ASIA-PACIFIC ECONOMIC COOPERATION (APEC) — A forum established as a vehicle for multilateral cooperation among the market-oriented economies of the Asia-Pacific region to better manage their growing interdependence and sustain economic growth. Begun in 1989 as an informal grouping of 12 Asia-Pacific economies (Australia, Brunei, Canada, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and the United States), APEC admitted the People's Republic of China, Chinese Taipei, and Hong Kong in November 1991, and Mexico and Papua New Guinea in November 1993. Chile became a full APEC member in 1994 and Peru, Russia, and Vietnam joined in 1998. APEC's annual meetings of foreign political leaders and economic ministers have often served as catalysts for further cooperation and integration among APEC member nations. The most important meetings of the group are the annual leaders summits, though APEC meetings are held throughout the year in a variety of spheres: economic, infrastructure, business, education, resources. The annual leaders summits have set the direction for APEC's work program and continued development into a multilateral regional economic forum. The 1993 Blake Island Summit brought the political leaders of the APEC nations together for the first time and, in combination with the 1994 Bogor Summit, firmly committed APEC members to creating a free trade and investment zone in the APEC region by 2020. The framework for achieving this goal was established by the 1995 Osaka Summit's Action Agenda and the 1996 Manila Action Plan. The 1997 Vancouver Summit saw the adoption of a plan of early voluntary sectoral liberalization (EVSL) in 15 market sectors (nine by 1998), the modernizing and harmonizing of customs systems throughout the region by 2002, and the creation of an APEC work program on electronic commerce. In addition to its work on furthering regional cooperation and development, APEC has focused closely on monitoring and ameliorating the Asian economic crisis via a cooperative growth strategy including such elements as expanded international financial assistance and further efforts toward corporate sector restructuring and free and open trade and investment. Current focuses of APEC include trade and investment liberalization and facilitation, strengthening markets, and increasing support for APEC among the business community and other groups. APEC is also working toward extending its EVSL agreement to non-APEC members through the WTO. See also Codes of Conduct; Countertrade; Customs; Customs Harmonization; Customs Union; Developed Countries; Developing Countries; Economic Development; Electronic Commerce; Foreign Investment; Free Trade; Free Trade Area Agreement; Harmonization; Liberalization; Multilateral; Multilateral Agreement; Multilateral Aid; Pacific Rim; Seattle Ministerial.

ASSOCIATED STATES — See ACP Countries; European Community; Lomé Convention.

ASSOCIATION AGREEMENT — See European Community.

ATA CARNET — An international customs document that is recognized as an internationally valid guarantee and may be used in lieu of national customs documents and as security for import duties and taxes to cover the temporary admission of goods and sometimes the transit of goods. The ATA (Admission Temporaire — Temporary Admission) Convention of 1961 authorized the ATA Carnet to replace the ECS (Echantillons Commerciaux — Commercial Samples) Carnet that was created by a 1956 convention sponsored by the Customs Cooperation Council. ATA Carnets are issued by National Chambers of Commerce affiliated with the International Chamber of Commerce, which also guarantees payment of duties in the event of failure to re-export. See also Codes of Conduct; Consular Invoice; Consular Formalities and Documentation; Customs; Customs and Administrative Entry Procedures; Customs Classification; Imports; Free Zone; Licensing; Liquidation; Nontariff Barriers; Port of Entry; Suspension of Liquidation; Tariff; Transit Zone; Valuation; World Customs Organization; World Trade Organization.

AUSTRALIA-NEW ZEALAND CLOSER ECONOMIC RELATIONS AGREEMENT (CER) — An agreement aimed at increasing trade links by liberalizing trans-Tasman trade, thereby allowing for more efficient use of each country's resources. Implemented on January 1, 1983, the CER has the ultimate goal of eliminating import quotas, tariffs, and import licensing requirements. The CER contains provisions to gradually reduce duties, quotas, and licensing requirements. It also provides for the elimination of domestic export incentive schemes in Australia-New Zealand transactions, extension of government purchases between the two countries, and harmonization of customs policies. See also Bilateral Trade Agreement; Binding; Export Quotas; Trade Agreement.

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Balance of Concessions Balance of Payments Balance of Payments Consultations Balance of Trade (BOT) Bank for International    Settlements (BIS) Banking Barter Basic Telecommunications    Services Agreement Basket of Currencies Beggar-Thy-Neighbor Policy Bern Convention Bern Union Bilateral Bilateral Aid Bilateral Investment Treaty (BIT) Bilateral Trade Agreement Bill Binational Panel Binding BIT Bogus Goods

Bond Bonded Goods Bonded Warehouse Border Tax Adjustments Bound Rates Bounties Boycott Break Bulk Bretton Woods Conference Bridging Credit Broker Brussels Ministerial Brussels Tariff Nomenclature (BTN) BTN Buffer Stocks Bulk Carrier Bureau of Export Administration    (BXA) Buy American Act Buy-Back Buy National Bias BXA

BALANCE OF CONCESSIONS — See Concession; Reciprocity.

BALANCE OF PAYMENTS — A tabulation of a country's credit and debit transactions with other countries and international institutions. These transactions are divided into two broad groups: current account and capital account. The main items included are exports and imports of goods and services (the balance of trade), foreign direct investments, intergovernmental loans, transfer payments, capital inflows and outflows, and changes in official gold holdings and foreign exchange reserves. See also Adjustment; Balance of Trade; Capital Account; Current Account; International Monetary Fund; Invisible Trade; Quantitative Restrictions; Transfer Payments; Visible Trade.

BALANCE-OF-PAYMENTS CONSULTATIONS — Consultations in accordance with Article XV of GATT, which requires coordination between the General Agreement on Tariffs and Trade and the International Monetary Fund to ensure that the trade and payments implications of any quantitative restrictions imposed for balance-of-payments reasons are fully analyzed within the respective jurisdictions of both organizations. Any contracting party that imposes such quantitative restrictions for balance-of-payments reasons is expected to hold consultations with other interested contracting parties. The framework agreement concluded during the Tokyo Round provided that any other trade restrictive measures imposed for balance-of-payments reasons should also be discussed in such consultations. See also Consultations; Contracting Party; Exchange Controls; Framework Agreement; General Agreement on Tariffs and Trade; International Monetary Fund; Prior Deposits; Quantitative Restrictions; Tokyo Round.

BALANCE OF TRADE (BOT) — A component of the balance of payments, the surplus or deficit that results from comparing a country's expenditures on merchandise imports with the receipts derived from its merchandise exports. See also Balance of Payments; Credit; Mercantilism.

BANK FOR INTERNATIONAL SETTLEMENTS (BIS) — An organization established at the Hague Conference in January 1930 to serve as a forum for international monetary and regulatory cooperation, as a bank for central banks, as a center for monetary and economic research, and as agent or trustee to facilitate the implementation of various international financial agreements. Initial members included six central banks and a U.S. financial institution. Membership currently includes 45 central banks. See also Credit; European Central Bank; European System of Central Banks; Foreign Exchange; Inflation; Interest; Loan; Reserve Currency.

BANKING — See Credit; Interest; Loan; Services.

BARTER — The direct exchange of goods for other goods, without the use of money as a medium of exchange and without the involvement of a third party. See also Countertrade; Money.

BASIC TELECOMMUNICATIONS SERVICES AGREEMENT — An agreement that contains specific commitments on market access and national treatment taken by 70 countries under the WTO General Agreement on Trade in Services in the area of basic telecommunications, which includes, but is not limited to, voice services, packet-switched data transmission services, circuit-switched data transmission services, telex services, telegraph services, facsimile services, and private leased circuit services. See also General Agreement on Trade in Services; Services; Uruguay Round; World Trade Organization.

BASKET OF CURRENCIES — See Par Value; Special Drawing Rights.

BEGGAR-THY-NEIGHBOR POLICY — A course of action through which a country tries to reduce unemployment and increase domestic output by raising tariffs and instituting nontariff barriers that impede imports, or by accomplishing the same objective through competitive devaluation. Countries that pursued such policies in the early 1930s found that other countries retaliated by raising their own barriers against imports, which, by reducing export markets, tended to worsen the economic difficulties that precipitated the initial protectionist action. The United States� Smoot-Hawley Tariff Act of 1930 is often cited as a conspicuous example of this approach. See also Column 2 Rates; Devaluation; Protectionism; Retaliation; Tariff Act of 1930.

BERN CONVENTION — The International Union for the Protection of Literary and Artistic Works, signed at Bern, Switzerland, on September 9, 1886, with additional protocols and revisions signed in 1914, 1928, 1948, 1967, and 1971. The Bern Convention is a major multinational treaty concerning the scope of copyright protection to be afforded works prepared by foreign persons whose countries are signatories. It provides copyright protection in the form of national treatment and also requires member countries to provide certain minimum protections for specified types of works. For instance, it requires that literary works be protected for the life of the author plus 50 years and forbids imposition of formalities (for example, a copyright notice) as a condition of protection. The other major copyright treaty, the Universal Copyright Convention, is somewhat less protective of the rights of authors. After decades of refusing to join, the United States became a signatory of the Bern Convention in 1989. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Commercial Counterfeiting; Copyright; Intellectual Property; Knowledge-Based Industry; National Treatment; Property; Trademark; Trafficking in Counterfeit Goods and Services; World Intellectual Property Organization.

BERN UNION — See Bern Convention.

BILATERAL — An agreement or arrangement involving two sides or parties. See also Multilateral; Unilateral.

BILATERAL AID — Development assistance provided directly by a donor country to a recipient country (as opposed to aid channeled through a multilateral institution). See also Additionality; Agency for International Development; Developing Countries; Least Developed Countries; Multilateral Aid; Newly Industrializing Countries; Official Development Assistance; Overseas Private Investment Corporation.

BILATERAL INVESTMENT TREATY (BIT) — An agreement establishing the terms and conditions for private investment by nationals and companies of one country in the country of the other.

BILATERAL TRADE AGREEMENT — A formal or informal agreement involving commerce between two countries. See also Consultations; Trade Agreement.

BILL — A document giving evidence of indebtedness of one party to another, as, for example, a written order for goods that can be used as security for a loan to the supplier of the goods from a bank, or a security such as a Treasury bill. See also Euro-Dollars; Medium of Exchange; Security; Trade Agreements Act of 1934.

BINATIONAL PANEL — A panel established under the U.S.-Canada Free Trade Agreement to assist in the resolution of trade disputes. Subsequently incorporated into the North American Free Trade Agreement, review by the binational panel is the principal mechanism to settle disputes among or between the United States, Canada, and Mexico arising from antidumping duty, countervailing duty, and final injury determinations. Chapter 19 of the NAFTA proffers the binational panel review as an alternative to judicial review. To this end, in article 1904, the signatories have established rules of procedure, as well as an "extraordinary challenge procedure," to safeguard against any panel impropriety or gross error. In addition, article 1903 provides the opportunity for a party to request that any amendment to another party's antidumping or countervailing duty law be referred to a panel for a declaratory opinion on whether the amendment is consistent with the NAFTA. See also Bilateral Trade Agreement; Dispute Settlement; North American Free Trade Agreement; U.S.-Canada Free Trade Agreement; U.S.-Canada Trade Commission.

BINDING — A provision in a trade agreement that no tariff rate higher than the rate specified in the agreement will be imposed during the life of the agreement. See also Bound Rates; Compensation; Concession; Tariff.

BIT — See Bilateral Investment Treaty.

BOGUS GOODS — See Commercial Counterfeiting.

BOND — An interest-bearing certificate issued by a government or a business promising to pay the holder a specified sum on a specified date. A bond is a common means of raising capital. See also Capital Market; Credit; Customs Bond.

BONDED GOODS — Imported goods stored in a bonded warehouse, usually after the owners of the goods have deposited a bond guaranteeing that the duty will be paid when and if the goods are withdrawn for domestic sale. See also Bonded Warehouse; Customs Bond; Free Zone.

BONDED WAREHOUSE — A secure storage area in which goods subject to excise taxes or customs duties are stored pending payment of taxes or duties. See also Bonded Goods; Customs Bond; Free Zone.

BORDER TAX ADJUSTMENTS — The remission of indirect taxes on exported goods, including sales taxes and value-added taxes, designed to ensure that national tax systems do not impede exports, and the imposition of domestic taxes on imported goods, to ensure that they do not receive preferential treatment as compared with domestically produced goods. Frontier adjustments on exports are permitted for indirect taxes under Articles VI and XVI of GATT, but not for direct taxes (such as income taxes assessed on producing firms). The U.S. government makes little use of border tax adjustments, since it relies more heavily on income (or direct) taxes than do most other governments, and since most goods exported from the United States are not subject to indirect taxes. See also Direct Tax; Indirect Tax; Tax; Value-Added Tax.

BOUND RATES — Tariff rates resulting from GATT negotiations that are incorporated in a country's schedule of concessions and are thus enforceable as an integral element of the WTO regime. If a WTO member raises a tariff to a higher level than its bound rate, the major beneficiaries of the earlier binding have a right to receive compensation, usually in the form of reduced tariffs on other products they export to the country. If the beneficiaries do not receive such compensation, they may retaliate by raising their own tariffs against an equivalent value of the original country's exports. See also Binding; Compensation; Concession; General Agreement on Tariffs and Trade; Retaliation; Tariff; World Trade Organization.

BOUNTIES — Payments by governments to producers of goods, often to strengthen the producer's competitive position. See also Countervailing Duties.

BOYCOTT — A refusal to deal commercially or otherwise with a person, firm, or country. See also Antiboycott Legislation; Coordinating Committee for Multilateral Export Controls; Embargo; Export Administration Act of 1979.

BREAK BULK — Loose, noncontainerized cargo imported in bulk, usually because of size or weight considerations (such as raw materials or oversized machinery). These shipments are often separated into individual lots and routed to different destinations and/or importers.

BRETTON WOODS CONFERENCE — A meeting of central bank economists and other government officials, formally known as the United Nations Monetary and Financial Conference, that took place in Bretton Woods, New Hampshire, in July 1944. The conference was convened to consider alternative proposals put forward by British and American financial experts relating to international payments problems, the economic reconstruction needs of Europe upon the conclusion of World War II, and the need to ensure stable exchange rates and free convertibility of currencies. The compromise solution negotiated at Bretton Woods led to the establishment of an International Monetary Fund and an International Bank for Reconstruction and Development (the World Bank). The presumed need for an International Trade Organization was also informally considered at Bretton Woods. See also General Agreement on Tariffs and Trade; International Monetary Fund; World Bank.

BRIDGING CREDIT — Borrowing ahead of receiving payment for a sale, or short-term credit to a customer pending his or her receipt of funds from another source. See also Credit.

BROKER — An intermediary between a buyer and a seller in a highly organized market, as in the case of a stockbroker. See also Capital Market; Market; Security.

BRUSSELS MINISTERIAL — An EC-hosted ministerial meeting scheduled for Brussels, December 3-7, 1990, to conclude the Uruguay Round of multilateral trade negotiations. However, discussions broke down, and the conclusion of the round was postponed. See also GATT Ministerial Meeting of 1982; General Agreements on Tariffs and Trade; Montreal Ministerial; Punta del Este Ministerial; Seattle Ministerial; Uruguay Round; World Trade Organization.

BRUSSELS TARIFF NOMENCLATURE (BTN) — See Customs Cooperation Council Nomenclature.

BTN — See Customs Cooperation Council Nomenclature.

BUFFER STOCKS — Commodity stockpiles managed in such a way as to moderate price fluctuations. Goods may be sold from a stockpile when prices reach or approach predetermined ceiling prices, and they may be purchased for the stockpile when prices reach or approach predetermined floor levels. Rubber and cocoa are among the commodities considered most likely to benefit from buffer stocks, and international commodity agreements exist for both of these products. See also Commodity; Common Fund; International Commodity Agreement; Strategic Stockpiles.

BULK CARRIER — A transporter (usually an ocean-going vessel) of large, heavy cargoes. "Dry" cargoes are usually mineral ores (such as phosphates or manganese), as opposed to "liquid hydrocarbons," a phrase that usually refers to petroleum.

BUREAU OF EXPORT ADMINISTRATION (BXA) — The branch of the International Trade Administration of the U.S. Department of Commerce that is responsible for, among other tasks, administering the Export Administration Act of 1979. See also Antiboycott Legislation; Export Administration Act of 1979; U.S. International Trade Administration.

BUY AMERICAN ACT — U.S. legislation passed in 1933 that mandates preference for the purchase of domestically produced goods over foreign goods in U.S. government procurement. The president has the authority to waive the Buy American Act within the terms of a reciprocal agreement or otherwise in response to the provision of reciprocal treatment to U.S. producers. Under the 1979 GATT Government Procurement Code, the U.S.-Israel FTA, the U.S.-Canada FTA, and the WTO Agreement on Government Procurement, the United States provides access to the government procurement of certain U.S. agencies for goods from the other parties to those agreements. Other "buy-national" legislative provisions exist separately from the Buy American Act requirements. See also Agreement on Government Procurement; Government Procurement Policies and Practices; U.S.-Israel Free Trade Agreement; U.S.-Canada Free Trade Agreement.

BUY-BACK — See Countertrade.

BUY NATIONAL BIAS — See Government Procurement Policies and Practices.

BXA — See Bureau of Export Administration.

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C&F Cairns Group CAP Capital Capital Account Capital Goods Capital Market Caribbean Basin Initiative Cargo Sharing Carnet Cartel CBI CCC CCCN Ceiling Price Central Planning CEP CER Certificate of Origin CET CFR CFTA CIF CIP CIT Clearing Agreements COCOM Codes of Conduct Collateral Column 1 Rates Column 2 Rates COMECON Commercial Counterfeiting Commercial Paper Commission of the European    Community Commodity Commodity Agreement Commodity Credit Corporation Commodity Exchange Commodity Stockpiles Common Agricultural Policy Common External Tariff Common Fund Common Market Commonwealth of Independent    States Comparative Advantage Compensation Compensation Trade Compensatory Finance Compensatory Tariff Reductions Competition Policy Competitive Competitive Devaluation Competitive Need Compound Tariff Concession

Concessional Aid Conditional Most-Favored-Nation    Treatment Conditionality Constructed Export Price Constructed Value Consular Formalities and    Documentation Consular Invoice Consultations Consulting Services Consumer Goods Consumer Preference Consumers Consumption Consumption Tax Contracting Party Conventional Tariff Conversion Product Convertibility Coordinating Committee for    Multilateral Export Controls Copyright Core Commodities Core Labor Standards Cost and Freight Cost, Insurance, and Freight Cotton Textiles Council for Mutual Economic    Assistance Council of the European Community Council of the European Union Council of Ministers Counterpurchase Contracts Countertrade Countervailing Duties (CVD) Country of Origin Certificate Court of International Trade (CIT) CPT Credit Creditor Clubs Currency Current Account Customs Customs and Administrative    Entry Procedures Customs Area Customs Classification Customs Cooperation Council Customs Cooperation Council    Nomenclature Customs Bond Customs Duty Customs Harmonization Customs Union Customs Valuation Code Customs Warehouse CXT

C&F — See CFR.

CAIRNS GROUP — A group of agricultural-exporting nations — comprising Australia, Argentina, Brazil, Canada, Chile, Colombia, Fiji, Hungary, Indonesia, Malaysia, New Zealand, the Philippines, Thailand, and Uruguay — established to develop a common negotiating position for the Uruguay Round. See also Multilateral Trade Negotiations; Uruguay Round.

CAP — See Common Agricultural Policy.

CAPITAL — Property or wealth that yields income expressed in terms of money. Also, the accumulated stock of tools, machinery, equipment, buildings, and other goods employed, in turn, to produce other goods and services. See also Capital Goods; Infrastructure; Interest; Money; Profit; Risk.

CAPITAL ACCOUNT — That portion of a country's balance of payments that includes the inward and outward flow of money for investment and international grants and loans (public and private). See also Balance of Payments; Current Account.

CAPITAL GOODS — Industrial products or other goods that are used in the creation of additional wealth, such as machine tools. Capital goods are sometimes called intermediate goods because they only indirectly satisfy human wants (as opposed to consumer goods, which satisfy human wants directly), and they are sometimes called producer goods, because they are used to produce other goods. See also Capital; Consumer Goods; Production.

CAPITAL MARKET — The market for longer-term loanable funds. The capital market in a country is not one institution; rather, it includes securities exchanges, underwriters, investment banks, and insurance companies that canalize supply and demand for long-term capital and claims on capital, especially when concentrated in such major financial centers as New York City and London. The marketing of securities is an important element in the efficient working of a capital market. See also Capital; Developing Countries; Insurance; International Finance Corporation; Market; Security; Underwriter; World Bank.

CARIBBEAN BASIN INITIATIVE (CBI) — A broad program to promote economic development through private sector initiative in Central America and the Caribbean islands. The goal is to expand foreign and domestic investment in nontraditional sectors, diversifying CBI country economies and expanding their exports. The major elements of the program are duty-free entry to the United States in perpetuity for a wide-ranging group of products; U.S. economic assistance to the region; continuing self-help efforts to improve investment climate and trade; a deduction on U.S. taxes for companies that hold conventions in qualifying CBI countries to increase tourism; and U.S. government, state government, and private sector promotion program support from other trading partners and from multinational development institutions. See also ACP Countries; Agency for International Development; Bilateral Aid; Developing Countries; Economic Development; Enterprise for the Americas Initiative; Liberalization; Lomé Convention; Multilateral Aid; North-South Trade; Official Development Assistance; Overseas Private Investment Corporation; Reverse Preferences; Soft Loan; Special and Differential Treatment; Tariff Quota.

CARGO SHARING — The reservation and division of maritime traffic between designated trading partners who agree that vessels owned or controlled by either will carry a specified percentage of the cargo moving between them.

CARNET — See ATA Carnet.

CARTEL — An alliance or arrangement among industrial, commercial, or state-controlled enterprises producing the same commodity, aimed at regulating the purchase, production, or marketing of the commodity. A cartel agreement is often accompanied by output and investment quotas. When a cartel gains monopoly power, it will normally seek to maximize profits by raising prices and limiting supply. See also Commodity; Monopoly; Organization of Petroleum Exporting Countries.

CBI — See Caribbean Basin Initiative.

CCC — See Commodity Credit Corporation.

CCCN — See Customs Cooperation Council Nomenclature.

CEILING PRICE — See Buffer Stocks.

CENTRAL PLANNING — See Non-Market Economy.

CEP — See Constructed Export Price.

CER — See Australia-New Zealand Closer Economic Relations Agreement.

CERTIFICATE OF ORIGIN — See Customs and Administrative Entry Procedures.

CET — See Common External Tariff.

CFR — An international commercial term (Incoterm) meaning "cost and freight." The term is used in international sales contracts to signify that the seller must pay the cost and freight necessary to bring goods to a port of destination, but that the risk of loss or damage passes from the seller to the buyer when the goods pass the ship's rail in the port of shipment. Because a CFR selling price includes the cost of the goods and freight but not the cost of insurance, this term of sale is often used when the government in an importing country requires that insurance be supplied by a company subject to its jurisdiction. Prior to the 1990 version of the Incoterms, C&F was used instead of CFR, with the same meaning. See also CIF; CIP; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB; Incoterms.

CFTA — See U.S.-Canada Free Trade Agreement.

CIF — An international commercial term (Incoterm), used in international sales contracts, meaning that the selling price includes all "costs, insurance, and freight" for any goods sold. The seller arranges and pays for all relevant expenses involved in shipping goods from their point of exportation to a given point of importation. In trade statistics, "CIF value" means that all figures for imports or exports are calculated on this basis, regardless of the nature of individual transactions. See also CFR; CIP; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB; CFR; Incoterms.

CIP — An international commercial term (Incoterm), meaning "carriage and insurance" that is used in international sales contracts to impose the same obligations on the seller as "carriage paid to" (CPT), with the exception that the seller is also responsible for contracting and paying for cargo insurance. Hence, in addition to this obligation, the seller will clear for export and pay the freight and all costs incurred for the carriage of goods to a destination named by the buyer. The risk of loss or damage passes to the buyer when the goods are delivered to the carrier. See also CFR; CIF; CPT; DAF; DDP; DDU; DEQ; DES; EXW; FAS; FCA; FOB; Incoterms.

CIT — See Court of International Trade.

CLEARING AGREEMENTS — See Countertrade.

COCOM — See Coordinating Committee on Multilateral Export Controls.

CODES OF CONDUCT — In general usage in trade law, any international agreement that prescribes or recommends standards of behavior by nation-states or multinational corporations deemed desirable by the international community. For example, the United Nations has encouraged the negotiation of several voluntary codes of conduct (meaning that they are not legally binding), including one that seeks to specify the rights and obligations of transnational corporations. More narrowly, "codes of conduct" refers to the six agreements that were negotiated during the Tokyo Round to liberalize and harmonize domestic measures that might impede or distort trade: the Agreement on Technical Barriers to Trade, or Standards Code; the Agreement on Government Procurement, or Government Procurement Code; the Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade, or Subsidies Code; the Agreement on Implementation of Article VII, or Customs Valuation Code; the Agreement on Import Licensing Procedures, or Import Licensing Code; and the Agreement on Implementation of Article VI, or Anti-Dumping Code. See also Agreement on Government Procurement; Agreement on Import Licensing Procedures; Agreement on Implementation of Article VI of GATT 1994; Agreement on Implementation of Article VII of GATT 1994; Agreement on Subsidies and Countervailing Measures; Agreement on Technical Barriers to Trade; Aircraft Agreement; Anti-Dumping Code; Articles of GATT; Consultations; Countervailing Duties; Customs; Customs Classification; Customs Valuation Code; Dispute Settlement; Domestic Subsidy; Export Subsidy; Government Procurement Policies and Practices; Liberalization; Licensing Code; Multilateral Agreement; Multinational Corporation; Nontariff Barriers; Restrictive Business Practices; Safeguards; Standards; Tariff; Tariff Schedules; Tokyo Round; Transparency; Valuation; World Customs Organization; World Trade Organization.

COLLATERAL — See Security.

COLUMN 1 RATES — U.S. tariff rates (nearly all of which are "bound" rates) established through trade negotiations. They are usually substantially lower than column 2 rates and apply to all countries to which the United States grants most-favored-nation treatment. See also Bound Rates; Column 2 Rates; Most-Favored-Nation Treatment.

COLUMN 2 RATES — U.S. statutory tariff rates, generally set by the Smoot-Hawley Tariff Act of 1930, as amended. These rates are substantially higher than column 1 rates. For countries receiving most-favored-nation treatment, they have been supplanted by lower tariffs established through concessions, which are set out in column 1 of the tariff schedule. Column 2 rates are currently assessed only on imports from countries that do not receive most-favored-nation treatment from the United States, all of which are state-trading nations. See also Column 1 Rates; Concession; Most-Favored-Nation Treatment; Tariff Act of 1930.

COMECON — See Council for Mutual Economic Assistance.

COMMERCIAL COUNTERFEITING — The production or marketing of goods with the intent of defrauding the purchaser by falsely conveying, directly or indirectly, that the goods are produced by a known and reputable manufacturer. Counterfeit goods are usually distinguished from bogus goods in that, in addition to replicating the legitimate good, they bear a forged trademark. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights includes provisions to discipline counterfeiting. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; General Agreement on Tariffs and Trade; Intellectual Property; Knowledge-Based Industry; Property; Trademark; Section 337; Special 301; Trafficking in Counterfeit Goods and Services; Uruguay Round; Uruguay Round Agreements Act; World Intellectual Property Organization; World Trade Organization.

COMMERCIAL PAPER — Short-term financial instruments that can be bought and sold, particularly promissory notes that call for the payment of specified amounts of money at a given time. See also Bond; Capital Market; Loan; Security.

COMMISSION OF THE EUROPEAN COMMUNITY — See European Commission.

COMMODITY — Broadly defined, any article exchanged in trade but most commonly used to refer to raw materials, including such minerals as tin, copper, and manganese, and bulk-produced agricultural products such as coffee, tea, and rubber. See also Buffer Stocks; Common Fund; Forward Market; International Commodity Agreement; Primary Commodity; Tropical Products.

COMMODITY AGREEMENT — See International Commodity Agreement.

COMMODITY CREDIT CORPORATION (CCC) — A public corporation attached to the U.S. Department of Agriculture that provides financial and other services associated with public price-support activities for certain agricultural commodities, including loans, guarantees, purchases, sales, storage, transport, and export programs. See also Export Enhancement Program.

COMMODITY EXCHANGE — See Forward Market.

COMMODITY STOCKPILES — See Buffer Stocks.

COMMON AGRICULTURAL POLICY (CAP) — A comprehensive system of production targets and market regulations adopted by the European Community covering most agricultural goods produced within the EC. Its purposes are to achieve fair and rising standards of living for the farm populations of member states, stable agricultural markets, and increased farm productivity and food security within the EC. To achieve these objectives, the CAP relies on uniform prices and the free circulation of agricultural goods among member states; preferences for agricultural products produced within the EC; the imposition of variable levies on imported goods to bring their prices to the level of EC prices; and subsidization of exports to countries outside the EC. (In practice, agricultural prices sometimes vary from one member state to another, principally because exchange rates applied to goods moving from one country to another do not always reflect market exchange rates.) The European Community finances the CAP through receipts from customs duties, including variable levies, and the value-added tax. See also Conversion Product; Deficiency Payments; Domestic Subsidy; European Community; Export Subsidy; Restitutions; Threshold Price; Value-Added Tax; Variable Levy.

COMMON EXTERNAL TARIFF (CET or sometimes CXT) — A tariff rate uniformly applied by a common market or customs union, such as the European Community, to imports from countries outside the union. For example, the European internal market is based on the principle of a free internal trade area with a common external tariff [sometimes referred to in French as the Tariff Extérieur Commun (TEC)] applied to products imported from non-member countries. "Free trade areas" do not necessarily have common external tariffs, and free trade agreements seldom have common external tariffs. See also Customs; Customs Area; Customs Union; European Community; Free Trade Area Agreement; Free Trade Area of the Americas; Free Zone; General Agreement on Tariffs and Trade; Kyoto Convention; MERCOSUR; North American Free Trade Agreement; Tariff; Tariff Schedules; Trade Diversion; U.S.-Canada Free Trade Agreement.

COMMON FUND — An international institution designed as the centerpiece of the UNCTAD Integrated Program for Commodities. Its first account (sometimes called its "first window" and financed from mandatory contributions of member governments) provides funds to help finance buffer stocks maintained under international commodity agreements to stabilize commodity prices. Its second account (sometimes called its "second window" and largely financed by voluntary contributions) supports research and development and export promotion for selected commodities. See also Buffer Stocks; International Commodity Agreement; United Nations Conference on Trade and Development.

COMMON MARKET — See Customs Union; European Coal and Steel Community; European Community.

COMMONWEALTH OF INDEPENDENT STATES (CIS) — A political group comprising the following independent nations formerly a part of the Soviet Union: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

COMPARATIVE ADVANTAGE — A central concept in international trade theory that holds that a country or a region should specialize in the production and export of those goods and services that it can produce relatively more efficiently than other goods and services, and that it should import those goods and services in which it has a comparative disadvantage. This theory was first propounded by David Ricardo in 1817 as a basis for increasing the economic welfare of a population through international trade. The comparative advantage theory normally favors specialized production in a country based on intensive utilization of those factors of production in which the country is relatively well endowed (such as raw materials, fertile land, or skilled labor), and perhaps also the accumulation of physical capital and the pace of research. See also Competitive; Efficiency; Exports; Imports; Structural Change; Welfare.

COMPENSATION — The principle, central to GATT and the WTO, that any country that raises a tariff above its bound rate, withdraws a binding on a tariff, or otherwise impairs a trade concession must lower other tariffs or make other trade concessions to compensate for the disadvantage suffered by countries whose exports are affected. See also Binding; Bound Rates; Concession; Consultations; Dispute Settlement; General Agreement on Tariffs and Trade; Section 201; Understanding on Rules and Procedures Governing the Settlement of Disputes; World Trade Organization.

COMPENSATION TRADE — See Countertrade.

COMPENSATORY FINANCE — A loan or transfer of financial resources on concessional terms to a country when its export receipts — either total receipts from merchandise exports or receipts from a component of total exports, such as an individual commodity or a stated group of commodities — fall below a predetermined level. The loan, to be repaid according to a previously agreed formula, is intended to stabilize the country's export receipts over an indicated period. Compensatory arrangements exist under the International Monetary Fund and the Lomé Convention. See also Commodity; International Monetary Fund; Lomé Convention.

COMPENSATORY TARIFF REDUCTIONS — See Special and Differential Treatment.

COMPETITION POLICY — A framework of rules and regulations designed to foster the efficient allocation of resources as a means of promoting certain objectives, such as economic vitality, consumer welfare and/or other desirable public policy goals. Generally, antitrust laws and other competition laws and policies focus on efficient resource allocation at the national level. The extent to which restraints on competition, public or private, impair cross-border competition is being examined in a variety of international trade and economic forums such as the WTO. See also Antitrust; Export Trading Company; Monopoly; Restrictive Business Practices; Unfair Trade Practices; Webb-Pomerene Act.

COMPETITIVE — Refers to a product that can be sold in an appropriate quantity within a specific market because buyers consider its price and quality acceptable, taking account of support services, credit, delivery terms, guaranteed repairs, promotion, or a combination of such factors, in comparison with other available goods. See also Comparative Advantage; Efficiency; Export Promotion; Market; Monopoly; Safeguards; Structural Change; Tariff.

COMPETITIVE DEVALUATION — See Beggar-Thy-Neighbor Policy.

COMPETITIVE NEED — See Generalized System of Preferences.

COMPOUND TARIFF — A combination of an ad valorem tariff plus a specific tariff. Also called a "mixed tariff." See also Ad Valorem Equivalent; Ad Valorem Tariff; Specific Tariff; Tariff.

CONCESSION — A grant of a position, privilege, or right by a party to a negotiation to induce the other party to yield an equivalent position, privilege, or right. In GATT trade negotiations, a country normally made concessions in the form of reductions in its tariff and nontariff import barriers, in exchange for reductions in the barriers of other countries to its exports. A country's "schedule of concessions," accepted as part of its obligations to other contracting parties, would become an integral part of GATT under Article II of the General Agreement on Tariffs and Trade. GATT Article II continues to govern the obligations of country members under the WTO, where it is incorporated by reference into GATT 1994. See also Binding; Bound Rates; Compensation; Conditional Most-Favored-Nation Treatment; Escape Clause; General Agreement on Tariffs and Trade; Most-Favored-Nation Treatment; Negotiations; Offer List; Principal Supplier; Reciprocity; Safeguards; Section 301; Special 301; Super 301; Tariff; Tariff Schedules of the United States; World Trade Organization.

CONCESSIONAL AID — See Official Development Assistance.

CONDITIONAL MOST-FAVORED-NATION TREATMENT — The extension of concessions by an importing country to other countries that provide equivalent benefits for its exports. The United States applied conditional most-favored-nation treatment in its trade relations with other countries from 1789 to 1923, when it first applied unconditional most-favored-nation treatment in a commercial treaty with Germany. See also Agreement on Government Procurement; Concession; Government Procurement Policies and Practices; Most-Favored-Nation Treatment.

CONDITIONALITY — The set of conditions attached to the use of its resources by the International Monetary Fund, involving undertakings and adjustment policies that will restore a sustainable balance-of-payments position within a one- to three-year period. See also Adjustment; Balance of Payments; International Monetary Fund.

CONSTRUCTED EXPORT PRICE (CEP) — The price at which particular merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. Under U.S. antidumping law, dumping consists of sales of merchandise exported to the United States at less than fair value, when such sales materially injure or threaten material injury to producers of like merchandise in the United States. The determination that sales have been made at less than fair value involves a comparison of "normal value" — the price at which the merchandise is sold within the exporting country or to third countries (or a "constructed value") — and the "U.S. price" — the price at which the merchandise is sold in the U.S. market. The U.S. price may be derived either from the "export price" (EP) or the "constructed export price" (CEP). The price used to establish the CEP can be adjusted to take into account certain costs, charges, taxes, duties, commissions, and expenses. The term "CEP" was introduced into U.S. antidumping law by the Uruguay Round Agreements Act (URAA) in implementation of the WTO Agreement concluded during the Uruguay Round. The term CEP replaces the term "exporter's sales price" (ESP), which was its counterpart under pre-URAA law. See also Agreement on Implementation of Article VI of GATT 1994; Anti-Dumping Code; Dumping; Export Price; Normal Value; United States Price; Uruguay Round; Uruguay Round Agreements Act; World Trade Organization..

CONSTRUCTED VALUE — See Dumping.

CONSULAR FORMALITIES AND DOCUMENTATION — Certain documents or procedures required by some countries before their customs authorities will permit goods produced in other countries to enter their markets, such as special invoices approved by a consul or another official of the importing country. These procedures impede trade, particularly when fees are charged for the authorizations. The number of countries that apply consular formalities has declined in recent years, and most countries that still apply them are developing countries. See also ATA Carnet; Codes of Conduct; Consular Invoice; Customs; Customs and Administrative Entry Procedures; Customs Classification; Free Zone; Imports; Licensing; Liquidation; Nontariff Barriers; Port of Entry; Quarantine, Sanitary, and Health Laws and Regulations; Suspension of Liquidation; Tariff; Tokyo Round; Transit Zone; Valuation; World Customs Organization; World Trade Organization.

CONSULAR INVOICE — See Consular Formalities and Documentation; Customs and Administrative Entry Procedures.

CONSULTATIONS — Formal discussions between two or more parties to an agreement with respect to their rights under the agreement. Typically, consultations are requested by a party that believes that its rights under an agreement have been nullified or impaired and are the first — and often mandatory — step in dispute settlement. If consultations are unsuccessful in resolving the dispute within a specified time, the dispute normally is submitted to a panel for a ruling. The most important multilateral agreements providing for consultations are the WTO's Understanding on Rules and Procedures Governing the Settlement of Disputes and GATT Articles XXII and XXIII. See also Article 23 (GATT Article XXIII); Balance-of-Payments Consultations; Compensation; Dispute Settlement; Panel of Experts; Understanding on Rules and Procedures Governing the Settlement of Disputes; World Trade Organization..

CONSULTING SERVICES — See Services.

CONSUMER GOODS — Goods that directly satisfy human desires (as opposed to capital goods). An automobile used for pleasure is considered a consumer good. An automobile used by a business person to deliver wares is considered a capital good. See also Capital Goods; Consumers; Goods.

CONSUMER PREFERENCE — See Demand; Structural Change.

CONSUMERS — Individuals or groups that use economic goods and services, thus deriving utility from them. See also Consumer Goods; Utility.

CONSUMPTION — The purchase and utilization of goods or services for the gratification of human desires or in the production of other goods or services. The consumer may be an individual, a business firm, a public body, or other entity. See also Consumers; Demand; Goods; Production; Services; Utility.

CONSUMPTION TAX — See Excise Tax.

CONTRACTING PARTY — A country or economic entity that has adhered to the General Agreement on Tariffs and Trade, thereby accepting the body of specified obligations and benefits contained therein. The signatories to the GATT are referred to in GATT documents as the CONTRACTING PARTIES, in full capital letters, when they act collectively within the framework of the GATT. The corresponding term for entities that have adhered to the WTO Agreement is "Member." See also General Agreement on Tariffs and Trade; Protocol of Provisional Application; World Trade Organization.

CONVENTIONAL TARIFF — A tariff established through a "convention" (or international agreement) resulting from tariff negotiations and, hence, not subject to modifications by national action. See also General Tariff.

CONVERSION PRODUCT — A product, such as pork, eggs, or poultry, whose price is affected under the EC�s Common Agricultural Policy by the price of feed grains. Its value is determined by the feed cost per unit produced. See also Common Agricultural Policy.

CONVERTIBILITY — A characteristic of a currency when it may be legally exchanged by its holder for other currencies through banks in the issuing country. See also Currency; International Monetary Fund.

COORDINATING COMMITTEE FOR MULTILATERAL EXPORT CONTROLS (COCOM) — A committee consisting of representatives from all NATO countries (except Iceland) that, between 1949 and 1994, coordinated policies restricting exports of products of potential strategic value to the former Soviet Union and certain other countries. Created in 1949, the committee not only reviewed military technology transfer for potential embargo but also tried to anticipate the end use of products manufactured for civilian purposes, such as computers and transistors. For reasons including the disintegration of the Soviet Union and the goal of assisting economic and political reform in Russia and the Newly Independent States, the COCOM partners agreed in 1993 to end the Cold War regime effective March 31, 1994, and to work toward a new arrangement to enhance transparency and restraint in exporting conventional weapons and sophisticated technologies to countries whose behavior is cause for serious concern and to regions of potential instability. The successor regime to COCOM is the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, which began operations in September 1996 and is headquartered in Vienna, Austria. See also Boycott; Embargo; Export Administration Act of 1979; Wassenaar Arrangement.

COPYRIGHT — An exclusive right conferred by a government for a specified period to the creator of literary or artistic works such as books, maps, articles, drawings, charts, photographs, musical compositions, motion pictures, recordings, or computer programs. The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights incorporates all substantive trade-related protection afforded under the Bern Convention for the Protection of Literary and Artistic Works, clarifying that computer programs are protected as literary works and compilations of databases as intellectual creation. Protection extends for the duration of the life of the author plus 70 years, and includes rights of translation, reproduction, public performance, broadcasting, adaptation and arrangement, and rental. See also Agreement on Trade-Related Aspects of Intellectual Property Rights; Bern Convention; General Agreement on Tariffs and Trade; Intellectual Property; Knowledge-Based Industry; National Treatment; Omnibus Trade and Competitiveness Act of 1988; Property; Section 337; Special 301; Technology; Technology Transfer; Uruguay Round; Uruguay Round Agreements Act; World Intellectual Property Organization; World Trade Organization.

CORE COMMODITIES — See Integrated Program for Commodities.

CORE LABOR STANDARDS — Core labor standards are human rights agreed by the International Labor Organization and other groups to include freedom of association, the right to organize and bargain collectively, a prohibition on forced labor, a prohibition on discrimination in employment, and a prohibition on exploitive child labor. Founded in 1919, the ILO is the United Nations� specialized agency established to promote social justice and internationally recognized human and labor rights. See also United Nations Development Program; Workers' Rights.

COST AND FREIGHT — See CFR.

COST, INSURANCE, AND FREIGHT — See CIF.

COTTON TEXTILES — See Multi-Fiber Arrangement Regarding International Trade in Textiles; Textiles.

COUNCIL FOR MUTUAL ECONOMIC ASSISTANCE (COMECON) — An intergovernmental organization established in 1949 to coordinate the economies of member states, consisting of the Soviet Union, Bulgaria, Czechoslovakia, the German Democratic Republic (East Germany), Hungary, Mongolia, Poland, Romania, Cuba, and Vietnam. The purpose of the council, according to its charter, was to improve economic cooperation among participating countries and to accelerate their economic and technological progress. This organization was formally disbanded in June 1991. See also Group D.

COUNCIL OF THE EUROPEAN COMMUNITY — See European Community.

COUNCIL OF THE EUROPEAN UNION — Usually referred to as the Council of Ministers, one of the official institutions of the European Union. (It should not be confused with the European Council of the European Union.) While the European Commission is charged with proposing legislation, the Council of Ministers has the power to adopt it, although in certain cases only with the approval of the European Parliament. Depending on the matter at issue, the Council of Ministers must take decisions either by qualified majority voting or by unanimity. The Council of Ministers is made up of representatives — usually government ministers — from all EU member states. As a result, the council is a forum in which EU member states attempt to assert their interests. The Council of Ministers, which is based in Brussels, Belgium, addresses the major areas of EU policy, including agriculture, economy, environment, foreign affairs, finance, industry, and transport. See also European Community; European Commission; European Council; European Parliament; European Union.

COUNCIL OF MINISTERS — See Council of the European Union.

COUNTERPURCHASE CONTRACTS — See Countertrade.

COUNTERTRADE (CT) — Arrangements under which the sale of goods or services from one country to another are linked to sales in the opposite direction. Countertrade arrangements frequently characterize East-West trade. Such transactions include:

• Counterpurchase contracts that stipulate that the vendor must purchase goods from the importer equivalent in value to a specified percentage of the value of the exported goods;
  
• Reverse countertrade contracts that require an importer (a U.S. buyer of machine tools from Eastern Europe, for example) to export goods equivalent in value to a specified percentage of the value of the imported goods — an obligation that can be sold to an exporter in a third country;
  
• Buy-back (or compensation) arrangements through which a company selling equipment, licenses, technology, or a turnkey plant agrees to accept in full or partial payment products manufactured with such equipment, licenses, technology, or plant;
  
• Clearing agreements between two countries that agree to purchase specific amounts of each other's products over a certain period of time, using a designated "clearing currency" in the transactions;
• Switch arrangements that permit the sale of unpaid balances in a clearing account to be sold to a third party, usually at a discount, that may be used for producing goods in the country holding the balance;
  
• Swap schemes through which products from different locations are traded to save transportation costs (for example, Russian oil may be swapped for oil from a Latin American producer, so the Russian oil is shipped to a country in South Asia, while the Latin American oil is shipped to Cuba);
  
• Barter arrangements through which two parties directly exchange goods deemed to be of approximately equivalent value without any flow of money taking place.