A fifty-year accord signed in 1994 by the United States,

You guys are having a nice and friendly discussion around here. Allow me to join in and give you my take on the issue;

A fifty-year accord signed in 1994 by the United States, Canada, and Mexico dictated the reduction of tariffs that member nations had been permitted to levy on imports from other member nations.
A. dictated the reduction of tariffs that member nations had been permitted to levy---- You absolutely don't need the past perfect; "to permit" is not an "action verb".
B. dictated the tariff reduction that member nations had been levying-----------------> You don't levy a "tariff reduction", you do levy a tariff.
C. dictates the tariff reduction member nations have been permitted to levy----------->You don't levy a "tariff reduction", you do levy a tariff.
D. dictated the reduction of tariffs that member nations are permitted to levy----------> "dictated" is fine because of the date "1994" and "are permitted" is the correct use of the verb.
E. dictates the reduction of tariffs permitted for levying by member nations ------------> "permitted for levying" is clearly unacceptable

In general, avoid using the present perfect and the past perfect when you're dealing with non-action verbs such as "to permit", "to allow", etc... especially on the GMAT.

A similar SC question from the GMAT is shown below. Guess what the correct answer is.

A 1972 agreement between Canada and the United States reduced the amount of
phosphates that municipalities had been allowed to dump into the Great Lakes.

(A) reduced the amount of phosphates that municipalities had been allowed to dump
(B) reduced the phosphate amount that municipalities had been dumping
(C) reduces the phosphate amount municipalities have been allowed to dump
(D) reduced the amount of phosphates that municipalities are allowed to dump
(E) reduces the amount of phosphates allowed for dumping by municipalities