By Edvinas Drevinskas, Eric Ng Shing, Dayong Yu
The WTO released in July 2023 a new version of its Multilateral Trade Negotiation (MTN) Categories, a classification system used by the WTO to compile trade statistics and to analyse trade policy.
First used in the Tokyo Round of trade negotiations in the 1970s, it has been occasionally updated to reflect evolving trends. This recently released version contains 72 new subcategories for the classification of traded goods.
The resulting data provides valuable insights into trends and developments in international trade.
Breakdown of global trade by sector
Figure 1 shows the shares of world trade in 2021 in value terms broken down by the new MTN categories. The inner ring compares shares of agriculture and non-agriculture products, revealing that non-agriculture/industrial goods accounted for 92.5 per cent of world trade.
The middle ring shows that the two largest sectors were minerals and metals (17.7 per cent) followed by electrical machinery and electronic equipment (17.6 per cent), which together accounted for more than a third of world trade in 2021.
The outer ring, depicting the new MTN subcategories, shows that the subcategories with the largest trade valuesare semiconductors (6.7 per cent), non-ferrous metals (5.5 per cent), crude oils (5.3 per cent), motor vehicles (5.2 per cent) and electrical machinery (4.2 per cent). For agricultural products, the categories with the largest trade valuesare cereals (0.8 per cent), meat (0.7 per cent), cereals preparation (0.7 per cent), fruits (0.6 per cent) and oilseeds (0.6 per cent).
Tariffs on industrial and agricultural products
Figure 2 shows that the average most-favoured-nation (MFN) tariffs weighted by imports flow is lower for industrial products than for agricultural products.
Categories with larger import values usually have lower tariffs. This is particularly the case for raw materials such as crude oils (0.9 per cent) as well as information and communications technology (ICT) products such as semiconductors (0.2 per cent), telecommunication equipment (0.9 per cent) and computers and office machinery (0.2 per cent).
However, high tariffs can be observed for products such as motor vehicles (8.3 per cent) and clothing (11.6 per cent) while remarkably high tariffs are applied in agriculture products such as cereals (27.4 per cent), tobacco (26.6 per cent) and meat (22.3 per cent). Within the chemicals MTN category, the tariff on pharmaceuticals (0.9 per cent) is much lower than for plastics (5.5 per cent).
Further information is available in the latest edition of the WTO’s World Tariff Profiles .
Changes in WTO members’ tariffs
The other “special topic” featured in the publication summarizes the changes in WTO members’ tariffs during the 16 years since the World Tariff Profiles was initially published in 2006.
While there has been some progress in lowering tariffs between 2007 and 2021, it has mostly been very modest. Figure 3 shows there has been a decline of only 1.2 percentage points in the overall MFN applied tariffs since 2006, with average tariffs for agricultural and industrial products standing at 14.8 per cent and 8 per cent, respectively, in 2021.