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CUSTOMS VALUATION EXERCISE  

Country Alpha  

Alpha is a developing country applying for accession to the WTO.  The tariff valuation of most manufactured products is based on either the worldwide price list received annually from foreign producers/distributors, or if that is not available, customs officials take the highest price available in the local market.  In cases where customs officials suspect under-invoicing, they usually add from 10 to 30% to the invoice value of imports for customs valuation purposes. 

Country Alpha’s import laws also specifies special valuation rules in the following circumstances:

  1. During the applicable growing seasons the value of citrus imports at 125 percent of the average price that like domestically produced citrus sold at the national wholesale market during the preceding week.
  2. Minimum import prices for customs valuation purposes must be used for rice, used clothes, and second-hand vehicles.
  3. For new clothing the following reference price must be used: (a) the higher of the price found in the Harrods on line catalogue (a luxury story in the UK ) or (b) the on-line catalogue of Neiman-Marcus (a luxury store in the United States ).
  4. For chemicals, the Alpha Selling Price (ASP) system is used whereby "competitive" chemical products are valued for customs purposes at the wholesale price of a like Alpha produced product.

Country Alpha has three principal ports of entry.  The Customs authorities at these ports have one computer for ten officers; the computers are not linked to the different ports and have access to the Internet only for two hours per day.  In addition, Alpha’s customs laws do not currently allow Customs officials to exams the books of importers and demand that importers produce documents.  The decision of the Director of Customs on all questions regarding valuation is final.  
   

Country Bravo

Country Bravo is a developing country that would like to export a wide-range of agricultural products, including oranges, to Country Alpha and has approximately the same growing season as Country Alpha.  
   

Country Charles

Country Charles is a developing country that produces a number of manufactured products that are competitive with those produced in Alpha.  Country Charles is an exporter of clothing, especially inexpensive clothing in large volumes at affordable fabrics.
   

Assignment:

What instructions should the trade ministers from countries Alpha, Bravo and Charles provide their WTO representatives regarding the accession of country Alpha to the WTO?  In particular, what provisions should seek to include in the working party report?

 

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