GENERAL AGREEMENT ON WSm&m Spec(7l)71

TARIFFS AND TRADE 30 August 1971

Working Party on the Tariff Study

ANALYSIS OF THE TARIFF AND TRADE SITUATION

Product Category 16; Photographic and Cinematographic Supplies

Introductory note

1. The tariff rates given in this document are the post-Kennedy Round duties which will enter into effect on 1 January 1972 at the latest.

2. The four tariff averages were calculated according to the following methods:

Average No. 1 is a simple (unweighted) arithmetic average of all most-favoured­nation duty rates applying to tariff lines classified in a commodity category. It was calculated directly from national tariff lines.

Average No. 2 was calculated in two steps. First, a simple (unweighted) arithmetic average of tariff lines, the same as average No. 1 in Summary Tablé 1, was calculated for each BTN heading in a category. Each of these arithmetic averages was then weighted by total (most favoured nation, preferential and intra-area) combined imports of the industrial countries covered by the study in calculating ah average for a category.

Average No. 3 is a weighted average of all duty rates classified under a category using most-favoured-nation imports of the country concerned at the national tariff line level as the weighting pattern.

Average No. L was calculated in two steps. First, a weighted average based on a country's own most-favoured-nation imports up to the BTN heading level was calculated. The results in individual BTN headings were then weighted by the total (most favoured nation, preferential and intra-avea) combined imports of the industrial countries covered by the study in calculating an average of each category.

3. All import data are for 1967, with the exception of Canadian figures which are for 1970 and data for Switzerland, Norway and Denmark which refer to 1968. The United States and Canadian import values, are calculated on an f.o.b. basis while the other countries have provided c.i.f. values. Generally, the tariff averages of these two countries would be lower if calculated on a c.i.f. rather than an f.o.b. basis*

k

Spec(7l)71 Page 2

4.. The figures for the number of tariff lines are not strictly comparable .»v between schedules. The United States and Canadian totals are generally overstated as, in the process of converting the nomenclatures used by these countries to the BTN, individual tariff lines have often been sub-divided. In the case of Sweden, Finland and Norway the numbering of lines reflects sub-divisions introduced for statistical reasons. - ... ..... .-•--.

5. The term "combined" refers to the totals of the eleven tariffs included in the study. Ihere broader figures are used for world totals the sources and coverage are indicated.

6. Preferential imports include intra-EFTA trade, (and the United Kingdom-Ireland Free Trade Area), Commonwealth preferences as well as preferences extended by Finland to the USSR, by the EEC to associated countries, and by the United States to the Philippines and to Canada under the Automotive Agreement. Intra-EEC trade is not included.

I-;'--1' Product coverage

This category consists of the eight BTN headings in Chapter 37, covering photographic film, plates and paper, whether they are for amateur or professional use, for scientific, photo-mechanical or radiographic purposesj also included are chemical products and flashlight material used in photography (but excluding flash-bulbs). Photographic film, including cinematograph film and sound track, is classified here whether it is developed or not, but developed photographic paper and paperboard falls within category 04. (printed matter). Waste and scrap materials such as cinematograph film waste and scrap, photographic pastes, gums and varnishes (in category 10) and film for mechanical sound recording (in category 18) are also excluded. : .......

II. Summary of significant findings

A. General structure of tariffs and trade

•'•'•• Tariff rates in this category are generally low, over three quarters of tariffs, .covering about an-equal proportion-of trade, having rates of 10 per cent or less. The averages- for the eleven tariffs combined are considerably lower than the corresponding averages for all finished manufactures. The percentage of duty­free tariff lines (37 per cent) and duty-free imports (20 per cent) is relatively high. -For the majority of countries, tariff lines are concentrated within a narrow range no higher than 10 per cent, and in several instances even less. Other countries, however, (i.e. Canada and Japan) have a more dispersed tariff with a concentration of both duties and imports in- the upper ranges, above 12 per cent, but in the case of Canada also at the duty-free level.

This category is not very important in trade terms, most-favoured-nation imports for the countries combined amounting to $323 million, 0.4. per cent of their combined industrial imports (BTN headings 25-99), and thus ranks nineteenth out of the twenty-three categories.

Spec(7l)71 Page 3

B. Substantial differences in tariff and trade levels by country

1. Category

As indicated above, there is a substantial difference between the majority of countries, for which tariffs and trade are mainly contained in the range between zero and 10 per cent, and Canada and Japan, where a relatively high proportion of tariffs and an even higher one of trade are above 12 per cent. Over one half of Canadian most-favoured-nation imports enter at rates between 14 to 18 per cent, most of the remainder entering duty frees the corresponding proportions of tariff lines are 30 and 49 per cent. The bulk of Japan's imports enter at rates from 14 to 20 per cent and 29 to 40 per centj within these two intervals, 45 and 23 per cent of tariff lines, and 49 and 37 per cent of most-favoured-nation imports are concentrated. For most other countries, imports enter mainly at rates below 5 per centj however, there is a concentration of imports at a slightly higher level in the case of the EEC, between 6 and 9 per cent, and the United Kingdom, between 9 and 11 per cent. All the rates of Sweden, Denmark and Switzerland, and 90 per cent of the rates of the Finnish and Norwegian tariffs are concentrated between zero and 5 per cent, while in addition Sweden, Denmark, Finland and also Austria have a large percentage of duty-free tariffs and trade.

The major most-favoured-nation importers are the EEC ($70 million) and the United States ($56 million).

The range of tariff averages from one country to another is wide,.as can be seen in Graph A, the highest being in the region of 18-22 per cent (Japan), roughly double the next highest (Canada) and the lowest less than 1 per cent (Sweden and Switzerland).

2. Important BTN headings

The three most important BTN headings in this category (3701-03, covering unexposed photographic plates and film, and photographic paper, not developed) account for three quarters of combined most-favoured-nation imports. For each of these headings, tariff rates for individual countries show roughly the same pattern as for the category. Japan has the highest averages, followed by the United Kingdom in the first heading and Canada in the other two. The lowest averages are those of Sweden, Denmark and Austria in BTN headings 3701-02, and those of Sweden and Switzerland in BTN 3703.

III. Analysis of category 16 - photographic and cinematographic supplies: (BTN headings 3701-08; SITC 862.863)

1. Trade importance and trade network (Tables Dj I, page 7)

World imports are estimated at $550 million j combined imports into the countries studied amounted to $370 million-'-, or 67 per cent of the world total. The major part of these imports originated in most-favoured-nation sources, only $45 million, or 12 per cent, being preferential trade.

Not including intra-EEC exchanges and, for the world total, trade between countries of the Eastern trading area. Export data (f.o.b.) are taken from 0ECD, Commodity Trade. Series C. 1967.

Spec(7l)71 Page 4.

Photographic and cinematographic supplies represent only 0.4- per cent of combined most-favoured-nation imports of industrial products (BTN Chapters 25-99). For individual countries, the relative importance ranges from 0.3 per cent (EEC, United States and Japan) to 0.8 per cent (Sweden, Finland and Switzerland). The category ranks nineteenth out of the twenty-three categories, the ranking varying from seventeen to eighteen for most countries, although it is higher for Finland (14) and Sweden (l6) and lower for Switzerland (19) and the United States (22).

The main importing countries on a most-favoured-nation basis are the EEC, $70 million, the United States, $56 million, Canada, #54- million and the United Kingdom, $40 million. Japan and Switzerland both imported about $25 million and Sweden $21 million, while the other countries took less than $10 million.

Virtually all supplies originate in developed countries, developing countries accounting for only 3 per cent of most-favoured-nation imports in the case of the United States and Japan, and even less for the other importers. Imports from the Eastern trading area are negligible, amounting to 1 per cent of imports into the EEC and some other countries.

The major exporters are the United States ($210 million) and the EEC ($160 million), followed by the United Kingdom ($80 million).

2. Structure of tariffs and trade

(a) Number of tariff lines and status of bindings (Tables Dj K, page 8)

The numbers of tariff lines are relatively limited in this category, the highest occurring in the tariffs of Canada and Japan (forty-three and forty, respectively) and the lowest in those of Denmark (nine), Switzerland and Austria (both thirteen). The relatively high number of lines in the Japanese tariff is mainly due to a more detailed breakdown of cinematographic film.

, Bound items account for 86 per cent of combined tariff lines, covering 92 per cent of most-favoured-nation imports. For the majority of countries, all tariff lines are fully bound; however, in the case of Canada, only 42 per cent of tariffs are bound, accounting for 75 per cent of imports, while 77-85 per cent of Swiss and Japanese tariff lines are fully bound. The bound items cover over 90 per cent of Swiss imports, but only 67 per cent in the case of Japan.

(b) Nature of tariffs and trade (Table D)

Most-favoured-nation imports represent a high proportion of total imports into most countries. All United States, EEC and Japanese imports are subject to most-favoured-nation duties, and over 90 per cent of United Kingdom imports. In the case of Canada, Sweden, Switzerland and Austria, the proportion is around 80 per cent, while the lowest percentage is 59 for Norway.

Spec(7l)71 Page 5

Apart from the Swiss tariff, which is comprised entirely of specific duties, it is the Norwegian tariff which has the highest percentage of lines (70 per cent) and imports (81 per cent) subject to duties other than ad valorem, followed by the EEC and the United States with about 40 per cent of tariff lines and 14-17 per cent imports. Canada and Sweden have the lowest proportion of lines (5 per cent) subject to specific rates (ll and 4 per cent of most-favoured-nation imports, respectively).

Imports from EFTA countries (i.e. the United Kingdom) are of considerable importance for Norway and Denmark, accounting for about 4-0 per cent of total trade, while for Austria, Sweden and Switzerland they are somewhat lower, 24-17 per cent. Canada purchases 23 per cent of total imports from preferential origins, at duties which are in most cases lower than most-favoured-nation rates but positive. In the case of the United Kingdom, preferential imports are of minor importance, only 5 per cent from preferential countries and 2 per cent from other members of EFTA; preferential rates are mostly free.

General imports are negligible in this category.

(c) Averages - all items (Table B)

Average most-favoured-nation duties for the eleven tariffs combined range from 5.1 per cent (average No. l) to 7.4 per cent (average No. 4)» The averages for Japan are roughly double the others, while those for Canada are also above most of the rest. Several countries, i.e. Sweden, Switzerland and Denmark have all tariff averages less than 2 per cent. In many cases (for example, Japan, Canada, EEC and the United Kingdom) the average No. 3 is higher than the simple arithmetic average No. 1, indicating significant imports under higher ratesi the main exceptions in this respect are the United States and Austria.

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Spec(71)71 -Page 6

'

Table 1

Country-

EEC

United States

Canada

United Kingdom

Japan

Switzerland

Sweden

Denmark

Austria

Finland

Norway

11 tariffs combined

_________________________________

Tariff 1

4.1

4.7 7.2

3.8

18.0**

0.7*

0.8

0.9

2.5

!•? 2.5

'5.1

averages - all 2 3

7.6

4.4 8.2

7.8

18.5**

0.9

0.7*

1.5

1.7'

2.4

2.6

6.5

7.4

3.7

9.3

7.7

22.0**

0.9 0.2*

1.5 1.0

3.1 2.1

6.8

items 4

7.7

4.5 11.6

8.1

22.2**

0.9

0.3*

1.6

1.1

2.5

1.9

7.4

M.f.n. imports ($ million)

71

56

54

42

25

24

21

10

9 6

5

323

** Highest average * Lowest average

(d) Duty-free items and trade (Table D)

Nearly 20 per cent of combined most-favoured-nation imports enter free of duty, corresponding to 37 per cent of combined tariff lines. Practically all Swedish most-favoured-nation imports enter duty free, while Austria shows the next highest figure (72 per cent). The United States and Japan have no imports entering duty free, and the EEC and the United Kingdom have a very low proportion. The highest percentages of duty-free tariff lines occur in the tariffs of Sweden and Denmark, while the lowest are found in those of Japan, where there are none at all, and the United States.

Spec(71)71 Page 7

Table 2

Duty-free Tariffs and Trade

Country-

Sweden Austria Denmark Canada Finland Norway Switzerland United Kingdom EEC United States Japan 11 tariffs combined

M.f.n. imports (%)

93 72 40 43 34 10 9 8 4 --

20

Tariff lines (%)

81 62 67 49 59 20 31 53 24 18 -

37

(e) Averages - dutiable items (Table B)

The combined averages for dutiable items only are somewhat higher than for all items, and range from 7.7 - 7.8 per cent (average No. 1 and 2) to 8.4 per cent (average No. 3). The highest averages are those of Japan and Canada, followed by the United Kingdom, and the lowest are those of Switzerland, Denmark and Sweden.

Table 3

Country r

EEC United States United Kingdom Canada Japan Switzerland Denmark Norway Finland Austria Sweden 11 tariffs combined

Tariff

1

5.4 5.7 8.1 14.0 18.0** 1.0* 2.8 3.1 4.1 6.6 4.0 7.7

averages

2

7.8 4.5 8.6 14.1 18.6** 0.9* 1.7 3.1 3.3 2.4 1.5 7.8

- dutiable items

3 5

7.7 3.7 8.4 16.2 22.0** 1.0* 2.5 2.4 4.8 3.8 3.0 8.4

4

7.9 4.5 8.5 16.5 22.5** 0.9* 1.7 2.2 3.3 1.5 1.1 8.5

Dutiable nuf.n. imports

($ million)

68 56 39 31 25 22 6 5 4 2 1.5

259 **Highest average * Lowest average

*

1

Spec(71)71 Page 8

(f) Frequency distribution of tariffs and trade (Table D)

For the eleven tariffs combined, the greatest concentration of positive duties lies in the 0.1-6 per cent range; the highest proportion of imports enters at rates within this range, but an appreciable percentage enters also at rates between 7.1-10 per cent. Thus, 56 per cent of combined most-favoured-nation imports and 65 per cent of all tariff lines are subject to duties of 6 per cent or less, while over four fifths of imports and 37 per cent of tariff lines are dutiable at rates of 10 per cent or less. (See Tables Uy 5 below)

The tariff schedules of individual countries show very different patterns.. •For the majority, at least nine tenths of tariff lines and trade are subject to duties no higher than 10 per cent. On the other hand, in two instances, Canada ;and Japan, a significant proportion of tariff lines are above 10 per cent. Canada has the greatest concentration of tariff lines, apart from duty-free items, in the 12.1-15 per cent range, and the highest proportion of imports in the 15.1-18 per cent range. In the case of Japan, the highest percentage of both tariffs and imports lies in the range from 12.1-15 per cent, while a relatively large propor­tion has rates between 20.1-30 per cent.

Several countries, i.e. Switzerland, Sweden and Denmark, maintain no tariff rates above 5 per cent; Finland has no duties higher than 7 per cent and two tariffs, those of the EEC and the United Kingdom, have no rates above 11 per cent. It can be seen in Table 4 that the greatest proportion of imports of the latter countries enters under the higher rates in their tariff schedules. The reverse is true in the case of the United States; while the bulk of tariff lines has duties ôf up to 12 per cent, virtually all imports are subject to rates of 5 per cent or less.

3. Important BTN headings (Table G)

The most important BTN heading is 3702. unexposed film in rolls, with combined most-favoured-nation imports of $110 million, i.e. one third of combined most­favoured-nation imports in this category, and preferential imports of $5 million. The major most-favoured-nation importers are the EEC ($24 million), and the United States (#22 million), followed by the United Kingdom ($H million). Duty rates are rather low for many countries* The highest averages are those for Japan, '22% (simple) and 27.5$ (weighted) on seventeen tariff lines, ranging from 15 to 40 per cent. These averages, together with those for BTN 3701 and 06, are among the highest averages for Japan under any BTN heading for manufactured goods. The averages for Canada are 7.0 per cent and 15.1 per cent. The other countries have no rates above 10 per cent.

BTN headings 3701. unexposed photographic films and plates in the flat, and 3703. sensitized paper, paperboard and cloth, not developed, each have combined most-favoured-nation imports of $60-70 million, one fifth of the total in the category, and preferential imports of $11-16 million. In each case, the EEC. and the United States are again the main importers. For most countries, tariff rates

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Table L

Frequency Distribution of Tariffs %

Country

EEC

United States

Canada

Japan

UK

Sweden

Denmark

Norway

Finland

Switzerland

Austria

11 tariffs combined

0.1-3.0%

12

15

-

3

-

5

22*

60*

24*

69*

8

15*

3.1-6.0$

35*

41*

-

-

18

14*

11

10

6

-

15*

13

6.1-9.0%

30

15

2

5

6

-

-

5

12

-

-

7

9.1-12.0%

-

9

9

10

23*

-

-

5

-

-

8

7

12.1-15.0%

-

-

26*

47*

-

-

-

-

-

-

8

13

15.1-20.0%

-

3

14

13

-

-

-

-

-

-

-

5

20.1-30.0%

-

-

-

15

-

-

-

-

-

-

-

3

30.1-40.0%

-

-

-

7

-

_ • • •

-

-

-

-

-

1

Maximum rate (%)

9

19

18

40

11

5

5

12

7

2

13

40

Table 5

Frequency Distribution of m.f.n. Imports (%)

EEC

United States

Canada

Japan

UK

Sweden

Denmark

Norway

Finland

Switzerland

Austria

11 tariffs combined

1

62*

-

-

-

4

39*

80*

29*

91*

10

21*

13

37

-

-

30

4

22

2

8

-

15*

15

82*

1

-

3

4 .

-

-

~

29*

-

-

19

-

-

3

7

58*

-

-

9

-

-

3

9

-

-

19

33*

-

-

-

-

-

-

-

6

-

-

36*

19

-

-

-

-

-

8

-

-

-

21

-

" -

-

-

-

-

2

-

-

-

16

-

. -

-

-

-

-

-

1

Highest concentration

t

Spec(71)71 Page 10

under 3701 are roughly similar to those under 3702. However, in the case of Canada, the simple arithmetic average is 4-2 per cent and the weighted average only 0.2 per cent, most imports entering under duty-free lines. BTN 3703 has the highest combined averages in the category, followed by those of BTN heading 3708, chemical products and flashlight materials.

Imports from developing countries.are very low in this category, the highest in absolute figures being $2.5 million most-favoured-nation imports under BTN 3707. developed cinematographic film, i.e. imports without commercial significance, out of combined most-favoured-nation imports of $33 million.

Graph A shows averages 1 to U (all items) for each of the eleven tariffs. Most­favoured-nation imports are indicated in thousands of dollars.

Graph B shows for each tariff and for the eleven tariffs combined both the simple and cumulative frequency distribution of most-favoured-nation imports and tariff lines.

These graphs are being prepared by a computer and will be issued later as an addendum.