Customs Duty in Kenya

Chapter 3

Objectives of GATT-WTO

The GATT-WTO system is built on five core principles namely;

1. The unconditional most-favoured-nation(MFN) obligation

  1. This principle obliges a WTO Member to treat imports from a Member on an equal and non-discriminatory basis vis-à-vis all other Members’ imports. MFN treatment must be accorded to all imports from WTO Members, regardless of country of origin and regardless of whether the exporting Member negotiated reciprocal trade concessions with the importing Member.

  2. there are some exceptions to the MFN obligation. And the two outstanding exceptions are the GATT: XXIV

    1. exception for Free Trade Areas and Customs Unions, and
    2. the exception for special and differential treatment of developing countries.
2. Tariff bindings

Tariff bindings or tariff concessions may either be ‘applied’/‘actual’ or ‘bound’.

  1. An ‘applied’ tariff rate is that rate which a Member actually imposes on the category of imported merchandise
  2. A “bound” tariff is a level of protection a Member has agreed NOT to exceed. In principle, if a WTO Member increases tariffs above the bound duty rate, other adversely affected Members have to be compensated for in the form of lowered tariffs on other items of interest to those Members. Failing compensation those Members will be entitled to retaliate by raising duties on goods of export interest to the Member raising its tariff.
3. The national treatment obligation

  • The principle of ‘National Treatment’ obliges WTO Members to treat imports no less favourably than the domestic like products respecting internal measures, and not to tax imports in excess of the amount of indirect taxes imposed on the like-domestic products.

4. The elimination of quantitative restrictions, and transparency of government regulations affecting trade @2014-2021 All rights reserved
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