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EXTERNAL TRADE GLOSSARY

 

MARKET ACCESS

Definition of a country trade standards to make easy or limit the entrance of goods and services from other countries or group of countries.  The market access is related with tariff policies, non tariff and para-tariff barriers (quotas, bans, etc.), and according to practice, with: origin standards, sanitary and phyto-sanitary standards, among other.

Within international trade negociation processes, tariffs are considered as the main objective of agreements of market access.

TRADE AGREEMENT

Agreement, treaty, or any other linking act between two or more countries, by which they commit to accomplish certain actions in order to improve their trade exchange.

NEW GENERATION AGREEMENTS

Trade treaties containing new areas as services, investment, intellectual property, governmental purchases, technical standards, disloyal practice of trade among other.

TARIFF QUOTAS

Definite volumes of agricultural commodities imports which enjoy of a special tariff treatment that consists of establishing a maximum applicable tariff to these volumes, lower than the tariff fixing as maximum for the remaining imports out of these volumes

TARIFF EXEMPTION

Tariff reduction between two countries which have reached a trade agreement on market access.

IMPORT LICENSES

Administrative measure through which imports done by a country, are controlled.

COMMON MARKET

An economic integration way which eliminates all internal trade barriers, harmonizes trade policies in front of the world and allows the free mobility of labor and capital among member countries.

RULES OF ORIGIN

A set of standards and specifications on which base internationally tradeable merchandises origin's country shall be qualified.  In order to establish the origin of a product, the following mechanisms shall be applied:

1) Added value.- A value (generally porcentage) that is added to a merchandise in terms of its transformation, giving it a charanterized inviduality; and,

2) Substantial transformation and tariff jump.- When the obtained commodity has suffered a great transformation if it's related to a subsection, in a merchandise systematic nomenclature different to that applicable to each product used for manufacturing purposes.

Standards of origin are concepts applied to most bilateral and multilateral agreements signed by Ecuador.

Certificate of Origin "FORM A"

Document multilaterally designed and adopted within the UNCTAD (United Nations Conference on Trade and Development) frame, used in order to help developing countries to certify origin of products exported to industrialized countries, so as to have right to a preferential treatment of the Generalized Sistem of Preferences.  The U.S. has also accepted the "Form A" for trade preferences purposes, granted within the Andean Tariff Preferences (ATPA) program.

TECHNICAL, SANITARY, PHYTO-SANITARY, AND ZOO-SANITARY STANDARDS

In order to avoid the use of these technical, sanitary, phyto-sanitary and zoo-sanitary standards and requirements imposed to imports, so as to constitute injustified trade barriers, the WTO, within its legal-trade frame, implemented the Agreement on Application of Sanitary and Phyto-sanitary Standards and the Agreement on Technical Barriers to Trade, where principles, conditions, and procedures where these measures shall be used, are set forth.

Basically, countries have right to apply any necessary technical or sanitary measure, provided its aim is protecting  and warranting ideal conditions for human, animal, vegetal, and environmental health in danger of adversely affected by international trade.

HISTORICAL PATRIMONY

Are all trade agreements, and treaties, in force up to date, signed by the country within the ALADI frame.

REFERENCE PRICES

Fixation by the governmental authority of the price for a commodity in order to apply a tariff.

INITIAL POINT OF PREFERENTIAL EXEMPTION

Percentage preference on which the Tariff Exemption Program Begins.

NON TARIFF BARRIER

Tariff and non-tariff measures, and trade standards applied by a country in order to ban entrance of commodities of other countries or group of countries.

SAFEGUARD

Safeguards are authorized by the GATT/WTO, and are useful to establish temporary exemptions to the liberalization regime when imports of a certain commodity are so high that cause injury to domestic production.  Application of safeguards obliges not to discriminate imports' origin, and compensate affected parts.

SPECIAL SAFEGUARD

An automatic measure applied to agricultural commodities when imports volume of the commodity subject to a special safeguard surpasses imports levels defined in a base period or when the import price of the product subject to safeguard falls down the prices level defined for a base period.

PRICE BAND SYSTEM

Is a mechanism for the stabilization of domestic prices by fixing a reference "floor" price and a reference "ceiling" price, between which it's hoped to maintain the import cost of a certain commodity.  Stabilization is reached increasing the general ad-valorem tariff when the international price falls down the floor level, and reducing such tariff up to zero, when the price increases over the ceiling.

Since February 1995, Ecuador has been applying the Price Band Andean System, as a statibilization mechanism of the harmonized import cost in the Andean subregion.  The band is applied to products originated from third countries not members of the Andean Community of Nations.

BINDING CEILINGS

Maximum tariff which could be applied by the WTO member countries over an especific commodity.

FREE TRADE AREA

Economical integration form that eliminates tariff barriers to goods' trade among member countries.

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