TARIFF RATE QUOTAS (TRQs)

A tariff-rate quota is used to import fixed quantities of a product at a lower tariff.  Once the quota is filled, a higher tariff is applied on additional imports.  The vast majority of tariff quotas in agriculture result from the Uruguay Round negotiations and constitute binding commitments as opposed to autonomous TRQs which WTO members may establish at any time.  However, many countries have been granted import concessions within the scope of bilateral, regional and preferential trade agreements such as the Lome Convention or the Generalized System of Preferences (GSP).  Import concessions may involve tariff preferences within TRQs and/or tariff preferences with no quantitative restriction.  EU preferential duty rates for specific products can be found in the European Commission’s online customs database.

On May 1, 2004, the EU expanded from 15 to 25 member states.  Under GATT rules, WTO trading partners must be compensated when a customs union is formed or expanded.  In March 2006, the U.S. and the EU signed a bilateral enlargement compensation agreement to offset tariff increases that the EU implemented as a result of the expansion with 10 new member states.  As part of the agreement, implemented by Council Decision 711/2006, tariffs on fish (hake, Alaska Pollack, surimi) have been permanently reduced, country-specific TRQs have been opened for U.S. exports of boneless ham, poultry and corn gluten meal and existing global TRQs have been expanded for beef, poultry, pork, rice, barley, wheat, maize, sugar, fructose, preserved fruits, fruit juices, pasta, chocolate, food preparations, pet food, live bovine animals and sheep and various cheeses and vegetables.  For exports under a U.S. specific TRQ, a certificate of origin must be supplied.

Detailed rules on the opening and administration of specific TRQs are published in the EU’s Official Journal.  Each TRQ has a 6-digit order number to identify specific conditions such as quantity, start/end date in the relevant legislation.  The EU allocates TRQs to importers using import licenses issued by the member states’ national authorities.  Only companies established in the EU may apply for an import license.  Council Regulation 717/2008 establishes a Community procedure for administering quantitative quotas.  Community rules on the administration of TRQs for agricultural products managed by a system of import licenses are set out in Council Regulation 1301/2006.