Agriculture
Ad valorem equivalent in the WTO
How can Syria benefit from converting specific tariffs into AVEs?
Authors:
M. Babili
Publisher:
National Agricultural Policy Centre, Syria, 2009
In order for WTO member countries to progress in Doha Round negotiations, and particularly on their negotiations on agricultural tariff reductions, they should clear the obstacle of how to convert specific tariffs into ad valorem equivalents (AVEs). This working paper goes into the technical details of the issue, elaborating the various views about it, and introducing practical examples in this context. The paper also focuses on the Syrian perspective in this relevance, and how can Syria benefit from it.
The paper indicates that current Syrian custom law does not include specific tariffs. However, considering that Syria is an agricultural country, it is important for Syrian agricultural trade to have these tariffs converted into AVEs. This would allow Syria to avoid several problems, specifically in light of that the main trading partner for Syria is the EU, which highly utilises specific tariffs. Furthermore, the paper finds that if a mechanism for applying AVE is agreed on multilaterally, Syria will gain the following advantages:
- facilitating agricultural trade flows with partner countries
- estimating tariff reduction accurately, and consequently requesting higher cut if the reduction is not sufficient
- transparency in calculating custom tariffs, and the simplicity in verifying imported country's calculations
- AVE doesn’t result in higher protection when international prices change, which allows for continuous and easy exporting of Syrian agricultural products
- on the contrary, maintaining specific tariffs would allow for more alternatives and much more flexibility in terms of tariff reduction obliged in Doha
- the conversion into AVE would ease largely studying economic impacts of agricultural trade liberalisation
The paper also concludes that the conversion would prevent repeating what happened after Uruguay Round, where many countries fixed their tariffs when none trade barriers (NTBs) were converted into tariffs.
