Directorate-General for Trade

Tariff and non-tariff barriers

For more information on the Doha Development Agenda, see Doha

Delivering on the commitment undertaken in Doha, the EU tabled an ambitious proposal for tariff reductions in industrial goods. The EU proposes a compression mechanism: eliminating tariff peaks and high tariffs, and significantly reducing tariff escalation.

The EU economy is already one of the most open to trade: the EU average level of customs duty protection amounts to around 4% on industrial goods, taking into account MFN (Most Favoured Nations) rates. EU tariffs for industrial products are among the lowest in the world. Moreover imports from many of the EU's suppliers of industrial products enter the Community at preferential rates under the terms of bilateral agreements, the Generalised System of Preference (GSP) or tariff suspension regimes. For instance steel imports from Mediterranean countries, linked to the Community through bilateral Co-operation Agreements or Euro-Mediterranean Agreements, enter at zero duty.

This bold initiative advances meaningful liberalisation across all non-agricultural products which represent over 70% of developing country exports. It also includes a proposal for all WTO Members to reduce tariffs for textiles clothing and footwear to a narrow common range as close to zero as possible. The EU is also adding specific unilateral elements it is prepared to shoulder with other key WTO members in order to take greater account of the needs and interests of developing countries. The mechanism proposed would benefit all WTO Members, with tariff cuts across non-agricultural products.

But the compression mechanism is not enough by itself. Ministers at Doha placed development at the heart of the negotiations, so even bolder approaches are needed to target products of specific interest to developing and least developed countries with reductions well above the ones that could be obtained through the compression mechanism alone.

That is why the EU is also proposing that all WTO Members agree to deeper cuts for textiles, clothing, and footwear, with a view to bringing these tariffs within a narrow common range as close to zero as possible. This would also require that non-tariff barriers are substantially reduced and all export restrictions on raw materials are removed.

This single, common tier of basic commitments - the compression mechanism and targeted reductions on textiles clothing and footwear - will in itself respond to many of the development objectives of the Doha Mandate.

But in order to go the extra mile, the EU is encouraging developed countries and those developing countries in a position to do so, to provide to Least Developed Countries (LDCs):

• Duty Free and Quota Free (DFQF) as of 2006. In the 6th WTO Ministerial Conference in Hong Kong in December 2005 it was agreed DFQF for all products from the LDCs. The US and Japan limited this benefit to 97% of products thus leaving aside some sensitive products for a period of time. The EU already grants this benefit of DFQF since 2001.
• a "Round for Free" for the Least Developed Countries, not obliged to undertake any tariff cuts commitments. They would be called however to bind as many tariff lines as possible for a shake of transparency and predictability.
• gradual phasing in of commitments for some members, where appropriate and depending on the results of the negotiations.

The EU also reiterates its desire to negotiate cuts that are deeper than average for those goods identified by the negotiating group as environmental goods, and whose liberalisation will help to develop a mutually supportive relationship between economic growth and environmental protection.

Industry needs certainty. This is why the EU also proposes a substantial increase in the number of headings bound (i.e. products for which the tariff is fixed and cannot be raised), to foster greater security and predictability in international trade. With the objective of achieving a 100 per cent bindings for all WTO members other than the least developed countries.

The key point of the Doha mandate concerns the reduction or elimination of tariff peaks, high tariffs and tariff escalation, in particular for products of export interest to developing countries and for environmental goods. The EU considers that modalities for the market access negotiations must aim at tariff cuts at single line level for all WTO Members, if we want to remove the disparities existing between tariff profiles.

Moreover it is of strategic importance to the EU that all trading partners remove also other non-tariff barriers, since they frustrate any additional market access acquired via tariff liberalisation. The EU pursues in particular the elimination of export duties that distort international commodity prices and disrupts trade.