April 13, 2000 | By Daniel Pruzin
GENEVA--The European Union April 12 defended its practice of applying standard price values to import of fruits and vegetables for customs valuation purposes, arguing that the practice is fully compatible with global trading rules.
The EU defended its Entry Price System after India charged that the practice may be in violation of the World Trade Organization's customs valuation agreement (formally known as the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994). India's claim was made at a meeting in Geneva of the WTO's customs valuation committee.
Under the agreement, member governments are required to use the transaction value of an imported good when determining the duty to be paid for customs purposes. If the transaction value cannot be used, customs authorities can use alternative methods such as the computed value of the good or the price of the good when sold domestically.
The agreement prohibits practices such as using minimum customs values or arbitrary/fictitious values, or fixing the customs value according to the price of the same good produced domestically or according to the price of the good on its home market. Minimum values are easier to apply for administrative purposes but are not allowed by the WTO because they have often been fixed at levels higher than the actual price of the imported good, resulting in higher tariffs.
India Sees Violation
Indian officials told the committee that the application of standard values for fruits and vegetables constitutes a use of minimum customs values which are prohibited under the WTO agreement. India also said the use of such minimum values raises questions as to whether the EU is respecting its WTO tariff ceiling commitments for imported fruits and vegetables.
The EU replied that importers are given a choice of methods for determining the customs value of their goods and that standard values are one option available. The EU added that the standard value option applies only to fruits and vegetables and is there primarily to speed up the customs clearance of perishable goods.
Both the EU and India agreed to hold consultations on the issue and to report on any progress at the next meeting of the customs valuation committee.
Deadline Extensions Delayed
The committee postponed a decision April 12 on requests from 11 countries for additional time to implement the WTO's customs valuation agreement. Committee chairman Edward Brown of the United Kingdom said that consultations were continuing among members on the requests and that the meeting would be suspended pending further progress.
The 11 countries--Bahrain, Colombia, Cuba, Egypt, El Salvador, Guatemala, Ivory Coast, Mauritius, Myanmar (Burma), Senegal and Tunisia--were all due to implement the agreement by Jan. 1 or during the course of 2000.
A number of countries including the Dominican Republic, Jamaica, Kuwait, Peru, Sri Lanka, Tanzania and Uruguay have already been given extended deadlines.
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