Thread by @Jim_Cornelius

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC A Primer.

The WTO is basically a club and the rulebook is GATT (General Agreement on Tariffs and Trade). Members of the WTO are obliged to treat every other member the same. This is called the Most Favoured Nation Rule. Article I GATT.

wto.org/english/docs_e…

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC Under MFN that means, bar some exceptions, that a member country has to treat China the same as it treats Bangladesh.

But there are exceptions. Mainly:

1. Customs Unions

2. FTAs

3. Developing countries.

1 & 2 are part of GATT Article XXIV.

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC The tariffs applied under Art I of GATT are MFN tariffs.

An FTA is an agreement to remove tariff and non-tariff barriers (up to a point) but no harmonisation of MFN tariffs to 3rd countries.

A CU is similar but members operate as a bloc with a unified external MFN tariff.

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC Under a WTO sanctioned FTA tariffs must be eliminated on substantially all (typically 90-95%) of goods.

FTAs didn't really get going until the 1990s before then the focus was on multilateral reductions at the WTO level.

The EU has more FTAs than any other country or bloc.

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC I mentioned the 3rd exception. Countries can break the MFN rule for imports from developing countries. General System of Preferences (GSP).

The EU's version of GSP includes total tariff elimination for countries on the UN's Least Developed Country list.

gspevaluation.com/wp-content/upl…

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC All of the countries in red are on EBA so all exports from these countries bar weapons are unilaterally exempt from customs duty to the EU.

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC So for the coffee tariffs shown here, the rate is either 7.5% the MFN tariff for countries with no deal; 2.6% for countries on standard GSP or 0% for countries with a trade deal, or least developed countries on EBA.

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC Well Colombia is shown as 0% because it has an FTA with the EU. The Andean Community (with Peru and Ecuador) agreement. The others on 0% are either EBA or with an FTA (some at listed as the bloc agreement) others as an Economic Partnership Agreement (EPA)

https://twitter.com/stevefc_cox/status/1107419040220413952

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC This is the full 5073-page text of Trade Agreement between the EU and Colombia & Peru. Ecuador was added later. assets.publishing.service.gov.uk/government/upl…

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC Section B contains the tariff elimination schedule for goods originating in Colombia.

"..duties on goods originating in Colombia .. in the tariff lines in staging category "0" .. shall be eliminated entirely [and] free of duty ... on the date this Agreement enters into force"

@stevefc_cox @hoddydod70 @DeborahMeaden @EmporersNewC Page 1016 shows the tariffs for coffee under HS code 0901 (coffee). The left column is the MFN rate. The right column shows the effect of the FTA and category 0. thus duties entirely eliminated by the FTA.

assets.publishing.service.gov.uk/government/upl…