Non-tariff measures of GATT

The following are the non tariff measures of General Agreement on Tariffs and Trade (GATT) for effective international discipline and favorable treatment for developing countries.

Non-Tariff measures of GATT

1. Restriction on use of subsidies: Subsidies were recognized as an alternative to tariff. Subsidies and countervailing measures committed signatory governments. Use of subsidies by them does not harm the trading interest of another signatory. Moreover, countervailing measures do not unjustifiably impede international trade. However, if any country resorts to dumping (where export price of the product is lower than its domestic price), then the affected country is allowed to impose countervailing duty; The rate of countervailing duty should not be higher than what is required to offset the margin of dumping.

2. Technical barriers: GATT provides for some technical barriers to trade. These are known as “the code”. Technical regulations or standards, testing and certification schemes adopted by the signatories to GATT should not
create unnecessary obstacles to international trade.

3. Import licensing procedures: Import licensing procedures must be appropriate. Their inappropriate use may hamper international trade leading to restrictions in imports. The signatories to the agreement should follow simple import licensing procedures. They should not create unnecessary obstacles to trade. Governments should administer import licensing procedures fairly.

4. Government procurement: Government procurement aims at achieving greater international competition while bidding for government procurement contracts. Tenders for government contracts are subject to detailed rules. Tenders should be invited and awarded as per rules laid. Government procurement should be transparent and should not protect domestic products or suppliers or discriminate among foreign products or suppliers.

5. Custom valuation: Customs valuation sets a fair and uniform system for the validation of goods for customs purpose. Use of arbitrary or fictitious custom values should be avoided. The code lays down a revised set of valuation rules giving greater precision to the provisions of customs valuation. Developing countries are empowered to counter potentially unfair valuation practices.

6. Anti-dumping code: Article VI of GATT lays down anti-dumping code. It specifies the conditions under which anti-dumping duties may be imposed as a defense against dumped imports. GATT has revised provisions of anti-dumping code in line with the relevant provisions of the code on subsidies and countervailing measures.