The multilateral trading system has reduced tariffs but not tariff escalation

23/02/201926/06/2025 sonia

indicators

Goal 10: Reduced inequalities

Target 10.a: Implement the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements
Indicator 10.a.1: Proportion of tariff linesA single item in a country’s tariff schedule -—
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—-. applied to imports from LDCsLeast developed countries and developing countries with zero-tariff

Goal 17: Partnerships for the goals

Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization, including through the conclusion of negotiations under its Doha Development AgendaDoha Development Agenda (DDA) refers to the latest Doha Round of world trade negotiations among the WTO memberships. The round is also known semi-officially as the Doha Development Agenda and was launched in November 2001. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules. The fundamental objective of DDA is to further liberalising trade in order to improve the trading prospects of developing countries. The main issues at stake are: Reforming agricultural subsidies; Ensuring that new liberalisation in the global economy respects the need for sustainable economic growth in developing countries; Improving developing countries' access to global markets for their exports -—
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Indicator 17.10.1: Worldwide weightedWeighted average of tariffs applied to imports of goods in HS chapter 01-97. The tariffs are weighted by the value of the imported goods to which they are applied. It is expressed as percentage of the value of goods imported. The average level of customs tariff rates applied worldwide can be used as an indicator of the degree of success achieved by multilateral negotiations and regional trade agreements. See metadata for indicator 17.10.1 -—
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—-.weighted tariff-averageWeighted average of tariffs applied to imports of goods in HS chapter 01-97. The tariffs are weighted by the value of the imported goods to which they are applied. It is expressed as percentage of the value of goods imported. The average level of customs tariff rates applied worldwide can be used as an indicator of the degree of success achieved by multilateral negotiations and regional trade agreements. See metadata for indicator 17.10.1 -—
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—-. (Tier ITier I means that a SDG indicator has been classified by the IAEG-SDG as being conceptually clear, has an internationally established methodology and standards are available, and data are regularly produced by countries for at least 50 per cent of countries and of the population in every region where the indicator is relevant.)

Target 17.12: Realize timely implementation of duty-freeNot subject to import tariffs. and quota-free market access on a lasting basis for all least developed countries, consistent with World Trade Organization decisions, including by ensuring that preferential rules of origin applicable to imports from least developed countries are transparent and simple, and contribute to facilitating market access.
Indicator 17.12.1: TariffsTariffs “are customs duties on merchandise imports, levied either on an ad valorem basis (percentage of value) or on a specific basis (e.g. $7 per 100 kg). Tariffs can be used to create a price advantage for similar locally produced goods and for raising government revenues. Trade remedy measures and taxes are not considered to be tariffs.” -—
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—- faced by developing countries, LDCs and SIDS

Trade multilateralism plays a crucial role in fostering global economic stability, promoting inclusive growth, and ensuring a predictable trading environment. The WTOWorld Trade Organization has been undergoing reform discussions to address challenges such as dispute settlement inefficiencies, special and differential treatment for developing countries, and the need for updated trade rules in areas like digital tradeDigital Trade is “all international trade that is digitally ordered and/or digitally delivered. and sustainability. Strengthening multilateral cooperation remains essential to counter protectionism and to support a fair, rules-based global trading system. The report to the Sixteenth Conference of UNCTAD, emphasizes the need for enhanced multilateralism and a stronger UNCTAD role in global consensus-building, including UN-wide initiatives, regional and multinational organizations, and South-South cooperationBroad framework of collaboration among countries of the Global South in the political, economic, social, cultural, environmental and technical domains -—
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—-. SSC involves diverse domains in the global South, both financial (e.g., grants and concessional loans) and non-financial (training, technical cooperation, humanitarian assistance) modalities and is guided by principles such as horizontality, solidarity, respect for sovereignty, country ownership, complementarity, mutual benefit, equity, transparency, and accountability -—
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—-. Data on related issues like trade and FDI among the global South are also provided by UNCTAD. frameworks, such as GSTPGlobal System of Trade Preferences among developing countries, AfCFTAAfrican Continental Free Trade Area, the G20Group of Twenty and ASEANAssociation of Southeast Asian Nations -—
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Two-thirds of world trade is tariff-free, but significant duties remain in agriculture and industry

International trade is mostly tariff-free, but remaining tariffs are high.

International trade is largely liberalized, in 2023 about two-thirds being tariff-free due to zero and . However, tariffs on the remaining trade can be high. Agricultural products are mainly tariff-free largely due to preferential access and reciprocal concession, as opposed to zero tariffs. Approximately 30% of agricultural trade outside of MFN and preferential regimes tends to face fairly high tariffs with remaining tariffs averaging nearly 20% (figure 1). In manufacturing, preferential access is also significant, as the remaining trade weighted tariffs amount to 8%. In contrast, preferential access is of limited importance to trade in natural resources, as trade in this category is largely tariff-free under MFN rates, with remaining trade-weighted tariffs of about 3%.

Figure 1. In 2023, about two-thirds of international trade are free of tariffs

Percentage (SDG 17.10.1)

Source: UNCTAD calculations based on -—
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Rising tariffs in green sectors make it harder for countries to move up the value chain

In sectors, such as renewable energy and electric mobility, tariff structures affecting critical minerals play a crucial role in shaping supply chain dynamics, investment flows, and the competitiveness of developing economies in global markets.

Tariffs on raw critical minerals are lower than on electric vehicles using them.

MFN simple average tariffs on key minerals essential for the energy transition - such as cobalt, graphite and lithium - differ across various stages of the value chain, with processed products facing higher tariff rates than raw materials (table 1). Across all economic groupings, tariffs imposed on the initial three stages of production are roughly half of those applied to battery packs and only a third of the tariffs levied on electric vehicles. LDCs maintain the highest tariff levels at every stage of the value chain - except at the highest value-added stage 5 - primarily due to their reliance on tariffs as a key source of public revenue and as a policy tool to support early-stage industrial development. In contrast, developed economies apply the lowest tariffs, reflecting their broader fiscal capacity and the competitiveness of their more advanced industrial sectors. -—
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Table 1. MFN applied simple average tariffs in trade of raw critical minerals are lower than those in electric vehicles that utilize these minerals

Percentage (SDG 17.10.1)

Group of economies	Stage 1: Raw minerals	Stage 2: Processed minerals	Stage 3: Battery materials	Stage 4: Battery packs	Stage 5: Electric vehicles
Developed economies	1.0	1.9	2.3	3.6	4.6
Developing economies excluding LDCs	3.9	3.8	4.4	9.4	17.0
Least Developed Countries (LDCs)	6.6	6.0	6.8	14.1	16.5
All economies	4.2	4.1	4.7	9.8	15.0

Source: WTO, ITCInternational Trade Centre, UNCTAD, -—
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Note: Simple average of the three latest available years, except for Switzerland, for which the reference year is 2024.

Recent developments in tariff wars have cast uncertainty over the future of multilateralism. In early April 2025, the United States imposed a baseline 10% tariff on almost all imports to the country and sharply raised duties on certain Chinese products to rates exceeding 100%. These new measures build on earlier protectionist policies, which were intensified during the United States–China trade tensions of 2018–2019 and further reinforced amid the global supply chain disruptions caused by the COVID-19COVID-19 is an infectious disease caused by the strain of coronavirus SARS-CoV-2 discovered in December 2019. Coronaviruses are a large family of viruses which may cause illness in animals or humans. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). The most recently discovered coronavirus causes coronavirus disease COVID-19 -—
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—-. pandemicCommonly described by the WHO as ‘the worldwide spread of a new disease’, no strict definition is provided. In 2009, they set out the basic requirements for a pandemic: • New virus emerges in humans
• Minimal or no population immunity
• Causes serious illness; high morbidity/mortality
• Spreads easily from person to person
• Global outbreak of disease.
The US Centre for Disease Control uses a similar approach, but with a reduced set of criteria. It is very difficult to gauge whether the spread of a disease should be termed an outbreak, epidemic or pandemic. In other words, when to declare a pandemic isn’t a black and white decision -—
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—-.. Tariff escalationHigher tariffs on processed goods than raw materials from which they are produced. underscores a shift towards a more fragmented global trading environment, thereby reinforcing the urgent need to strengthen multilateral efforts to safeguard open trade flows.

References

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