Countries in Africa, the Caribbeans and the Pacific which benefit from preferential tariff treatment in the E.C. These tariff preferences were introduced under the Lomé Conventions (Lomé I – Lomé IV), which were later replaced by the Cotonou Agreement. In terms of the Cotonou Agreement these tariff preferences had to be replaced with reciprocal, WTO compliant free trade agreements (Economic Partnership Agreements or ‘EPAs’) between the ACPs and the EC by 1 January 2008.

An ad valorem duty is a customs tariff duty expressed as a percentage of the value of the imported goods (e.g. 10% of value).  In the case of specific duties (i.e. $2.00 per KG) it is necessary to calculate an ad valorem equivalent (AVE) which gives the equivalent level of the duty in percentage terms.

An ad valorem equivalent is the equivalent in percentage of a specific duty, mixed, compound or other duty containing a specific element.  An ad valorem equivalent is calculated for each customs duty that is not ad valorem. The AVE is calculated from the actual duty collection or from the unit value of imports.  For example, the AVE of a specific duty of $1.00 per KG levied on a product with a unit value of $10.00 per KG is equal to 10% ($1.00/$10.00). 

The African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000. It is a US Trade Act that provides unilateral tariff preferences into the US market to 39 Sub-Saharan African countries. AGOA is an expansion of the existing (duty-free) benefits previously available only under the Generalised System of Preferences (GSP) programme. Together AGOA and the GSP programme provides duty-free access to the U.S. market for approximately 7,000 product tariff lines, including around 1,800 product tariff lines that were added to the GSP by the AGOA legislation.