Tarrif - Instrument of National Trade Policy

International Trade
Written Report
Tariff – Instrument of National Policy
By:
Norafel Arquiza
Jebie Mae Olhon
Euverly Pintac
Kimberly Kate Siso
Submitted to:
Mrs. Rosalia Equico – Celestiano
August 2019
TARIFF
 is a tax imposed by one country on the goods and services imported from another country
 as a system is looked upon as an instrument of national commercial policy
 are generally intended to afford protection to domestic infant industries
Kinds based upon their purpose:

 Tariff for Revenue - imposed for the primary purpose of raising revenue
 Tariff for Protection - is imposed for the purpose of reducing imports
Kinds based on the manner by which rates of duties are established:

 Autonomous Tariff System – rates of customs duties are established by legislative action
examples of what are described as rigid tariffs
 Conventional Tariff System – result of conventions or agreements and not only easy to
amend since it change the rates of existing duties, but are less permanent in character
According to schedule:
 Single-Schedule (unilinear/one-line)
– imposes the same rates on imported goods of the same nature and kind regardless of the
countries of origin
 Double Schedule (minimum and maximum)
– provides for two different rates of duties applicable on every particular good imported
into the country, one setting forth the minimum rate and the other, the maximum rate
- it is intended for bargaining and obtaining concessions
 Multiple Schedule (multiple linear/three line)
– specifies different rates of import duties applicable to different countries
Generally utilize the following rates of import duties:

o Preferential – extended to goods coming from countries belonging to British
Commonwealth
o Intermediate – applied to goods coming from countries with which the
importing country has an existing trade agreement
o General – those which are being imported other than those from sister-nations
as well as those having no existing trade agreements with the importing country
Tariff enactment or establishment has certain matters to be taken and one of which is
the tariff classification and specialization
Classification of goods into a customs nomenclature may be done by methods such as:
o According to rate of duty – goods are grouped together according to the rates of their
duties
o Alphabetical Order – relates to alphabetical arrangement
o According to attributes – commonly used by highly industrialized countries is to group the
goods according to their attributes or characteristics on the bases of:
 Material Origin
– grouping together of all goods made on the basis of their physical substance or origin
 Actual Content
- composition of the finished good is the basis for classification in the tariff
- Rule 3b of the Tariff and Customs Code of the Philippines, "mixtures and composite
articles which consist of different materials shall be classified as if they consisted of the
material or component which gives the articles their essential character" known as
"component material of chief value"
 Use or purpose
- if the rate of the article is dependent upon the use or purpose of the article, the chief
or predominant use governs
- "law on similitude" Use of tariff classification and specializations stems, from 3 factors:
a. The desire to give various domestic industries varying degrees of protection

b. The desire to those entrusted with the task of negotiations of commercial
treaties to be equipped with a better instruments for purposes of bargaining and
obtaining concessions
c. To insure adequate and proper implementation of tariff without placing undue
reliance upon administrative interpretations which may be confusing as well as
conflicting at times
Tariff Terminology
Territorial Jurisdiction
Customs Union - agreement between two or more political jurisdiction to abolish

customs duties and other trade restrictions among themselves, and to adopt a common
policy regarding trade with political jurisdiction outside of the union
Free Trade Area - provides for the elimination of customs tariffs and other obstacles to
trade among its members but does not require the introduction of a common external
tariff
CUSTOMS DUTIES
Customs Duties, and their Origin
- describe the manner of collecting revenue as well as the means of controlling trade
- their modern use has been standardized since the beginning of the sixteenth century
Toll
- oldest words which is still in common use
- got into England during the invasion of the Teutons in the fifth century
- eventually customs duties which refer to customary payments made by traders on
goods served as economic burden upon the life of the people
Imposition of Customs Duties

 regular practice in England to farm out customs revenue among favored few for lengthy
periods covering a number of years
 collapsed after the period of the Restoration Customs duties:
3 ways
o import duties - at the time a commodity from a foreign country enters the
country
o export duties -at the time goods leave the country bound for a foreign country
o transit duties - on the occasion of its passing through a country
Import Duties
 levied either for revenue or for protection
 intended for protection claim for its advantage the conferment of the benefits upon
selected economic groups
 intention for revenue, rates of duties are generally made low so as not to impede the flow
of goods into the importing country
Export Duties
 impositions levied on goods that are shipped away to a foreign country
 imposed either for purposes and revenue or for protection
The countries that have used or are still imposing export duties are:
Afghanistan: most items they run as high as 3% ad valorem
Brazil: on coffee Ceylon: on copra and coconut oil
Columbia: on hides, livestock, bananas, coffee
Ecuador: on current manufactures of silver
France: scrap iron

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International Trade

Tariff – Instrument of National Policy

Jebie Mae Olhon

Kimberly Kate Siso

Mrs. Rosalia Equico – Celestiano

Kinds based upon their purpose:

Kinds based on the manner by which rates of duties are established:

Generally utilize the following rates of import duties:

a. The desire to give various domestic industries varying degrees of protection

Customs Union - agreement between two or more political jurisdiction to abolish

Imposition of Customs Duties

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