Plain meaning
A WTO commitment setting the maximum tariff rate a member generally agrees not to exceed for a product.
Also called
WTO bound rate
bound tariff
Key points
- A bound tariff is a ceiling committed under WTO schedules.
- Applied tariff rates can be lower than bound rates.
- Raising applied rates above bound levels can create WTO consequences unless an exception applies.
- Bindings are part of the legal architecture behind trade negotiations and tariff-policy disputes.
Why it comes up
Tariff bindings matter when governments change tariffs, negotiate trade commitments, or face WTO disputes.