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May 26 2023
How Trade Agreements Facilitate Export of Goods

Schedule of goods to benefit from preferential trade.

According to World Trade Organization, Schedules of concessions, often referred to as "Goods Schedules" are legal instruments that describe the treatment a Member must provide to the trade in goods of other Members. They ensure transparency, security, and predictability for trade. These schedule of goods have bound duties, which is the maximum tariff that can be applied by a member for products, and other tariff and non-tariff concessions. Members of the trade agreements negotiate the schedules from time to time to accommodate new members or new trends. The concessions and commitments can be spread over several legal instruments that form the member obligations in the trade agreement.

Goods schedules in the WTO agreements consist of at least 4 parts namely Most Favoured Nation concessions and maximum tariff to goods from other members, preferential tariffs, concessions on non-tariff members and domestic support and export subsidies on agricultural products. In Free Trade Area (FTA) goods schedules refer to list of products at tariff line level that the members to an FTA have committed to reduce import duties to zero, descripting the HS Codes, product description, and applicable tariff. For trade in services, schedules refer to list of services that members of an FTA commit to liberalize trade among themselves, describing the services subject to liberalization and the extent of liberalization.

Tariff liberalization

Each country has a tariff schedule, or list, indicating various tariff rates. However, a product may have several rates. For example, there is often a rate applicable to MFN (Most Favoured Nation), a non-MFN, or preferential, according to the specific trade agreements. The tariff structures of countries vary.

Tariffs tend to be high in developing countries and lower in developed countries. Tariffs on agricultural products tend to be higher than on others. It is important for the exporter to obtain the most updated schedule for information on the major tariffs and duties of the target market.

Most trading nations have adopted the HS system (the Harmonized Commodity Description and Coding System) to assign a product a code that is recognizable by customs officials in other nations. The HS system is an international six-digit commodity classification developed under the auspices of the Customs Cooperation Council. Individual countries have extended it to ten digits for customs purposes, and to 8 digits for export purposes.

Trade liberalization is the reduction or complete removal of trade barriers or restrictions on the free exchange of goods between countries. The barriers and restriction include tariffs such as surcharges and duties. The other trade restrictions are non-tariff barriers such as quotas, licences and standards. Tariff liberalization is therefore the removal or reduction of tariffs on imports into a country.

Tariff liberalization:

1) Reduces the price of final product of an exporter in the partner country as exports attract lower or no tariff duties.

2) Reduces the production cost of an exporter as imports of raw and/or intermediate material required for production attract lower or no tariff duties.

3) Gives incentive for exporters to venture into other markets as costs of production and export are reduced by lower or no tariff duties.


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