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Sectoral Tariff Initiatives

What are sectoral initiatives?

Tariff reductions via mathematical formula cuts (“Formula”) will be complemented by sectoral tariff initiatives. The goal of these sectoral initiatives is to fully eliminate or harmonize global tariffs in specific industry areas. There are two main modes of tariff liberalization through sectoral initiatives: 1) complete tariff elimination in a sector, or "zero-for-zero"; and 2) harmonization of tariffs, whereby all participants agree to reduce tariffs to the same level.

What is the history of sectoral initiatives?

During the Uruguay Round, WTO Members discussed the elimination of duties among major trading countries as a means to achieve broader liberalization. Zero-for-zero discussions focused on a broad range of sectors. Consensus was reached among key WTO Members to eliminate or harmonize tariffs in the following sectors: agricultural equipment, beer, brown distilled spirits, chemicals, construction equipment, furniture, medical equipment, pharmaceuticals, paper, steel, and toys. The success of these sectoral initiatives in the Uruguay Round prompted senior trade officials to pursue sectoral initiatives as a component of the Doha Round.

What is the status of sectoral initiatives in the Doha Round?

The United States, guided by Trade Promotion Authority, is pursing sectoral initiatives in industries of economic importance to U.S. manufacturers, exporters, and workers. Additionally, the Doha Mandate states the importance of tariff reductions in products of export interest to developing countries and environmental goods.

In July 2004, senior trade officials from WTO Member countries agreed that: “a sectoral tariff component, aiming at elimination or harmonization is another key element to achieving the objectives. . . of the Doha Ministerial Declaration with regard to the reduction or elimination of tariffs, in particular on products of export interest to developing countries.”

Review the process and details surrounding the formation of the Information Technology Agreement, which serves as a model for sectoral initiatives in the Doha Round.

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