Data for ad valorem equivalents is not always available. The notes for tables A.3 through A.20, which
display past and present MFN applied tariff rates, detail the specific years used for ad valorem equivalents
of specific tariffs, as well as for tariffs that are expressed on an ad valorem basis. Keeping with the
methodology of GTAP, ad valorem equivalents of specific tariffs are calculated using the United Nations
Conference on Trade and Development (UNCTAD) Method 2. This method considers specific tariff
rates and import unit values for OECD countries at the Harmonized System (HS) 6-digit level (FAO
2004).3
The MFN applied tariff figures, both ad valorem and ad valorem equivalents of specific rates, are
taken from the UNCTAD Trade Analysis Information System (TRAINS). The data was retrieved using
the World Integrated Trade Solution (WITS) software developed by the World Bank. The UNCTAD
TRAINS database is standardized at the HS 6-digit level. When countries supply their tariff schedules
to UNCTAD, tariffs at the HS 8-digit level or higher are collapsed into the HS 6-digit level. UNCTAD
reports both a simple average and weighted average of tariffs at the tariff line level (i.e., when the
underlying figures are reported in greater detail than HS 6-digit level). Using a concordance supplied
by the World Bank between HS 1988/1992 and GTAP, we collapse the UNCTAD TRAINS estimates
of “past” MFN applied tariffs at the HS 6-digit level into the 42 GTAP merchandise sectors, using the
simple average of the HS 6-digit level tariffs. We do the same with the “present” MFN applied tariffs
using a concordance between HS 2002 and GTAP also supplied by the World Bank.
The overwhelming trend in our estimates of MFN applied rates at the GTAP level from “past”
to “present” is downward; yet, in a few instances, tariff increases are observed. The increases occur for
four reasons. First, many countries have room under their bound commitments to the GATT/WTO to
move their applied tariff rates up, and in a few cases this has happened. Second, as a result of Uruguay
Round agreements, many countries underwent a process known as “tariffication” in which they converted
quotas and other NTBs into ad valorem tariffs.4 Under our method of averaging tariffs, Uruguay Round
tariffication can at times make it seem like a country’s tariff took a big jump from past to present, which
in reality exaggerates the overall level of protection. For example, if the GTAP sector for a country had
only one tariff line in 1990 with a tariff rate of 0 percent but in 2005 had five tariffs, one with the same 0
percent and four others that were converted from quotas under the Uruguay Round to 50 percent tariffs,
then the calculated average tariff rate for that GTAP sector would have jumped from 0 to 40 percent.
3. The UNCTAD Method 1 for calculating ad valorem equivalents of specific tariffs prefers the specific tariff and the
national import unit value at the tariff line level (i.e., potentially more detailed than the HS 6-digit level). If national
import unit values at the tariff line level are not available, the specific tariffs and national import unit values at the HS 6-
digit level are used. If the first two options are not available, the specific tariffs and OECD import unit values at the HS
6-digit level are used. HS
4. This process is occasionally referred to as “dirty tariffication” because many countries made their new tariffs much higher
than the ad valorem equivalent of quotas or other NTBs.
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