Tariff escalation

Measuring the extent of protection in any country or market poses a number of practical and analytical difficulties. While simple nominal tariff rates are widely available and easily measurable, where tariff escalation is prevalent these will tend to understate the level of protection facing processed products. A more rigorous approach would involve consideration of effective tariff (and protection) rates, but here there are major difficulties in estimation." The quite widespread application of preferential tariffs and non-tariff barriers in the lead industry compound the problems involved in any comparison. 

The large majority of tariffs are in the range of 0 to 10% of the product s value. However, in extreme cases, tariffs of more than 30% might occur. Many tariff structures contain an escalation process whereby tariffs on raw materials are lower than those on goods further processed from that raw material. In many countries basic raw materials have no tariff at all. Also, if products are re-exported either without transformation or after transformation, many governments offer tariff drawbacks effectively paying back the tariffs levied on any raw materials or components imported to produce the product. 

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