G/RO/W/185  
 
9 May 2019  
(19-3181) Page: 1/11 
Committee on Rules of Origin    
 
UTILIZATION RATES UN DER PREFERENTIAL TRA DE ARRANGEMENTS FOR LEAST 
DEVELOPED COUNTRIES UNDER THE LDC DUTY S CHEME  
NOTE BY THE SECRETAR IAT1 
1  INTRODUCTION  
1.1 A previous note by the Secretariat on the utilization of trade preferences by least-developed 
countries (LDCs) (G/RO/W/179)  showed that trade preferences were not being systematically 
utilized for agricultural  exports. In fact, low rates of preference utilization could be observed  for 
several  agricultural exports  and several  LDCs under all preferential schemes that were reviewed . 
This observation  seem s counterintuitive  from the point of view of preferential rules of origin. 
Agricultural products are often very simple products  (e.g. fresh fruits and vegetables) , subject to 
simple rules of origin , so it could be expect ed that LDC producers would face no difficulties in 
comply ing with such rules to enjoy duty-free treatment. This note builds on previous analyses and 
examines in greater detail preference utilization  rates for agricultural products.  
2  METHODOLOGY FOR THE CALCULATION OF UTILI ZATION RATES  
2.1 "Preference utilization rates" can be defined as the proportion of trade, which is eligible for 
trade preferences  and which, in practice, receives preferential treatment. This definition assumes 
that preferential treatment may only occur if there actually is a preference (that is, if the 
Most-Favoured Nation (MFN) tariff rate of a given product is higher than the pre ferential rate).2 
2.2 Utilization offers a useful concept for the examination of the impact of rules of origin on trade 
preferences, as recognized in paragraph 4.3 of the 2015 (Nairobi) Ministerial Decision on preferential 
rules of origin for LDCs. In fact , the observation of high rates of preference utilization indicates 
necessarily that exporters are capable of meeting origin requirements to use trade preferences. 
On the contrary, low levels of preference utilization could indicate that origin requirement s are 
operating as a barrier to preferential tariff  treatment. For this reason, low utilization rates 
("underutilization" or "non -utilization") offer useful pointers for further analysis.  
2.3 This note  builds on these concepts and compare s the utilization rates for agricultural products3 
and agricultural sub -sectors to analyse whether variations  in preference utilization rates could be 
related  to different origin criteria.  The preferences reviewed in this note are preferential trade 
arrangements for LDCs  (LDC-PTAs, henceforth)4 for which preferential tariff and preferential import 
statistics are available with the Secretariat as indicated in Table 1.  
  
                                                
1 This document has been prepared under the Secretariat's own responsibility and  is without prejudice to 
the positions of Members or to their rights and obligations under the WTO . 
2 The Committee on Rules of Origin (CRO)  adopted, at the end of 2016, modalities for the calculation of 
utilization rates as recommended in paragraph 3.2(a) of document G/RO/W/161.  Under this  methodology, 
preference utilization is the value of imports which "reportedly" received  duty-free treatment  as a proportion of 
the value of total imports which was "eligible" for such trade preferences . Section 2 of G/RO/W/168/Rev.1 also 
reviews this methodology.  
3 The definition of agricultural products used in this note is that of WTO Agreements.  
4 The scope of this note is limited to non -reciprocal trade preferences offered to least developed countries, 
including  the US African Growth and Opportunity Act (AGOA), which is also considered.  G/RO/W/185  
 
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  Table 1: List of PTAs included in the analysis  
Preference -granting Member  Year of import statistics  Prefer ential Trade Arrangement  
1. Australia  2017 GSP-LDC 
2. Canada  2017 GSP-LDC 
3. Chile 2016 LDC-specific  
4. China  2016 LDC-specific  
5. European Union  2017 GSP-LDC 
6. India 2015 LDC-specific  
7. Japan  2017 GSP-LDC 
8. Korea, Republic of  2016 LDC-specific  
9. Norway  2016 GSP-LDC 
10. Switzerland  2017 GSP-LDC 
11. Chinese Taipei  2017 LDC-specific  
12. Thailand  2016 LDC-specific  
13. United States (GSP /LDC) 2017 GSP-LDC 
14. United States (AGOA)  2017 AGOA  
Source:  Preferential Trade Arrangements database ( http://ptadb.wto.org ). 
3  HOW ORIGIN CRITERIA FOR AGRICULTURAL PRO DUCTS AFFECT THE UTILIZATION OF 
TRADE PREFERENCES  
3.1 Not all agricultural products are subject to the same rules of origin , reflecting the diversity of 
production processes related to some agricultural products. While many agricultural products are 
necessarily the produce of a single country (e.g. sesame), others may be obtained from raw 
materials  which could be imported and therefore involve at least two countries  (e.g. crude oil 
extracted  from imported sesame). In the first case  (production in a single country) , the product will 
necessarily  fall under the category of "wholly obtained goods" . In the second case  (production 
involving at least two countries), different origin criteria could be us ed to determine whether a 
"substantial transformation" occurred in the last country of production. The Bali (2013) and the 
Nairobi (2015) Ministerial Decisions recognize that different methods may be used  for that purpose . 
However, the choice of each origin method and the design of the rule wo uld create stricter or softer 
constrain ts for a producer willing to comply with it to claim trade preferences . For instance : 
a. Wholly obtained product rule : the oil must be obtained from originating inputs . As a result, if 
the LDC does not produce sesame seeds or does not produce sesame seeds in sufficient 
quantities or quality, there can be no qualifying product and no utilization of the preference;  
b. Value calculation  (percentage criterion ): sesame seeds may be imported a s long as the 
extraction of the oil in the LDC accounts for a minimum value of the final product  ("regional 
value content", or RVC) . If this minimum value cannot be reached  (for instance because 
extracting the oil entails simple , low-cost processes), there  can be no qualifying product and 
no utilization of the preference ; 
c. Change of tariff classification criterion : sesame seeds can be imported from any country to be 
processed in to oil in  the LDC because the extraction of the oil will automatically lead to a 
change in the classification of the final good: the classification will change from sesame seeds 
(HS 1207.40) to sesame oil (HS  1515.50). In this case, a change of tariff sub -heading (CTSH) 
occurs, but a rule requiring a change of tariff heading (CTH) or c hange of chapter (CC) would 
have an identical origin outcome ; 
d. Specific process  criterion : the rule may require that the oil be extracted in a beneficiary 
country . In that case, sesame seeds can be imported from any source  as long as the extraction 
takes pl ace in a beneficiary LDC . The rule could , however,  also require that the oil be extracted 
from originating seeds, in which case the seeds must be  totally or partly  produced  in the LDC . 
e. More complex rules : these criteria could be combined (one "and" the oth er; or one "or" the 
other). They could also  include exceptions.  
3.2 In this particular example , a wholly -obtained rule would be most constraining for producers 
while a change -of-tariff-classification rule (and perhaps a specific -process rule) would not create any 
sourcing constraints for the producer. The effect of a value -based rule would depend on the specific 
costs involved and on the minimum value (percentage) indicated in the rule. It can be inferred that 
the choice of an origin criterion will influence the conditions and costs of production and therefore 
influence the willingness or the ability of LDCs to produce goods qualifying for trade preferences.  G/RO/W/185  
 
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  Table 2: Origin criterion: cru de sesame oil (HS 1515.50)  
Preference -granting Member  Origin criterion  
Australia  RVC 25%  
Canada  RVC 20%  
Chile CTH or RVC 50%  
China  CTH or RVC 40%  
EU CTSH, except that of the product  
India CTSH and RVC 30%  
Japan  CTH 
Kazakhstan  RVC 50%  
Korea _Rep. of  RVC 40%  
Kyrgyz_Rep. of  RVC 50%  
New Zealand  RVC 50%  
Norway  CTSH, except that of the product  
Russian Fed.  RVC 50%  
Switzerland  CTSH, except that of the product  
Chinese Taipei  RVC 50%  
Thailand  RVC 50%  
USA (AGOA)  RVC 35%  
USA (GSP)  RVC 35%  
  
3.3 In this example , it could be expected that utilization rates would  be, in general, higher when 
the criterion used is "change of tariff heading" and lower when the criterion used is "wholly obtained".  
It could also be expected that a n LDC producing sesame seed s would show a consistent high use of 
preferences in all its export markets, irrespective of the stringency of the origin criterion.  
4  OTHER FACTORS AFFECT ING UTILIZATION RATE S 
4.1 The choice and design of origin criteria, nevertheless, is not the only facto r which may 
influence  utilization rates. An exporter's willingness  or ability  to claim preferential tariff  treatment 
under trade preferences depend s largely, but not only, on the origin criteria. As noted p revious ly by 
the Secretariat5, other factors must also be considered  when reading utilization rates , including : 
a. Difficulties in complying with  other origin  requirements, namely:  
i. Proof of origin : Difficulties could relate to obtaining a valid proof of origin  as required 
by the preferential rules of origin. The difficulties could relate, f or instance, to using a 
specif ic format , providing specific information , obtaining the necessary signatures, 
covering the costs associated with certification, etc. In case of self -certifica tion, 
difficulties could be related to  using prescribed forms; providing  the required 
information (e.g. name of end buyer) or completing administrative pre-requisites 
(e.g. registration of exporters with the competent authorities) ; 
ii. Direct consignment : Difficulties in ensuring that the goods are transported directly from 
the LDC to the preference -granting Member or difficulties in obtaining a certificate of 
non-manipulation in case of tranship ment; 
b. Deliberate choice by the economic operators to refrain f rom claim ing duty-free treatment 
under a LDC -PTA. This could be the case if : 
i. other trade preferences  are available  and are seen as being more favourable or are 
better understood. For instance, Australia grants trade preferences to Cambodia both 
under the "Australian System of Tariff Preferences" (ASTP) and under the ASEAN -
Australia -New Zealand free trade agreement (AANZFTA). Australia;  China;  
the European Union;  India;  Japan;  the Republic of Korea; New Zealand;  Switzerland;  
Norway;  and Thailand have concluded regional trade agreements with some or several 
LDCs.  Similarly, some LDCs are eligible for preferences in the US under two schemes: 
AGOA and the GSP. As a result,  operators can choose which preferential scheme to use , 
trade will be split between both reciprocal and non -reciprocal preferences . 
                                                
5 See, for instance, section 4 of document G/RO/W/168/Rev.1.  G/RO/W/185  
 
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  Consequently , the rate of utilization of the LDC -PTA could be low because trade flows 
are registered under another preference .6; 
ii. the preferential ta riff margin is low, so it could seem pointless to comply with origin 
requirements to claim preferential tariff  treatment . This argument is controversial 
because it is not clearly corroborated through statistic al evidence.  On an aggregate 
level, preference utilization tends to increase as preferential margins widen  (Graph 1 
below) . Surprisingly, h owever, overall utilization rates drop slightly for products with 
the widest preferential tariff margins. One possible reason for this may be that rules of 
origin a re stricter for products subject to the highest MFN rates (most sensitive 
products). In any case , at the product -specific level, utilization rates can be very high, 
even on products subject to very low MFN tariff rates.  
Graph 1 : Utilization rates and preferential tariff margins (a ll products, all beneficiary 
LDCs) , 2017 or latest available year7 
 
Source: WTO Integrated Database, 2019 . 
c. Insufficient knowledge or lack of knowledge about the existence of trade preferences  can also 
affect the ability or willingness of operators to claim preferential tariff  treatment.  For example , 
if the rule of origin is drafted in complex language and is not well understood, operators may 
prefer to pay MFN duties  and avoid the uncertaintie s of claiming preferential tariff treatment;  
d. Statistical limitations:  it could be difficult to draw general conclusions or identify patterns of 
utilization if  trade values are too low or if trade is conducted by a very small number of 
companies.  Often, how ever, imports from LDCs are small, scattered and can suffer great 
annual variations.  For greater consistency, all the analyses in this note review exclusively 
annual imports above USD$1,000 at the tariff -line level (except for the Annex, which shows 
total trade).  
5  UTILIZATION RATES VS. UNDERUTILIZATION RA TES 
5.1 Some of the limitations  note above can be, at least in part, avoided by focusing on  
under utilization (non-utilization) as opposed to utilization.  Utilization rates show how much trade 
eligible for preferences under a specific scheme  actually received tariff preferences under that 
specific  scheme. Table 3 below shows imports from Madagascar to China. The only preference 
available between the two cou ntries is China's LDC -PTA. For that reason, the utilization rate (8%) 
necessarily reflects the utilization of the only preference available and is the exact mirror of the 
                                                
6 Graph 1 in document G/RO/W/179 illustrates how trade from LDCs to preference -granting Members 
can be split between LDC -PTAs and "other preferences".  
7 All products (ag ricultural and non -agricultural) considered in the LDC -PTAs of developed countries 
only. Excludes tariff lines for which annual trade was below USD $1,000.  0%10%20%30%40%50%60%70%80%90%100%
<=2 <2 & <=5 <5 & <=10 <10 & <=15 <15 & <=20 >20Utilization rate
Preferential marginG/RO/W/185  
 
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  underutilization rate (92%). In the case of the EU, however,  4% of imports from Madag ascar 
received preferences under the EU -LDC PTA (Everything but Arms) while 94% of imports received 
preferences under the EU -Madagascar regional trade agreement (Economic Partnership Agreement). 
About 2% of imports did not receive any tariff preferences. A n analysis of utilization rates for the 
EU-LDC PTA alone (4%) would lead to the wrong conclusion that trade preferences are not being 
used whereas, in reality , they are (a combined 98% of trade eligible for preferences is receiving 
tariff preferences under  one or the other scheme).  
5.2 Underutilization rates , instead,  show how much trade is paying MFN duties despite being 
eligible for  preferences under any scheme . Underutilization rates show a missed opportunity to save 
import duties because some  preferenc es were available.  Underutilization  rates therefore offer a more 
comparable and comprehensive  indicator to identify products in which origin requirements have a 
restrictive impact.  
Table 3: Imports of vanilla from Madagascar ( HS 0905 .10) 
 Total trade eligible for Preferences , in US$  Utilization rate  Under 
utilization  Using the  
LDC-PTA Using another 
preference  Paying 
MFN duties  Total (LDC-
PTA) (Other)  
EU 12,926,048  330,617,472  6,336,593  349,880,128  4% 94% 2% 
China  41,416  -    458,963   500,37 9  8% 0% 92% 
Source: WTO Integrated Database, 2019.  
6  THE ORIGIN CRITERIA USE D FOR AGRICULTURAL P RODUCTS  
6.1 Some preference -granting  Members only use general rules of origin : Australia ; China ; India; 
Republic of Korea ; Kazakhstan ; Kyrgyz Republic ; New Zealand ; Russia n Federation ; Chinese Taipei ; 
and Thailand. Other Members  complement their general rules with product -specific rules (PSRs) : 
Canada ; European Union ; Japan ; Norway ; Switzerland ; and the USA.   
6.2 When reviewing specifically the origin criteri a used for  agricultural products, only live animals, 
live trees and other plants  have the same criteria across all preferences ("wholly obtained goods") . 
Meat and edible meat offal must also be wholly obtained under all schemes (except for Japan when 
it is subject to a Change of Chapter rule) . Of course, all products obtained in a beneficiary LDC 
exclusively from originating components would be considered wholly obtained under all schemes.  
6.3 For all other agricultural products, which are not wholly obtain ed, preference -granting 
Members use different origin  criteria . Australia and Canada apply a percentage criterion ( RVC 25% 
and RVC  20% respectively) . The European Union;  Norway;  and Switzerland apply most commonly 
the CTH criterion while Japan appl ies the  CC and CTH criteria . Chile and China apply alternation 
rules,  that is, they give operators the choice of using a  CTH criterion o r a minimum RVC of 50% 
(Chile) or 40% (China). In the case of India, two criteria must be satisfied:  CTSH  and a minimum 
RVC of 30%. Kazakhstan ; Republic of Korea ; Kyrgyz Republic ; New Zealand ; Russia ; Chinese Taipei ; 
and Thailand require an RVC of 50%. Finally, the USA appl ies an RVC of 35%.  
7  ANALYZING  THE UTILIZATION OF PREFERENCES FOR AGRICULTURAL PRO DUCTS  
7.1 One first interesting observation with relation to the utilization of trade preferences for 
agricultural goods by LDCs is that utilization rates for agricultural products are lower than that of 
non-agricultural goods.  This is true at the aggregate level an d is true for  all LDC-PTAs reviewed  
(except  for the Rep . of Korea  and China and, to a lesser extent Norway, Switzerland and US -GSP). 
The same observation can be made  when preference utilization rates for agricultural and 
non-agricultural products are compa red on the basis of  preferential tariff margins (Graph 2).  G/RO/W/185  
 
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  Graph 2: Preference utilization rates and preferential tariff margins - Agricultural vs. 
Non-Agricultural goods , in %, 2017 or latest available year8 
 
Source: WTO Integrated Database, 2019 . 
7.2 A second interesting observation is that  preferences are , most often,  either used  in all cases 
for a single product  or not  used at all . In other words, preferential utilization rates are, most of the 
time, either zero or 100% . The data held by the Secretariat correspond to imports at the tariff line 
level from LDCs in a single year. It is not possible to know how many transactions occurred in a year  
(the imports could correspond to one or to several transactions) . It is, however , possible to affirm 
that a preference utilization rate of zero means that no transactions in that year used the preference. 
Conversely, a utilization rate of 100% means that all transactions receive d duty-free treatment . 
Graph 3 below shows  tariff lines e ligible for trade  preference s where trade w ere recorded grouped 
by utilization -rate ranges . 
Graph 3: Tariff lines eligible for trade preferences where imports  were  recorded grouped 
by utilization -rate ranges , 2017 or latest available year9 
  
Source: WTO Integrated Database, 2019 . 
                                                
8 Excludes tariff lines for which annual trade was below USD $1,000.  
9 Excludes tariff lines for whi ch annual trade was below USD $1,000.  0%10%20%30%40%50%60%70%80%90%100%
<=2 <2 & <=5 <5 & <=10 <10 & <=15 <15 & <=20 >20Utilization rate
Preferential margin
Non-Agricultural Agricultural
1402
50 277445771
02004006008001000120014001600
=0 >0 <=10 >10 <=90 >90 <100 =100Number of tariff lines
Utilizaton rates (%)G/RO/W/185  
 
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  7.3 A third noteworthy point is that under utilization concerns all agricultural product categories, 
including products subject to wholly obtained rules. In fact, a sectoral breakdown confirms that 
underutilization  occurs in  all product  group s10 (Table 4). While it is true that overall high utilization 
rates may conceal variations in utilization for individual LDCs, for individual products and for 
individual LDC -PTAs, a sectoral analysis can help identify priority sectors for furth er analysis .  
7.4 Although under utilization concerns  all product groups, it is less relevant  for some products , 
for instance :  
− Only 15 % of imports of cereals and preparation imports from LDCs do not utilize trade 
preferences (HS codes 0407 -10, 1101 -04, 1107-09, 2102.06 and 2209 and Chapters 10 and 
19); and 
− Only 14 % of LDC of beverages and tobacco imported from LDCs do not utilize trade 
preferences (HS codes 2009, 2201 -08 and Chapter 24).  
Table 4: Under utilization of preferences in agricultural sub -sector s (in million US$ )11 
Product group  Total trade eligible 
for preferences  Trade eligible for preferences 
but entering MFN  Under  
Utilization  rate 
Fruits, vegetables, plants  2,333. 8  1,920. 1  82% 
Other agricultural products  705.5  178.1  25% 
Beverages and tobacco  888.6  124.2  14% 
Oilseeds, fats and oils  779.4  66.2 8% 
Cereals and preparations  387. 0 57.9  15% 
Animal products  54.0  53.1  98% 
Coffee, tea  52.9  25.1  48% 
Sugars and confectionary  9.0  7.1  79% 
Dairy products  3.2  0.4  12% 
Cotton  0.1  0.0  17% 
Source: WTO Integrated Database, 2019 . 
7.5 Interestingly, utilization of trade preferences is particularly problematic for the category 
"fruits, vegetables, plants". This is the single most important agricultural category by value of 
imports eligible for preferences . However, 82% of imports from LDCs  in that product category did 
not receive tariff preferences.  A closer look into the composition of this sub -group shows that i t 
covers fruits, vegetables and nuts (Chapters 07, 08, 13 and 14, HS12 11); flours (HS1105 -06); fruit 
and vegetable preparations (HS 2001 -08); bulbs, live plants and cut flowers (HS 0601 -03). All 
products in this category are either primary goods or simple agro -processed goods which , in 
principle, fall under "wholly obtained product" rules. The origin criterion applied is therefore unlikely 
to explain that such products are not receiving preferential tariff  treatment  so other possibilities 
must be explored .  
7.6 One possible alternative explanation could relate to d ifficulties to comply with  sanitary (SPS) 
requirements. However, if an operator is unable to comply with an  SPS measure, the goods would 
be rejected and no trade at all would be recorded  in a tariff line . If, for instance, Burkina Faso exports 
mangoes to C hina (whether or not using trade preferences) but no t to India, one could speculate 
whether India's SPS measures are more stringent and therefore impede trade . In this case,  
nonetheless,  trade is recorded to both countries (so the goods were accepted), but  not under 
preferences. In cases in which no trade at all is observed for a tariff line, it is unlikely that preferential 
origin requirements operate as a trade barrier. Trade could still occur under MFN conditions. 
Conversely, if imports are observed (whe ther under MFN or preferential conditions), SPS 
requirements have necessarily been complied with.  
7.7 It could therefore be inferred that the only explanation why MFN trade, instead of preferential 
trade, is observed relates to origin requirements. This is  particularly true if MFN duties are high and 
if there are no other competing preferences (e.g. an FTA) diverting trade away from LDC -PTAs. If, 
                                                
10 The sectors used in this note correspond to categories used in other databases, research and 
publications prepared by the WTO Secretariat. The specific product categories of each sector with the 
corresponding Harmonized System (HS) codes can be found here : 
http://stat.wto.org/idbdata/MTN_product_classification_e.pdf . 
11 Excludes tariff lines for which annual trade was below USD $1,000.  G/RO/W/185  
 
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  as seen above, the origin criterion cannot explain differences in utilization, the only possible 
explan ation to  underutilization  relates to  origin certification or direct transportation requirements . 
8  PRODUCT -SPECIFIC  ILLUSTRATIONS  
8.1 This hypothesis can be tested through an examination of some product -specific  cases . Senegal 
exports beans (HS0708.20) under preferences to three preference -granting markets: the EU, 
Norway and Switzerland. In all cases, such exports are subject to the wholly obtained origin criterion. 
One would therefore expect that the utilization rates  under the three LDC -PTAs would be similar, if 
not identical. However, there is no preference utilization at all with Switzerland and Norway whereas 
preferences are almost entirely used in the EU (99%). This would seem to suggest that the origin 
criterion alone cannot explain variations in the  utilization rate. Th us, th e explanation is likely come 
from a lack of capacity to comply with certification or direct transportation requirements. 
Since  Switzerland (a landlocked country ) and Norway are smaller market s, there is a good chance 
that a wholesale importer in the EU distributes beans from Senegal to the se markets , thereby 
requiring the goods to be tranship ped. 
Case 1: Imports of beans ( HS 0708 .20) from Senegal  
LDC-PTA Trade eligible for 
preferences (US$)  Trade paying MFN 
duties (US$)  Under  
utilization  MFN Duty  
(or Ad Valorem  equivalent)  
EU               26,315,062               166,843  1% 4.0% 
Switzerland                      821,694               821,694  100%  50.4% 
Norway                        98,934                 98,934  100%  7.0% 
Source: WTO Integrated Database, 2019 . 
8.2 The same hypothesis – that direct transportation requirements could hinder the utilization of 
trade preferences - would seem to be confirmed by  another case:  exports of cut plants from Tanzania 
(HS0602.10). Exports of this product are recorded from Tanzania to  Chile, the EU, the Rep. of Korea, 
and to the US (under both the US -GSP and US -AGOA). The rule of origin for this product is invariably 
"wholly obtained". Yet, as can be seen, there are steep variations of the utilization rate, i.e. either a 
preference is granted in all cases  (EU, US)  or it is refused in all cases  (Korea, Chile) . Preferential 
tariff margins are similar in these markets and do not seem to influence utilization (MFN rate of 4 % 
to 8%). This would seem to confirm that transportation and certification requirements have a higher 
impact on preference utilization than the origin criterion used . 
Case 2: Imports of cut plants (HS 0602.10) fr om Tanzania  
LDC-PTA Trade eligible for 
preferences (US$)  Trade paying MFN 
duties (US$)  Under  
utilization  MFN Duty  
(or Ad Valorem  equivalent)  
EU 11,312,941  36,645  0% 2.0% 
Norway  128,372  13,042  10% 40.8% 
Korea_Rep. of  35,867  35,867  100%  8.0% 
USA (AGOA)  28,711  -    0% 4.9% 
USA ( GSP) 28,711  -    0% 4.9% 
Chile 3,009  3,009  100%  6.0% 
Source: WTO Integrated Database, 2019 . 
8.3 Another interesting case of a product for which utilization rates vary despite an identical origin 
criterion is exports of spices (0910.99) from Nepal. Exports are recorded to India, Switzerland  and 
the United States. The origin criterion under all schemes  is "wholly obtained". MFN rate s are similar 
and do not seem to affect utilization . In India, however, no preference utilization is recorded (despite 
the highest preferential tariff margin) and preferences are almost never granted in Switzerland (only 
8% o f utilization) . While direct transportation could be affecting exports to Switzerland, this should 
not be the case for India since India and Nepal are geographical neighbours. Two remaining 
hypotheses would remain : either c ertification obligations under the Indian  preferences are hindering 
the use of preferences or Nepal is using other trade preferences. According to the data held by the 
Secretariat, no imports are recorded under "other preferences" and imports are only recorded under 
"MFN" . If confirmed,  certification of origin would remain as the possible explanation  for 
non-utilization . G/RO/W/185  
 
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  Case 3: Imports of spices (HS 0910.99) from Nepal  
LDC-PTA Trade eligible for 
preferences (US$)  Trade paying MFN 
duties (US$)  Under  
utilization  MFN Duty  
(or Ad Valorem  equivalent)  
India 2,170,362  2,170,362  100%  3.0% 
Switzerland  8,417  7,717  92% 1.7% 
USA (GSP)  20,578  -    0% 1.1% 
Source: WTO Integrated Database, 2019 . 
8.4 Finally, the case of rice exports  (HS1006.30 ) from Cambodia. Exports are recorded to the EU, 
to the US and to Switzerland. The rule in all cases is "wholly obtained but, as can be seen, utilization 
rates vary greatly. Preferential tariff margins could be having an impact on utilization . In that case,  
however,  it wou ld be difficult to explain the difference in utilization in the US (47%) and in 
Switzerland (no utilization at all). It seems  more likely , as seen in previous examples, that difficulties 
related to certification or transportation requirements  could explain  these variations . 
Case 4: Imports of rice (HS 1006.30 ) from Cambodia  
LDC-PTA Trade eligible for 
preferences (US$)  Trade paying MFN 
duties (US$)  Under  
utilization  MFN Duty  
(or Ad Valorem  equivalent)  
EU 160,183,648  3,197,560  2% n.a. 
USA (GSP)  1,311,883  693,820  53% 6.4% 
Switzerland  57,190  -    0% 3.4% 
Source: WTO Integrated Database, 2019 . 
8.5. These cases show that direct transportation and certification requirements also have a direct 
impact on utilization.  These examples show that there does not seem to be a strong correlation 
between preferential tariff margins and utilization rates. Finally, they confirm that it is useful to 
conduct disaggregated , product -specific, country -specific and LDC -PTA-specific analysis.  Annex 1 to 
this note therefore shows, for each LDC, the share of trade which is not receiving duty -free treatment 
despite being eligible for trade preferences (Column 1, "under -utilization"). Trade values were added 
to the table to give more context to utilization rates ( Column 2 , value of imports eligible for LDC 
preferences but not receiving preferential treatment, in thousand US $). 
  
  G/RO/W/185  
 
- 10 - ANNEX 1  – UNDERUTILIZATION  OF TRADE PREFERENCES  IN AGRICULTURAL PROD UCTS : MEMBER -BY-MEMBER BREAKDOWN  
(1) Share of total imports eligible for LDC preferences but not receiving preferential treatment (%)  
(2) Value of total imports eligible for LDC preferences but not receiving preferential treatment (in thousand US $) 
  Australia  Canada  Chile China  EU India 
(1)(%) (2) (1)(%) (2) (1)(%) (2) (1)(%) (2) (1)(%) (2) (1)(%) (2) 
 Afghanistan  50.1 43.6 48.2 42.1 - - 100.0  1237.7  32.7 1,289.8  100.0  288,289.2  
 Angola  - - 100.0  0.0 - - 100.0  87.8 36.7 795.7  - - 
 Bangladesh  3.2 56.0 1.8 61.6 - - 3.7 385.8  1.5 962.3  100.0  49,669.6  
 Benin  - - 100.0  0.0 - - 34.8 447.2  3.2 103.4  10.4 64.9 
 Burkina Faso  - - 100.0  8.1 - - x x 2.3 374.8  - - 
 Burundi  - - - - 100.0  54.4 3.4 42.3 0.3 0.3 - - 
 Cambodia  0.0 0.0 100.0  6.6 100.0  0.2 100.0  82,458.7  3.1 5,684.9  50.4 90.3 
 Central African Republic  - - 100.0  0.0 100.0  68.5 100.0  131.0  0.1 0.3 - - 
 Chad  - - 100.0  0.2 - - 100.0  128.0  100.0  0.0 100.0  1,420.3  
 Democratic Rep. of the Congo  - - 100.0  0.6 - - 100.0  295.6  31.4 1,306.4  100.0  9,177.4  
 Djibouti  - - - - - - 100.0  17.5 88.2 982.8  100.0  105.4  
 Gambia, the  - - 100.0  0.5 - - x x 2.6 36.1 - - 
 Guinea  - - 100.0  0.5 100.0  2,205.2  100.0  7.5 13.4 206.5  100.0  1,546.7  
 Guinea -Bissau  - - 100.0  0.0 - - - - 100.0  4.2 - - 
 Haiti  100.0  2.0 66.1 311.5  100.0  7,118.6  x x 41.9 846.6  100.0  674.7  
 Lao People's Democratic Rep.  - - 100.0  0.1 - - x x 42.1 4,209.0  4.7 4.0 
 Lesotho  - - 100.0  0.0 - - 0.0 0.0 12.8 220.9  100.0  1,251.7  
 Liberia  100.0  8.1 - - - - 100.0  0.6 100.0  12.7 - - 
 Madagascar  100.0  7.4 91.7 139.9  100.0  32.6 22.7 1,101.8  2.7 11,351.6  16.3 20,086.7  
 Malawi  - - 6.5 81.6 100.0  172.0  58.3 426.6  0.6 1,880.1  100.0  61,944.1  
 Mali  9.4 27.6 100.0  58.0 - - 0.6 522.0  11.1 465.1  61.9 1,238.4  
 Mauritania  - - 100.0  0.2 - - - - 0.2 0.2 - - 
 Mozambique  - - 3.5 39.4 100.0  12,439.1  4.8 1,855.8  10.8 14,954.1  99.7 89,285.8  
 Myanmar  18.6 30.9 66.5 727.9  - - 100.0  81,449.3  1.2 1,599.8  99.2 838,751.7  
 Nepal  0.3 1.1 19.6 77.1 100.0  0.9 64.4 55.3 6.5 116.1  100.0  112,182.4  
 Niger  100.0  77.7 100.0  7.0 100.0  2,484.7  1.4 1,746.3  1.5 36.6 - - 
 Rwanda  - - 0.4 0.1 100.0  20.8 80.0 236.4  1.1 58.2 100.0  12.9 
 Senegal  - - 22.4 21.2 100.0  0.1 0.0 33.6 0.6 701.8  100.0  1,015.6  
 Sierra Leone  100.0  6.1 100.0  3.7 - - - - 6.7 190.3  - - 
 Solomon Islands  0.0 0.0 100.0  129.1  - - x x 0.0 0.2 - - 
 Tanzania  100.0  5.2 100.0  498.6  100.0  482.2  2.4 2,768.3  1.5 2,891.7  78.5 144,609.9  
 Togo  - - 0.0 0.0 - - 0.5 456.7  1.5 290.2  - - 
 Uganda  - - 59.9 8.0 100.0  144.6  2.5 366.0  1.0 879.6  76.5 12,433.0  
 Vanuatu  100.0  22.8 - - 100.0  4.1 100.0  172.0  27.8 14.3 - - 
 Yemen  - - 100.0  0.0 - - 100.0  21.6 84.7 129.6  100.0  115.1  
 Zambia  0.0 0.0 100.0  1.5 100.0  0.2 100.0  798.6  8.2 4,156.6  - - 
 Total LDCs   
288.7   
2,225.4   
25,228.1   
177,250.1   
56,753.0   
1,633,969.7  
  
  G/RO/W/185  
 
- 11 -   Japan  Rep. of Korea  Norway  Switzerland  Chinese 
Taipei  Thailand  USA (AGOA)  USA (LDC)  
(1)(%) (2) (1)(%) (2) (1)(%) (2) (1)(%) (2) (1)(%) (2) (1)(%) (2) (1)(%) (2) (1)(%) (2) 
Afghanistan  - - 100.0  0.1 - - 100.0  124.9  - - 100.0  23.7   79.6 1,357.4  
Angola  - - 100.0  0.1 - - - - - - 100.0  0.1 - - - - 
Bangladesh  3.4 32.3 13.2 115.5  100.0  2.8 22.4 9.8 - - 100.0  1,584.5    x x 
Benin  100.0  2.9 49.0 47.4 - - 43.8 166.0  - - 100.0  502.8  0.0 0.0 0.0 0.0 
Burkina Faso  25.1 8.5 100.0  2.1 x x 98.8 917.0  - - 100.0  10.4 8.2 97.6 8.2 97.6 
Burundi  94.8 80.8 16.3 50.5 x x - - - - - - x x - - 
Cambodia  67.2 606.9  0.1 8.0 49.4 16.9 0.1 6.1 100.0  0.2 100.0  266,372.9    53.1 756.7  
Central African Rep.  - - - - x x 100.0  4.2 - - - - x x 100.0  11.8 
Chad  - - - - x x - - - - 100.0  2.5 - - - - 
Democratic Rep.  
of the Congo  100.0  6.5 100.0  7.0 100.0  0.8 5.8 11.8 - - 100.0  7.9 - - - - 
Djibouti  - - 11.1 60.0 x x 51.6 2.8 - - - - 13.3 23.0 13.3 23.0 
Gambia, The  - - - - - - 100.0  13.6 - - - - x x 0.0 0.0 
Guinea  100.0  106.4  100.0  0.1 - - 86.8 101.4  - - 100.0  0.5 0.0 0.0 0.0 0.0 
Guinea -Bissau  - - - - x x - - - - - - - - - - 
Haiti  96.6 58.6 100.0  8.9 - - 100.0  5323.4  - - - -   0.8 105.3  
Lao People's  
Democratic Rep.  2.1 64.9 54.6 1,424.5  100.0  119.7  76.2 63.0 - - 100.0  108,862.1    x x 
Lesotho  - - - - - - x x - - - - 0.0 0.0 0.0 0.0 
Liberia  - - - - 100.0  2.2 - - - - - - 14.8 3.9 14.8 3.9 
Madagascar  9.3 32.6 82.7 3,371.7  100.0  8.8 61.8 1,581.1  - - 100.0  81.5 40.9 528.7  40.9 528.7  
Malawi  1.6 74.6 13.8 3,584.9  - - 100.0  7.1 - - 100.0  42.6 1.5 245.1  1.5 245.1  
Mali  - - - - - - 71.9 69.6 - - 100.0  1.8 44.3 69.4 44.3 69.4 
Mauritania  - - 100.0  0.0 x x 100.0  1.7 - - 100.0  1.5 - - - - 
Mozambique  - - 84.7 705.7  - - 1.0 182.9  - - 100.0  292.5  0.0 0.0 0.0 0.0 
Myanmar  0.8 89.5 0.9 25.5 100.0  0.5 0.1 1.1 100.0  0.1 100.0  122,928.7    20.8 1,496.7  
Nepal  5.8 69.8 30.1 70.1 0.0 0.0 30.7 19.6 - - 100.0  30.3   8.8 80.1 
Niger  100.0  11.0 100.0  35.1 - - 8.3 1.1 - - 100.0  0.8 100.0  15.4 100.0  15.4 
Rwanda  98.8 684.1  29.0 353.6  x x - - - - - - 0.0 0.0 0.0 0.0 
Senegal  59.2 18.6 100.0  10.9 100.0  205.5  31.0 3,293.3  - - 100.0  24.6 11.0 44.0 11.0 44.0 
Sierra Leone  0.0 0.0 - - x x - - - - - - 0.0 0.0 0.0 0.0 
Solomon Islands  100.0  7.6 100.0  0.6 x x 1.5 235.4  - - 100.0  10.4   100.0  6.4 
Tanzania  26.7 411.3  2.1 802.0  16.3 114.0  1.1 181.7  100.0  0.6 100.0  159.8  79.8 559.4  79.8 559.4  
Togo  - - 100.0  0.5 - - 19.5 53.8 - - 100.0  0.7 50.9 211.0  50.9 211.0  
Uganda  4.6 115.9  15.1 1,006.8  3.9 34.8 8.8 400.7  - - 100.0  25.6 0.8 10.5 0.8 10.5 
Vanuatu  29.5 253.9  - - x x - - - - - -   - - 
Yemen  - - 100.0  530.3  x x - - - - - -   25.4 43.6 
Zambia  100.0  21.6 100.0  77.8 11.0 50.4 100.0  17.3 - - 100.0  5.4 9.2 41.0 9.6 41.0 
Total LDCs   
2,758.3   
12,299.7   
556.5   
12,790.4   
0.9  
500,973.5   
1,849.0   
5,707.1  
Source: WTO Integrated Database, 201 9. 
Note: - Fields showing ' -' indicate that no imports of products subject to the preferential tariff treatment from specific LDC beneficiaries have been  recorded.  
 - Some LDCs may be excluded from some of the programmes. Country exclusions are marked with [x] in the table.  
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