JOB/AG/141  
 
25 July 2018  
(18-4701) Page: 1/15 
Committee on Agriculture, Special Session  
Committee on Agriculture  Original: English  
 
TARIFF IMPLEMENTATIO N ISSUES  - JUNE 2018 UPDATE  
COMMUNICATION FROM T HE UNITED STATES OF AME RICA 
The following communication , dated 16 July 2018, is being circulated at the request of the 
delegation of the United States of America . 
 
_______________  
 
 
1.1.  In June 2018, the World Trade Organization Agriculture and Commodities Division and the 
Institute for Training and Technical Cooperation organized the Symposium on the Agriculture 
Policy Landscape to discuss the relationship between trade and agriculture. All of the various 
experts from around the world emphasized the need for more trade to improve global welfare, 
help producers, and address the challenges of sustainably feeding a growing world population. To 
achieve this, they stressed the importance of ma rket-oriented trade as a means of advancing 
consumer and farmer welfare in all countries.  
1.2.  In the agricultural sector, tariffs remain much higher than for other sectors, but have been 
reduced by more than one -quarter since 2001.1 Reducing tariffs, as was d one through the Uruguay 
Round, contributes to the welfare gains from trade. However, it is important to have reciprocal 
reductions in tariffs. Indeed, it was shown that these welfare gains were greatest because of tariff 
reductions from both developed and developing countries. Reductions by only developed countries 
or only by developing countries resulted in suboptimal welfare gains.2 Further, locking in tariff 
reductions by all countries can contribute to substantial gains to global welfare going forward.3  
1.3.  In June 2014, the United States of America submitted "Tariff Implementation Issues " 
(G/AG/W/132) to the Committee on Agriculture. In that communication, the United States of 
America  noted that agricultural tariffs can distort global markets and make it d ifficult for 
consumers to have access to producer 's products. However, in some cases, market access is 
facilitated, for example, through the application of tariffs at levels below bound rates or through 
preferential access as a result of reciprocal trade a greements.  
1.4.  In order for Members to have productive discussions to address the challenges facing 
agricultural trade today, an understanding of the current state of Members ' tariff regimes, 
amongst other policy types, is needed. In 2014, the United States o f America  requested that the 
Secretariat issue, in one compilation for the Membership, the most recent tariff and trade data 
available, including on Members ' average bound and applied tariff rates in agriculture, the 
percentage of agricultural tariffs boun d at zero by Members, as well as Members ' global share of 
agricultural imports and exports. While the United States of America  is resubmitting this request to 
the Secretariat, the United States of America  also urges Members to ensure that all WTO 
notificat ions relevant to market access are up to date. This includes Integrated Data Base (IDB) 
notifications, as well as notifications of regional trade agreements.  
                                                
1 Bureau, Guimbard and Jean, Agricultural Trade Liberalization, 2018 , page 20, 
https://onlinelibrary.wiley.com/doi/abs/10.1111/1477 -9552.12281 . 
2 Caliendo, et. al. , Tariff Reductions, Entry, and Welfare: Theory and Evidence for the Last Two Decades, 
April 2 017, http://www.nber.org/papers/w21768.pdf . 
3 Bureau et. al.  (2018).  JOB/AG/141  
 
- 2 - 
 
  1.5.  The United States of America  has identified six areas within the area of market access that 
furthe r analysis of Members ' current implementation of tariffs should be considered and discussed 
by Members in order to better understand Members ' current tariff regimes. This includes: (i) bound 
versus applied tariffs, (ii) complex tariffs, (iii) high tariffs (e.g., tariff peaks), (iv) issues with TRQs, 
(v) agricultural safeguards (SSGs), and (vi) regional/preferential trade agreements.  
1.6.  For this analysis, the United States of America  reviewed tariff data of all WTO Members 
where accessible. Howev er, more detailed analysis was also done on the top ten largest 
agricultural exporters and the top ten largest agricultural importers in 2017 - namely Argentina; 
Australia; Brazil;  Canada;  China;  the European Union;  Hong Kong, China;  India;  Japan;  Mexico;  
the Russian Federation;  Korea, Rep. of,  and the United States of America . Most analysis is based 
on the WTO 's World Tariff Profiles and Members ' submitted data to the WTO. Data on 
regional/preferential trade agreements is sourced from the World Integrated Trade Solution 
Database.4  
1.7.  The United States of America  invites other Members to provide their views and own analysis.  
Bound versus Applied Tariff Rates  
1.8.  In 2016, the average bound rate for all WTO Members ' agricultural tariff lines was 54.7 % 
compared to a n average applied rate of 14.5 % (see red bar in Figure 1).5 While Members 
unilaterally apply lower tariff rates to facilitate more open trade, water in Members ' bound tariffs 
continues to contribute to market uncertainty. Water in Members ' tariffs permit M embers to modify 
tariff rates in response to domestic and international market conditions without notice.6  
1.9.  As demonstrated in Figure 1, some Members have bindings substantially greater than applied 
rates, while others apply tariffs at the bound level. App roximately 35 % of Members, of which 
nearly all are developing countries, have water in their tariffs exceeding the average for all WTO 
Members. While developed Members tend to have much less water in their tariffs than developing 
Members, a number of developing Members have very little water as well.  
1.10.   To illustrate this situation further, it is useful to consider the situation of the largest 
exporting and importing Members of agricultural products (Figure 2).7 These Members, on 
average, maintained applied tariff rates of 14.7%, which is one -half of their average bound tariff 
rates of 29.4 %. On average, the largest traders have significantly less water in their tariffs than is 
the case for the average of all WTO Members. Amongst these largest traders, some Members, such 
as India, Indonesia, Mexico, Brazil and Argentina had significantly more water in their tariffs than 
others, such as Korea, Rep of ; the European Union;  China;  Hong Kong, China; the Russian 
Federation;  Canada and the United States of America .  
                                                
4 WITS is a collaboration between the World Bank and the United Nations Conference on Trade and 
Development and in consultation with the WTO, International Trade Center, and United Nations Statistical 
Division.  
5 Data is available for 122 WTO Members only. WTO, World Tariff Profiles 2017 , pages  16-21, 
https://www.wto.org/english/res_e/booksp_e/tariff_profiles17_e.pdf . 
6 "Water " or tariff overhang is defined as the difference b etween Member's bound and applied rates.  
7 Top ten largest agricultural importers and exporters, by value, for 2017. IHS GTA (accessed 
20 June 2018).   
  JOB/AG/141  
 
- 3 - Figure 1: Bound and Applied MFN Rates, 2016  
 020406080100120140160180200
Lesotho
Bangladesh
Nigeria
Mauritius
Zimbabwe
Zambia
Malawi
Tanzania
Saint Lucia
Saint Vincent and the Grenadines
Kuwait, the State of
Saint Kitts and Nevis
Myanmar
Norway
Dominica
Iceland
Antigua and Barbuda
Democratic Republic of the Congo
Mozambique
Tunisia
Pakistan
Burkina Faso
Grenada
India
Ghana
Kenya
Belize
Colombia
Guyana
Jamaica
Burundi
Israel
Niger
Togo
Solomon Islands
Chad
Uganda
Rwanda
Malaysia
Benin
Mali
Guatemala
Venezuela, Bolivarian Republic of
All WTO Members
Indonesia
Gabon
Egypt
Vanuatu
Bahrain, Kingdom of
Nicaragua
Brunei Darussalam
South Africa
Swaziland
Costa Rica
El Salvador
Namibia
Mexico
Angola
Botswana
Peru
Bolivia, Plurinational State of
Mauritania
Cuba
Morocco
Nepal
Dominican Republic
Sri Lanka
Brazil
Philippines
Uruguay
Paraguay
Fiji
Singapore
Argentina
Honduras
Chile
United Arab Emirates
Qatar
Turkey
Oman
Madagascar
Panama
Congo
Yemen
Senegal
Cambodia
Mongolia
Samoa
Seychelles
Switzerland
Saudi Arabia, Kingdom of
Tonga
Lao People's Democratic Republic
Central African Republic
Thailand
Ecuador
Cabo Verde
Jordan
Georgia
Armenia
New Zealand
Haiti
Japan
Kyrgyz Republic
Viet Nam
Moldova, Republic of
Australia
Albania
Montenegro
Ukraine
Korea, Republic of
European Union
Chinese Taipei
The FYR of Macedonia
Tajikistan
Kazakhstan
China
Macao, China
Hong Kong, China
Russian Federation
Canada
United States of America
Côte d'IvoirePercent  
Bound Applied
JOB/AG/1 41 
 
- 4 - 
 
  Figure 2: Bound and Applied MFN AV Rates for Largest Importers and Exporters, 2016  
 
Complex Tariffs  
1.11.   Some Members make use of complex tariffs in their bound and applied tariff schedules. 
Complex  tariffs include compound tariffs, mixed tariffs, and formulaic measures (e.g., Minimum 
Import Prices, Price Bands, Variable Levies, Gate Price mechanisms) as well as simple 
discretionary tariff increases and decreases. These measures are aimed at controlling import 
competition and limiting competition for domestic producers. Often times, this  is accomplished by 
ensuring imports do not enter the domestic market at prices below domestic market prices. By 
blocking consumers ' access to price competition, these measures appear to distort trade flows by 
restricting imports and allowing high -priced d omestic products to be competitive. Ultimately, this 
reduces consumers ' access to competitive and often cheaper goods. Conversely, simple specific 
tariffs (e.g., 100 Euro/kg), have the virtue of predictability but are eroded over time with price 
inflation.  Tariffs expressed in simple ad valorem  terms (e.g., 5 %) are the easiest for exporters to 
understand, but in some cases those may pose enforcement challenges for customs officials.  
1.12.   A total of 41 Members chose to bind some tariffs at non -ad valorem  (NAV) terms that are 
either simple: such as specific (a set value per quantity) or complex: compound (e.g., ad valorem  
and specific in same tariff), mixed (e.g., either ad valorem  or applied, whichever is higher), or 
other (see Figure 3).8 The share of NAV tar iffs is as high as 78 % (Switzerland) of all agricultural 
lines. Based on the World Tariff Profiles 2017, eight countries including the European Union, 
Iceland, Malaysia, Norway, the Russia n Federation , Switzerland,  Thailand and the United States of 
America  bound at least 20 % of their agricultural goods in NAV terms. While only 41 Members 
bound some of their tariffs in NAV terms, 76 Members applied some tariffs in NAV terms in 2016. 
Of those 76 Members, 35  Members hav e zero lines bound at NAV terms . 
                                                
8 WTO, World Tariff Profiles 2017 , https://www.wto.org/english/res_e/booksp_e/tariff_profiles17_e.pdf . 020406080100120140
India All WTO
MembersIndonesia Mexico Brazil Argentina Japan Australia Korea,
Republic
ofEuropean
UnionChina Hong
Kong,
ChinaRussian
FederationCanada United
States of
AmericaPercent  
Bound Applied
 
  JOB/AG/141  
 
- 5 - Figure 3: Percent of Bound and Applied Lines Expressed as Non -Ad Valorem  MFN Rates, 2016  
 
0102030405060708090
Switzerland
Norway
Thailand
United States of America
European Union
Iceland
Russian Federation
Malaysia
Canada
Kazakhstan
Japan
The FYR of Macedonia
Haiti
Saudi Arabia, Kingdom of
Moldova, Republic of
Yemen
Mexico
Chinese Taipei
Korea, Republic of
All WTO Members
Solomon Islands
Singapore
Samoa
Tajikistan
Sri Lanka
Zimbabwe
Georgia
Kyrgyz Republic
Brunei Darussalam
Fiji
Australia
Egypt
Ukraine
Jordan
Myanmar
Philippines
India
Jamaica
Israel
Panama
New Zealand
Pakistan
Armenia
Lesotho
South Africa
Swaziland
Namibia
Botswana
Kuwait, the State of
Bahrain, Kingdom of
United Arab Emirates
Qatar
Turkey
Vanuatu
Zambia
Montenegro
Belize
Nepal
Oman
Saint Kitts and Nevis
Indonesia
Ecuador
Tanzania
Kenya
Burundi
Uganda
Rwanda
Mauritania
Seychelles
Bangladesh
Lao People's Democratic Republic
Grenada
Chad
Central African Republic
Mauritius
China
GhanaPercent of Tariff Lines
Applied Bound Average WTO Member Applied Average WTO Member BoundJOB/AG/141  
 
- 6 - 
 
  1.13.   Looking at the largest exporters and importers of agricultural products, a number of these 
Members use NAVs well in excess of the average for all WTO Members, including the United States 
of America , the European Union, the Russia n Federation , Canada, Japan  and Mexico (see 
Figure  4).9 However, this picture over represents the number of complex tariffs given that WTO 
data on NAVs include simple tariffs, such as specific rates.  
Figure 4: Percent of MFN Bound/Applied Lines Expressed as Non -Ad Valorem  for Larges t 
Importers and Exporters, 2016  
 
1.14.   In 2016 and amongst some of the largest importers, the majority of NAVs were specific 
tariffs (see Figure 5). However, complex tariffs remained an important component of these 
Members ' overall tariff schedules, accounting for between six and 31 % of total agricultural tariff 
lines.  
Figure 5: Percent of MFN Applied Tariff Lines by Notified NAV Type, 2016  
 
 
                                                
9 WTO, World Tariff Profiles 2017 , https://www.wto.org/english/res_e/booksp_e/tariff_profiles17_e.pdf .  051015202530354045
United
States of
AmericaEuropean
UnionRussian
FederationCanada Japan Mexico Korea,
Republic
ofAll WTO
MembersAustralia India Indonesia Brazil Argentina China Hong
Kong,
ChinaPercent of Tariff Lines  
Applied Bound
0%5%10%15%20%25%30%35%40%
Specific Compound Mixed OtherPercent of Tariff Lines
United States European Union Russian Federation Canada JapanJOB/AG/141  
 
- 7 - 
 
  High Tariffs  
1.15.   High tariffs are a particular problem for trade in agriculture, as some Members that 
otherwise may have lo w average tariffs reserve "tariff peaks " for sensitive tariff lines. Across all 
Members, bound tariffs in agriculture can exceed more than 1,000 % and some Members apply 
tariffs at a very high level across an entire sensitive sector. Amongst all WTO Members, 18 have 
bound tariffs that exceed 500 % (see Figure 6). Of these 18 Members, eight Members also apply 
tariffs in excess of 500 % (Malaysia;  Egypt ; Switzerland;  Korea,  Rep. of;  Chinese Taipei ; Norway 
and Japan). On average across all Members, the maximum bound tariff is 1.5 times larger than the 
average bound tariff (i.e., 232 % versus 149 %) as illustrated by the red line in Figure 6.   
1.16.   The largest i mporting and exporting Members of agricultural products generally have 
maximum bound rates well in excess of the average bound rates with a few excep tions such as 
Brazil;  Argentina  and Hong Kong , China  (see Figure 7). Korea, Rep. of,  and Japan both have 
maximum rates exceeding 500 %. While Japan, Canada, the European Union , the United States of 
America and the Russia n Federation  all have average bound rates of less than 20 %, maximum 
tariffs range from 233 % to 613 %. 
1.17.   In most circumstances, the highest bound ta riffs are for select sectors. For example, Korean 
cereals and vegetable products (namely ginseng and cassava) exceed 800 %, Japanese rice 
exceeds 600 %, and Canadian dairy and animal products, US tobacco products, and EU sugar beets 
exceed 300 %. However, whi le most of India' s agricultural tariff schedule is bound consistently at a 
rate of 150 %, tariffs for nearly all products with animal or vegetable fats are bound at 300 %. More 
detailed analysis of which sectors and which countries have the most protective tariffs in place will 
help the Committee better understand the application of trade restrictions .  
  JOB/AG/141  
 
- 8 - Figure 6: Max Bound and Average Bound MFN Rates  
01002003004005006007008009001000Percent  
Max Bound Average Bound
JOB/AG/141  
 
- 9 - 
 
  Figure 7: Max Bound and Average Bound MFN Rates for Largest Importers and Exporters  
 
Issues with TRQs  
1.18.   Tariff-rate quotas (TRQs ) were a compromise policy instrument that arose during the 
Uruguay Round to replace non -tariff barriers. The proliferation of TRQs ensured some level of trade 
even with the imposition of high tariff equivalents. The use of TRQs has resulted in rationing b y 
importing countries while protecting certain commodities from import competition. However, 
although TRQs were designed as a tool of access, very high over quota and in -quota tariffs, low fill 
rates, and conflicting administration of TRQs together with th e global increasing dependence on 
trade can make TRQs a tool of protection. The 2013 Bali Decision on TRQ Administration was 
agreed to help improve transparency and quota under -fill related to TRQ administrative processes. 
Further TRQ reform, can increase market access and reduce the risk of trade bias.  
1.19.   Currently, 40 WTO Members have more than 1,000 TRQs in their bound schedules. While 
most Members continue to apply their TRQs with the high out -of-quota duty rate, several Members 
have effectively eliminated  their TRQs and liberalized trade by not applying an out -of-quota duty, 
including three Members who have done so for all of their WTO TRQs.10 Members have scheduled 
TRQs for a wide variety of products with dairy, fruits and vegetables, meats, and grains bei ng the 
most common ( see Figure 8).  
                                                
10 Brazil, Colombia and New Zealand do not operate WTO TRQs , G/AG/W/169 . 01002003004005006007008009001000
Korea,
Republic
ofJapan Canada European
UnionUnited
States of
AmericaIndia Mexico Russian
FederationAll WTO
MembersIndonesia China Brazil Argentina Australia Hong
Kong,
ChinaPercent  
Max Bound Average Bound
JOB/AG/141  
 
- 10 - 
 
  Figure 8: Tariff Rate Quotas by Commodity Groupings  
 
1.20.   Amongst the largest importers and exporters of agricultural products, several Members had 
relatively low in -quota and out -of-quota rates (e.g., Brazil, the European Un ion, Japan, the United 
States of America ), others had in -quota rates well below very high out -of-quota rates (e.g., 
Indonesia;  India;  Korea, Rep. of ), and a few had both high in -quota and out -of-quota rates (e.g., 
Mexico and the Russia n Federation ) (see Figure 9).  050100150200250300350400450Number of TRQs  JOB/AG/141  
 
- 11 - 
 
  Figure 9: Average In -Quota and Out -of-Quota AV Rates for Select Members, 2016  
 
Special Agricultural Safeguard  
1.21.   The Special Agricultural Safeguard (SSG) was developed to help Members to deal with 
import surges resulting from tariffication during th e Uruguay Round. A total of 39 Members 
reserved rights to use the SSG on a wide variety of products covering an average of 18 % of 
agricultural tariff lines (see Figure 10).11 Switzerland and Norway maintain SSG rights on 
approximately 50 % of agricultural tariff lines, while Botswana, Namibia, South Africa and Eswatini 
have SSG rights covering nearly 40 % of agricultural tariff lines.  
                                                
11 TN/AG/S/29/Rev.1  050100150200250300350Percent  
IQR OQRJOB/AG/141  
 
- 12 - 
 
  Figure 10: WTO Members with SSG Rights as Percent of Ag Tariff Lines  
 
1.22.   In total, meat (18%), oilseeds, fats,  and oils (14%), dairy (13%), fruits and vegetables 
(12%), and cereals (12%) account for more than two -thirds of all SSG lines covered. However, 
composition by country varied (see Figure 11).  
Figure 11: WTO Members' SSG Rights by Product Share  
 
  
0102030405060Percent0%10%20%30%40%50%60%70%80%90%100% Percent  
Other Fruit and Vegetables Cereals Dairy Oilseeds, Fats, and Oils MeatJOB/AG/141  
 
- 13 - 
 
  1.23.   While ri ghts to the SSG are broad, actual use has been relatively limited. The largest users 
of SSG actions, both price - and volume -based, have been Chinese Taipei and the United States of 
America (see Figure 12). With regards to price -based SSG s, only seven Membe rs (Barbados;  
European Union;  Japan;  Korea, Rep. of; Philippines;  Chinese Taipei and the United States of 
America ) made use of such actions between 2004 and 2016.12 Only six Members ( Japan;  Korea, 
Rep. of; Norway;  Chinese Taipei and the United States of Ame rica) made use of the volume -based 
SSG during the same period.13 
Figure 12: Notified SSG Actions, 2004 -2016  
 
 
1.24.   Notified price -based SSG actions totaled 1,827 from 2004 through 2016 accounting for 
approximately three -quarters of all SSG actions. The United States of America , Chinese Taipei, 
Barbados and the European Union accounted for 89% of total price -based SSG actions. These 
actions were primarily used for dairy, meat, food preparations, fruits and vegetables, and sugar 
(see Figure 13).  
1.25.   Notified volume -based SSG actions totaled 593 over the same period accounting for 
approximately one -quarter of all SSG actions. Chinese Taipei and Japan accounted for 93% of total 
volume -based SSG actions. These actions were primarily used for dairy, meat, fruit and 
vegeta bles, and food preparations (see Figure 13).  
                                                
12 TN/AG/S/29/Rev.1 and Member notifications.  
13 TN/AG/S/29/Rev.1 and Member notifications.  
050100150200250300
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Number of Actions
Norway Korea, Republic of Barbados Philippines European Union Japan United States of America Chinese TaipeiJOB/AG/141  
 
- 14 - 
 
  Figure 13: SSG Actions by Commodity, 2004 -2016  
 
Preferential and Free Trade Agreements  
1.26.   As detailed above, many Members unilaterally apply MFN tariff rates that are below their 
bound rates. This facilitates more  open trade, but also contributes to market uncertainty because 
Members can raise tariffs without notice when water in their bound tariffs is significant. However, 
MFN tariff rates are increasingly becoming less relevant to larger shares of global agricult ural trade 
due to the proliferation of preferential and free trade agreements (FTAs), which can significantly 
reduce the tariff rates faced on agricultural products. For example, US agricultural exports to FTA 
partner countries have increased from 29% of t otal US agricultural exports in 1990 to more than 
40%.14 
1.27.   Almost all WTO Members participate in one or more preferential or free trade agreements, 
while a few participate in many. If the preferential or free trade agreements cover substantially all 
agricultu re and result in complete tariff elimination, the result can provide enormous trade 
liberalizing opportunities.   
1.28.   Amongst the largest importing and exporting Members of agricultural products the trade 
liberalizing trend with tariff reductions is clear. In 2016, the average preferential agricultural tariff 
rates were only 20% of the MFN applied tariff rates for the largest importers and exporters of 
agricultural products (see Figure 14).15 For example, preferential rates in the Japan, the European 
Union , Cana da, Indonesia and the United States of America were less than 10% of the MFN tariff 
rate. 
                                                
14 USDA  FAS, "Free Trade Agreements and US Agriculture ", https://www.fas.usda.gov/data/free -trade-
agreements -and-us-agriculture . 
15 Data sourced from World Bank WITS and uses ad valorem  equivalents using UNCTAD methodology. 
Data are presented for illustrative purposes and without prejudice or preference towards any ad valorem  
equivalent methodology at the WTO.  0%5%10%15%20%25%30%35%40%
Meat Dairy Fruit and
VegetablesSugar Food Preparations OtherPercent  
Price VolumeJOB/AG/141  
 
- 15 - 
 
  Figure 14: MFN and Average Preferential Tariff Rates, 2016 Ad Valorem  Equivalents  
 
Conclusion  
1.29.   Members ' implementation of tariff measures is both complex and varies c onsiderably by 
Member. Understanding how Members implement and adjust tariff measures at the multilateral, 
plurilateral, and unilateral levels can contribute to understanding their impacts on global 
agricultural trade. This in turn can help Members to addr ess the challenges that face farmers today 
within the context of agricultural trade and the WTO. One of the most direct impacts of tariffs is 
limiting the ability of consumers to purchase producers ' products. Improving access to customers 
contributes to th e likelihood that farmers get better prices for their products and in turn the more 
production they can undertake.  Similarly, expanding access to more producers benefits consumers 
who have more choice and competition when seeking supplies. More open market s contribute to 
greater productive efficiencies, particularly for value chains, and foster competition that spurs 
investment and technological innovation.  
1.30.   Therefore, as noted previously, the United States of America  requests the Secretariat to 
compile info rmation and Members to ensure that all WTO notifications relevant to market access 
are up to date and consider what other data could improve Members ' knowledge. The United 
States of America will continue its own analysis of the six identified areas within this paper and 
looks forward to constructive engagement from other Members.  
 
__________  
010203040506070
Korea, Republic of
India
Japan
European Union
Canada
China
Russian Federation
Indonesia
Brazil
Argentina
United States of
America
MalaysiaPercent
MFN Average PreferentialSource: World Bank and UN