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The intent of this dictionary was to produce a broad listing of terms, which are commonly used in trade negotiations and especially within the context of the Free Trade Area of the Americas (FTAA) with a view to providing an information tool for the public at large. The dictionary is presented in the four official languages of the FTAA: English, Spanish, Portuguese and French.

The compilation does not attempt to present the entire universe of terms used nor does it seek to prejudge or to affect in any way definitions or approaches currently proposed by any country in any trade negotiation. In fact, many of the definitions included in the publicly-available Draft FTAA Agreement which are still the subject of difficult debates have been excluded from this dictionary. The definitions are based on widely available source material including other trade agreements.

An alphabetical listing of the terms is included to facilitate the use of the dictionary. The terms and their definitions are presented by general negotiating theme found in the FTAA and in other trade negotiations.

An electronic version of this document can be found on the following websites: IADB, OAS,  and ECLAC.




Ad valorem tariff A tariff which is imposed in percentage terms over the value of the good. For example, a 5% tariff, which means that the import tariff is 5% of the appraised value of the good in question.
Ad valorem equivalent When a tariff is fixed in specific or mixed terms, usually an “ad valorem equivalent” of the non ad valorem portion of the duty is calculated for reference purposes. There are several formulas for estimating the AVEs. One common approach is based on MFN trade dividing duties collected by Customs value.
Automatic import licensing Import licensing where approval of the application is granted in all cases, and is not administered in such a manner as to have restricting effects on imports subject to automatic licensing.
Drawback procedure Customs procedure which, when goods are exported, provides for a repayment (total or partial) to be made in respect of the import duties and taxes charged on the goods, or on materials contained in them or consumed in their production.
Duty-free shop Duty-free shop is a licensed warehouse that has obtained permission from the government to make sales free of customs duty, domestic taxes and excises, to persons traveling out of the country. Most of these shops are located in ports, airports, and international borders. There are normally two categories of duty-free shops, ‘outwards’ duty-free shops and ‘inwards’ duty-free shops. ‘Outwards’ duty-free shops are allowed to sell tax-free items to individuals departing a country. ‘Inwards’ duty-free shops are located within international airport terminals between the disembarkation gates and the customs processing areas. These shops can only sell duty and tax-free goods to arriving passengers. They are limited in the range of items that they can sell. Similarly, passengers are constrained in the amount of certain goods they can purchase.
Duty deferral program Any import scheme which includes provisions for the deferral in the payment of import duties such as those governing free zones, temporary importations under bond, bonded warehouses, “maquiladoras”, and inward processing programs.
Export processing zone A clearly delineated industrial estate which constitutes a free trade enclave in the customs and trade regime of a country, and where foreign and local manufacturing firms producing mainly for export benefit from a certain number of fiscal and financial incentives.
Harmonized Commodity Description and Coding System Harmonized Commodity Description and Coding System, generally referred to as “Harmonized System” or simply “HS”, is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). It comprises about 5,000 commodity groups, each identified by a six digit code, arranged in a legal and logical structure and is supported by well-defined rules to achieve uniform classification. The system is used by more than 177 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. The Harmonized System is governed by “The International Convention on the Harmonized Commodity Description and Coding System”.
Harmonized System See “Harmonized Commodity Description and Coding System”, see above.
Import licensing Administrative procedures requiring the submission of an application or other documentation (other than those required for customs purposes) to the relevant administrative body as a prior condition for importation of goods. WTO Agreement on Import Licensing Procedures.
Mixed tariff  A tariff which combines ad valorem and specific tariffs.
National treatment Legal provision that seeks to avoid discrimination and protectionism in the application of internal tax and regulatory measures. It normally states that, once imports have entered the territory of an importing country, 1) internal taxes must be applied equally to imports and the like domestic production, and 2) national regulations must not treat imports “less favorably” than similar domestic production. See Investment, page 33 and Services, page 39, where this text may have a slightly different meaning.
Non-automatic import licensing Licensing not falling within the definition of automatic import licensing. Non­automatic licensing is used to administer trade restrictions such as quantitative restrictions when justified within the international trade legal framework.
Non-tariff barriers Non-tariff measures that have a protectionist impact. Examples: quotas, tariff-rate quotas, licensing regimes, price bands.
Non-tariff measures All measures imposed on trade flows that are not tariff measures. Some of these measures may constitute non-tariff barriers.
Performance requirements A legal requirement imposed on producers of goods and/or services, which impose on them certain obligations. For instance, some trade agreements include the following performance requirements, among others: (i) that a given level or percentage of goods or services be exported; (ii) that domestic goods or services of the producing country granting a waiver of customs duties be substituted for imported goods or services; (iii) that a person benefiting from a waiver of customs duties purchase other goods or services in the territory of the producing country granting the waiver or accord a preference to domestically produced goods or services; (iv) that a person benefiting from a waiver of customs duties produce goods or provide services, in the territory of the producing country granting the waiver, with a given level or percentage of domestic content; or (v) a requirement that relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows. See Government Procurement, page 27 and Investment, page 34, where this text may have a slightly different meaning.
Specific tariff A tariff which is imposed in terms of specific monetary charges per unit or quantity of the imported good. For instance, $100 per metric ton of a given good.
Tariff-rate quota/ Tariff-quota A trade protection system by which a lower tariff rate is imposed on imports of specified quantities of a given product, and higher rates are imposed on imports that exceed those quantities. The size of the quota is normally defined by the government on a periodical basis, for instance, annually.
Voluntary export restraint A measure adopted by an exporting country by which it voluntarily agrees to limit the volume or value of exports of a given product to a particular importing country.