In effect NTBs became tariffs; in the process there may have been some increase in overall protection,
but not from 0 to 40 percent.5 The third reason MFN applied tariffs may have increased from “past”
to “present” is the introduction of new coding systems. Periodically, international trade classification
systems are updated to account for new products and to regroup existing products. Our past tariff data
was submitted to the UNCTAD data system using the HS 1988 coding system. This was revised twice
with the HS 1996 system and the HS 2002 system. “Present” data was submitted to the UNCTAD data
system using the HS 2002 system. For similar reasons as the tariffication process under the Uruguay
Round, the introduction of new coding systems can influence the tariff averages at the GTAP level.
Lastly, the TRAINS database does not include tariff lines with zero trade, so it is possible that some goods
with high tariffs were traded in the “present” but not the “past.”
To control for instances where we believe increases in average tariff rates do not accurately reflect an
increase in protection, we assume that the “present” MFN applied tariff is the same as the “past” rate—
i.e., there was no change in tariff rates from “past” to “present”—whenever the “present” rate is more
than 10 percentage points higher than the “past” rate. The middle column (“past rate used”) in tables A.3
through A.20 shows the results of this assumption.
Bound Rates
Bound tariff rates are the rates that WTO members agree to as the cap for their MFN applied tariff rates.
Traditionally, countries agree to bind their tariffs either during multilateral trade negotiations, like the
current Doha Round, or during their accession process. All but four of the US partner countries in our
analysis bound their tariffs during the Tokyo and Uruguay Rounds. Mexico and Venezuela bound their
tariffs in the Uruguay Round but did not belong to WTO’s predecessor, the General Agreement on
Tariffs and Trade (GATT), until after the Tokyo Round. Both Mexico and Venezuela bound their tariffs
in their accession commitments during the mid-1980s; these are the rates we use in lieu of Tokyo Round
rates. China joined the WTO in late 2001 and Taiwan joined in early 2002; we include their initial and
final accession bindings in the relevant bound rate tables but only use the initial accession bindings in
lieu of Uruguay Round rates. As the stand-in for the Tokyo Round rates for China and Taiwan we use
the “past” applied rates from tables A.6 and A.17. For countries other than these four, we use Tokyo and
Uruguay Round bindings.
We use the Uruguay Round raw tariff schedules (accession schedules for China and Taiwan)
supplied by the 18 members directly to the WTO. These schedules include both a pre-Uruguay bound
rate (usually the Tokyo Round binding) and a post-Uruguay bound rate. In a few cases the tariff
5. By the process known as “dirty tariffication,” some countries exaggerated the ad valorem impact of their agricultural
quotas when converting them to tariffs after the Uruguay Round.
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