Agreement Article Vii Gatt

Agreement Article VII GATT: What It Means for International Trade

As global commerce continues to grow, so does the need for clear guidelines and regulations. One key document governing international trade is the General Agreement on Tariffs and Trade (GATT), which was established in 1947 and has since undergone several revisions. One important part of GATT is Agreement Article VII, which addresses customs valuation. Here’s a closer look at what this section entails and why it matters for global businesses.

What Is Agreement Article VII?

In brief, Article VII sets forth rules for how customs officials should determine the value of imported goods when calculating tariffs and other fees. The goal is to establish consistent and transparent practices across different countries, which can help prevent disputes and promote fair trade.

Under the article, customs officials are instructed to use “transaction value” as the primary basis for determining the value of goods. This refers to the price actually paid or payable for the goods in question, with some adjustments made for certain costs and expenses that may be part of the transaction but are not part of the actual price. If transaction value cannot be determined, customs officials are instructed to use alternative methods that still aim to reflect the actual value of the goods.

Why Is Agreement Article VII Important?

In practice, Agreement Article VII helps ensure that countries do not unfairly boost their own economies at the expense of others. If a country’s customs officials use inconsistent or inflated valuation methods, it could place higher tariffs on imports and effectively block competition from foreign businesses. By requiring transparency and consistency in valuation practices, Article VII helps level the playing field for international trade.

This can be especially important for smaller and developing countries that may be more vulnerable to trade imbalances. If a larger country sets artificially high tariffs on certain goods, it could stifle the smaller country’s ability to compete and grow its own economy. Agreement Article VII aims to prevent this kind of situation from arising by promoting clear and objective valuation methods.

In recent years, there has been some criticism of how Article VII is applied in practice. Some argue that the rules are not always followed, leading to disputes and obstacles to fair trade. Others argue that the rules themselves are too narrowly focused on transaction value and do not take into account other factors that may affect the actual value of goods. Nonetheless, most observers agree that Article VII remains an important part of the broader GATT framework for regulating international commerce.


In conclusion, Agreement Article VII of GATT is a crucial part of the international trade landscape. By establishing clear rules for customs valuation, it helps promote fairness and transparency in commerce. While there may be some challenges to implementing the rules in practice, they remain an important tool for promoting balanced and sustainable global trade. For businesses operating in the international marketplace, understanding the provisions of Article VII and complying with its guidelines is essential to success.