Conventional Tariff Rate

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📖 Detailed Explanation

Conventional Tariff Rate refers to the preferential tariff rate granted by a country to imported goods originating in a member party of a bilateral or multilateral trade agreement signed with another country or region. It is usually lower than the Most-Favored-Nation (MFN) rate but higher than a preferential rate (such as zero tariff under a free trade agreement). Usage scenario: When declaring imports, importers must provide a valid certificate of origin (e.g., FORM A, FORM E) to prove that the goods meet the rules of origin stipulated in the agreement, thereby enjoying the conventional tariff rate. Notes: The conventional tariff rate applies only to specific products under the agreement and must meet conditions such as direct transport and origin criteria; if a valid certificate of origin is not provided, the MFN rate or general rate will apply. Difference from MFN rate: The MFN rate applies to WTO members, while the conventional tariff rate applies only to specific agreement partners. Difference from preferential rate: A preferential rate usually refers to unilateral preferences (such as GSP), while the conventional tariff rate is reciprocal. Foreign trade practitioners should pay attention to the agreement list, rules of origin, and the validity period of the applicable rate to avoid additional taxes or penalties due to inconsistent documents.

📝 Examples

1. Our company imports a batch of natural rubber from ASEAN. With a FORM E certificate of origin, we can enjoy the China-ASEAN Free Trade Agreement rate, which is 5 percentage points lower than the MFN rate. (Note: Using the FTA rate to reduce import costs.) 2. Because the supplier failed to provide a valid certificate of origin, the goods cannot apply the conventional tariff rate and can only pay tariffs at the MFN rate, resulting in increased costs. (Note: A certificate of origin is a necessary condition for enjoying the conventional tariff rate.)

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