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How is tariff reduction under an FTA different from WTO tariff negotiation?

How is tariff reduction under an FTA different from WTO tariff negotiation?

For the purposes of FTAs, the “base rate” is the critical element in all aspects of negotiations/phasing that are carried out. The base rate is the applied MFN duty of any year which is decided mutually.

In an FTA tariff reduction is generally undertaken with reference to the base rate i.e. from the applied MFN tariffs. However, the WTO negotiations are always based on “bound duty rates” and not the MFN applied duties.

International Trade Law includes the appropriate rules and customs for handling trade between countries. However, it is also used in legal writings as trade between private sectors, which is not right.

This branch of law is now an independent field of study as most governments has become part of the world trade, as members of the World Trade Organization (WTO).

Since the transaction between private sectors of different countries is an important part of the WTO activities, this latter branch of law is now a very important part of the academic works and is under study in many universities across the world.


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