Which principle is identified as the most commonly used in the WTO Valuation Agreement?

Which principle is identified as the most commonly used in the WTO Valuation Agreement?

• A. Transactional Value on Price Actually Paid or Payable (PAPP)
• B. Deductive Value
• C. Computed Value
• D. Fall Back Method

Answer: (A)

The pricing approach based on the actual price paid or payable for the goods is used as the starting point for customs valuation under the WTO Valuation Agreement. This method reflects what buyers actually paid in a real sale to export to the country of import, making it a direct and verifiable measure of value. It’s the most common because it mirrors everyday commerce, is straightforward to verify with invoices and contracts, and generally provides a transparent basis for assessing duties.

If this price cannot be used for some reason (for example, the sale lacks a reliable price, or there are special conditions affecting the price), the other methods come into play. Deductive value looks at the unit price of identical or similar goods sold in the importing country. Computed value uses the costs of production and related charges to arrive at value. The fall-back method is a last resort when neither of the other methods can be applied. Since most transactions have a clear, verifiable sale price, the price actually paid or payable remains the most commonly used principle.