2023

Custom Valuation

FRANCIS NDUNGU MUNYUI

HDB335-2320/2023

Kenya School of Revenue Authority

Question One
Principles
1. Safety Values
The principle of safety values allows WTO members to restrict trade where trade may
create other negative externalities related to the environment and human, animal and
plant health. Provisions to these principles include articles whose design facilitates the
achievement of non-economic objectives, articles that restrict trade protectionism in the
guise of environmental protection measures, and articles that allow for trade policy
interventions in response to economic conditions.
2. Reciprocity
Reciprocity is a principle introduced to reduce the occurrence of free riding and facilitate
market access. Although non-discrimination principle reduces favors, it is possible that a
nation grants favors to all other nations without earning favors in return. This is free
riding. By requiring reciprocity, the WTO hopes to push nations away from free riding.
Furthermore, this principle is designed to realize the gains from trade that can be
exploited when negotiated terms confer better outcomes than unilateral trade
liberalization.
3. Binding and Enforceable commitments
States are obliged to work towards the reduction of tariffs. Tariff reductions are
negotiated and then recorded. The states agree on the maximum amount that they may
set. This is then binding. This rate must also be extended to all GATT members.
4. Transparency
The enforcement of commitments requires access of information on the trade regimes
maintained by members. The agreement administered by the WTO incorporates
mechanisms designed to enable communication between members on issues thus
allowing exchange of views and restricts potential conflicts. Transparency allows the
WTO to facilitate trade by ensuring that member nations uphold WTO principles.
5. Nondiscrimination
The principle of national treatment requires that goods, once lawfully imported, will be
treated in the same manner as domestic goods. They must not be treated any less
favorably such as in relation to tax, consumer laws, regulations and requirements in
relation to the sale, offering for sale, marketing, transportation, distribution and use. It has
two major components: the (MFN) Most-Favored-Nation rule and the National treatment
principle.
QUESTION TWO
BDV, also known as the Brussels Value, is based on the normal price of the goods, which is the
price at which the goods would be sold in the ordinary course of trade under fully competitive
conditions. The BDV is an older method and is considered less transparent and more subjective,
as it relies on hypothetical values and may not accurately reflect the actual transaction value of
the goods. The ACV, also known as the Transaction Value Method, is based on the actual price
paid or payable for the goods when sold for export to the country of importation. It is a more
transparent and objective method, as it relies on the actual transaction value of the goods. The
ACV is part of the World Trade Organization's (WTO) valuation system and is widely accepted
by most countries.

QUESTION THREE
Outcomes of Uruguay Round:

Trade Liberalization
To promote trade liberalization, the Uruguay round cut tariffs around the world. The tariffs were
reduced and as a result of reduced tariffs, there was increase in world trade
Agriculture
Countries did agree to one thing: to make a transition away from quota restrictions on
agricultural commodity imports toward tariffs instead. The logic is that tariffs are more
transparent and would be easier to negotiate downward in future World Trade Organization
(WTO) rounds. A second concession countries made was to accept at least low levels of market
access for important commodities. For many countries, important food products had prohibitive
quotas in place

Clothing and textiles

The MFA specified quotas on exports from all major exporting countries to all major importing
countries. Essentially, it represented a complex arrangement of multilateral VERs. The MFA was
renewed periodically throughout the 1970s to 1990s, and it represented a significant setback in
the pursuit of trade liberalization. Thus, as a part of the Uruguay Round discussions, countries
agreed to a significant overhaul of the MFA. First, the agreement was brought under the control
of the WTO and renamed the Agreement on Textiles and Clothing (ATC). Second, countries
decided to phase out the quotas completely over a ten-year transition period ending on January 1,
2005.
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
IPR covers the protections of written materials (copyrights), inventions (patents), and brand
names and logos (trademarks). Most countries have established monopoly provisions for these
types of creations in order to spur the creation of new writing and inventions and to protect the
investments made in the establishment of trademarks. However, many of these protections have
been unequally enforced around the world, resulting in a substantial amount of counterfeiting
and pirating. To harmonize the IPR protections around the world and to encourage enforcement
of these provisions, countries created an IPR agreement called the Trade-Related Aspects of
Intellectual Property Rights Agreement, or TRIPS. The TRIPS intends to both encourage trade
and protect writers, inventors, and companies from the theft of their hard work and investments.
Changes in Administration
The most obvious outcome of the Uruguay round is the change in administration from General
Agreement on Tariffs and Trade (GATT) to World Trade Organization (WTO). Although the
GATT was a very successful agreement for regulating trade between nations, there was always a
need for a powerful international organization to govern international trade.

Since the year 1995, after the Uruguay round of GATT, WTO has replaced the administration of
GATT. In the rules of WTO, the updated version of the initially formed GATT agreement has
been incorporated. GATT was focused only on the trade of goods and neglected the trade of
services.

Tokyo Round Outcomes

Consultations and exchanges of information with respect to international trade in bovine meat.
Consultations, minimum export sales prices, and other arrangements regarding international
trade in cheese, milk powder, and some other dairy products.
Trade-distortive government subsidies and countervailing duties imposed to offset the effects of
such subsidies.
New international rules on dumping, or sales of goods in an export market at less than fair value,
through amendment of the existing international antidumping code.
Government procurement, requiring fairness and non-discrimination between imports and
domestically produced goods when specified government agencies buy products for their own
use.
Elimination of red tape and delay in the issuance of import licenses.
Rational, uniform, and fair methods for appraising the value of imported goods for the purpose
of assessing import duties.
Rules of fairness and non-discrimination in the development and use of product standards and
related tests and certifications.
The future treatment of agricultural trade within the international trading system.
Free trade and fair trading conditions for civil aircraft and aircraft parts imported goods for the
purpose of assessing import duties.