Trade in Goods
Direct effect—The principle whereby a treaty may be invoked by a private person to
challenge the actions of a state that is a party to the treaty.
Dumping—Selling exported goods at prices below their normal value.
Escape clause—Allows a WTO member state to escape temporarily from its GATT
obligations when there is a surge in the number of imports coming from other member states.
Free trade area—A group of states that have reduced or eliminated tariffs among themselves
but that maintain their own individual tariffs in dealing with other states.
General Agreement on Tariffs and Trade (GATT 1994)—Annex to the Agreement
Establishing the World Trade Organization that sets out the rules under which the member
states of that organization are committed to negotiate reductions in customs tariffs and other
impediments to international trade in goods.
General Agreement on Tariffs and Trade (GATT) 1947—Multilateral agreement that set out
the rules under which the contracting states parties were committed to negotiate reductions in
customs tariffs and other impediments to international trade in goods.
General exceptions—Situations that excuse a WTO member state from complying with its
GATT obligations in order for the state to protect certain essential public policy objectives.
Generalized System of Preferences (GSP)—A GATT scheme that allows a developing state to
obtain tariff concessions from a developed state on a nonreciprocal basis.
Harmonized System (HS)—A system of classifying goods for customs purposes established
by the Convention on Nomenclature for the Classification of Goods in Customs Tariffs.
Integrated Program for Commodities (IPC)—Proposal of developing countries that would
establish a Common Fund to underwrite the costs of maintaining a buffer stock of primary
commodities as a way to stabilize supplies.
Kennedy Round—GATT MTNs held from 1964 to 1967 that established the practice of
setting an agenda for and defining the techniques to be used during GATT negotiations.
Missile Technology Control Regime—Group of states concerned with limiting the
proliferation of missiles capable of delivering nuclear warheads.
Most-favored-nation status—When a GATT member nation sets a favorable tariff rate on a
particular type of goods imported from one GATT member, that member nation may not
assess a higher tariff on the particular type of goods being imported from any GATT nation.
National treatment—Once goods are legally imported, they must be treated the same way as
domestic goods (no additional requirements).
National treatment rule—Once imported goods are within the territory of a state, that state
must treat those goods no less favorably than it treats its own domestic goods.
Nonactionable subsidy—A subsidy that is permissible and nonchallengeable, such as
government funding to underwrite research activities, to aid disadvantaged regions, or to help
existing facilities adapt to new environmental requirements.
Nuclear Suppliers Group (NSG)—Group of nuclear supplier states concerned with limiting
the proliferation of nuclear weapons.
Primary commodities—Products obtained by extraction or harvest that require minimal
processing before being used.
Prohibited subsidy—A subsidy that is presumed to be trade distorting because it requires
export performance or is contingent upon the use of domestic instead of imported goods.
Round—A meeting of the contracting parties of GATT to participate in MTNs.
Rules of origin—Laws, regulations, and administrative procedures used by states for
determining the country of origin of goods.
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