WT/REG384/2  
 
16 January 2019 
(19-0242) Page: 1/3 
Committee on Regional Trade Agreements    
 
ACCESSION OF PANAMA TO THE CENTRAL AMERI CAN COMMON MARKET (C ACM)  
GENERAL INCIDENCE CA LCULATION  
Note by the Secretariat  
1.1.  In the context of "[t]he evaluation under paragraph 5(a) of Article XXIV of the general incidence 
of the duties and other regulations of commerce applicable before and after the formation of a 
customs union", paragra ph 2 of the Understanding on the Interpretation of Article  XXIV of the 
GATT  1994 directs the Secretariat to calculate "the weighted average tariff rates and customs duties 
collected  in accordance with the methodology used in the assessment of tariff offers  in the Uruguay 
Round" . 
1.2.  At the time of the accession of Panama to the CACM on 6 May 2013 , all Parties to the RTA were 
WTO Member s. Panama adopts the Central American  common external ta riff (hereinafter CET) on 
entry into force except for the lines listed i n Annex 5.2 of the Protocol Incorporating the Republic of 
Panama to the Economic Integration Subsystem of the Central American Integration System . The 
negotiations for the harmonization of Panama's exception s to the CACM CET are still ongoing .  
1.3.  The outcome of the mandated calculations is the following : 
a. Weighted a verage tariff rates : 
i. pre-accession of Panama : average CACM CET taking into consideration the exceptions  
for the existing CACM  Parties  and average MFN applied tariff for Panama in 2012 , 
weighted by the aggregated 2010 -2012 import s of the Parties;  and 
ii. post-accession of Panama, at ent ry into force : average of the CACM  CET taking into 
consideration the exceptions  to the CET of each Party including Panama in 2013 , 
weighted by the same  aggregated  2010-2012 import s.  
b. Customs duties collected : estimates derived from the average tariff rates obtained under 
(a) and ann ual average imports in 2010 -2012. 
1.4.  The Committee on Regional Trade Agreements, through its Chairman, has instructed the 
Secretariat to perform those calculations, on the basis of information provided by the Parties or 
available otherwise and according to the methodology described below.  
Results 
1.5.  The mandated calculations for the Panama and the CACM  before and after the enlargement , 
according to the described methodology and based on  available data  summarized below , result s in 
the following:  WT/REG384/2  
 
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  Table 1. General Incidence of the CACM  
 Average 
imports  
2010 -2012  
(US$ million)  Weighted average tariff rates  
(%) Estimated customs  
duties collected  
(US$ million)  
Pre-accession 
of Panama  Post-accession  
of Panama  Pre-accession 
of Panama  Post-accession 
of Panama  
Panama  3,444  4.892  4.861  168 167 
CACM  without 
Panama  17,58 2 4.360 4.360 767 767 
CACM with 
Panama  21,026 4.447 4.442 935 934 
 
Methodology  
1.6.  The calculations , at the tariff-line level, followed to the greatest extent possible the 
methodology provided for in paragraph 2  of the Understanding . In particular : 
a. MFN applied rates were used;1 
b. imports from WTO Members  only were considered.2 Intra-CACM imports, bilateral imports 
between existing CACM P arties and Panama  and imports from WTO Members with which 
contractual preferences were in force  before 2013  were also excluded;3 
c. calculations require having import and tariff data in the same nomenclature  and at the 
tariff line level. In that respect,  
i. the concordance  table pr ovided by Honduras was  used to align imports of all the 
existing CACM P arties  with the CET nomenclature in HS2017 . The World Customs 
Organization 's standard concordance  table and the Parties' nomenclature descriptions 
were also  used in some instances ; and 
ii. for Panama, before the accession to the CACM , the nomenclature  was aligned at the 
8-digit level using the concordance table pro vided by Panama in HS2012 while, after 
the accession, the nomenclature was aligned to the CET nomenclature using the 
concordance table provided by Honduras.   
iii. when imports were reported at 8 -digits while the CET nomenclature was at 10-digits, 
imports were equally distributed at  the more detailed  10-digit level  when necessary;  
iv. for the calculation of the import weighted averages, tariff rates of each Party's  
exceptions  to the CET were considered.   
Data  
1.7.  Unless otherwise specified, t he data used were in HS2012 for 2012 and  in HS2007 for  2010 
and 2011. Whenever avail able, import data reported to the WTO-IDB, including the MFN tariffs for 
                                                
1 HS Chapter 1 -97. 
2 WTO me mbership is as of 1 January 2013 .   
3 For Costa Rica: Barbados, Canada, Chile, China, Dominican Republic, Guyana, Mexico, Trinidad and 
Tobago, United States of America, Venezuela, Bolivarian Republic of, Guatemala, Honduras, Nicaragua, El 
Salvador, Panama .  
For El Salvador: Chile, Chinese Taipei, Colombia, Dominican Republic, Mexico, United States of America.  
For Guatemala: Belize, Chile,  Chinese Taipei, Colombia, Cuba, Dominican Republic, Mexico, United 
States of America, Venezuela, Bolivarian Republic of.  
For Honduras: Chile, Chinese Taipei, Colombia, Dominican Republic, Mexico, United States of America, 
Venezuela, Bolivarian Republic o f.  
For Nicaragua: Chile, Chinese Taipei, Dominican Republic, Mexico, United States of America, Venezuela, 
Bolivarian Republic of.  
For Panama: Argentina, Bolivia, Plurinational State of, Brazil, Chile, Chinese Taipei, Colombia, Cuba, 
Dominican Republic, Ecuador, Israel, Mexico, Paraguay, Peru, Singapore, United States of America, Uruguay, 
Venezuela, Bolivarian Republic of.  WT/REG384/2  
 
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  Panama in 2012 , were used . Other sources include data provided directly from the authorities to the 
RTA Section  and Comtrade. The list of exceptions to the CET for Panama in HS201 2 was taken from 
Annex 5.2 to the Protocol Incorporating the Republic of Panama to the Economic Integration 
Subsystem of the Central American Integration System . 
1.8.  The following data were used in the calculations:  
a. tariff rates:  
i. pre-accession of Panama to CACM in  2012:  
• for Panama, MFN applied tariffs as reported to the IDB (8 -digit) ; and  
• the existing CACM Parties, CACM CET provided by the authorities (10 -digit). 
ii. post-accession of Panama to CACM in 2013:  
• for Panama, CACM CET taking into consideration its list of e xception s; and  
• for existing CACM P arties, CACM CET provided by the authorities (10 -digit).  
b. average imports during the 2010 -2012 period, in value by tariff line:  
i. imports as reported to the IDB  at 10 -digit level for Costa Rica, El Salvador and 
Nicaragua;  
ii. imports as reported to the IDB at  8-digit level for Guatemala and Panama  in all years 
and for Honduras in 2010 ; and,    
iii. Comtrade at 10-digit level for imports of Honduras in 2011 and 2012.  
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