Which of the following is a principle of the WTO Valuation Agreement?

• A. Transactional Value on Price Actually Paid or Payable (PAPP)
• B. Global Cost Approach
• C. Market Value Method
• D. Freight-Based Valuation

Answer: (A)

The central idea is that customs value under the WTO Valuation Agreement is based on the price actually paid or payable for the goods when they are sold for export to the country of importation. This transaction value approach is the default method and aims to reflect the true economic value of the goods by grounding the duty in a real sale price, including any additions that are part of that price (like packing or selling commissions if they’re paid or payable). It’s preferred because it ties the value directly to an actual transaction and provides consistency across countries. If this price isn’t usable, other permitted methods are used in a defined sequence, such as values for identical or similar goods or computed/deductive values. The other options—global cost approach, market value method, or freight-based valuation—do not represent the primary basis of valuation in the WTO framework.