 10 percent of a country's imports of a given product. In GA n tariff negotiations, countries with substantial supplier status may take precedence over all other countries except principal & suppliers and countries holding initial negotiating rights in claiming compensation for a change in a bound tariff.

Superdeductive. A customs valuation procedure (also known as the "further processing method") that permits a deduction from the value of imported merchandise to allow for further processing to be undertaken in the importing country prior to final sale. Under US Customs regulations, the super deductive can be applied to goods sold between 90 and 180 days of importation, but may not be applied if the processing destroys the identity of the product as imported. See also deductive value.

Supplementary Levy. An additional duty that may be imposed under the European Community's Common Agricultural Policy on imports of pork, poultry , or eggs when the purchase price falls below the established gate price. See also variable levy.

Supplier Credits. See export credits.

Supply Access. Assurances that importing countries will have fair and equitable access at reasonable prices to supplies of raw materials and other essential imports. Pursuit of supply access commitments usually includes seeking explicit constraints on the use of export restrictions as instruments of foreign policy. US efforts to negotiate supply access commitments, such as during the 1973-79 Tokyo Round, have generally not met with success.

Surcharge. See Import Surcharge.

Surveillance. The monitoring of trade practices to help ensure that governments fulfill their obligations under trade agreements. See Surveillance Body and Trade Policy Review Mechanism.

Surveillance Body. A body created at the outset of the Uruguay Round to monitor participating countries' trade practices and implementation of their standstill and rollback commitments.

Suspension. See duty suspension.

Suspension Agreement. A legal agreement between an exporting firm and the government of an importing country restraining the volume of exports to avoid injury to producers of similar goods in the importing country .Suspension agreements are designed to forestall imposition of antidumping duties or countervailing duties; under US law, countervailing or antidumping proceedings may be suspended when the exporters involved agree to change offending practices, offset subsidies, raise prices, or cease shipments. See also price undertaking .

Swap Schemes. See Countertrade.

Swing. In international textile agreements, refers to the shift of allowable imports from a filled quota to an under-filled quota. Swing provisions usually permit 5 to 10 percent of specified quota levels to be shifted to another product heading.

Switch Trading. See Countertrade.

Target Price. See Common Agricultural Policy.

Tariff. A tax or duty levied upon goods imported into a country or customs area. (The term also refers to a list or "schedule" of articles of merchandise, specifying the rate of duty to be paid to the government of the importing country.) A "protective tariff' is one which is designed to discourage foreign import competition; a "revenue tariff' is primarily intended to raise money for the government of the importing country .Tariffs increase prices paid by domestic purchasers while reducing the total amount imported; domestic producers of the product and the importing country's government gain, but not by as much as domestic purchasers lose (see deadweight loss, Sec. II). See also export duty.

Tariff Anomaly. A situation in which the tariff on raw materials or semi-manufactured goods is higher than the tariff on the finished product. The opposite of tariff escalation.

Tariff Binding. See binding .

Tariff Escalation. The application of tariff rates on raw materials that are lower than on processed versions of the same or derivative products. Exporters of primary commodities argue that tariff escalation in importing countries impedes their efforts to move "upstream" to higher-value-added processing and manufacturing activities.

Tariff Peaks. See harmonization.

Tariff Quota. A two-stage tariff, providing a base tariff rate that applies to goods up to a specified quantity imported during a certain period --usually a calendar year --and a higher tariff rate that "kicks in " once the quota threshold is reached. Because tariff quotas focus their protective effects on import surges, they tend to provide selective protection against highly competitive suppliers.

Tariff Rate Quota (TRQ). Alternative term for tariff quota.

Tariff Schedule. A comprehensive list of the goods, which a country imports, and the import duties applicable to each product. See tariff.

Tariff Surcharge. See import surcharge.

Tariffication. Conversion of a quota or other nontariff barrier (NTB) to a tariff providing an equivalent amount of protection to domestic producers of the product in question. In principle, conversion of NTBs to a tariff basis enhances transparency, minimizes economic distortions, and facilitates future negotiations aimed at reducing levels of protection.

Technical Barriers to Trade (also referred to as Standards). Government-established specifications of product characteristics --such as levels of quality or purity, performance, safety, environmental impact, or physical dimensions --that must be met in order to receive permission to import the product. The specifications may cover testing and test methods, terminology, symbols, packaging, marking, or labeling requirements. Standards normally reflect policy criteria not purposely established to impede imports, but some standards systems clearly function as disguised trade barriers. See Standards. Code and sanitary and phytosanitary measures.

Third World. See developing countries. The term originated during the Cold War, when it was applied to countries that belonged neither to the Western industrialized countries (the "First World") nor to the Communist bloc (the "Second World").

Threshold Price. See Common Agricultural Policy.

Threshold Value. The monetary value of contracts above which government entities are covered by the Government Procurement Code.

Tied Aid. Foreign assistance that is linked to procurement of goods and services from the donor country.

Tied Loan. A loan made by a government agency that requires a foreign borrower to spend the proceeds in the lender's country.

TIR Convention. An international agreement designed to facilitate international cargo movements across third countries en route to a final destination. Originally established in 1949 as a means of facilitating West European road transportation ("TIR" is a French acronym for Transports Internationaux Routiers, or internationallong-haul trucking), the convention now applies to other countries and other modes of transport as well.

Tokyo Declaration. The statement signed in September 1973 in Tokyo by ministers representing 105 countries,4 initiating the Tokyo Round of trade negotiations.

Tokyo Round. The seventh GATT Round of multilateral trade negotiations, held from September 1973 to April 1979 with 99 countries participating. The Tokyo Round achieved substantial tariff cuts covering $300 billion of trade, and reduced the industrial countries' average tariff on manufactured goods from 7 percent to 4.7 percent. For the first time, the Round also focused on nontariff measures, and a series of agreements regulating their use, called GAIT Codes, were negotiated. In addition, the Framework Agreement reforming certain aspects of the GATT system was adopted. Through the various codes and agreements, the Tokyo Round completed a major overhaul of the global trading system; however, the Round did not settle controversial issues of international trade policy so much as it provided ground rules and a mechanism for resolving such issues. The Round derived its name from the site of the ministerial meeting at which it was launched, but negotiations took place in Geneva.

Torquay Round. The third GAIT Round of multilateral trade negotiations, held at Torquay, England, from September 1950 to Apri1195l. The Round dealt with institutional matters and the accession of new members, but did not make significant progress in reducing tariffs.

TPM. See trigger price mechanism.

Track I. Designation for consolidated negotiating activities in the final phase of the Uruguay Round concerning market access in goods.

Track II. Designation for consolidated negotiating activities in the final phase of the Uruguay Round concerning market access in services.

Track III. Designation for legal drafting sessions in the final phase of the Uruguay Round.

Track IV. Designation for efforts by the GATT Director General to refine the Draft Final Act (see Dunkel Draft) in the final phase of the Uruguay Round.

Trade and Investment Framework Agreement (TIFA). See Framework Agreement (2).

Trade Bloc. A general term referring to regional arrangements among countries that have established formal mechanisms for cooperation on trade issues. The term does not necessarily imply a protectionist stance with respect to nonmember countries, although it is sometimes used in this way. No widely accepted definition of "trade bloc" exists, but it is commonly understood to include six types of arrangements. In descending order of political-economic integration, these categories are: economic union, common market, customs union, free trade area, preferential arrangement, and regional cooperation organization.

Trade Negotiations Committee (TNC). The body consisting of all countries participating in a GAIT Round, with responsibility for exercising overall supervision over the negotiations and for establishing appropriate plans and negotiating procedures. In the Uruguay Round, the TNC is chaired by the foreign minister of Uruguay when .meeting at the ministerial level; otherwise, it is chaired by the GA TT Director-General.

Trade Opportunities Program. An export promotion service of the US Department of Commerce.

Trade Policy Review Mechanism (TPRM). A process of examination in the GATT Council to provide information on and discuss the trade policy regimes of individual Contracting Parties. Established during the Uruguay Round on a provisional basis, the goal of the TPRM process is to induce compliance with GATT rules rather than to punish wrongdoers. Thineen country reviews were conducted under the TPRM during 1992. The TPRM is expected to be placed on a permanent basis following conclusion of the Uruguay Round and the pace of examinations increased so that all GATT members' trade regimes can be reviewed at least every six years, with larger countries' regimes reviewed at more frequent intervals.

Trade-Related Aspects of Intellectual Property Protection (TRIPs). Designation for a Uruguay Round negotiating group considering new GATT rules to promote effective protection of intellectual property rights and to ensure that such protection is not implemented in ways that obstruct trade.

Trade-Related Investment Measures (TRIMs). Designation for a Uruguay Round "' negotiating group examining the adequacy of current GATT rules with respect to investment measures that restrict or distort trade --such as local content and export performance requirements --and negotiating new rules to limit their adverse trade effects.

Trade War. An "unwinding" of the liberalization process, in which countries impose trade restrictions for punitive purposes and others retaliate in kind.

Transaction Value. The cornerstone of the GATT Customs Valuation Code, which obligates signatory governments to use transaction value, or the price actually paid or payable for goods when sold for export (subject to certain adjustments for costs or charges not reflected in the price), as the principal basis for valuing goods for customs purposes. In cases where the transaction value cannot be used --for example, shipments between corporate affiliates or related entities --the primary alternative method is the transaction value of identical merchandise shipped from the same country of origin; a secondary alternative is the transaction value of similar goods sold from the country of origin. If none of the foregoing methods can be used, the deductive value or the computed value may be employed.

Transition. A term referring to the period of time during which provisions of a trade agreement will be implemented (including, in some cases, phasing out existing trade restrictions) by signatories Transit Zone. A port of entry in a coastal country that is established as a storage and distribution center for a neighboring country lacking adequate port facilities or access to, the sea. Goods in transit to and from the neighboring country are exempt from customs duties, import controls, and many of the entry and exit formalities of the host country. A transit zone is a more limited type of facility than a free trade zone.

Transitional Protection. See pipeline protection.

Transshipment. Shipping goods through one country to another country in order to conceal the true country of origin. Transshipment may occur for circumvention purposes or to take advantage of preferential tariff rates applied to imports from the intermediary country.

Transparency. Openness, clarity, and predictability of a country's trade laws and regulations. Transparency --especially as it connotes freedom from capricious bureaucratic action or manipulation of rules for protectionist purposes --is one of the fundamental tenets of the GATT. Tariffication is regarded by many GATT members as a key to promoting transparency.

Treaty of Rome. The agreement, signed in Rome in 1957 by Belgium, France, Germany, Italy, Luxembourg, and the Netherlands, by which the European Economic Community --forerunner to the present European Community --was established. The Treaty took effect 1 January 1958.

Trigger Price Mechanism (TPM). Refers to a mechanism for controlling imports of sensitive products by establishing a minimum "fair price" for the imported goods. Under , the TPM established by the United States in 1978 for steel imports, the trigger price (or reference price) was pegged to within 5 percent of the cost of production of the most efficient international steel supplier --Japan --plus 8 percent nominal profit plus transportation costs. Imported steel sold below the reference price would automatically "trigger" an investigation of presumed dumping.

TRIMS. See trade related investment measures.

TRIPS. See trade-related aspects of intellectual property protection.

Tropical Products. Agricultural and other products of export interest to countries in tropical regions of Latin America, Africa, Asia, and Oceania. Examples include coffee, tea, cocoa, bananas, spices, rubber, and tropical timber. Liberalizing trade in these products is a high priority for many developing countries, and was the subject of both a Tokyo Round and Uruguay Round negotiating group.

Unfair Competition. See unfair trade practices.

Unfair Trade Practices. International usage tends to mirror terminology in US legislation, which applies the term to export-related practices that may be subject to countervailing duties (i.e., export subsidies by foreign governments) and antidumping duties (i.e., dumping by foreign firm), as well as certain anticompetitive practices such as discriminatory shipping arrangements. The term is not normally applied to the range of import-related nontariff barriers, even though discriminatory elements may be involved. Determination of "unfairness" is left to administrative proceedings in the ~ importing country, subject to procedural requirements of the relevant GATT Codes. See competitive policies and practices ( Sec .II ).

Universal Copyright Convention (UCC). An international agreement on intellectual property rights negotiated under United Nations auspices in 1952, and revised in 1971. UCC member states agree to provide "adequate and effective" copyright protection and to accord national treatment to the works of nationals of other UCC signatories. See also Berne Convention.

Upstream Subsidization. An "indirect export subsidy," whereby a producer benefiting from a government subsidy sells a subsidized product to an unrelated company, which in turn performs further processing and then exports the product.

Uruguay Round. The eighth GAIT Round, launched in 1986 with 105 countries participating, and extended in December 1990 after failure to reach agreement by the original target completion date. In the Uruguay Round, efforts have focused on expanding GA TT disciplines to new areas, such as agriculture, intellectual property rights, investment, and services, as well as reducing barriers and strengthening international rules affecting market access, dispute settlement, safeguards, and enforcement measures under the GA TT .The Round derives its name from Punta del Este, Uruguay --the site of the Ministerial Meeting at which it was launched --but negotiations take place at GATT headquarters in Geneva.

User Fee. A fee for a service --such as the provision of customs operations by the government of the importing country --assessed on imported goods. GATT Article 8 requires user fees to be assessed on the basis of the estimated or computed cost of the service.

Valuation. See customs valuation.

Variable Levy. An import duty that is subject to alteration as world market prices change, designed to ensure that the imported product's price after payment of the duty will be no less that a predetermined minimum import price. As applied to imported farm products under the European Community's Common Agricultural Policy, the variable levy amounts to the difference between the EC target price for domestic producers and the lowest available prices on world markets. For imports of cattle, beef, and veal, the variable levy is applied in addition to normal customs duties. The amount of EC variable levies are adjusted for changes in world market conditions on a daily basis for sugar and grains; weekly for dairy products, beef, live cattle, veal, and rice; monthly for olive oil; and quarterly for pork, poultry , and eggs. See also supplementary levy .

Voluntary Export Restraints (VERs). A restraint agreement between governments negotiated within the context of the Multifiber Arrangement. See export restraints.

Voluntary Restraint Agreement (VRA). An arrangement by which an exporting country takes steps --usually by means of export quotas --to restrain exports that could cause economic dislocation in a key trading partner. VRAs are generally undertaken to forestall action by the importing country against imports that may injure or threaten the position of domestic firms. A VRA is less contractual in nature than an orderly marketing agreement, but with similar economic effects. Under a VRA the importing country does not apply restrictions to enforce the agreement (as under an OMA), nor is compensation involved as may be the case if the importer unilaterally raises tariffs. VRAs are not covered by GA n rules (see grey-area measures).

Waiver. A legal exception in GA n whereby a contracting party --with the approval of other GATT members --may maintain a specific practice that would otherwise violate the MFN principle or other GATT obligation.

Working Party. An ad hoc subgroup established by the GATT Council to address a specific trade policy issue, such as a country's application for accession to GA n or a dispute between two members. Unlike a GATT panel, members of a working party function as representatives of their governments.

Working Requirement. A term associated with the lapse of intellectual property protection --or the granting of compulsory licenses --if a patented invention, trademarked good, or copyrighted work is not produced or sold within a specified period of time.

World Economic Conference of 1927. The first attempt to negotiate a cooperative multilateral approach to problems facing the world trading system. Along with its subsidiary Conference on Import and Export Prohibitions and Restrictions, the Conference sought to counter the trend toward increased protectionism that had begun in Europe in the l870s and that by the 1920s was intensifying in all major countries. A code negotiated at the Conference regulating use of quantitative restrictions and other trade barriers fell short of necessary ratification by one country , while a tariff truce agreed at the Conference was effectively ended upon adoption of the Smoot-Hawley Act (Sec.IV) by the United States in 1930. Although unsuccessful, the Conference served ultimately as a progenitor of the GATT .

World Economic Conference of 1933. The second multilateral effort to deal with the global economic crisis of the interwar period, the Conference focused on European efforts to secure an international currency stabilization plan. Following collapse of the Conference, nations engaged in a period of competitive currency devaluations (Sec.l/) through the mid-1930s, further exacerbating trade tensions. The experience of both Conferences weighed heavily on the minds of the architects of the Bretton Woods System a decade later.

Yaounde Convention. See Lome Convention.

Zero-For-Zero. A term used in the market access negotiations in the Uruguay Round to denote a sectoral free-trade initiative that would essentially eliminate tariffs on an entire category of goods. Meeting in Tokyo in July 1993, the Quad trade ministers announced plans to negotiate zero-for-zero agreements in eight industrial areas including pharmaceuticals, medical equipment, steel, construction equipment, farm equipment, furniture, beer, and distilled spirits.