WORLD TRADE  
ORGANIZATION   
WT/MIN(01)/41 
11 November 2001 
 (01-5316) 
MINISTERIAL CONFERENCE 
Fourth Session Doha, 9-13 November 2001  
 
 
 
REPORT OF THE WORKING PARTY ON THE 
ACCESSION OF THE SEPARATE CUSTOMS TERRITORY 
OF TAIWAN, PENGHU, KINMEN AND MATSU 
 
I. INTRODUCTION 
1. At its meeting on 29 September-1 October 1992, the GATT 1947 Council of Representatives 
established a Working Party, as re flected in the respective Minutes (document C/M/259), to examine the 
application of the Separate Customs Territory of  Taiwan, Penghu, Kinmen and Matsu (hereinafter 
referred to as "Chinese Taipei ") to accede to the General Agreem ent  1947 under Article XXXIII, and 
to submit to the Council recommendations which may include a Draft Protocol of Accession.  
Membership of the Working Party wa s open to all contracting parties wishing to serve on it.  Following 
the request of Chinese Taipei, circulated in docum ent WT/ACC/TPKM/1, and pu rsuant to the decision 
of the General Council of 31 January 1995, the Wo rking Party was transformed into a World Trade 
Organization (WTO) Working Party to  negotiate the terms of accessi on of Chinese Taipei to the 
Marrakesh Agreement Esta blishing the World Trade Organization (hereinafter referred to as the "WTO 
Agreement ") under Article XII of  that Agreement. 
2. The Working Party met on 6 November 1992, 15 April 1993, 28 June 1993, 12 October 1993, 
17 May 1994, 26 July 1994, 21 December 1994, 28 February 1997, 8 May 1998, 12 May 1999, and 
18 September 2001 under the Chairmanship of H.E. Mr. M. Morland (United Kingdom).   The terms of 
reference and the membership of the Working Party are set out in document WT/ACC/TPKM/6/Rev.6.  
II. INFORMATION PROVIDED 
3. The Working Party had before it, to serve as a basis for its disc ussion, the memorandum on 
Chinese Taipei's foreign trade regime (L/7097 and Addenda 1 - 11) and the questions submitted by 
Members on the foreign trade regime of Chinese Taipei  together with the replies of the Chinese Taipei 
authorities thereto (L/7089/Rev.1, L/7429 and Add.1) , and documents Spec(94) 28 (Newly Promulgated 
or Revised Laws and Regulations),  Spec(94)30 (Description of Servic e Sectors), Spec(94)31 and Add.1 
(Special Exchange Agreement), Sp ec(94)41 (Status Report of the Bila teral Negotiations),  Spec(95)1 
and Corr.1 (Checklist of Accession Issues - Pre liminary Responses Provided by Chinese Taipei), 
Spec(95)8 (Laws and regulations regarding agricultu ral products), WT/ACC/TPK M/2 (Tariff reductions 
for 758 tariff lines effected as from 14 July 1995), WT/ACC/TPKM/3 (Newly Promulgated or Revised 
Laws and Regulations), and WT /ACC/TPKM/4 (The Customs Import Tariff and Classification of 
Import and Export Commodities: revised editi on of August 1995);  WT/ACC/TPKM/8/Rev.2 and 
WT/ACC/TPKM/9/Rev.2 (In formation on Industrial Subsidies) ;  WT/ACC/TPKM/10 (Adoption of 
Codex Standards);  WT/ACC/TPKM/12 (Standards for Agricultural and Processed Agricultural 
Products);  WT/ACC/TPKM/13 (Lis t of Commodities Subject to E xport Restriction and List of 
Commodities);  WT/ACC/TPKM/14 and Corr.1 and Add.1 (Additional Questions and Replies 
                                                      
1 This document reprints the document distributed as WT/ACC/TPKM/18 on 5 October 2001. 
 WT/MIN(01)/4 
Page 2 
 
 Concerning Domestic Support and Expo rt Subsidies).  In addition, the representative of Chinese Taipei 
made available to the Working Party the following material: 
Customs Regime: 
 
- Customs Law; 
- Rules Governing the Implemen tation of the Customs Law; 
- Implementing Regulation on the Imposition of Countervailing Duty and Anti-Dumping 
Duty; 
- Rules for the Collection of Customs Fees. 
 
Trade Regime: 
 
 General: 
 
- Foreign Trade Act; 
- Enforcement Rules of th e Foreign Trade Act; 
- Regulations Governing the Process of Objections Against Punishment on 
Violation of Fore ign Trade Act; 
- Customs Import Tariff and Classifica tion of Import & Export Commodities 
(June 1998 Revised Edition); 
- Consolidated List of Commodities S ubject to Import Restriction and 
Commodities Entrusted to Customs fo r Import Examination (January 2000 
Edition); 
- Regulations Governing Import of Co mmodities by Business Firms; 
- Regulations Governing Registration a nd Administration of Exporters and 
Importers; 
- Regulations Governing Revenue, Expe nditure, Custody, and Use of Trade 
Promotion Fund; 
- Rules for Handling Import Relief Cases; 
- Import Regulations Codes. 
 
Industrial Goods: 
 
- Regulations Governing Export and Im port of High-Tech Commodities; 
- Operating Rules for Screening Applicat ions to Import Fish ing Vessels Using 
New Fishing Methods; 
- Requirements for Imported Drug Registration; 
- Veterinary Drugs Control Act; 
- Agro-Pesticide Act; 
- Guidelines Governing the Applicati on for and Issuance of Fertilizer 
Registration Certificate; 
- Operating Regulations Governing the Cont rol of Restricted Methyl Bromide; 
- Regulations of the Industrial Developmen t Bureau of the Ministry of Economic 
Affairs for Controlled Substances Pursuant to the Montreal Protocol. 
 
 Agricultural Goods: 
 
- Statute for Agricultural Development; 
- Regulations Governing Relief and Aid for Major Agricultural Products 
Damages by Importation; 
- Guidelines for Screening Applications for Letter of Approval for the 
Importation of Livestock and Poultry;  WT/MIN(01)/4 
 Page 3 
 
 
- Guidelines for the Issuance of Written Approval Regarding the Importation of 
Aquatic Animals; 
- Guidelines Governing Food Companies Applying to Import Raw Glutinous 
Rice/Powder for Processing for Export; 
- Operating Procedures Governing Applica tions to Import Wheat and Operation 
of the Stabilization Fund; 
- Operating Procedures Governing Appl ications to Import Wheat Flour and 
Operation of the Stabilization Fund; 
- Feeds Control Act; 
- Guidelines Governing Applicat ions to Import Aduki Beans; 
- Screening Procedures and Criteria Govern ing the Issuance of Written Approval 
for the Importation of Dried Betel Nuts (Ta-Fu-Tzu). 
 
 Investment Regime: 
 
- Statute for Investment by Foreign Nationals; 
- Negative List for Investment by Ov erseas Chinese and Foreign Nationals; 
- Statute for Upgrading Industries; 
- Enforcement Rules of the Statute for Upgrading Industries; 
- Statute for Development of Me dium and Small Businesses; 
- Statute for Establishment and Manage ment of Export Processing Zones; 
- Aeronautics and Space Indust ries Development Programme; 
- Automotive Industry Development Policy. 
 
 Other Texts Affecting Trade: 
 
 General: 
 
- Income Tax Law; 
- Business Tax Law; 
- Statute for Commodity Tax; 
- Statute for Foreign Exchange Regulation; 
- Fair Trade Law. 
 
 Intellectual Property Rights: 
 
 Copyright: 
 
- Copyright Law; 
- Implementation Rules of  the Copyright Law; 
- Copyright Intermediary  Organization Act; 
- Illustrated Contents of 'Each Kinds of Works' in Paragraph One, Article 5 of 
Copyright Law; 
- Certain amounts of Items 2 and 3 of Paragraph One of Article 87 bis of the 
Copyright Law; 
- Standard for Compensation for Fair Use of Works in Paragraph4, Article 47 of 
the Copyright Law; 
- Regulations Governing Application for Approval of Compulsory License of 
Musical Works; 
- Regulations Governing Regi stration of Pl ate Rights; 
- Implementation Regulation for Suspension of Release of Goods Infringing on 
Copyright or Plate Right by Customs Authority; 
- Regulation of Copyright  Dispute Mediation; WT/MIN(01)/4 
Page 4 
 
 
- Organic Charter of the Copyright Exam ination and Mediation Committee of 
IPO, Ministry of Economic Affairs; 
- Agreement for the Protection of Copyri ght between the Coordination Council 
for North American Affairs and the American Institute in Taiwan; 
- Agreement Concerning the Protection  and Enforcement of Rights in 
Audiovisual Works between the Coordi nation Council for North American 
Affairs and the American Institute in Taiwan. 
 
 Trademark: 
 
- Trademark Law. 
 
 Patent: 
 
- Patent Law. 
 
 
 Standards, Quarantine, Inspection: 
    S t a n d a r d s :  
 
- Provisional Standard for Hi -Fi and Stereo Equipment. 
   Quarantine: 
 
- Quarantine Requirements for the Importation of Animal  and Animal Products; 
- Quarantine Regulations on Im ported Fishery Products; 
- Quarantine Restrictions on the Importa tion of Plants and Plant Products; 
- Statute for Prevention and Control of Infectious Animals Diseases; 
- Implementation Rules of the Statute for Prevention and Control of Infectious 
Animals Diseases; 
- Regulations Governing the Quarantine at International Ports. 
 
  Inspection: 
 
- Commodity Inspection Law; 
- Enforcement Rules for the Commodity Inspection Law (Implementation Rules 
of the Commodity Inspection Act). 
 
  O t h e r s :  
 
- Commodity Labelling Law; 
- Law Governing Food Sanitation; 
- Enforcement Rules of the Law Governing Food Sanitation; 
- Law for the Control of Cosmetic Hygiene. 
 
 Government Procurement: 
 
- Law of Audit; 
- Rules Governing Procuring Goods of Foreign Origin; 
- Ordinance Concerning Inspection Pr ocedure Governing Construction Work, 
Procurement and Disposal  of Properties by Government Agencies. 
 
  WT/MIN(01)/4 
 Page 5 
 
  Others: 
 
- Guidelines for Screening Applications fo r Written Import/Export Approval Regarding 
Wild Fauna and Flora Deserving Conservation; 
- Wildlife Conservation Law; 
- Implementing Regulations of the Wildlife Conservation Law; 
- Rules of Royalty Rate for Public Interest Activities. 
  Trade in services: 
 
 Schedule of Commitments: 
 
- Schedule of the Separate Customs Terr itory of Taiwan, Penghu, Kinmen and 
Matsu Concerning Initial Commitments on Trade in Services (WT/ACC/TPKM/18/Add.2). 
 
 Banking: 
 
- Banking Law; 
- Guidelines for the Screening and Approva l of the Establishment of Branches 
and Representative Offices by Foreign Banks. 
 
 Insurance: 
 
- Insurance Law; 
- Insurance Company Establishment Criteria; 
- Criteria for Approving Foreign Insu rance Enterprises and the Governing 
Regulation; 
- Central Reinsurance Corporation Act. 
 
 Securities: 
 
- Securities and Exchange Law; 
- Foreign Futures Trading Law; 
- Regulations Governing the Standard for Incorporation of Securities 
Companies; 
- Rules for the Administration of Securi ties Investment Trust Enterprises. 
 
 Others: 
 
- Broadcasting and Television Law; 
- Motion Picture Law; 
- By-laws Governing the Execution of the Motion Picture Law; 
- Employment Service Act; 
- Rules Governing the Approval and Admini stration of Foreign Specialist and 
Technical Personnel Employed by Public  or Private Enterprises and Ranking 
Executives Employed by Overseas Ch inese or Foreign National Invested 
Enterprises. 
 
 
 WT/MIN(01)/4 
Page 6 
 
 
III. INTRODUCTORY STATEMENTS 
4. In his statements the representative of Chinese Taipei inter alia recalled that this Separate 
Customs Territory, which encompasses the islands of Taiwan, Penghu, Kinmen and Matsu, was short of 
natural resources.  Its only substant ial resource - labour - was the source  of its strong rate of growth.  
The main economic indicators were as follows:   WT/MIN(01)/4
 Page 7Chinese Taipei’s Main Economic Indicators  
 
Year GNP 
(Billion US$)GNP per 
Capita 
(US$) *Annual Final Budget  
(Billion US$) Annual Changes in Prices Unemployment 
Rate (%) Foreign 
Exchange 
(Billion US$) Export Statistics
(Billion US$) Import 
Statistics 
(Billion US$) Consumer price 
(%) Wholesale price 
(%) 
1993 228.6 10,964 42.7 2.9 2.5 1.5 83.6 85.1 77.1 
1994 248.3 11,806 39.6 4.1 2.2 1.6   92.5 93.0 85.3 
1995 269.1 12,686 42.4 3.7 7.4 1.8 90.3 111.7 103.6 
1996 283.6 13,260 40.9 3.1 -1.0 2.6 88.0 115.9 102.4 
1997 293.3 13,592 44.8 0.9 -0.5 2.7 83.5 122.1 114.4 
1998 269.2 12,360 34.6 1.7 0.6 2.7 90.3 110.6 104.7 
1999 290.5 13,235 40.7 0.2 -4.6 2.9 106.2 121.6 110.7 
2000 314.4 14,216 76.2 1.3 1.8 3.0 106.7 148.3 140.0 
 
- Since 1960, the "Fiscal Year " refers to the 12-month period beginning from 1 July 1 of the preced ing year to 30 June of the de signated  year.  The item excl udes repayment of 
government debt.  
- In 2000, the "Fiscal Year " refers to the 18-month period beginning from 1 July of 1999 to 31 December 2000.  The item excludes repayment of government de bt. 
 
 
 
 
Chinese Taipei’s Expenditure on Gross National Product 
Unit: Billion US$ 
 
Year Gross National 
Product Gross Domestic 
Product Private 
Consumption Government 
Expenditure Gross Fixed  Capital 
Formation Increase in 
Inventory Export of Goods & 
Services Imports of Goods & 
Services 
1993 228.6 224.3 126.9 35.0 56.4 2.3 98.9 95.2 
1994 248.3 244.3 142.6 35.6 60.0 2.0 106.6 102.5 
1995 269.1 264.9 155.7 37.7 66.1 1.0 127.1 122.7 
1996 283.6 279.6 165.3 40.0 62.9 2.0 132.6 123.1 
1997 293.3 290.2 172.0 41.7 66.0 4.2 140.1 133.8 
1998 269.2 267.2 159.4 38.2 62.9 3.7 127.7 124.8 
1999 290.5 287.9 174.8 37.9 65.8 1.4 139.0 131.1 
2000 314.4 310.1 192.8 40.4 72.3 -1.6 168.1 161.8 
 WT/MIN(01)/4 
Page 8 
 
 Chinese Taipei’s Employment Population by Sectors 
   Unit: 1000 Persons 
Year Agriculture Sector Indust rial Sector Services Sector 
1993 1,005 3,418 4,323 
1994 976 3,506 4,456 
1995 954 3,504 4,587 
1996 918 3,399 4,751 
1997 878 3,502 4,795 
1998 822 3,523 4,944 
1999 776 3,492 5,116 
2000 740 3,534 5,218 
 
Chinese Taipei’s Balance of Payments 
   Unit: Million US$ 
Year Current Account Capital Account Financial Account Reserves 
1993 7,042 -328 -4,629 -1,541 
1994 6,498 -344 -1,397 -4,622 
1995 5,474 -650 -8,190 3,931 
1996 10,923 -653 -–8,633 -1,102 
1997 7,051 -314 –7,291 728 
1998 3,437 -181 2,495 -4,827 
1999 8,384 -173 9,220 -18,593 
2000 8,903 -287 -8,019 -2,477 
 
5. He added that government policies had rest ructured the economy from agriculture towards 
basic and heavy industries.  As part of an impor t substitution and integration process, intermediate 
goods industries were established.  Transportation was streamlined and large investments were made 
in new ports, airports and highways.  The Chine se Taipei authorities had also intensified rural 
development and supported the moves to improve  farm income.  More recently, industrial 
restructuring was further promoted.  Educationa l institutions placed greater emphasis on science and 
technology in order to provide a highly trained workforce.  In the 1990's, economic liberalization and 
the internationalization of the economy had continue d.  Infrastructure investments, the regulation of 
pollution and the privatization of the economy had accelerated.  Employment had shifted from the 
agricultural sector to the industrial and service sect ors.  The representative of Chinese Taipei also 
stated that when Chinese Taipei initiated its import-substitution strategy, exports were mostly 
composed of sugar, rice, bananas, tea and pro cessed agricultural products.  Few industrial products 
were sufficiently competitive for export.  Gradua lly the import substitution industries became capable 
of producing competitive export products.  As a resu lt, the share of exports of traditional products 
declined whilst industrial products took an increasing share of exports.  At first, major export items 
were labour intensive products such as textiles a nd plywood.  Recently, electronic goods had become 
major export items.  Recent total exports value in US$000 was as follows: 
Year Total 
1993 85,091,458 
1994 93,048,783 
1995 111,658,800 
1996 115,942,064 
1997 122,080,673 
1998 110,582,300 
1999 121,591,000 
2000 148,320,500 
  WT/MIN(01)/4 
 Page 9 
 
 
  Recent total imports value in US$000 was as follows: 
 
Year Total 
1993 77,061,203 
1994 85,349,194 
1995 103,550,044 
1996 102,370,021 
1997 114,424,665 
1998 104,665,300 
1999 110,689,900 
2000 140,010,600 
 
6. Referring to the direction of the future economic policies, the representative of Chinese 
Taipei said that overall global economy expanded st eadily in 1997, in contrast, Chinese Taipei’s 
economy reached its slowest growth rate that year at  6.8 per cent, the highest in six years.  Economic 
growth for 1995 and 1996 had been 6.0 per cent and 5.7 per cent respectively.  The upturn in Chinese 
Taipei’s economy could be attributed  to strong private investment and consumption.  In 1997 inflation 
was low at the rate of 0.9 per cent, compared with  3.7 and 3.1 in 1995 and 1996.  Trade surplus in 
1997 was US$7.7 billion.  For 1998, the economy of Chinese Taipei was expected to grow 5.3 per 
cent, with per capita GNP expected  to reach almost US$12,030 and consumer prices to rise 1.9 per 
cent.  Nevertheless, these expectations would depend  on whether public investment projects proceed 
according to schedule. An additional source of major impetus to growth would be the private sector as 
a result of strength in private consumption, steady improvement in the investment climate and greater private investment in public projects.  In his stat ements he also outlined the sectors where Chinese 
Taipei would need transition periods to bring spec ific measures into full conformity with WTO 
obligations and said that Chinese Taipei was read y to assume obligations comparable to those 
undertaken by WTO Members with a comparable le vel of economic development.  The representative 
of Chinese Taipei stated that his government  would not claim any right granted under WTO 
Agreements to developing country Members or to a Member in the process of transforming its 
economy from a centrally-planned into a market, free-enterprise economy.   
7. Members of the Working Party warmly welc omed the application of Chinese Taipei for 
accession to the WTO.  Notwithstanding limitations on its natural resources and the relative size of 
the economy, Chinese Taipei had transformed itself into one of the world's most dynamic trade 
centres.  Chinese Taipei's membership of the WTO would strengthen the multilateral trading system. 
Members also congratulated Chinese Taipei on its  willingness to make the required adjustments 
promptly and to only seek a minimum of transition periods in which to bring its economy fully into 
conformity with the requirements of the WTO.  Members noted, however, that membership of the WTO required full observance of the MFN and national treatment principles, in particular, GATT 
1994 required the grant of any advantage, favour, pr ivilege or immunity granted by any contracting 
party to any product originating in or destined for any other WTO Member or other country or 
separate customs territory, wh ether or not a contracting party, to products originating in or destined 
for the territories of all other contracting parties.  Similar MFN requirements applied in respect of the 
General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of 
Intellectual Property (TRIPS).  It also require d the taking of comprehensive market access 
commitments on goods, including agricultural products, and services, which would be reflected in the 
respective Schedules of Concessions and Commitments annexed to the Draft Protocol of Accession.  
Several members of the Working Party were of the view that Chinese Taipei should assume a level of 
obligations commensurate to that of the develope d economy original Members of the WTO, and that 
Chinese Taipei should apply the WTO Agreement full y from the date of accession, without recourse 
to any transition periods.   WT/MIN(01)/4 
Page 10 
 
 8. The representative of Chinese Taipei acknowledged the importance of observing the 
principles of MFN and national treatment in the WTO and the broad scope of that obligation.  He 
stated that upon accession Chinese Taipei would fully observe its MFN and national treatment 
obligations in respect of any advantage, favour, pr ivilege or immunity granted to WTO Members or 
other countries or separate customs territori es, unless specifically exempted from its GATS 
commitments. 
IV. ECONOMIC POLICIES 
 Foreign Exchange Policies 
9. In response to requests from members of th e Working Party for information on the foreign 
exchange system prevailing in Chinese Taipei, the representative of Chinese Taipei stated that all 
current account transactions were free from foreign ex change controls.  As for residents, any company 
or individual could freely settle foreign exchange  with authorized banks up to an amount of 
US$50 million and US$5 million respectively per year.  As for non-residents, any non-resident could 
open a NT dollar account with local commercial ba nks.  However, foreign financial institutions 
outside the territory of Chinese Taipei could only deposit locally earned revenue of NT dollars into 
their accounts.  There was no restriction when th e remittance was related to an outward/inward 
investment project approved by the competent author ity.  The foreign exchange rate was determined 
by the market, and there were no discriminatory curre ncy practices.   In response to further questions, 
he said that enterprises established under the Comp any Law of Chinese Taipei could freely purchase 
the foreign exchange required for imports or for invisible trade settlements through the authorised 
foreign exchange banks without any restriction.  There was no restriction on the use of foreign exchange for overseas investment provided that the i nvestment had been approved by the authorities.  
Authorized foreign exchange banks and foreign bank s were free to take part in the Chinese Taipei 
foreign currency call loan market.  Since 1991, fo rward foreign exchange transactions had been 
permitted.  The representative of Chinese Taipei said that these requirements would be gradually 
phased out as market conditions permitted.  He expressed the view that Chinese Taipei's foreign 
exchange practices were fully consiste nt with Article XV of the GATT 1994.  
10. Some members of the Working Party noted that Chinese Taipei was not a member of the 
International Monetary Fund (IMF) and thus would ha ve to enter into a Speci al Exchange Agreement 
as provided for in Article XV:6 of the GATT 1994 inco rporating obligations c onsistent with Fund 
Article VIII.  Some members also expressed concern th at elements of Chinese Taipei's foreign exchange 
system provided scope for practices that distorted tr ade flows.  The representative of Chinese Taipei 
said that in the context of accession to the WTO, Chinese Taipei was prepared  to comply with the 
provisions of Article XV of the GATT 1994 regarding its foreign exchange restrictions.  He added 
that in order to comply with GATT 1994 Artic le XV, Chinese Taipei had negotiated a Special 
Exchange Agreement with the WTO.  
- Pricing Policies 
11. Some members of the Working Party noted th at Chinese Taipei had price controls for the 
domestic prices of certain commodities and that ther e were no price controls applied exclusively to 
imports, they requested a full list of the products subj ect to price controls, and the plans to eliminate 
such price controls.  In response the representative of  Chinese Taipei stated that price controls applied 
primarily in the area of public utilities under control of the Public Utility Rate Commission.  The 
products specified in the list reproduced in Attachme nt A to this Report were the only ones subject to 
price controls.  In relation to the sale of tob acco and alcoholic beverages, the representative of 
Chinese Taipei stated that minimum profit or pric ing of tobacco and alcohol products had been 
abolished.  The regulation on the maximum reta il margin would cease to be effective when the 
monopoly system was formally abolished.  He furthe r added that petroleum, natural gas and liquefied 
petroleum gas were subject to price controls in order to maintain stability in en ergy prices.  Salt, sugar  WT/MIN(01)/4 
 Page 11 
 
 
 and fertilizer were subject to price controls to stab ilize farmers' income and production costs.  Chinese 
Taipei intended to phase out price controls as soon  as possible, keeping in view the objectives noted 
above.  Future liberalization of price controls woul d take into account the timetable for privatizing 
state enterprises which had been involved in exerci sing price controls, such as the Taiwan Fertilizer 
Company, and the Taiwan Salt Industrial Cor poration  The Chinese Petroleum Corporation's 
monopoly on activities had been phased out since 1996 and price controls on petroleum and liquified 
petroleum gas were removed in 2000.  Fertilizer ha d also been removed from price controls in 1999 
due to the privatization of the Taiwan Fertilizer Company.    Some members of the Working Party 
noted that they could see no justification for price controls on sugar and salt.  In response, the 
representative of Chinese Taipei stated that the price controls on salt were expect ed to be abolished by 
the end of June 2002.   Domestic sugar prices we re set by Taiwan Sugar Corporation, which was the 
sole supplier of sugar.  The sugar price set by Ta iwan Sugar Corporation took into account the price at 
which Taiwan Sugar purchased sugar cane from loca l growers (which was set 10 years ago according 
to the farmers' production cost at th at time), and its own cost of prod uction.   The domestic sugar price 
had been decreasing, as the increase in import of sugar (the cost of which was lower), helped to bring 
down Taiwan Sugar's cost.  Industrial users of sugar we re consulted, in order to ensure that the price 
control would not seriously affect their compe titiveness.  There was no discrimination between cane 
and beet sugar.  The price control system would be replaced by the implementation of a tariff rate 
quota system upon Chinese Taipei's accession.  The private sector would be free to import sugar at 
out-quota rates.  Upon accession, the private sector would have access to an annual sugar tariff quota.  
Therefore, importation of sugar would not be subject to monopoly.  With the private sector free to 
import sugar, market prices would be determined by market forces.  It was expected that the oil 
product market would be fully liberalized by the e nd of 2001.  It was not Chinese Taipei's policy to 
add to the list of products subject to price control set out in Attachment A to this Report, unless the 
economy or a specific sector thereof was in serious  difficulty or in a state of emergency.   
12. The representative of Chinese Taipei stated that, from the date of accession, Chinese Taipei 
would ensure that price controls applied to the products covered in the list reproduced in 
Attachment A to this Report, and to any other produc t, would be applied in a WTO-consistent fashion, 
taking account of the interests of exporting WTO Members as provided for in Article III:9 of the 
GATT 1994.  The price levels of the goods subject to  price controls would be published in accordance 
with Article X of GATT 1994.  The Working Party took note of these commitments. 
V. FRAMEWORK FOR MAKING AND ENFORCING POLICIES 
 Powers of Executive, Legislative and Judici ary, Administration of Policies on WTO-related 
 Issues 
13. In response to requests for information, the representative of Chinese Taipei stated that the 
subject matter of international trade, including all matters covered by the WTO Agreements fell 
within the power of the government of the Separate  Customs Territory.  In the event that measures 
taken by local levels of government had an impa ct upon international trade, those measures became 
subject to regulation by the government of the Sepa rate Customs Territory which could overrule or 
invalidate measures of local levels of government.  By way of example, he noted that the procurement 
decisions of local levels of government were subject to the disciplines of the Government 
Procurement Law made by the government of the Sepa rate Customs Territory.  He further noted that a 
natural or juridical person whose rights and interest s in a matter relating to issues covered by the 
WTO Agreements were impaired by an administ rative action in Chinese Taipei was permitted to 
appeal such action.  In cases of administrative action allegedly contrary to law, such appeal would be 
to the Administrative Court.  In cases of an admini strative action that was allegedly improper, but not 
illegal, an appeal committee, organised by a hi gher administrative level, drawn from government 
officials not involved in the enforcement of the matter at issue, experts from academia and other 
experts, would review the matter and recommend a correction to the administrative action. WT/MIN(01)/4 
Page 12 
 
 14. Some members of the Working Party enqu ired whether international treaties were 
self-executing under the law of Chinese Taipei a nd sought a commitment that Chinese Taipei would 
bring its foreign trade laws and regulations into conformity with WTO provisions at the time of 
accession.  In response, the representative of Chinese Taipei said that international treaties enter into 
force after being duly ratified  and promulgated and would have the same force and effect as domestic 
laws.   
15. The representative of Chinese Taipei confirme d that Chinese Taipei would fully implement 
its obligations under the WTO Agreement and its Draft Protocol of Accession upon accession to the 
WTO, unless specifically provided in this Report and Draft Protocol.   Further, the government of the 
Separate Customs Territory would eliminate or nu llify measures taken by local levels of government 
in Chinese Taipei that were inconsistent with  WTO provisions from the date of accession.  An 
illustrative list of the laws that would be amended as part of Chinese Taipei's implementation of its 
obligations is reproduced in Attachment D to this  Report.  The Working Party took note of this 
commitment. 
VI. POLICIES AFFECTING TRADE IN GOODS 
16. Chinese Taipei undertook negotiations on market access in goods.  The Schedule of 
Concessions reflecting the results of those negotiations is reproduced in Part I of Annex I of the Draft 
Protocol of Accession reproduced in the Appendix to this Report. 
 Import Regulations 
 Registration of Importers and Exporters 
17. Some members of the Working Party noted  that Chinese Taipei required a registered 
importer/exporter to clear all impor ts and exports through its custom s.  Further, Chinese Taipei 
conditioned registration as an importer or exporte r on being an enterprise in Chinese Taipei and 
meeting a NT$5 million minimum capital requirement.  These members of the Working Party stated 
that they considered that the minimum capital re quirement was excessive and could act as a restraint 
on trade.  They requested that the minimum capita l requirement be eliminated and that registration 
should be automatic, open to all individuals and enterprises inter ested in engaging in import/export 
without regard to investment or establishment in Chinese Taipei and conform to WTO rules.  
18. In response, the representative of Chinese Taip ei stated that the purpose of the registration 
requirement was not to restrain trade, but to ensu re that importers/exporters  had sufficient financial 
resources to support their import/export operati ons.  The precondition of NT$5 million minimum 
capital requirement had been abolished in Septembe r 1997.  With the elimination of that capital 
requirement, the only condition for importer/exporter registration was that the enterprise list import 
and/or export activities in its profit-seeking enterprise registration certificate.  No fee was charged for 
the registration.  Chinese Taipei however would like to retain the registration system, which operated 
as an automatic licensing procedure pursuant to the Agreement on Import Licensing    
19. The representative of Chinese Taipei stated th at any enterprise including sole proprietorships,  
interested in importing and/or exporting and ha ving included in its profit-seeking enterprise 
registration certificate export/import or buying/se lling as a business item, would be permitted to 
register as an importer/exporter.  Registration as a profit-seeking enterprise required maintenance of 
an address in Chinese Taipei, but did not impose minimum investment or similar requirements.  The registration system to become an importer/exporter would conform to WTO rules, including the 
automatic licensing provisions of the Agreement on Import Licensing Procedures, and would not 
restrain trade.  The Working Part y took note of these commitments. 
  WT/MIN(01)/4 
 Page 13 
 
 
  Advertising and Trade in Alcohol and Tobacco Products 
20. Some members of the Working Party considered that the rules applying to the advertising of 
tobacco and alcohol products, which had a strong er effect on imports, should not be used to 
discriminate either de facto  or de jure  against imported products.  The representative of Chinese 
Taipei stated that under current law, alcohol pr oducts could be advertised  on television and radio 
during specified times.  While beer and wine could be advertised in magazin es and newspapers, spirits 
could not be advertised in these publications.  New sp irits products could be advertised in magazines 
for a period of one year following their release onto th e market.  The representative of Chinese Taipei 
also said that advertising of tobacco products was governed by the Tobacco Hazard Prevention Act, 
which came into force on 19 September 1997.   The rules on the advertising of tobacco products were 
provided in Article 9 and 10 of the Tobacco Hazard Prevention Act.  The rules set out in these two articles prohibit the use of certain methods for th e promotion or advertising of tobacco products, 
restrict the use of periodicals as a medium for the promotion or advertising of tobacco products to 120 
items per year in periodicals, the types of activ ities or sponsorship permitted under the name of a 
tobacco company, and the display of tobacco products. 
21. The representative of Chinese Taipei conf irmed that from the date of accession Chinese 
Taipei would not use advertising rules to discrimin ate against imported tobacco and alcohol products.  
The one-year limitation on advertising of alcoholic  beverages would be eliminated upon accession.  
He also stated that, upon accessi on, Chinese Taipei would permit a dvertising for alcoholic beverages 
in all media, subject to regulation in relation to the content and timing of advertising. He further 
confirmed that the advertising rules for tobacco and alcohol products and implementation of those 
rules would be consistent with WTO requirement s from the date of accession. The Working Party 
took note of these commitments.  
22. Concerning the right to sell and trade in t obacco and alcoholic beverages, the representative 
of Chinese Taipei stated that, upon accession, enterpri ses engaged in the distribution and/or trade of 
imported alcohol and tobacco products would not be required to provide information beyond that 
requested of firms engaged in the distribution and/or  trade of like domestic products in Chinese Taipei 
concerning their business plans or corporate structures  and that such information would be requested 
on the same timetable as applied to the latter firms.  He also stated that taxes and other charges of 
whatever character, including licensing and other admi nistrative fees, related to trade and distribution 
of imported alcohol and tobacco products would no t be applied in excess of those applied to firms 
dealing with like domestic products.  The Wo rking Party took note of these commitments. 
 Customs Tariff  
23. Several members of the Working Party requ ested information on the tariff structure of 
Chinese Taipei, the existence of bilateral rates of dut y, in particular the products covered by bilateral 
trade concessions, the existence of mixed duties, whether trade measures were being adopted on a 
MFN basis, the level of average eff ective rates of duty and the actual levels of protection in force.  
Some members noted that in 1992 some 413 agricultural and 21 non-agricultural products accounting 
for 5.4 per cent of total tariff lines were subject to  duty rates ranging from 30 per cent to 50 per cent.  
In response, the representative of Chinese Taipei said that since 1 September 1980, Chinese Taipei's 
tariff had two columns of duty rates.  The differentia l duty rates in Column II were applied to imports 
from countries or areas that granted reciprocal tariff treatment to Chinese Taipei's exports.  At present, 
Column II duty rates applied to products from 154 countries or areas which amounted for almost 
98 per cent of the total value of imports. Products from the following WTO Members did not fall 
within Column II: Angola, Cuba, Djibouti, Republic  of the Congo, Estonia, Georgia, Lithuania, 
Mongolia, Gambia, Mauritania, Mozambique, Myanma r, Romania, Rwanda, Uganda, Zimbabwe and 
The Kyrgyz Republic. The representative of Chinese Taipei undertook that upon accession to the 
WTO, MFN treatment would be extended to all WTO Members applying the WTO rules to Chinese WT/MIN(01)/4 
Page 14 
 
 Taipei. He added that between 1984 and 1992, the ta riff had been revised across-the-board and duty 
rates have been lowered by some 50 per cent.  Du ring that same period, 668 items had become duty 
free, and 13165 items had their duty rates reduced. An  additional tariff reduction in 1995 had further 
reduced duty rates on 758 items, with an average dut y reduction of 2.8 per cent.  Besides, the duty 
rates of 1,358 items had been further reduced in  1998 including 289 items in accordance with the 
WTO Ministerial Declaration on Trade in Inform ation Technology products on December 1996.  
Further reductions for 750 tariff lin es were pending in the Legislature.  At present, the highest 
nominal duty rate was 50  per cent, but this was levi ed only in a few agricultural product areas.  The 
simple average of nominal duty rates had declin ed from 30.81 per cent in 1984 to 8.20 per cent in 
2000.  
24. In response to further questions, the representa tive of Chinese Taipei indicated that in 1998 
out of a total of 8,399 dutiable items, 42 items we re subject to specific duties and 114 items were 
subject to mixed duties.  The remaini ng 8,243 dutiable items were subject to ad valorem  duties.  Some 
members of the Working Party stated that, in thei r view, Chinese Taipei should preferably adopt an ad 
valorem  approach throughout the tariff in order to incr ease the predictability and transparency of the 
tariff régime.  The representative of Chinese Taipei sai d that more than 98 per cent of the tariff lines 
were already subject to ad valorem  duties.  In future reviews of its tariff system, Chinese Taipei 
would take into account the views of members in this respect. 
 Tariff Rate Quotas 
25. Members of the Working Party requested info rmation on Chinese Taipei's proposed new tariff 
rate quota system.  In response, the representative of  Chinese Taipei stated that following revision of 
its system of import restrictions on certain imported products, Chinese Taipei had decided to  
introduce a system of tariff rate quotas as described in paragraphs 27-35 below. The representative of 
Chinese Taipei provided further info rmation on that scheme in document 
WT/ACC/SPEC/TPKM/5/Rev.1. and WT/ACC/SPEC/TPK M/7 and Corr.1.  He further noted that 
each tariff rate quota would be  recorded in Part I of Annex I to the Draft Protocol of Accession). 
26. The representative of Chinese Taipei stated th at for the agricultural and fish products that 
were subject to a tariff rate quota regime after Ch inese Taipei accedes to th e WTO, the quota would 
be allocated according to the follo wing methods described in paragraphs 27-35 below, which would 
be implemented  consistently with relevant WTO rules.   
27. The representative of Chinese Taipei stated  that Tariff Rate Quota (TRQ) allocation 
certificates, as import licences, would be in compliance with the Agreement on Import Licensing Procedures. All commercial terms of trade, incl uding product specifications, origin, pricing, 
packaging, etc. would be at the sole determination of the parties engaged in the transaction.  Partial 
shipments against a single allocation would be perm itted.  Traders would be allowed to import any 
product or mixture of products subject to the same TRQ as noted in the tariff schedule.  All products 
imported under the TRQ could be distributed freely within Chinese Taipei without further trade-based 
restrictions.  Allocation certificates would be freel y transferable and tradable, and certificate holders 
could have certificates reissued to  combine or divide allocations. 
28. The representative of Chinese Taipei stated that all applications for allocation of TRQ 
quantities would be submitted to the Ministry of Finance (MOF).  Any enterprise registered as an importer/exporter in Chinese Taipei would be eligib le to apply for certificates under each of the quota 
allocations systems.  Any domestic or foreign enterp rise, including a sole-proprietorship, meeting the 
requirements set out in paragraph 19 above would be permitted to regi ster as an importer/exporter in 
Chinese Taipei.  Specific conditions for applying fo r a TRQ allocation would be published in the 
official journal sixty days in advance of the start of the application period.  The application period for 
initial allocations should be closed by 30 Novemb er of the previous year, unless the timing of 
accession necessitated a change in schedule for the firs t year.  The application period for reallocations  WT/MIN(01)/4 
 Page 15 
 
 
 of unused quotas would be closed by 1 September.   The MOF would grant allocations and publish and 
notify the names of recipients and allocations within  two weeks of the close of the application period 
for the purpose of transfer.  
  System 1 
29. The representative of Chinese Taipei stated th at the allocation of tariff quotas would be made 
as follows.  Under System 1 (for quotas of chicken m eat, pork offal, poultry offal, deer velvet, fresh 
pears (excluding European pears), bananas, and pork  belly), the initial distribution of allocations for 
the first two years, certificates would be issued on a first-come, first-served basis.  Allocations would 
be established for commercially viable shipping quan tities, but a ceiling of no more than 20 per cent 
of the total in-quota quantity would be established in advance and published as part of the allocation 
notification procedures.  Allocation certificates woul d be valid for product arriving between 1 January 
and 1 September.  The date of arrival would be defined in accordance with Article 5 of the 
implementing regulations of the Customs Law of Ch inese Taipei as currently in place. Upon request 
and proof of signed contract befo re 1 September, MOF would automa tically extend the validity date 
of the certificate to cover products arriving on or before 31 December. 
30. With respect to the reallocation of unused allocations under System 1, the representative of 
Chinese Taipei stated that in any year, if the holde r of a quota allocation certificate had not contracted 
for import of the holder’s total allocation by 1 Sept ember, the unused portion of the allocation would 
be reallocated on a first-come, first-served basis.  The date of re-issue would be no later than 15 
September.  The re-issued allocation certificates w ould be valid for products arriving on or before 31 
December.   
31. The representative of Chinese Taipei stated that  after the first two years, and in each year  in 
which allocations were made under System 1, applic ants for an allocation of the quota would receive 
an allocation at least as large as the average of the amount actually imported by the applicant in the 
prior two years.  Any remaining quota amounts or increases in the quota amount would be allocated 
on a first-come, first-served basis. any and all fees, charges, deposits, duties, etc. associated with the 
allocation process would be made explicit in the advance public notification process, and with the 
exception of ordinary customs duties, would be comme nsurate with the cost of the services rendered.  
A performance bond would be required to ensure comp lete utilisation of the allocations.  The bond 
would be returned to the applicant after the app licant imports its allocation before its allocation 
certificate expires.  The bond would  not be set at a level which could deter full utilisation of the TRQ 
or otherwise restrict trade. 
System 2 
32. In relation to quotas of red bean, liquid milk  and peanuts, under System 2, the representative 
of Chinese Taipei stated that the initial distribution of allocations would be distributed once a year.  
Allocations would be established for commercially vi able shipping quantities, but a ceiling of no more 
than 20 per cent of the total in-quota quantity w ould be established in advance and published as part 
of the allocation notification procedures.  Alloca tions would be made through a competitive process.  
An applicant would need to bid by mail in order to obtain its allocation.  Bids submitted would be 
arranged in a priority order according to the premium of the bid, which was the amount a bidder was willing to pay for each unit of the allocation it bids fo r.  Quota would be allocated in this order until 
filled.  In situations where some bids offer the same amount of premium and the quota available were 
not sufficient to fill each of such bids, the quota would be allocated on a pro rata  basis.  Successful 
bidders for allocations would be required to obt ain their allocation certificates by paying a non-
refundable premium within thirty days.  The MOF w ould re-allocate the allocations of those failing to 
pay the premium accordingly.  Such reallocation process would commence immediately after a period 
of twenty-one days for notification. Allocati on certificates would be valid for product arriving WT/MIN(01)/4 
Page 16 
 
 between 1 January and 1 September.  The date of arrival would be defined in accordance with 
Article 5 of the implementing regulations of the Cu stoms Law of Chinese Taipei as currently in place.  
Upon request and proof of signed contract before 1 September, MOF would automatically extend the 
validity date of the certificate to cover pr oducts arriving on or before 31 December.  
33. Concerning the reallocation of unused allo cations under System 2, the representative of 
Chinese Taipei stated that  except otherwise provide d for in the preceding paragraph, by 1 September, 
the unused portion of the allocation,  would be rea llocated through a competitive process.  The date of 
re-issue would be no later than 15 September. The re-issued allocations woul d be valid for products 
arriving on or before 31 December. 
  System 3 
34. Concerning quotas of garlic bulbs, dried shiita ke, dried day lily, young coconut, betel nuts, 
pineapples, mangoes, shaddocks, pe rsimmons, dried longans and longa n pulp, sugar (private sector), 
mackerel, carangid, and sardine (herrings), under System 3, the representative of Chinese Taipei 
stated that the annual distribution of allocation would be divided into one to four segments for 
distribution.  Allocations would be established for commercially viable shipping quantities, but a 
ceiling of no more than 20 per cent of each segment would be established in advance and published as 
part of the allocation notification procedures.  In  addition to the announcement made in the previous 
year on the number of segments and the quantity of each quota segment announcements would be made twenty-one days in advance of the start of the application period for each segment amount.  
Allocations would be made through a competitive pro cess.  An applicant would be required to bid by 
mail in order to obtain its allocation.  Bids subm itted would be arranged in a priority order according 
to the premium of the bid, which was the amount a bidder would be willing to pay for each unit of the 
allocation it bids for.  Each segment of the quota would be allocated in this order until filled. In 
situations where some bids offer the same amount  of premium and the segment of quota available 
were not sufficient to fill each of such bids, the segment of quota would be allocated on a pro rata  
basis.  Successful bidders for allocations were requi red to obtain their allocation certificates by paying 
the non-refundable premium within thirty days.  The MOF would re-allocate the allocations of those 
failing to pay the premium accordingly.  Such  re-allocation process would commence immediately 
after a period of twenty-one days for notification. 
35. The representative of Chinese Taipei noted that except as otherwise provided for in the 
preceding paragraph, by 1 September, the unused portion of the allocation would be reallocated 
through a competitive process.  The date of re-issu e would be no later than  15 September. The re-
issued allocations would be valid for pr oducts arriving on or before 31 December. 
36. The representative of Chinese Taipei stated th at the new Tariff Rate Quota system described 
in paragraphs 27-35 above would be  implemented by the date of Chinese Taipei's accession to the 
WTO.  The Working Party took note of this commitment.   
37. The representative of Chinese Taipei stated that  with a view to maintaining a transparent and 
open TRQ administration system, upon request from any WTO Member, Chinese Taipei would consult with the Member on the administration of TR Q to ensure that the quota would be allocated in 
a transparent, equitable, and non-discriminatory manner and the quota would be fully utilised.  The 
Working Party took note of this commitment.   
38. Some Members of the Working Party expressed  concern that Chinese Ta ipei’s intention to 
allocate tariff quota access by comp etitive processes may not be consistent with Chinese Taipei’s 
tariff commitments.  While acknowledging that there was discussion taking place within the WTO on 
the legality of auctioning or tendering of market  access entitlements, these Memb ers were of the view 
that premiums associated with this method of allocation represented charges imposed on or in 
connection with imports that we re inconsistent with commitme nts undertaken by Members under  WT/MIN(01)/4 
 Page 17 
 
 
 Article II:1(b) of GATT 1994.  These Members sought assurances that Chinese Taipei would modify 
its tariff quota allocation system should it be demons trated in the WTO that charges associated with 
allocation by competitive processes were WTO inconsistent.   
39. The representative of Chinese Taipei stated th at should it be demonstrated in the WTO that 
charges associated with allocati on by competitive processes were WT O inconsistent Chinese Taipei 
would promptly modify its tariff quota allocation system to bring it into conformity with WTO 
requirements.  The Working Party took note of these commitments. 
 Other Duties and Charges (Article II:1(b)) 
40. The representative of Chinese Taipei stated  that except as provided in the Schedule of 
Concessions on Goods (Part I of Annex I to the Dr aft Protocol of Accession of Chinese Taipei) all 
other duties and charges covered by Article II:1(b)  of the GATT 1994 would be bound at the level of 
zero.   The Working Party took note of this commitment.   
 Fees and Charges for Services Rendered 
41. The representative of Chinese Taipei said that  there were no taxes, charges or fees levied on 
imports only.  The trade promotion fee authorized by the Foreign Trade Act had a ceiling of 
0.0425 per cent, and was collected on all imports and exports exclusively to promote import and 
export trade.  He stated that the Trade Promotion Fee was a very small charge, no more than 0.0425 
per cent of customs value (currently only 0.0415 per cent), applied to both imports and exports to fund 
trade promotion activities.  He added that in add ition to import tariffs and taxes applied equally to 
imported and domestic products (e.g., the Commodity  Tax, the VAT, and the Alcohol and Tobacco 
Tax), the Harbour Construction Dues and the Trade Pr omotion Fee were the only charges applied to 
imports.  In response, some members of the Workin g Party stated that the Trade Promotion Fee did 
not appear to be consistent with  Article VIII of the GATT 1994.  In response to questions concerning 
the Harbour Construction Due, the representative of Chinese Taipei explained that the customs 
authorities collected a Harbour Construction Due fo r goods entering Chinese Taipei through ports.  
The levy, introduced in 1948 to fund harbour expans ion and maintenance, was imposed at the fixed 
rate of 0.4 per cent and did not apply to inter-island trade.    
42. Some members of the Working Party stated that  they considered that this levy and fee were 
inconsistent with Article VIII(1)(a) of the GATT 1994.  These members of the Working Party 
considered that the levy and fee discriminated ag ainst imports because they were only applied to 
imported goods and not to like domestic  products and they were not in  conformity with Article III of 
the GATT 1994.  Some members of the Working Party pointed out that the ad valorem  nature of the 
Harbour Construction Dues and the Trade Promotion Fee made it impossible for them to reflect the 
approximate cost of the services rendered.  The representative of Chinese Taipei said that both the 
Harbour Construction Dues and the trade promotion f ee applied to imports as well as exports.  In his 
view, the Harbour Construction Dues could be treate d as an internal tax or a service fee to improve 
port facilities and services.  Chinese Taipei consid ered both the Harbour Construction Dues and the 
trade promotion fee to be service fees as contempl ated under Article VIII of the GATT 1994.  He 
acknowledged that 25 per cent of the Harbour Cons truction Dues proceeds were used to provide 
financial assistance to the cities where the harbour s were located.  Upon accession to the WTO, the 
revised Commercial Port Law would require that  any revenue generated through the Harbour 
Construction dues be used exclusively for the development of commercial harbours. 
43. Some members of the Working Party stated that  the levy of 0.4 per cent was a revenue charge 
to fund harbour up-keep and expansion based on im port taxation, and was not a charge for specific 
services rendered.  This levy and the trade promoti on fee should be brought into conformity with 
GATT 1994 in advance of Chinese Taipei's accession.  The representative of Chinese Taipei stated WT/MIN(01)/4 
Page 18 
 
 that after reviewing the comments made by Workin g Party members, Chinese Taipei had decided to 
bring the Harbour Construction Dues into conformity  with Article VIII of the GATT 1994.  He added 
that the Trade Promotion Fee would not be revised  because it was considered in conformity with 
GATT 1994 Articles III, and VIII.  In addition, neit her charge would be increased in its level of 
application, or included in the taxable base of im ports for the purposes of applying domestic taxes 
such as the Commodity Tax.  If requested, Ch inese Taipei would consult with the Members 
concerning the effect of these measures on their tr ade.  Some members reserved their position in 
relation to the Trade Promotion Fee which they c onsidered incompatible with Chinese Taipei’s WTO 
obligations.  These members expressly reserved the ri ght to pursue this issue pursuant to the WTO 
Understanding on Rules and Procedures Gove rning the Settlement of Disputes.  
44. The representative of Chinese Taipei confir med that the Trade Promotion Fee would be 
applied in conformity with WTO obligations and would not exceed 0.0425 per cent of the customs 
value of the good.  The Working Party took note of these commitments.   
45. The representative of Chinese Taipei stated that Chinese Taipei would bring the Harbour 
Construction Dues into conformity with Artic les III and VIII of the GATT 1994 upon accession. The 
Harbour Construction Dues would be based on the co st of the services provided and not applied on an 
ad valorem  basis.  The Harbour Construction Dues would also be applied to all trade, including inter-
island trade.  Within the same time-frame Chin ese Taipei would exclude these charges from the 
valuation base for the application to imports of domestic taxes, such as the Commodity Tax and the 
Tobacco and Alcohol Tax.  The current Harbour C onstruction Dues were 0.3 per cent of the taxable 
base.  The Working Party took note of these commitments.   
 Internal Taxes Applied to Imports 
46. In response to questions, the representative of Chinese Taipei stated that VAT, Commodity 
Tax, tobacco and alcohol monopoly tax were applied equally to imported and domestic products.   
 Commodity tax 
47. Some Working Party members sought informa tion from Chinese Taipei on the application of 
the special commodity tax.  In response, the repr esentative of Chinese Taipei said that the tax was 
imposed on imported goods at the time of importati on, and on like domestic goods upon their release 
from the factory.  For imported goods, the amount  of the commodity tax was the taxable value 
established in accordance with the Customs Impor t Tariff, plus customs duties, plus harbour 
construction dues multiplied by the tax rate.  For domestic goods, the amount of the tax was 
calculated on the basis of one of two methods.  Th e first method applied when the manufacturer sold 
products through wholesalers or if the manufacturer w as paid to manufacture the products for others.  
The second method considered a 12 per cent promo tional expense.  The goods subject to the 
commodity tax were: rubber tires, cement, machine-made  cool drinks, flat glass, oil and gas, certain 
electric appliances and motor vehicles.  Chinese Ta ipei believed that many Working Party members 
had similar practices.  He noted that the 12 per cen t promotional expense repr esented a manufacturer's 
typical promotion expense.  The tax allowed a deduction of 12 per cent fo r promotional expenses 
when goods were circulated not through an excl usive wholesaler or distributor.  Chinese Taipei 
considered that it treated imported goods the same as  the goods sold through distributors, and did not 
discriminate against imports.  The commodity tax was a special excise tax.  The determination of the 
tax base had taken into account common practices.  The 12 per cent deduction only applied if the 
domestic sales were not through a sole distributor.  In response, some Working Party members noted 
that a critical consideration in the application of  this internal tax was consistency with national 
treatment and other WTO obligations and the avoidance of subsidization.   
48. Some members of the Working Party were of th e view that the basis for the application of the 
commodity tax to imports was artificially inflat ed because the tax base of domestic and imported  WT/MIN(01)/4 
 Page 19 
 
 
 goods were different.  Domestic goods  were assessed on an ex factory basis, excluding the cost of 
delivery and transfer of the goods to the wholesale level whereas the base for imported goods was the 
import value plus transportation, insurance and othe r customs charges and customs duty.  They also 
noted that domestic goods profited by having an additional 12 per cent deduction for promotional 
expenses prior to the calculation of the tax.  These  members of the Working Party considered that 
Chinese Taipei should address the central issue of equal application of the tax.  The bases for 
calculation of the tax were inequitable, and the in corporation of a 12 per cent differential in the 
valuation of imports and domestic products based on the concept of promotional expenses could not 
be justified, and should be eliminated prior to accession.  Those members considered that due to the 
different tax bases, the tax was applied in a manner th at were not in conformity with Article III of the 
GATT 1994.  They stated that Chinese Taipei s hould eliminate by the date of its accession any 
domestic tax measures or methods of applying dom estic taxes whose applica tions vary according to 
whether the items were locally manufactured or imported. 
49. The representative of Chinese Taipei stated th at from the time of Chinese Taipei's accession, 
changes to the Commodity Tax would modify the base for the tax.  From that date, the tax would be 
calculated on the basis of the sale price.  The sale price was the manufacturer's wholesale price for the 
current month; if the manufacturer sold directly to retailers, wholesale profit could be deducted from 
the selling price.  Deductible wholesale profit rate w as determined on an industry-by-industry basis.  
Imported goods were taxed on the basis of their CIF value and therefore were not eligible for the tax 
adjustment.  He further added that in order to  equalise the treatment of domestic and imported 
products, prices of domestic manufactured goods sold  directly to retailers contained elements of 
wholesale profits which were not included in the tax b ase.  He further stated that the current practice 
of assessing the commodity tax based upon engine disp lacement of automobiles and the licence plate 
tax was fully consistent with Article III of the GATT 1994.  Some member s of the Working Party 
were of the view, however, that application of  a tax based on characteristics such as engine 
displacement could de facto discriminate against imports.  
50. The representative of Chinese Taipei stated that Chinese Taipei would amend its laws to 
remove the 12 per cent allowance provided when g oods were circulated not through an exclusive 
distributor, and would use selling prices as the base for levying the commodity tax.  He further stated 
that Chinese Taipei would eliminate by the date of  its accession any domestic taxes, tax assessment 
methods or application of them which was incons istent with Article III of the GATT 1994.  The 
Working Party took note of these commitments. 
 Business Tax:  Gross Business Receipt Tax and VAT 
51. Some members of the Working Party asked Chin ese Taipei to describe the application of the 
business tax, its scope and level of application, the portion of the tax revenue accounted for by 
imports, etc.  In response, the representative of Ch inese Taipei said that Business Tax applied to the 
sale of goods and the rendering of services.  The tax was levied in two forms.  The first form was a general sales tax which applied to the business of insurance, banking, investment trusts, securities, 
agricultural wholesale, pawn shops and small bus iness operators.  The second form, a VAT business 
tax, applied to all other businesses.  The VAT was a pplied at the rate of 5 per cent, to both domestic 
and imported products.   All goods, both domestic ally manufactured and im ported, were generally 
taxed at the point of sale.  Revenue from both kinds of tax imposed on imported goods had 
represented 1.24 per cent of total tax revenue in 1999 (1 July 1998 to 30 June 1999).  Chinese Taipei 
considered that the imposition of the tax at the point of sale simplified the procedure by levying the 
tax on the taxable goods' imported value and the importers ' added value jointly, rather than separately.  
However, in some cases, to minimise tax avoida nce imported goods were subjected to business VAT 
at the time of importation.  The reason for this was that if business VAT was levied at the time of sale, 
it was possible that certain imported goods with par ticular end uses could avoid payment of the tax, 
i.e. motor vehicles imported for personal use, or g oods imported by a financial institution.  He further WT/MIN(01)/4 
Page 20 
 
 noted that because the tax paid on inputs could be deducted from the tax paid on outputs collected 
from purchases, goods imported for use and goods impor ted for resale were not differentiated at the 
time of importation.  In relation to the tax base for calculation of the amount of business VAT 
payable, the representative of Chinese Taipei noted that imported goods were taxed on the basis of the 
customs duty paid value plus the commodity tax, if  applicable.  The harbour construction dues would 
be removed from the tax base.  If the commodity ta x was payable, the commodity tax formed part of 
the value added, and was counted as the tax base fo r the business, whether the goods were imported or 
manufactured domestically.  In addition, the bus iness importer could deduct the input tax from the 
output tax and was only taxed for the value added to the goods.  Therefore, there was no double counting or "tax-on-tax ".  He added that Chinese Taipei, afte r examining whether all goods could be 
taxed at the time of importation, had found that it was common practice in those economies which 
imposed VAT to levy the tax at the time of importation. 
 Monopoly tax on tobacco and wine 
52. Some members of the Working Party sought information on the monopoly tax for tobacco, 
wine, spirits and beer.  In their view, there was a serious transparency problem in this sector.  In 
response, the representative of Chinese Taipei confirme d that imported tobacco and wine were subject 
to a Monopoly Tax, in lieu of  customs duty, harbour construction fees, commodity tax and 
value-added business tax.  The Monopoly Tax impo sed on domestic tobacco and wine products was 
assessed on an ad valorem  basis, equivalent to the operating revenue minus all relevant cost and 
expenses of the Taiwan Tobacco and Wine Monopo ly Bureau (TTWMB) and was considered a sales 
tax.  On average, imported tobacco and wines we re subject to the Monopoly Tax at the rate of 
approximately 120 per cent of the import price.  So me members of the Working Party requested that 
Chinese Taipei provide information on cost of production, and indicate how the TTWMB's 
methodology to determine the tax ra te complied with the GATT 1994, in particular Articles I, III, X, 
XI, XVI, and XVII, a list of the taxes applied to im ports, their negative rates, the value basis as well 
as the methodology used to determine that domestic tobacco, spirits and wine were subject to a tax 
rate of approximately 185 per cent of cost. 
53. Some members of the Working Party reiterated their concerns in relation to the operation of 
the Monopoly Tax scheme, particularly in relation to the lack of sufficient transparency in its 
operation.  Without the availability of data to calculate domestic costs, it was not possible to 
accurately determine whether the Monopoly Tax w as equally applied to domestic and imported 
products.  In their view the Monopoly Tax appeared  to have a greater impact upon imported products.  
They did not consider Chinese Taipei's explana tions of the methodology used to determine the 
Monopoly Tax adequate, substantiate d and verifiable.  It was not possible to conclude that domestic 
and imported products were taxed in an equivalent manner.  As there were large discrepancies 
between the rates quoted by Chinese Taipei and the information available to national authorities, it 
also appeared that the tax system was discriminator y.  Those members stated that no transition period 
would be appropriate.  Chinese Taipei should either  eliminate the Monopoly Tax on imports of wine 
and distilled spirits immediately upon accession or replace the Monopoly Taxes with reasonable ad 
valorem  import duties, and ensure that internal taxe s applied equally to dom estic and imported wine 
and spirits.  These members of the Working Party di sagreed with the view that a system for the ad 
valorem  taxation of domestic goods based on net profits  of the TTWMB could be considered as 
equivalent to a specific tax on imported goods.  It ap peared to these members that due to the lack of 
transparency mentioned above, there were probl ems in assessing the consistency of the Monopoly 
Tax system with the GATT 1994.  Nevertheless th e Monopoly Tax for imported wine, cigarettes and 
distilled spirits was significantly higher than the e ffective tax rate for similar domestic products in 
breach of Article III of the GATT 1994.  These members requested, therefore, that the operation of 
the TTWMB be altered prior to Chinese Taipei's acce ssion, to enhance transparency and to operate in 
a manner consistent with the provisions of the GA TT 1994.  The official monopoly plan ought to be 
liberalised and the trade impact of the plan fully reviewed prior to accession.  The representative of 
Chinese Taipei said that due to the alteration of the scheme over recent years, the Monopoly Tax on  WT/MIN(01)/4 
 Page 21 
 
 
 imported products tended to be lowe r than the tax applied to domestic products.  In any event, the 
Legislature was determined to repeal the tobacco and wine monopoly system.  Alcohol and tobacco 
products were classified according to production met hods and other features, with different tariff rates 
and taxes applying to different products.  Classi fication and tariff and tax rates were carefully 
monitored in order to ensure that no discrimina tion occurred between domestic  and imported goods.    
54. Some members of the Working Party asked th at details be provided of the scheme which 
would replace the Monopoly Tax and reiterated that  no transitional period was appropriate for a 
situation which was in clear breach of Article III  of the GATT 1994.  The representative of Chinese 
Taipei responded that public hearings had been co mpleted, and a plan had been developed.  He 
provided the Working Party with a summary of the re form plan and said that he considered that the 
future regime would improve trade in alcohol and tobacco products.  The new scheme would be 
implemented upon Chinese Taipei's accession.   
55. The representative of Chinese Taipei stated that, upon accession, the Monopoly Tax would be 
abolished and that tobacco and al cohol products would be subject to (i) import duties as reflected in 
Chinese Taipei's Schedule of Concessions (Part I of A nnex I to the Draft Protocol of Accession) in the 
same manner as other imported products, (ii) the t obacco and alcohol tax, and (iii) business tax.  The 
representative of Chinese Taipei also stated that fro m the date of accession internal taxes and charges 
of whatever character related to trade and dist ribution of alcohol and tobacco products would be 
applied equally to domestic and im ported products, including with respect to domestic distribution 
and sales of these products without regard to the owne rship of the enterprise.  The Working Party took 
note of these commitments. 
 Quantitative Restrictions 
  Area restrictions 
56. In the early stages of the Working Party, some members noted that discriminatory area 
restrictions were imposed on many products: (i) peaches: limited to imports from Europe and the 
United States; (ii) lemons and limes, grapes, plum s, whole ducks, turkey cuts: issuance of import 
licenses was suspended except for im ports from the United States; (iii) oranges and other mandarins, 
including tangerines and satsumas, and grapefruits: imports from the United States were free, imports 
from South Africa were limited in quantity;  (iv) apples:  imports from the United States and Canada 
were free; imports from other areas were subject to quantitative restrictions.  In response to requests 
from Members for updated information on area rest rictions, the representative of Chinese Taipei 
stated that as of May 1999, (i) peaches: limited to  imports from Europe and the United States, imports 
from Australia and New Zealand were limited in quan tity; (ii) lemons and limes: limited to imports 
from the United States; imports from Argentina, Au stralia and European Union were limited in 
quantity; (iii) grapes: limited to imports from the United States; imports from Chile were limited in 
quantity; (iv) plums: limited to imports from the United States; imports from Australia, Chile and 
New Zealand were limited in quantity; (v) whole ducks, turkey cuts: issuance of import licenses was suspended except for imports from the United States;  (vi) oranges: imports from the United States 
were free, imports from Australia, European Uni on and South Africa were limited in quantity; 
(vii) other mandarins, including tangerines and sat sumas: imports from the United States were free, 
imports from European Union and Japan were limite d in quantity; (viii) grapefruits: imports from the 
United States were free, imports from Argentina, Au stralia and South Africa were limited in quantity; 
(ix) apples: imports from the United States and Cana da were free; imports from Argentina, Australia, 
Chile, European Union, France, Japan, New Zeala nd and South Africa were limited in quantity;  
(x) young coconuts:  imported from the Philippines, Ma laysia and Thailand were limited in quantity.  
There were also restrictions on cigarettes and bila teral agreements on the importation of beer, wine 
and cigarettes.  In the view of some members,  the area restrictions and similar exclusive access 
accorded for additional agricultural products were di scriminatory trade measure s inconsistent with the WT/MIN(01)/4 
Page 22 
 
 GATT 1994 and, in particular, the MFN principle.   Those members emphasized that there was no 
justification to permit the continuation of such di scrimination.  Chinese Taipei should eliminate those 
measures from the date of its accession to the WTO.  
57. In response the representative of Chinese Taipei  said that the area restrictions and similar 
measures operated to maintain the diversity in the or igin of imports and to maintain trade balances 
with certain areas, or to facilitate agriculture restru cturing. Only a small percentage of industrial and 
agricultural products were subject to these discriminat ory restrictions. Area restrictions for alcoholic 
beverages and cigarettes had been eliminated on 1 September 1994.  The tariff rate quota offered as a 
liberalization measure to be implemented after ac cession for young coconuts would be distributed as 
described in paragraphs 27-35 through procedures c onsistent with the relevant provisions of GATT 
1994 and the Agreements on Agriculture and Import Licensing Procedures. 
58. With regard to automobiles, some members noted that Chinese Taipei's Import 
Regulation 209, provided that only motor vehicles from "Europe and the American Continent " may 
be imported into Chinese Taipei.  The representative of  Chinese Taipei agreed that this restriction was 
discriminatory.  It was imposed pursuant to the Automobile Industry Strategic Development Plan.  
Chinese Taipei's car industry was currently not a competitive one, as the size of the market was not 
substantial enough to allow for economies of scale.  The total production value in 1992 was US$8.2 
billion, representing 5 per cent of the total pr oduction value of the whole manufacturing sector. 
Workers directly employed in the car industry were in the number of 120,000. A sudden opening of 
the market would result in serious economic and social problems.   
59. Some members of the Working Party stated th at a transitional period was not appropriate, and 
that the area restrictions on automobiles should be  eliminated prior to accession.  In response, the 
representative of Chinese Taipei undertook to eliminate the area restrictions on automobiles.  Up to 
now the liberalisation of car imports had proceeded  as follows:  (i) heavy trucks could be imported 
freely from February 1994;  (ii) passenger cars co uld be imported without quantitative restrictions 
from North America and Europe (excepting Easter n Europe).  Passenger cars from other areas were 
currently under either quantitative or area restrictions ;  (iii) light trucks a nd station wagons could be 
imported freely from North America and Europe.  Im ports of light trucks and station wagons from 
other areas were currently under either quantitative or area restrictions.  He assured the Working Party 
that it was not the intention of Chinese Taipei  to employ measures not permitted by the WTO 
Agreement, such as voluntary export restraints or ot her grey area measures to liberalise automobile 
imports.   
60. At the request of some members of the Wo rking Party, the representative of Chinese Taipei 
provided a comprehensive listing, covering both tariff and non-tariff measures, of all trade preferences 
in force.  He added that once area restrictions  were eliminated, there would remain no trade 
preferences extended on a bilateral basis.  The re presentative of Chinese Taipei assured the Working 
Party that area restrictions would be brought into  conformity with the requirements of the WTO 
Agreement. He confirmed that area restrictions for alcoholic beverages and cigarettes had been 
eliminated from 1 September 1994. 
61. The representative of Chinese Taipei stated th at area restrictions applying to imports of 
certain passenger cars and certain small commercia l vehicles, certain automobile chassis and 
motorcycles would be eliminated upon Chinese Ta ipei's accession to the WTO.  Passenger cars,  light 
commercial vehicles and certain fish  products were the only industrial  products that would be subject 
to tariff-rate quotas after WTO accession.  For passenge r cars and light commercial vehicles, the tariff 
rate quotas would be increased at the annual rate of 20  percent.  The transition period of the tariff rate 
quota system would  be eight years after the accession year.  Chinese Taipei also undertook that upon its accession, area restrictions on agricultural prod ucts, except young coconut which would be subject 
to tariff rate quotas, would be eliminated.  These ta riff rate quotas would be administered in a manner 
consistent with the requirements of the WTO Agre ement, in particular the Agreement on Agriculture,  WT/MIN(01)/4 
 Page 23 
 
 
 the Agreement on Import Licensing Procedures and GATT 1994.  The Working Party took note of 
these commitments. 
 Import Licensing 
62. Several members of the Working Party noted th at historically Chinese Taipei had maintained 
a complex network of non-tariff measures consisting of quantitative restrictions affecting some 27 
items, non-automatic import licensing affecting some 246 items, including 27 items which were 
subject to quantitative restrictions and standards in spections, quarantine, labelling requirements, etc.  
These members requested detailed information on the schemes.  Some members added that the bans 
on liquid milk, rice, passenger cars equipped with di esel engines and motorcycles of 150cc or more, 
applied by Chinese Taipei were inconsistent with WT O obligations and would have to be eliminated.  
These members requested that Chin ese Taipei eliminate, prior to accession to the WTO, all import 
restrictions inconsistent with the GATT 1994 and th e WTO Agreements, in particular the Agreements 
on Agriculture, Sanitary and Phytosanitary Measures and Technical Barriers to Trade. 
63. In response, the representative of Chinese Taip ei said that a system of licensing had been 
operating in relation to the importa tion of certain products that consisted of area restrictions, 
discretionary licensing and import controls.  Automa tic licensing operated to grant an import license 
without requiring the Customs to screen the goods.  Di scretionary licensing required that the Board of 
Foreign Trade issued import licenses for certain pr oducts, following approval by consent letter of the 
relevant agencies.  In the case of such products , the Council of Agriculture, Industrial Development 
Bureau, Department of Health, Environmental Pr otection Administration and other agencies were 
required to consent to the issue of licenses for bot h import controls and discretionary licensing in 
respect of products falling within their respective jurisdictions.  Once the importation was approved, 
the Board of Foreign Trade issued an import license.   
64. The representative of Chinese Taipei stated th at as a result of the concerns expressed by 
members of the Working Party, Chinese Taipei had decided to establish a "Negative List " system.  
The Negative List system would streamline the importation process and replace all pre-existing 
licensing requirements, except in ca ses where the product had essential  security, public order, public 
health, or environmental protection implications.  The Negative List would result in the issuing of 
licenses by the relevant agencies according to an obj ective standard, and in a transparent manner.  He 
noted, however, that some items on the automatic license list would become subject to quantitative 
restriction or import ban under the Negative List syst em, due to the re-categorisation of those items.  
For products subject to import monopolies, con sent letters would only be granted to importers 
enjoying an import monopoly.  The procurement practices of the government agencies enjoying the 
import monopoly would be made consistent  with Article XVII of the GATT 1994.  
65. The representative of Chinese Taipei outlined the operation of its Negative List system under 
the June 1997 version as follows.  Items were listed in either Table I (Table of Commodities Subject 
to Import Control) or in Table II (Table of Comm odities Subject to Conditional Import).  Items listed 
in Table I could not be imported unless specially a pproved by the Board of Foreign Trade or other 
relevant authorities, which were listed in Impor t Regulations 111/112.  Items listed in Table II 
required that an import license be issued prior to importation, by the Board of Foreign Trade or its 
designated licensing banks i.e. Import Regulations 121/122.  Tables I and II constituted the Negative 
List.  In respect of items that had previously re quired a license issued by the Board of Foreign Trade 
but were not retained in the Negative List, if they  were subject to administration requirement, which 
had no trade restriction effect, the Customs were requ ired to carry out an inspection to determine that 
all requirements for importation were fulfilled.  The items subject to that requirement were listed in 
the "List of Commodities Entrusted to Customs for Import Examination " ("the Entrusted List ").  The 
Entrusted List was published together with the Ne gative List in a consolidated volume arranged by 
HS Code number.  The Negative List and the Entrusted List each accounted for 8 per cent of tariff WT/MIN(01)/4 
Page 24 
 
 lines, the remaining tariff items were free of this requ irement.  Items contained in Table I were subject 
to general import bans, which in respect of most  products were justified under Articles XX and XXI 
of the GATT 1994, whilst others were required to pr otect domestic sectors.  In the case of bans 
necessary to protect domestic sectors, an entitle ment to import the necessary quantity could be 
auctioned when domestic production fell short of demand.  He stated that upon accession, the items 
listed in Table I could be moved to Table II if  quotas or tariff quotas were used as transitional 
measures.   
66. In response to further questions from member s of the Working Party, the representative of 
Chinese Taipei explained that the decision whether a product should be included in the Negative List 
was taken by government agencies.  The legal basis for including items in the negative list was 
Article 11 of the Foreign Trade Act, which permitted the imposition of a restriction if the restriction 
was necessary to fulfil obligations under international treaties or tr ade agreements, or for  defence 
purposes, social security, culture, human health, e nvironmental protection reasons or to implement 
specific policies.  After accession the inclusion of ne w items would be subject to a review procedure 
to ensure WTO consistency.  Although the legisl ation did not specifically provide for interested 
parties to make representations concerning the in clusion of an item in the negative list, existing 
practice permitted such representations to be made  to decision makers.  The practice of inviting 
interested parties to express their view when c onsidering changes to the Negative List would be 
continued.  Following accession to the WTO, the number of items included in the negative list would 
be substantially reduced; inclusion of new items wo uld be subject to a review procedure to ensure 
WTO consistency.  He also noted that the effect of the recent Foreign Trade Act was to limit the types of considerations required to be  taken into account by administrators when deciding whether items 
were to be included in the Negative List as subj ect to new import licensing requirements.   The 
Working Party took note of this commitment.   
67. Several members of the Working Party indicated that all bans and restrictions set out in the 
Negative List, and the requirements for import licen sing being issued by more than one regulatory 
agency should, be brought into full conformity w ith the WTO Agreement, especially the Agreement 
on Import Licensing Procedures.  In particular, a me mber of the Working Party noted that some of 
Chinese Taipei's stated reasons for restrictions did not appear consistent with WTO requirements, e.g., 
restrictions required to protect domestic sectors.  Th is member requested specific justifications for any 
import restrictions maintained or imposed in the fu ture.  A general statement that  import bans, which 
in respect of most products were justified under Ar ticles XX and XXI was insufficient to evaluate any 
commitment.  In response, the representative of Chinese Taipei noted that although the Agreement on 
Import Licensing Procedures allowed Members to have more than one import licensing entity, 
Chinese Taipei would work towards a system that  required import licenses to be obtained from one 
regulatory entity only.  Some members of the Wo rking Party said that all import bans, quantitative 
restrictions import licensing restrictions, and ot her non-tariff measures inconsistent with the 
requirements of the WTO Agreement would have to be  eliminated prior to Chinese Taipei's accession.  
Some members of the Working Party said that if Chinese Taipei believed that certain of its import 
bans, quantitative restrictions and administrativ e requirements were not inconsistent with the 
provisions of the WTO, the onus was on Chinese Taipei  to demonstrate this.  They requested Chinese 
Taipei to modify this list to show: the precise description of the product affected by HS number, the 
measure or measures applied to each, the specific WT O provisions which justified the maintenance of 
the measure or measures and the responsible agency .  If border measures were to be justified to 
enforce Technical Regulations or Sanitary and Phyt osanitary Measures, the table should also show the 
relevant national standard(s) and any international st andard(s).  The Working Party would then be in a 
position to examine the matter further.  The repr esentative of Chinese Taipei  stated that a table 
containing the justifications for placing items on the Negative List would be submitted to the Working 
Party. 
68. The Consolidated List of Commodities S ubject to Import Regulations and Commodities 
Entrusted to Customs Import Examination was referred to in Attachment C to this Report.  The  WT/MIN(01)/4 
 Page 25 
 
 
 representative of Chinese Taipei undertook to notify an y changes introduced to the Consolidated List 
in accordance with the Agreement on Import Licensi ng Procedures.  The Work ing Party took note of 
these commitments. 
69. In response to a request that Chinese Taipei produce a plan for the elimination of quantitative 
or other non-tariff measures on fish, the representative  of Chinese Taipei stated that Chinese Taipei 
would eliminate all quantitative restrictions on these products from the date of accession, with the sole 
exception of import bans on mackerel, carangid and sardines.  The existing import controls for 
mackerel, carangid and sardines would be replaced by tariff rate quotas which would be distributed, as 
indicated in paragraphs 27-35, through procedures consistent with GATT 1994 and the Agreement on 
Import Licensing Procedures.   The Working Party took note of these commitments. 
70. Some members of the Working Party noted th e continued application of non-tariff measures 
to imports of certain yachts and recreational fishing vessels and a ban on the importation of 
motorcycles, including those with  reciprocating internal combustion piston engines of a cylinder 
capacity exceeding 150cc.  These members of the Work ing Party stated that the restrictions were not 
justified under the WTO Agreement.  In addition, some members noted that Chinese Taipei had not 
developed appropriate emission st andards for motorcycles over 150cc which in itself could preclude 
effective market access even if the formal ban was eliminated.  Finally, those members noted that 
Chinese Taipei restricted motorcycle access on cer tain major highways in Chinese Taipei.  These 
issues would need to be addressed at the time the ban was eliminated to ensure effective market 
access for these products. 
71. The representative of Chinese Taipei stat ed that upon accession, Chinese Taipei would 
implement a licensing system for recreational fi shing vessels that conformed to the automatic 
licensing provisions of the WTO Agreement on Import Licensing Procedures and would require 
importers to have an approved abandonment/repla cement right as applicable to domestically built 
fishing boats.  He also stated th at Chinese Taipei would eliminate the import ban on motorcycles over 
150cc six months after accession to the WTO and would permit their import.  At that time, Chinese 
Taipei would implement emission standards for motorcycles over 700cc comparable to international 
standards.  The representative of Chinese Taipei also stated that the restrictions on motorcycle access 
to roads would generally apply only to the two major cross-isla nd motorways in Chinese Taipei.  He 
stated that restrictions on motorcycle access to ro ads would not be barriers to market access and that 
Chinese Taipei would consult, upon request of a WTO member, regarding road access restrictions and their effects.  The representative of Chinese Taipei further stated that Chinese Taipei would eliminate 
the import ban on passenger cars equipped with diesel engines two years after accession to the WTO.  
The Working Party took no te of these commitments.  
72. The representative of Chinese Taipei said th at from the date of accession, Chinese Taipei 
would apply its import licensing and quantitative restrictions regime in strict conformity with WTO 
Agreements, in particular with the Agreements  on Agriculture and Import Licensing Procedures.  
Chinese Taipei would also ensure that the dist ribution of import licenses, quotas, tariff-rate quotas, 
permits or any other means of approval for importati on or the right of importation by  all levels of 
government would not be conditioned on whether co mpeting domestic suppliers of such products 
exist or on performance requirements of any kind, including but not limited to local content or mixing 
requirements, the transfer of technology, the co nduct of research and development, minimum export 
requirements, or on the origin or nature of the enterprise.  Chinese Taipei would ensure that price 
increases, if any, in respect of imports by stat e trading enterprises would be imposed in a manner 
consistent with the requirements of Article II:4 of GATT 1994 and Article 4.2 of the Agreement on 
Agriculture.  The Working Party took note of these commitments. 
73. The representative of Chinese Taipei said that  Chinese Taipei also undertook to eliminate and 
not reintroduce or apply import bans, quantitative r estrictions, licensing restrictions, or other non-WT/MIN(01)/4 
Page 26 
 
 tariff measures having similar effect which were not  justified under specific provisions of the WTO 
Agreement. He also noted that Chinese Taipei w ould not use measures related to customs procedures 
and technical product or safety standards and sanitary and phytosanitary measures as disguised 
barriers to trade and that any measures applied would be no more restrictive than necessary to 
accomplish their legitimate goals.  The Work ing Party took note of these commitments. 
 Customs Valuation  
74. Some members of the Working Party requ ested information on the system of customs 
valuation in Chinese Taipei.  In response, the repres entative of Chinese Taipei stated that paragraph 1 
of Article 12-1 of the Customs Law reflected the s ituations in which the transaction price would not 
be used as the basis of customs value.  The tran saction value would not be used when the invoice 
price did not include the cost adjustments provided under Article 12 of the Customs Law and the 
importer failed to provide objective and quantifiable in formation to support the price calculation.  In 
addition, if the Customs had any doubts concer ning the adequacy or accuracy of an invoice, it 
normally requested the importer to provide an expl anation or other evidence to substantiate the 
validity of the invoice.  If the importer refused to give explanations or the evidence provided contradicted the facts, and further investigation proved that the invoice price was not the price 
actually paid or payable, the Customs could determ ine that the invoice price would not be accepted as 
the customs value.  In such a circumstance, Article  12-2 to 12-6 of the Customs Law provided that the 
value was assessed in the follo wing sequence: firstly, the transaction value of identical goods; 
secondly, the transaction value of similar goods; thirdl y, the deductive value; fourthly, the computed 
value; and, fifthly, any other reasonable value.   
75. Some members of the Working Party asked whether any minimum import values were used 
in Chinese Taipei.   The representative of Chinese Taipei replied that although Article 12 of its 
Customs Law provided for use of a duty paying valu e list which provided a pre-determined value for 
imported products, the government, by administrati ve order, had eliminated the pre-determined 
values.  The discretionary power had been eliminat ed as the result of the April 1997 amendment to the 
Customs Law. 
76. Some members of the Working Party said that  some aspects of the customs valuation regime 
of Chinese Taipei appeared to be inconsistent with the requirements of the Agreement on the 
Implementation of Article VII (Customs Valuat ion Agreement) in the following respects: the 
authority to use the duty paying value list or any refe rence price mechanisms or other arbitrary lists of 
prices used for customs valuation purposes on agricu ltural and other imports should be eliminated; 
and the selection of valuation methods outside th e hierarchy provided in the Customs Valuation 
Agreement, particularly in the case of valuation of leased and rented goods, should be addressed.  
They also noted that precise WTO consistent rul es on the determination of whether parties were 
related when dealing with the customs valuation of transactions between relate d parties were required; 
and provisions giving effect to the WTO Ministerial Decision on Customs Valuation should be 
enacted. 
77. Some members of the Working Party also  expressed concern regarding the practice of 
requiring importers to post bonds for prompt clear ance of goods, in particular horticultural goods, 
based on pre-determined reference prices.  Th ese reference prices were not established in a 
transparent manner, were often changed without prior notice and no opportunity was provided for 
comment on the rate established.  In the view of th ese members, this practice had the same effect as 
use of reference prices to calculate duties.  In response, the representative of Chinese Taipei stated 
that its use of reference prices in determining the am ount of the bond to be posted to facilitate prompt 
clearance of goods was not inconsistent with the WT O obligations, in particular, the obligation under 
the Agreement on Customs Valuation.   WT/MIN(01)/4 
 Page 27 
 
 
 78. The representative of Chinese Taipei stated that  Chinese Taipei would continue to improve its 
current practice of requiring importers to post bonds for prompt clearance of goods in order to make 
the bond amount a closer reflection of the actual value of the goods.  Any bond paid would be refunded, if a post-clearance assess ment of the customs value of the goods was less than the bond 
amount.  Chinese Taipei would, by the date of a ccession, adopt an equitable, transparent Customs 
bonding system for any perishable fruits and vegetabl es subject to such requirements that allows for 
potentially frequent adjustment to the bond value to take account of prevailing market forces.  The 
representative of Chinese Taipei stated that th e Customs bonding system would have the following 
characteristics:  
(i) specific bond values would be fixed fo r each supplier country.  Upon request, 
Chinese Taipei Customs authorities would make  available to any domestic or foreign 
interested party the data, the data source,  and the methodology used in formulating 
the reference price upon which the value of the bond was based. 
(ii) Adjustments would be made to the specific bond values, as frequently as  necessary, 
to take account of prevailing internati onal market prices, and seasonal quality 
consideration. 
(iii) Alternative data sources would be cons idered, should representatives of an exporting 
country believe that more appropriate a nd accurate data exist beyond that being 
employed by Chinese Taipei in setting the bond values. 
(iv) A mechanism  would be established to pr ovide, at the request of either an exporting 
country or Chinese Taipei authorities, for prompt consultations should a question or 
concern arise relative to an established bond value. 
The Working Party took no te of these commitments. 
79. Responding to comments from some members of the Working Party detailing other areas 
where the customs valuation regime of Chinese Taipei did not concord with the provisions of the 
Agreement, the representative of Chinese Taipei in dicated that these issues were addressed in the 
implementing legislation for WTO accession.   
80. The representative of Chinese Taipei confirme d that amendments to bring the Customs Law 
into conformity with the Customs Valuation Agreem ent would be made prior to accession, either by 
eliminating the inconsistent practices or amending cu rrent laws and regulations  to bring procedures 
into line with the Customs Valuation Agreement.  He confirmed that Chinese Taipei would implement 
the Customs Valuation Agreement fully upon accession, w ithout recourse to any transition period.  He 
further committed that Chinese Taipei would, with a view to resolving specific problems, upon 
request, provide information to WTO Members on the methods for determination of customs 
valuation of specific products and consult concerning the effect of Chinese Taipei's customs valuation 
procedures on their trade.  The Working Party took note of these commitments. 
 Rules of Origin 
81. Some members of the Working Party requested information about the elaboration of rules of 
origin in Chinese Taipei whether in the context of free trade agreements or otherwise, and also 
requested Chinese Taipei to confirm that its rules of origin for both preferential and non-preferential 
trade complied fully with the WTO Agreement on Rules of Origin. 
82. The representative of Chinese Taipei said th at the Customs Law had been amended in 
April 1997 to provide a legal basis for the establishmen t of rules of origin fully consistent with the WT/MIN(01)/4 
Page 28 
 
 WTO Agreement.  The Rules of Origin on Imported Goods set out the criteria for determining origin.  
The representative of Chinese Taipei  stated that Chinese Taipei would ensure that its laws and 
regulations relating to rules of origin were c onsistent with the releva nt WTO Agreements upon 
accession.  The Working Party took note of this commitment. 
 Preshipment Inspection 
83. Some members of the Working Party request ed information on whether the services of a 
preshipment inspection firm were employed by Ch inese Taipei.  The representative of Chinese Taipei 
said that Chinese Taipei did not use pre-shipment inspection.  The representative of Chinese Taipei 
noted however that Chinese Taipei had amended the Foreign Trade Act in April 1997 to provide the 
legal basis for the authority to regulate preshipme nt inspection activities of firms mandated by foreign 
governments.   
84. The representative of Chinese Taip ei stated that Chinese Taipei w ould ensure that its laws and 
regulations relating to preshipment inspection would be consistent with the relevant WTO 
Agreements, in particular, the Agreements on Presh ipment Inspection and Customs Valuation.  The 
Working Party took note of this commitment. 
 Anti-Dumping and Countervailing Duties 
85. In response to questions from members of the Working Party the representative of Chinese 
Taipei said that in 1984 Chinese Taipei had enacted "The Implementing Regulation on the Imposition 
of Countervailing Duties and Anti-Dumping Duties ".  That Regulation provided that countervailing 
or anti-dumping duties could be levi ed on goods found to have receive d subsidies or to have been 
dumped and which threatened domestic industries.   In the view of Chinese Taipei the implementing 
regulations had been in compliance with the requirements of the Tokyo Round Codes on 
Anti-Dumping and Subsidies and Countervailing Measures. In pursuance to the 1997 amendment to 
the Customs Law, Chinese Taipei undertook to revise the Regulations to make them consistent with 
the Uruguay Round Agreements prior to accession to  the WTO and to submit them to the WTO. 
86. The representative of Chinese Taipei stated that, Chinese Taipei would ensure that its 
legislation on anti-dumping and countervailing duties was in full conformity with the requirements of 
the WTO Agreement, in particular Article VI of GATT 1994 and the Agreements On the 
Implementation of Article VI and Subsidies and Countervailing Measures from the date of accession.  
Chinese Taipei would also ensure that any an ti-dumping or countervailing duties imposed on any 
product after its accession were in accordance with the requirements of Article VI of GATT 1994 and 
the Agreements On the Implementation of Article VI and Subsidies and Countervailing Measures.  
The Working Party took no te of these commitments. 
Safeguards Regime 
87. Some members of the Working Party noted that a provision in the Foreign Trade Act, referred 
to as the "trade imbalance clause " permitted Chinese Taipei to suspend trade from specific countries 
because of persistent trade deficits and did not speci fically authorise the type of actions foreseen in 
the Understanding on Balance of Payments Provisi ons of GATT 1994.  In response to requests for 
justification of this provision and measures taken pu rsuant to it, the representative of Chinese Taipei 
said that, in his view, Articles XI, XII, and XIX of  the GATT 1994 authorized the maintenance of this 
particular provision of the Foreign Trade Act.  Some members of the Working Party disagreed with 
this opinion and stated that the provision in ques tion was not in conformity with the requirements of 
WTO Agreement, in particular GATT 1994 Articles I, II, XI, XII, XIII, XIV and XIX.  Following 
further discussions in the Working Party, the repr esentative of Chinese Taipei  agreed that certain 
provisions of the Foreign Trade Act were inc onsistent with the provisions of the WTO.  WT/MIN(01)/4 
 Page 29 
 
 
 88. The representative of Chinese Taipei stated th at in April 1997, the Foreign Trade Act had 
been revised to address members' concerns about th e trade imbalance clause.  This clause had been 
replaced with one that was consistent with Ar ticle XII of the GATT 1994.  The representative of 
Chinese Taipei further confirmed that the provision s of the Foreign Trade Act would be implemented 
from the time of accession in a manner conformi ng to the provisions of the WTO Agreement. 
Moreover, the representative of Chinese Taipei stat ed that should a critical balance of payment 
situation develop, Chinese Taipei would give pr eference to those measures referred to in the 
Understanding on the Balance of Payments Provisions of GATT 1994 as price-based measures to 
address the situation and would maintain any measure s only so long as necessary.  In the circumstance 
that Chinese Taipei must resort to measures that were not price-based, Chinese Taipei would 
transform these measures into pr ice-based measures within 6 months after implementing the initial 
measures.  Moreover, any measures taken for bala nce-of-payment reasons would not be used to 
provide import protection for specific sectors, industries or products. 
89. The representative of Chinese Taipei stated that, from the time of accession, the safeguards 
regime would be fully consistent with the WTO Agreement on Safeguards.  The Working Party took 
note of these commitments. 
Export Regulations 
90. In response to requests for information on any restrictions maintained on exports, the 
representative of Chinese Taipei stated that no products were prohibited from export from Chinese 
Taipei.  Ammunition, narcotics, protected wildlife, and strategic high-tech products were subject to 
strict export controls, and could only be exporte d under special export permits.  As a result of 
measures adopted by importing countries, certain ot her items such as textiles were subject to an 
export licensing system.  In document WT/ACC/TPKM/13 the representative of Chinese Taipei  provided the Working Party with a list of all pr oducts subject to export licensing maintained to 
ensure:  
(i) the implementation of quantitative restri ction arrangements and voluntary restraint 
arrangements;  
(ii) essential security, the security of supply of certain daily necessities and important 
industrial materials, including rice and salt; 
(iii) social policies, including narcotics control;  
(iv) protection of endangered species of wild fauna and flora, including Formosan land-
locked salmon;   
(v) hygiene and health, including eels; 
(vi) agricultural development, including bana nas, white skin sugar cane, and onions.  
91. In order to streamline the granting of an e xport licence, an automatic electronic export licence 
had been adopted.    
Export Processing Zones / Economic Processing Zones / Export subsidies  
92. Some members of the Working Party requested information on the Export Processing Zones 
("zones"), in particular, information on the total value of trade as well as the percentage of zone 
production.  In response, the representative of Chin ese Taipei said that the zones were established 
pursuant to the Statute for the Establishment a nd Management of Export Processing Zones.  The WT/MIN(01)/4 
Page 30 
 
 Statute was amended in 1999 and thereafter rena med the Statute for the Establishment and 
Management of Economic Processing Zones.  As  a result, Export Processing Zones were also 
renamed Economic Processing Zones.  Investors in the zones were entitled to the following 
incentives:   
(a) exemption from the following duties and taxes: 
(i) customs duties on imported machinery a nd equipment, raw materials, fuels, 
commodities, components, and samples;   
(ii) commodity tax on the exported or im ported products, machinery and equipment, 
raw materials, components, and samples;  and  
(iii) deed tax on newly built standard build ings acquired from the zone's Administration 
or the buildings legally acquired from the zone's Administration;   
(b) no business tax on exported goods and their re lated labour services, as well as on the goods 
purchased by the export enterprises;   
(c) due to the exemption from taxes or duties, th ere was an exemption from the requirement to 
keep certain documents and to pay tax deposits et c..  In addition, transfers of property to 
different enterprises within a zone were  not subject to the business tax.   
93. The representative of Chinese Taipei further added that the zones were managed by the 
Economic Processing Zones Administration, Ministry of Economic Affairs.  Various products and 
services were produced in the zones.  The representativ e of Chinese Taipei noted that there were four 
zones in Chinese Taipei.  In 1994, 96 per cent of  production in the zones was exported.  Under 
Article 5 of the Statute for the Establishment and Management of Export Processing Zones, most of the production of the zones was required to be expo rted.  A certain percentage of the production could 
be sold on the local market, provided that it w as accorded the same treat ment as imported products, 
and was subject to customs duties, commodity tax a nd business tax.  The product of the zones sold in 
the domestic market was subject to customs duty on the final product, not on inputs into the product.  
If goods produced in the zones for local sale were le ss than 50 per cent of the annual production, the 
zone's Administration would automatically approve the domestic sale of the goods.  If the goods 
produced for local sale were in excess of 50 per cent of annual production, the approval by the zone's 
Administration was discretionary.  However, no such application for approval had ever been refused.  
The representative of Chinese Taipei added that ther e was no local content requirement for enterprises 
wishing to operate in the zones.  In the past subsidiaries or branches of enterprises could not be 
located in the zones.  In Janua ry 1990 Chinese Taipei had amended the Implementing Regulation in 
order to permit subsidiaries or branches of enterpri ses to be located in the zones.  The product of 
zones which entered the domestic market accounted for only 3-4 per cent of the value of total zones 
production in 1994, 6-7 per cent in 1997, 8.19 per cent in 1998 and 11.34 per cent in 2000.  In May 1997 Chinese Taipei had lifted the 50 per cent limit on local sales through amendments to the Statute.  
Domestic sales had exceeded 50 per cent of the produc tion of crystal oscillators, electronics testers, 
voice synthesizers, capacitor parts, sensors, etc..  Around 41.6 per cent of zones' production had benefited from the tax exemption granted by the Statute for Upgrading Industries. 
94. Some members of the Working Party noted th at some of the arrangements providing for fiscal 
incentives for businesses located or op erating in the zones appeared to be in conflict with the 
provisions of the SCM Agreement and the Agreement on TRIMS.  They requested further information 
on the fiscal incentives offered.  In response, the representative of Chinese Taipei indicated that 
investments in the zones were exempted from customs duties and the commodity tax on imported 
machinery, raw materials, fuels, commodities, co mponents and samples, and the deed tax on the new 
buildings purchased from or otherwise acquired from the zones' Administration.  No business tax was  WT/MIN(01)/4 
 Page 31 
 
 
 charged on the exported goods and th eir related services, nor was the business tax levied on purchases 
by those enterprises.  These enterp rises were also exempted from applying for tax exemption, 
guarantee, relevant bookkeeping, and paying provisiona l tax.  He further stated that in Chinese 
Taipei's view those practices complied with the requirements of the WTO Agreement and did not 
constitute export subsidies.  Their trade effect, if any, was minimal:  0.185 per cent of total exports. 
95. Some members of the Working Party noted that import duty and tax exemptions on goods 
imported into the zones were provided for goods not directly incorporated into the exported product.  
Direct taxes on the profits from the exports of those enterprises were also ex empted.  In their view 
these practices appeared to be in conflict with th e SCM Agreement.  Those subsidies could also be 
countervailable.  The representative of Chinese Taipei  replied that the purpose of the zones was to 
create duty-free zones for the production of exports, in  order to create an environment where exports 
manufactured from imported inputs need not obtain a re fund of duties.  This was consistent with the 
obligations contained in the WTO Agreement.  The limitation on duty refunds/exemptions on inputs 
directly incorporated into exported products w as applied by many developed economies, for the 
purpose of administrative expediency, rather than being based on the theory that refunds/exemptions 
of duties on imported inputs not directly incor porated into the exported products would unduly 
increase the exporters' competitiveness and should  not be allowed.  Because the products were 
primarily for export, it was therefore not necessary to  limit exemptions or refunds to the extent of 
products directly incorporated into the products expo rted from the zones.  In fact, in Annex II of the 
SCM Agreement, inputs consumed in the productio n process, for which drawback of import charges 
was allowed, were defined to cover energy, fuel an d oil in the production process and catalysts which 
were consumed in the course of their use to obtain the exported product as well as the inputs 
physically incorporated.  Because the exports from the zones did not receive "undue " amounts of 
refund or exemption the relevant practices did not co nstitute a subsidy.  The representative of Chinese 
Taipei added that the SCM Agreement Annex I "Illustrative List of Export Subsidies " did not contain 
the requirement that the input be physically incorporat ed into the exported product.  He stated that the 
exemption from corporate income tax for zones  en terprises had been abolished together with the 
Statute for Encouragement of Investment at the end of 1990.  The current tax exemption granted to zone's enterprises also applied to enterprises located outside the zones, whether or not they exported 
their products, provided that they met the requ irements set forth in the Statute for Upgrading 
Industries.  Consequently, the practice was neith er a specific subsidy nor conditional upon export 
performance. 
96. Some members of the Working Party reiterated that the incentives provided in the zones 
appeared to be incompatible with the SCM Agreem ent.  They expected that Chinese Taipei would 
ensure that sales into the market  of Chinese Taipei from the zones would be subject to normal taxes, 
tariffs, and other border measures.  In addition, these members considered th at Chinese Taipei should 
satisfy the Working Party that the regime of the zones was consistent with all the requirements of the 
WTO concerning the treatment of goods, services a nd intellectual property.  The representative of 
Chinese Taipei replied that Chinese Taipei had deci ded to levy duties on z one products entering the 
domestic market on the basis of ex-factory prices minus value added resulting from manufacturing or 
processing activities in the zones, and would undertake to do so in the future.  The formula to be used 
in calculating the value added by the zones would ta ke into account the relevant practices of other 
economies.  He added that Chinese Taipei hoped that the changes to the system would alleviate 
concerns that the current system operated as a di sincentive for zone products entering the domestic 
market.  In May 1997 the Statute was amended and after the amendment, it was renamed the Statute 
for the Establishment and Management of Economic Pr ocessing Zones.  In the interim, elimination of 
the limits on sale of products into the domestic  economy had removed the requirement to export 
products from a zone and the proportion of goods ex ported from the zones had declined over the first 
six months of 1998.  While the fiscal incentives previously provided under the Economic Processing 
Zones statute could be considered by some members to constitute subsidies, elimination of the export 
requirement, in Chinese Taipei’s view, resolved this issue. WT/MIN(01)/4 
Page 32 
 
 97. The representative of Chinese Taipei confirmed that, from the date of its accession, all taxes, 
charges, and measures affecting imports, including import restrictions and customs and tariff charges, 
applied to imports from abroad into other parts of Chinese Taipei would be applied to zone products 
entering the domestic market.  While customs duties would be applied on the basis of ex-factory prices minus value added resulting from manufactur ing or processing activities in the zones, other 
taxes, charges and measures would be based on the ex-factory price.  He further added that 
preferential arrangements provided to enterprises loca ted within the zones would be extended to all 
enterprises whether domestic or foreign and maintain ed in a WTO consistent manner, in particular 
with regard to the principles of non-discrimina tion and national treatment.  Furthermore, export 
requirements or incentives would not be reintroduced.  The Working Party took note of these 
commitments. 
 Internal Policies Affecting Trade in Goods 
 Industrial Policies Including Subsidies 
98. Some members of the Working Party stated th at in Chinese Taipei th ere were currently in 
place a number of official industrial assistance program s that could be consider ed prohibited industrial 
subsidies under the WTO Agreement on Subs idies and Countervailing Measures (the SCM 
Agreement).  These practices included all export subsid ies that were of the type contained in the 
illustrative list set out in Annex I to the SCM Agre ement (including preferential tax rates and other 
subsidies contingent upon export performance) and other subsidies contingent upon the use of 
domestic over imported goods, as provided for in Article 3 of the SCM Agreement.  
99. Some members of the Working Party said that they considered that many of the industrial 
promotion plans currently being implemented by Ch inese Taipei acted as disguised subsidies.  These 
members requested that Chinese Taipei review th ese measures in light of the WTO Agreement on 
Subsidies and Countervailing Measures.  The repres entative of Chinese Taipei recalled that Chinese 
Taipei had, as an observer, participated in the meetings of the GATT 1947 Committee on Subsidies 
and Countervailing Measures.  He said that Chinese Taipei undertook to notify all relevant laws and 
regulations in order to facilitate the Committee's discussion of the industrial promotion plans.  
Moreover, Chinese Taipei undertook to notify its subsidy practices acco rding to Articles 25 and 28 of 
the WTO Agreement on Subsidies and Countervailing Measures.  In document WT/ACC/TPKM/8/Rev.2, the representative of Chinese Taipei submitted to members of the Working 
Party a draft Notification Pursuant to Article  XVI.1 of the GATT 1994 and Article 28.1 of the 
Agreement on Subsidies and Countervailing Measu res.  In document WT/ACC/TPKM/9/Rev.2, the 
representative of Chinese Taipei submitted to the Working Party a draft Notification Pursuant to 
Article XVI.1 of the GATT 1994 and Article 25 of  the Agreement on Subsidies and Countervailing 
Measures. 
100. In response to questions about industrial  subsidies maintained by Chinese Taipei, the 
representative of Chinese Taipei explained that the Statute for Upgrading Industries ("SUI") provided 
financial assistance to industry, such as tax exempt ions or accelerated depreciation to enterprises in 
"newly emerging, important and strategic industries " that were very beneficial to economic 
development, and were of high risk and in great need of support.  The representative of Chinese 
Taipei explained that to qualify for this assistance, as a "newly emerging, important and strategic 
industry ", the enterprise was required to meet the followi ng criteria:  (1) the paid-in or increased paid-
in capital for the investment plan should be ove r NT$200 million;  and (2) the amount of the fund 
available for the purchase of brand-new machinery/e quipment in the investment plan should be over 
NT$100 million.  The above criteria for paid-in or increased paid-in capital and the amount of funds 
for purchasing brand-new equipment/machinery were di fferent from industry to industry.  He further 
explained that the benefits specified in Article 5 of the SUI  (conferring accelerated depreciation of 
assets) applied to all enterprises, organized in the form of a company pursuant to the Company Law of 
Chinese Taipei, including companies incorporated by fo reign investors or entities.  He added that all  WT/MIN(01)/4 
 Page 33 
 
 
 industrial sectors could be entitled to receive acceler ated depreciation for investment in instruments 
and equipment for exclusive use for energy savin g, R&D purposes, experiments or inspection of 
quality deemed eligible pursuant to Article 5 of the SUI.  The representative of Chinese Taipei said 
that in the fiscal year 1999 the total value of the ta x exemptions or tax reductions granted, pursuant to 
the SUI , was approximately US$1.45 billion. 
101. Some members of the Working Party expressed concern that Article 18 of the Statute for the 
Establishment and Administration of a Science-Ba sed Industrial Park ("SSP") constituted a prohibited 
subsidy because the business tax was exempted fro m sales of domestically produced machinery and 
equipment sold to enterprises inside such an i ndustrial park, but was imposed on imported machinery 
and equipment sold to enterprises inside a park.  In their view, this constituted an import substitution 
subsidy.  Some members of the Working Party pointed out that a similar provision could be found in Article 17 of the Statute for the Establishmen t and Management of Ec onomic Processing Zones 
(Amended Edition) ( "Amended  law ").  The representative of Chinese Taipei explained that the 
business tax was not included in the scope of eith er Article 18 of the SSP or Article 17 of the 
Amended  law. The business tax was, in fact, exempted on machinery and equipment that was 
imported for non-resale.  Such imports were cove red by the very broad exemption from business tax 
under Article 41 of the Business Tax law for goods imported by businesses for "business operations 
purposes. "  Some members asked the Chinese Taipei re presentative why, if this was the case, was 
there a need for the preceding article of the SSP, Ar ticle 17, which refers specifically to the business 
tax and exempts from such tax imports of machiner y and equipment into a park.  The representative 
of Chinese Taipei explained that the provisions of  Article 18 of the SSP and Article 17 of the 
Amended Law were redundant to Article 41 paragra ph 2 of the Business Tax Law in respect of the 
business tax.  In light of these concerns, however, th e representative of Chinese Taipei stated that the 
relevant provisions (proviso) of Article 18 of th e Statute for Establishment and Administration of a 
Science-Based Industrial Park and Article 17 of th e Amended law had been eliminated respectively in 
January and May 2001. 
102. Some members of the Working Party noted that Article 7 of the Statute for Upgrading 
Industries (SUI) gave tax credits to industries inv esting in particular regions filling criteria to be 
determined by the government, and requested more information on those criteria.  The representative 
of Chinese Taipei noted that the criteria were whether a particular region was poor or the economic 
development was stagnated relative to population, le vels of employment, transportation capacity, tax 
revenues, the average regular income per family, a nd the availability of public facilities.  For this 
purpose, each year the counties were ranked in a p ublished list which determin ed levels of regional 
assistance.  Chinese Taipei submitted a draft  notification of  the investment tax credit provided under Article 7 of the SUI in Annex III of document WT/ACC/SPEC/TPKM/8.   
103. Some members of the Working Party expressed concern about the transparency of the criteria 
used to determine which enterprises would r eceive assistance under the Statute for Upgrading 
Industries and requested information on the scope of application for tax benefits, whether they applied 
to domestic and foreign investors, to all indus trial sectors and to specific areas, as well as a 
breakdown of expenditures.  In response, the repr esentative of Chinese Taipei said that under the tax 
incentive programme, any company for establishi ng a renowned brand and image exceeding NT$3 
million expenditure in a tax year was entitled to a tax credit of 10 per cent of the tax payable in 1993;  
if the expenditure exceeded NT$5 million and the company was authorized by the Ministry of 
Economic Affairs to use the symbol of "excellence ", the tax credit was 15 per cent of the tax payable.  
Other tax benefits were allocated to all industrial sect ors or to particular industrial sectors.  In a recent 
period the incentives under the Statute for Upgrading Industries related to the Business Income Tax 
had included accelerated depreciation, corporate inv estment tax credit, institu tional shareholders tax 
credit and foreign investment loss reserves.  Benef its had also concerned the Deferral of Land Value 
Increment Tax, Stamp Tax, Deeds Tax, etc. WT/MIN(01)/4 
Page 34 
 
 104. Some members of the Working Party enquired wh ether all of the criteria listed in Article 21 
of the Statute for Upgrading Industries were requi red to be established before a business could be 
eligible for assistance from the Development Fund.  Those members also requested examples of how 
the  government determined when assistance s hould be paid for other purposes as prescribed by 
sub-paragraph 7 of that Article.  The representative  of Chinese Taipei said that only one criteria 
needed to be satisfied, and that sub-paragraph 6 onl y applied when none of the other criteria applied.  
He also explained that the value of the revolvi ng Fund was approximately NT$111.1 billion at the end 
of July  2001. 
105. Noting that the Statute for the Development of Medium and Small Businesses and the Statute 
for Upgrading Industries provided for industrial incentives, some members of the Working Party 
requested an estimate of their set-up amount in a recen t period.   In response to another question, the 
representative of Chinese Taipei noted that Chinese Taipei had established the Fund for Development 
of Small and Medium Businesses in 1992, with a total value of NT$12 billion.  Until March 1998, the 
allocated amount of the Fund was NT$9.1 billion.  Furthermore, almost all enterprises could qualify 
as small or medium sized enterprises.   
106. Some members expressed concerns that th e tax credit provided in connection with the 
creation of internationally recogni zed brands constitutes an export s ubsidy and thus prohibited under 
the SCM Agreement.  Article 4 of the implementi ng regulations for the relevant law lists covered 
expenses, which include, in part, "expenses for international market investigation for the development 
of new products. "  The representative of Chinese Taipei stat ed that the Regulation on Creation of 
International Brands had been eliminated in D ecember 2000. Any future programme in this area 
would be consistent with WTO requirements and would not reintroduce prohibited subsidies.  The 
Working Party took note of this commitment. 
107. Some members of the Working Party also noted that among the measures to support new and 
promising industries were tax c oncessions and that industrial cooperation programmes could be 
applied in certain areas.  Reference was also made to  the existence of two separate steel prices and the 
need to ensure that the lower domestic price was not  used to indirectly subsidize the export of steel.  
With regard to steel, the representative of Chinese Ta ipei said that besides direct export price at the 
world market level, China Steel Corporation (CSC ) maintained a two-tier pricing in the domestic 
market.  The higher domestic price offered to cust omers whose products were sold and consumed in 
the domestic market was based on the landed, duty- paid price of imported steel products. The lower 
one (i.e. indirect export price), applied to custom ers who manufactured steel into final products for 
exports, was based on the landed, duty-free price of im ported steel products.  The indirect export price 
was aimed to ensure that CSC's pricing remained competitive with that of imported steel.  The 
two-tier pricing system had been abolished in 1994 and China Steel Corporation had been privatized 
in April of the same year.  Prices of China St eel Corporation's products since then had been 
determined according to the market condition.  There had been no State intervention in the 
determination of prices whatsoever.  Since then  the domestic steel market had been free and 
competitive. 
108. Some members of the Working Party asked  how Chinese Taipei proposed to stimulate 
development of desirable industries, particularly  high-technology and high value-added industries.  
The representative of Chinese Taipei said that in a ddition to the Statute for Upgrading Industries, 
Chinese Taipei had eased the requirements relating to the acquisition of land used for factory 
construction and had taken steps to satisfy long te rm demand for industrial sites.  Chinese Taipei had 
also provided medium and long-term training progr ammes to highly qualified personnel in order to 
upgrade skill levels, and had developed the necess ary infrastructure pursuant to the Development 
Plan. 
109. In response to additional questions concerni ng the specific measures taken by Chinese Taipei 
to support new and promising industries, the represen tative of Chinese Taipei indicated that Chinese  WT/MIN(01)/4 
 Page 35 
 
 
 Taipei supported research and technological deve lopment in the areas and technologies identified as 
promising and major focuses of attention.  The Mini stry of Economic Affairs (MOEA) gave priority 
to funding scientific research and development.  Such investment had increased yearly.  The MOEA 
also contracted with non-profit seek ing research institutes to develop "Generic Technology " required 
by promising industries.  Promising industries could also enjoy tax incentives, pursuant to Article 8 of 
the Statute for Upgrading Industries. In order to support industries deemed to be "Important 
Technology-Based Enterprises ", the following steps were taken.  The  government determined the 
generic technologies to be develope d for the relevant industries, re viewed  and approved the required 
budget and  entered into contracts with non-prof it research institutions to execute the required 
research.  Fourth, private companies might be invite d to participate in the joint development of the 
required technologies, or alternatively, following deve lopment of the technology, might be offered the 
technology at a market price.  Fifth, the non-prof it research institutions might sub-contract specific 
research tasks to private companies.  Sixth, if the private companies had the capacity to develop the 
required technology by themselves, the authoriti es could assist them in obtaining the necessary 
finance, or could provide other assistance.  The ten promising industries specified in the six year 
Development Plan were as follows: telecommunicati ons industry, information industry, consumer 
electronics industry, semi-conductors industry, precision machinery and automation industry, 
aerospace industry, advanced materials industry, specialty chemicals and pharmaceuticals industry, 
medical and health care industry and pollution contro l industry.  The eight key technologies to support 
the development of the above-mentioned new a nd promising industries are: optoelectronics, 
information software, industrial automation, a pplied materials technology, advanced sensing 
technology, bio-technology, resource development and energy conservation. 
110. In response to questions from members of  the Working Party concerning the incentives 
allocated to the use of advanced technology a nd their consistency with WTO obligations, the 
representative of Chinese Taipei said that in additio n to the funding of research and development by 
the MOEA, funds were also allocated for technology import or "Inward Technology Transfer ".  
Subsidies applied to the purchase of automation e quipment and pollution prevention equipment.  The 
subsidy took the form of a tax credit to purch asers.  Depending on whether the equipment was 
imported or of domestic manufacture,  different tax credits applied. 
111. Some members of the Working Party expr essed continued concern regarding the assistance 
granted for the purpose of developing the "Top-Ten Emerging Industries. " In their view, such 
assistance included practices that constituted impor t substitution and export subsidies and a wide 
range of R&D funding.  These members sought assura nces that Chinese Taipei had included all such 
assistance in its subsidy notifications, emphasizing that  such notifications would be without prejudice 
to the legal status of such assistance.  The re presentative of Chinese Taipei assured the concerned 
members and the Working Party that (1) the top- ten emerging industries did not now, and would not 
in the future, benefit from any measure meeting the definition of a "prohibited subsidy " under 
Article 3 of the SCM Agreement, other than tho se notified, and (2) Chinese Taipei had notified all 
domestic subsides that the top-ten emerging industr ies currently benefitted from, namely, (i) R&D 
grants provided under Article 10 of "Measures for Assistance in th e Development of New Leading 
Products "; (ii) low-interest loan granted under Article 21 of the SUI and (iii) tax credits granted under 
SUI Article  6,7,8,9.  
112. The representative of Chinese Taipei confirmed that the "Program for the Development of 
Critical Components and Parts " was nothing more than an illu strative list of the goods/products 
covered by Top Ten Emerging Industries and that the Program involves support or assistance measures only under the "Measures for Assistance in the Development of New Leading Products." 
The Program ceased to be effective on 30 June 2000.  With respect to low interest loans under Article 
21 of the SUI, the representative of Chinese Taipei  confirmed that the loans that Chinese Taipei 
maintained were not given to a specific enterpri se, industry or group of enterprises or industries 
within the meaning of Article 2 of the SCM Agreem ent, did not require the purchase of domestically WT/MIN(01)/4 
Page 36 
 
 produced goods or services, and did not constit ute an incentive or inducement to purchase 
domestically produced goods or services over imported goods or services. With respect to Article 6 
tax credits, the representative of Chinese Taipei explained that under Article 6 of the SUI, enterprises 
that purchased domestically produced automation machinery and equipment, including "automatic 
machine equipment, " received a larger tax credit than if they purchased imported automation 
machinery and equipment.   
113. The representative of Chinese Taipei confir med that Chinese Taipei would eliminate the 
Article 6 tax credit differential upon accession and would not in the future reintroduce it or any other 
tax credit differential that favours domestically  produced automation machinery and equipment, 
including "automatic machine equipment. " The Working Party took note of this commitment. 
114. The representative of Chinese Taipei said that the Export/Import Bank (Ex-Imbank) was a 
government owned bank which provide d financing and insurance schemes.  It provided secured loans 
to export firms if the terms of sale provided paym ent terms of 181-360 days, in order to provide 
working capital prior to payment.  Interest accrue d on such loans at the rate of 0.75 per cent above 
LIBOR for US$ loans in August 1997.  The bank also provided deferred payment "export credits " 
with a duration of more than one year to exporters or importers in relation to shipments of machinery 
and equipment, and products including turnkey cap ital goods.  The amount of the down payment was 
not less than 15 per cent of f.o.b. contract value.  In terest was charged at the rate of 6.5 - 7.75 per cent 
for US$ loans.  Meanwhile the Bank also provided a fixed rate re-lending fac ility to overseas banks to 
enable the purchase of manufactured goods of Chinese Ta ipei origin, at the rate of 8 per cent, and 8.25 
per cent depending on maturity date.  He added th at the Ex-Imbank provided an overseas investment 
financing system which financed domestic firms seeking overseas investments.  That system did not 
provide a more favourable interest rate than co mmercial loans from other banks.  Financing by the 
Ex-Imbank was not linked to or c onditional upon export performance.   The representative of Chinese 
Taipei reiterated that no export subsid ies were paid to export enterprises. 
115. Some members of the Working Party referred in detail to the aeronautics and space industry.  
These members requested information concerning th e Aeronautics and Space Industries Development 
Programme, asked whether private or government owned enterprises had received assistance from the  
government and enquired about the use of industrial  cooperation programmes in this sector.  In this 
connection, a member of the Working Party noted th at Chinese Taipei had indicated that it would use 
defence operating funds, technical personnel, technology and equipment facilities to assist 
government-owned and private enterprises in the de velopment of research and the development and 
the manufacturing of aeronautics and space products and their associated equi pment.  These members 
indicated that there could be no exemption, transitio nal or otherwise from subsidies disciplines for any 
sector or product such as the aeronautics and space industry.  The representative of Chinese Taipei 
said that the Aeronautics and Space Development Centre of the Chung Shan Science Research 
Institute  had entered into an agreement with the Taiwan Aerospace Corporation and the Industrial 
Technology Research Institute for technology tr ansfer.  If a government entity purchased imported 
aeronautics and space products, the Committee for Aviation and Space Industry Development could 
enter into a technology transfer agreem ent without penalty clauses, known as an "Industrial 
Co-operation Agreement ".  If the foreign supplier entered su ch an agreement, the supplier was 
required to provide a credit line in an amount e qual to a percentage of the purchase price as a 
commitment to technology transfer and the purch ase of domestic aeronautics and space products.  
Private companies that purchased foreign aeronau tics and space products were encouraged to enter 
into such "Industrial Co-operation Agreements ", and if they did so were recommended to commercial 
banks by the government of Chinese Taipei.  If they did not enter such  agreements, no such 
recommendation was made, and decisions by the banks  whether to accord loans to those companies 
were taken by the banks. 
116. The representative of Chinese Taipei stated th at, as provided for in Article 28, any such 
measure falling within the scope of Article 3 of th e SCM Agreement granted or maintained within its  WT/MIN(01)/4 
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 territory would be notified by Ch inese Taipei.  Such subsidies, wi th the exception of those provided 
under Article 12 of the Statute for Commodity Ta x, would be repealed upon accession and subsidies 
provided to manufacturers of automobiles and motorcycles using domestically developed and 
designed parts would cease no later than 3 years after Chinese Taipei's accession to the WTO.  The 
Working Party took note of these commitments. 
117. The representative of Chinese Taipei stat ed that, upon accession, Chinese Taipei would 
provide a complete notification of a ll of its subsidies which were speci fic to an enterprise, industry or 
group thereof (within the meaning of Articles 1 and 2 of the SCM Agreement) in conformity with Article 25 of the SCM Agreement.  The Working Party took note of this commitment. 
 Technical Barriers to Trade 
118. In response to requests for information, with respect to the publication of the laws, 
regulations, administrative orders and technical rules and standards, invitation of comments by the 
public, inquiry points, consultation agencies and ot her agencies required under the Agreement, the 
representative of Chinese Taipei said that, curren tly, only the Regulation for the Establishment of 
National Standards promulgated in September 1996 contained a provision  that set forth the length of 
time for soliciting comments.  There were nine laws, regulations and administrati ve orders relevant to 
the implementation of the Agreement on TBT in Ch inese Taipei.  The respective notifications would 
be submitted to the WTO in due course. 
119. The representative of Chinese Taipei added that Chinese Taipei had formed a special  
committee to deal with and to coordinate all matter s relating to the Agreement. To ensure that the 
Agreement was applied by all domes tic relevant bodies, Chinese Taip ei had promulgated the "Points 
of Operation Concerning Enquiries under the Worl d Trade Organization's Agreement on Technical 
Barriers to Trade".  With respect to the publicat ion of the technical regulations, standards and 
procedures for assessment of conformity, and to th e invitation of comments by the public, details 
concerning the enquiry point and consultation agen cy that were required to be involved under the 
Agreement were as follows: 
(i) notices of proposed or adopted technica l regulations, standards and procedures for 
assessment of conformity would be publis hed in the monthly Official Gazette of 
Standards, distributed by the Bureau of Standards, Metrology and Inspection 
(previously the National Bureau of Standards) under the Ministry of Economic 
Affairs; 
(ii) currently, only the Regulation for the Establishment of National Standards 
promulgated in September 1996 contained a provision  that set forth the length of 
time for soliciting comments.  Apart from this, there were no explicit rules at any   level of government that set forth the le ngth of time required for soliciting comments. 
In principle, all government bodies would pr ovide a reasonable time period (generally 
60 days) for presentation comments. 
120. In response to questions concerning the registration and certification requirements for 
imported pharmaceuticals, cosmetics and medical de vices, the representative of Chinese Taipei said 
that the requirements and approval standards for the importation of pharmaceuticals, cosmetics and 
medical devices did not exceed the requirements applied in some advanced WTO members, and were 
the same for imported and domestic goods.  
121. The representative of Chinese Taipei stated th at recognition of foreign quarantine or other 
standards would be dealt with in a manner consiste nt with Article 2.7 of the Agreement on Technical 
Barriers to Trade.  The Working Party took note of this commitment.   WT/MIN(01)/4 
Page 38 
 
 122. Some members of the Working Party reaffirmed  that Chinese Taipei would need to reform its 
standards regime to bring it into  conformity with the WTO Agreement on Technical Barriers to Trade, 
particularly in the area of notification procedures.   The representative of Chinese Taipei replied that 
Chinese Taipei was reviewing its standards with a vi ew to bringing them into conformity with the 
TBT Agreement and had decided to incorporate notification procedures into the draft amendments to 
its relevant laws.   
123. The representative of Chinese Taipei also pr ovided examples of particular differences 
between its standards and ISO and IEC standards, such as domestic electrical standards, Chinese 
Taipei television broadcasting systems, the designatio n of industrial products, and the requirement of 
"weight " certificates for all imports of automobiles.  He said that Chinese Taipei was prepared to 
comply with the Agreement on TBT but might need  a transitional period for the rectification of laws 
or practices which did not comply with the Agreemen t.  In response, some members of the Working 
Party stated that they considered that a transitiona l period of general applica tion was not appropriate.   
124. Following examination of Chinese Taipei's t echnical barriers to trade regime, some members 
of the Working Party stated that in addition to  taking a commitment to apply the Agreement on 
Technical Barriers to Trade from the date of access ion, without recourse to a transitional period, 
Chinese Taipei should commit itself to eliminate th e specific problems members of the Working Party 
had identified and which were listed below.  In this regard, some members of the Working Party 
stated that, as a condition of its accession, Chinese Taipei would be required to eliminate the 
mandatory conformity assessment procedures and sta ndards for imports that were not applied to 
similar domestic goods and were not based on releva nt internationally recognized criteria.  Chinese 
Taipei would be required to accept equivalent third c ountry standards and regulations in particular, in 
the case of automobiles and heavy-duty vehicles, concerning the safety requirements (lightening, 
specification of brakes, horns, emission standards and test procedures, fuel consumption, on board diagnostic systems, evaporative requirements, vehi cle noise).  Whenever new standards were imposed 
by Chinese Taipei, enough time would have to be ma de available for manufacturers to adapt their 
products.  Chinese Taipei would be required to abandon carry-over testing for vehicles whose model 
types were unchanged from one year to the next an d which were identical in emission-related aspects 
with the previous model-year vehicles as well as additional quality control testing when manufacturers 
in-house test data were made available Chinese Taip ei would be required to provide for a simplified 
homologation for vehicles supplied in small volum es and to extend to CKD vehicles the same 
acceptance of self certification for emissions as app lied to BU imports.  The representative of Chinese 
Taipei said that because of the high density of cars, Chinese Taipei had serious concerns over 
pollution resulting from emissions.  Furthermore, Ch inese Taipei's current practice was to accept the 
results of tests carried out by th e original car manufacturers accordi ng to the emission standards set by 
Chinese Taipei.  New emission and noise standards were implemented with prior notice of three to 
four years. 
125. Some members of the Working Party also  stated that Chinese Taipei should ensure 
compliance with requirements for publication of mandatory conformity assessment procedures and 
standards and ensure the establishment of a r ecommended comment period of 60 days prior to 
finalization of such measures.   Chinese Taipei s hould also eliminate from the date of its accession its 
requirements for performance testing of imported liv estock.  Chinese Taipei should also replace the 
weight certificate system for automobiles with an automobile safety certification system of general 
application, which would take effect prior to Chin ese Taipei's accession.  It was also noted that the 
current requirements for performance testing of imports  of livestock were inconsistent with Article 2.2 
of the Agreement on Technical Barriers to Tr ade.  These members requested that all such 
inconsistencies with the Agreement on Technical Ba rriers to Trade be eliminated upon accession.  
They also stated that Chinese Taipei should submit its statement on implementation and 
administration of the Agreement on Technical Ba rriers to Trade to the Committee on Technical 
Barriers to Trade at the time of accession.  WT/MIN(01)/4 
 Page 39 
 
 
 126. Some members of the Working Party further stated that Chinese Taipei should confirm that 
all relevant laws relating to its technical regula tions, standards, conformity assessment procedures, 
and labelling, including product cove rage, would be administered by Chinese Taipei in conformity 
with relevant international sta ndards and guidelines.  Chinese Taipei should also undertake that the 
controls applied in connection with technical  regulations, standards, conformity assessment 
procedures, and labelling would be applied in no less favourable a ma nner for imported products than 
for like domestic products.  Such requirements shoul d be administered in a manner which did not 
unnecessarily impede trade or create barriers to im ported products, and shoul d not be applied to 
imported products in an arbitrary manner, in a way which discriminated between supplier countries 
where the same conditions prevail, or as a dis guised restriction on international trade.   
126bis. Some Members noted with concern that Chin ese Taipei was considering adopting a technical 
regulation to define whisky that would unnecessarily discriminate against the exports of whiskies to 
Chinese Taipei by some Members.  The representa tive of Chinese Taipei confirmed that Chinese 
Taipei would ensure that its definition for whisky  would take into account generally accepted criteria 
for defining whisky, and would avoid restrictive cr iteria that resulted in unjustifiable discrimination 
among products, and be consistent with the TBT Agre ement.  The Working Party took note of this 
commitment. 
127. The representative of Chinese Taipei stated  that Chinese Taipei would fully apply the 
provisions of the Agreement on Technical Barriers to Trade from the date of its accession to the 
WTO, without recourse to any transitional period.  The Working Party took note of this commitment. 
 Sanitary and Phytosanitary Measures 
128. Some members of the Working Party asked whether the regulations regarding sanitary and 
phytosanitary measures including quarantine and in spection provisions were published and readily 
available to importers and exporters and whet her these measures were based on sound scientific 
evidence.  They also asked wh ether Chinese Taipei would accept the sanitary and phytosanitary 
measures of other economies which offe red equivalent levels of health protection.  In this connection, 
information was requested on certain provisions of the Commodity Inspection Law and its 
Implementation Rules concerning the inspection of imports, bilateral arrangements, inspection fees, 
the inspection quantities and sample quantities, the san itary requirements obtaining products such as 
coconut and palm oil, milk, fresh fruits, poultry, bovin e meat, pork.  In response, the representative of 
Chinese Taipei said that the most commonly used SP S measures in the agricultural sector were set out 
in the Commodities Inspection Law, the Statute fo r Prevention and Control of Infectious Animal 
Diseases, the Plant Protection and Quarantine Act, the Quarantine Requirements on the Importation of 
Animal and Animal Products, the Quarantine Restri ctions on the Importation of Plants and Plant 
Products, the Law Governing Food Sanitation, the Regulations Governing the Quarantine at 
International Port, and the Quarantine Regula tion for Cholera on Imported Fishery Products. 
129. In response to questions whether Chinese Ta ipei was prepared to apply phytosanitary 
standards in a transparent manner based on scientif ic evidence, the representative of Chinese Taipei 
stated that in developing its standards Chinese Taipei  referred to relevant international biological and 
entomological publications.  It also evaluated th e probability of harm resulting from the introduction 
of the pests or diseases.  In addition, comments on the proposed measures were often sought from 
relevant organisations.  In order to ensure tr ansparency in the future, when a regulation was 
promulgated by the authority, it would be notified to  the relevant associations and trading partners.  
The representative of Chinese Taipei also provided the Working Party with detailed information on 
various quarantine rules and import bans concerni ng the following products: rice and rice products, 
sugar, wheat flour, meat and offal, fish, dairy pro ducts, and fruits.  The sanitary requirements for food 
stuffs were the same for imported and domestic goods.  Domestic goods were also subject to 
inspection in order to maintain effective quaran tine in certain instances.  Goods found to be 
contaminated with toxigenic vibrio cholerae  were destroyed.  The regulation on pesticide residue WT/MIN(01)/4 
Page 40 
 
 tolerances had been developed on a "positive listing principle ".  The same tests applied equally to 
domestic and imported goods.  The CODEX standards set by FAO/WHO were one of the references 
used in determining the pesticide maximum re sidue limits.  There were no procedures for the 
recognition of foreign quarantine or other sta ndards in Chinese Taipei.  Chinese Taipei was 
endeavouring to modify standards so that they co mplied with international standards, except where 
essential security, animal and plant health considera tions, or differences in environment, climate, 
geography or important technology considerati ons necessitated deviations from international 
standards.  He stated that even though all safety inspection requirements and standards applied equally 
to domestic goods, some phytosanitary requireme nts only applied to imported goods, when only 
imported goods risked contamination by particular diseases and pests. 
130. The representative of Chinese Taipei added that  the sanitary requirements for food were set 
by the Law Governing Food Sanitation.  The standa rds set out in that law were developed with  
reference to the CODEX standards set by the F AO/WHO.  In setting sanitary standards, Chinese 
Taipei used Codex standards with modifications as necessary, to a allow a higher level of protection, 
if there was a scientific justification, or otherwise as set out in the relevant pr ovisions of paragraphs 1 
through 8 of Article 5 of the Agreement on SPS.  He further added that  imported products were 
subject to mandatory inspection by the Bureau of Commodity Inspection and Quarantine (BCIQ).  
The BCIQ's statutory duties were to protect product safety, protect consumers' interests and prevent the dissemination of plant and animal diseases and in sect pests.  The BCIQ applied scientific methods 
in its inspection and quarantine practices.  Quaran tine regulations were established in accordance with 
disease and insect pest variations, and international trends. The BCIQ had entered into arrangements 
to recognise the certification, issued by inspection a nd veterinary authorities of certain of its trading 
partners.  The determination and publication of infectious animal diseases had been transferred from 
the BCIQ to the Council of Agriculture.  Chinese Taipei  had determined that in addition to the List A 
and List B animal diseases of the Office Internati onal des Epizooties, the following were also among 
the infectious animal diseases: Vesicular exanthema, Erysipelas, Scabies, Bovine ephemeral fever 
(Bovine influenza), Gas gangrene, Streptococcal m astitis, Infectious pancreatic necrosis, Wirling 
disease and Bacterial Kidney disease.  The plant pest s or diseases referred to in the Enforcement 
Rules concerned harmful organisms which were fungi, slime mould, bacteria, viroids, phytoplasma, 
parasitic plants, nematodes, insects, mites, molluscs,  and invertebrates or vertebrates directly or 
indirectly causing harmful effects to plants and plant products. 
131. The representative of Chinese Taipei added th at the importation of fresh fruit was prohibited 
from areas where infestations of mango seed weevil, ma ngo weevil, Chinese citrus fly, peach fruit fly, 
cucurbit fly or guava fruit fly had occurred.  Fresh fruit could only be imported from areas under 
quarantine for Mediterranean fruit fly if the BCIQ approved the quarantine treatment at the place of 
origin.  Fresh fruit could only be imported from ar eas subject to codling moth, apple maggot, plum 
curulio, peach twig borer, Mexican  fruit fly, West Indian fruit fl y, South American fruit fly or 
Queensland fruit fly and lethal yellowing, kaincope r disease, cadang-cadang disease, bronze leaf wilt, 
root (wilt) disease, Guam coconut disease, leaf scorch disease of coconuts, and arrowhead scale of 
Citrus and red and black citrus leafminer, if impor ted with a certificate stating that the fruit had been 
thoroughly inspected and found free of infestation or has been treated with an appropriate treatment 
prior to shipment.  The representative of Chinese Taip ei added that there were 449 standards applying 
to agricultural and processed agricultural products ad ministered by the Bureau of Standards.  He 
further added that the implementation of animal a nd plant quarantine regulations and measures carried 
out by the Bureau of Commodity Inspection and Quarantine (BCIQ) has b een transferred to the 
Bureau of Animal and Plant Health Inspection & Quarantine (BAPHIQ), Council of Agriculture, from 
1 August 1998. In addition, the BCIQ has been  operating under a new name, the "Bureau of 
Standards, Metrology and Inspection" (BSMI),  following reorganization on 26 January 1999. 
132. In response to the information presented by the representative of Chinese Taipei on the 
sanitary and phytosanitary regime, some members of  the Working Party requested that Chinese Taipei 
enter a commitment that in implementing the terms of the Agreement on Sanitary and Phytosanitary  WT/MIN(01)/4 
 Page 41 
 
 
 Measures as follows: Chinese Taipei  would enforce its sanitary or phytosanitary measures based on 
accepted scientific principles and an assessment of the risks i nvolved; follow the notification 
procedures of the SPS Agreement; not maintain a measure unless based on sufficient scientific 
evidence; ensure that existing international standards were a pplied when they exist; accept the 
sanitary and phytosanitary measures of other WTO Members as equivalent, even if these measures 
differed from Chinese Taipei's measures or from tho se used by other Members trading in the same 
product, upon demonstration that such measures achieved the appropriate level of sanitary or 
phytosanitary protection; and,  ensure that sanita ry and phytosanitary measures were adapted to the 
sanitary or phytosanitary characteristics of the area, including areas within a country or other political 
boundary, from which the product originated and to which the product was dest ined.  Some members 
of the Working Party also requested that Chinese Taipei recognize exports as being from pest or 
disease free areas and areas of low pest or disease prevalence.   
133. Some members of the Working Party stated that new quarantine regulations applying to 
air-freighted fresh fruit, whereby inspectors were being sent to the exporting countries to inspect the 
fruit prior to shipment imposed excessive burdens on importers and acted as a barrier to trade.  The 
representative of Chinese Taipei replied that this  measure was typically applied by developed 
economies.  Chinese Taipei had held intensive discussi ons with the trading partners that had indicated 
they had problems with Chinese Taipei's SPS provisi ons.  Some of the problems had been resolved, 
and technical experts had discussed existing problems.   
134. Some members of the Working Party requested  that Chinese Taipei eliminate the following 
practices from the date of its accession to the WT O without recourse to any transitional period: 
quarantine controls applied to imported agricultu ral commodities without adequate notification, 
consultation, or a clear scientific basis for their a pplication; certificates nominally granted for health 
sanitation or quarantine reasons which were in fact never granted, and therefore acted as de facto  bans 
on importation; and the arbitrary denial of certificatio n with no criteria being made available to traders 
to indicate under what conditions certificates can be  obtained, and no expl anation being given for 
non-approval of certification. 
135. The representative of Chinese Taipei stated th at the ban on imports of live swine due to the 
infestation of Porcine Reproductive and Respirator y Syndrome (PRRS) had been removed, and that 
live swine which met the quarantine requirements w ould be allowed entry into Chinese Taipei from 
the date of accession.  The Working Pa rty took note of this commitment. 
136. Some members of the Working Party raised  various concerns regarding Chinese Taipei’s 
practices with respect to application of SPS measures.   In their view, Chinese Ta ipei had, in the past, 
adopted SPS measures without providing notice of the action and the criteria for its application to traders and often bases quarantine areas on political geographical regions, rather than scientifically 
justified areas.  In addition, Chinese Taipei  had at times failed to base its SPS measures on 
international guidelines or recommendations and had in some cases adopted and maintained measures 
without sufficient scientific evidence.  In particular , scientific risk assessment s that take into account 
assessment techniques developed by international orga nizations had not been provided in some cases.  
137. The representative of Chinese Taipei stated  that Chinese Taipei would fully apply the 
provisions of the Agreement on Sa nitary and Phytosanitary Measures from the date of its accession, 
without recourse to any transitional period and woul d address the concerns raised by members.  He 
also stated that Chinese Taipei would, from the date  of its accession, notify to the WTO all relevant 
laws, decrees, regulations, and admi nistrative rulings of general appli cation relating to its sanitary and 
phytosanitary measures, including product coverage a nd relevant international standards, guidelines 
and recommendations.  The Working Party took note of these commitments. 
 WT/MIN(01)/4 
Page 42 
 
  Trade Related Investment Measures 
138. Some members of the Working Party request ed information on the investment regime of 
Chinese Taipei, in particular the local content requi rements prevailing in the automotive sector.  Some 
members of the Working Party said that Chinese Taipei  needed to notify its trade-related investment 
measures such as the local content requirements fo r motor vehicles and the mixing requirements in 
force for coal and cement production, and specify a schedule for their elimination.   In response the 
representative of Chinese Taipei said that Chinese Taip ei only maintained local content requirements 
on automobiles and motorcycles.  In the case of sm all automobiles, at least 40 per cent of the motor 
vehicle plus at least four items from a list of fift een designated major items were required to be of 
local manufacture.  For large automobiles (3.5 to 10  tons), at least 37 per cent of the motor vehicle 
plus at least three items from a list of fifteen designated major items were required to be of local 
manufacture.  For large automobiles over ten tons, at least 31 per cent of the motor vehicle plus at least two items from a list of fifteen designated major items were required to be of local manufacture.  
For motorcycles, at least 90 per cent was required to be of local manufacture.  These local content 
rules applied equally to domestic and foreign enterprises.  He added that a local content requirement 
on government procurement of incinerators had been  eliminated, but that a local content requirement 
on electric locomotives remained.  He noted that this  was an exception to national treatment permitted 
under Article III of the GATT 1994, as these products were not intended for commercial resale. 
139. Some members of the Working Party said th at Chinese Taipei needed to notify its trade 
related investment measures such as the mixing requi rements in force for coal and cement production, 
and specify a schedule for their elimination.  Th e representative of Chinese Taipei said that Chinese 
Taipei had no mixing requirements for cement pr oduction.  The mixing requirements for coal were 
imposed upon importers of coal.  Importers of coal  were required to purchase local coal which was at 
least 1.41 per cent of the amount of coal that they wished to import.  Chinese Taipei planned to lower 
this requirement to 0.72 per cent by the end of 1998.   However, the ratio had actually been lowered to 
0.55 per cent as of the end of 1996.  This measure was eliminated in January 2001.   
140. The representative of Chinese Taipei stated that Chinese Taipei undertook to eliminate the 
existing local content and sourcing requirements applied to the production of automobiles and 
motorcycles and the mixing requirement relating to the use of coal upon accession to the WTO.  The 
Working Party took note of this commitment.  
141. The representative of Chinese Taipei confirmed that Chinese Taipei did not apply any other 
measures inconsistent with the Agreement on Trad e-Related Investment Measures  and would not do 
so in the future.  The Working Pa rty took note of this commitment. 
 State-Trading  
142. Some members of the Working Party requested  that Chinese Taipei provide information on 
the State owned enterprises covered by Article XVII of the GATT, and the WTO Understanding on 
the Interpretation of Article XVII, operating in Ch inese Taipei.  At the request of members of the 
Working Party, the representative of  Chinese Taipei supplied details of the State enterprises operating 
in the energy industry, the agriculture-fertiliser i ndustry, the metals-mining industry, heavy industry, 
the petrochemical industry, the paper manufacturing industry, and the tobacco products and alcoholic 
beverages industry.  He noted that the Taiwan Chung Hsin Paper Corporation, the Tang Zong Iron 
Works Co. Ltd, the Agricultural and Industrial Enterprise Co. Ltd, the Kao-Hsiung Ammonium 
Sulphate Co. Ltd, and the Taiwan Tobacco and Wine Monopoly Board (TTWMB) previously owned 
by the Taiwan Provincial Government  were now owned by various  Ministries.  He indicated that the 
Chinese Petroleum Corporation had enjoyed a monopoly to import crude oil and refined products and 
to export refined products.  The import and export monopoly of the Chinese Petroleum Corporation 
was eliminated in January 1999.  The Taiwan S ugar Corporation enjoyed a monopoly to import and 
export sugar.  All liquid ammoni a imports were monopolised by the Taiwan Fertiliser Company,  WT/MIN(01)/4 
 Page 43 
 
 
 which also centrally administered purchase and sal es, except for imports of waste acid gas.  The 
Taiwan Fertilizer Company was privatised in  September 1999.  The Taiwan Salt Industrial 
Corporation held a monopoly to import salt, except for imports of industrial salt used in the production of alkali-chloro.  It was expected to be abolished by the end of June 2002.  Taiwan Sugar 
Corporation supplied all the alcohol requirement s of the TTWMB.  The representative of Chinese 
Taipei asserted that neither Taiwan Power Co mpany, China Steel Corporation (before it was 
privatized) nor Aerospace Industrial Developmen t Corporation enjoyed import or export monopoly.  
These enterprises did not enjoy any special treatment in their trade or production activities.  Private traders could import alcohol and tobacco pr oducts using TTWMB as the nominal importer. 
143. In response to further questions from some members of the Working Party, the representative 
of Chinese Taipei said that the above-mentioned State-owned enterprises were profit oriented and operated on the basis of commercial considerations.  Purchases by State enterprises in principle were 
made by public tender and the purchase decisi ons were based upon such factors as qualities, 
specifications, deliveries and prices.  Non-commer cial factors did not come into play.  Area 
restrictions applied to two ne ighbouring economies that were the only instances where purchase 
decisions could deviate from commercial consider ations when the amount of the procurement 
involved exceeded US$600,000 had been abolished on 1 June 1997.  These State enterprises imported 
raw materials for products where production coul d meet the demand of the domestic market.  The 
reselling price of the imported products was determ ined in the same way as for domestically produced 
products.  There was no discrimination against impor ts.  The purchasing decisions of Taiwan Power 
Company and China Steel Corporation (before it was privatized) were also generally based upon 
criteria such as quality, specification, delivery and price.  However, since the government of Chinese 
Taipei was the largest shareholder in these enterprise s, the purchasing decisions were affected by the 
government's economic and trade policies.   Some me mbers noted that the State-enterprises were not 
subject to the Fair Trade Law and asked how this c ould be justified in light of Articles XVII and III of 
the GATT 1994.  The representative of Chinese Taipei  replied that some of the practices of these 
enterprises had been exempted from the provisions of the Fair Trade Law for an interim period of five 
years to permit the commercial adjustment and th eir eventual privatization.  This temporary 
exemption from the application of the Fair Tr ade Law had expired in February 1996.  The 
procurement by these companies would be governed  by the Agreement on Government Procurement 
once Chinese Taipei became a signatory. 
144. Some members of the Working Party referred to the status and operations of the publicly 
owned retail stores which offered buyers between 20  per cent and 30 per cent discounts on identical 
merchandise purchased in the free market.  In thei r view the pricing policies of these stores were 
highly irregular.  Prices were fixed in a manner wh ich could undermine sales in the free market as 
suppliers were required not to sell at a lower pri ce to open market stores.  There were no limits on 
purchases or resale of goods purchased in the pu blicly-owned retail stores and access was not 
restricted to members only.  In response, the repr esentative of Chinese Taipei said that there were 55 
publicly owned retail stores in operation.  These st ores do not discriminate against imported products 
and do not create obstacles to importation and di stribution of imported products.  The United 
Cooperative Association (UCA) was a private entity commissioned by the government to supply daily 
necessities to employees of the government and edu cational institutions.  The rules governing the 
negotiation practices contemplated the determination of a base price which was 15 per cent to 
30 per cent lower than the market price.  Access to these stores was restricted to members and the 
resale of merchandise was prohibited.  In the  PX  stores, the selling price was 2 per cent above the 
sourcing price to cover the operating expenses.  Some members of the Working Party said that many 
privately owned stores used the public stores as sources of supply, which resulted in market 
distortions.  Some members of the Working Party al so said that the UCA requirement that suppliers 
not sell at lower prices to any store in the free market  appeared to be in conflict with the Fair Trade 
Law.  In addition, the operating practices of the UCA and the Military PX stores harmed both 
manufacturers who were forced to sell at unrealistically low prices, and private retailers who were WT/MIN(01)/4 
Page 44 
 
 forced to compete with subsidised  publicly-owned stores.  Prices in  the publicly-owned retail stores 
were 15-30 per cent below retail leve ls, and in many cases manufacturers were forced to supply these 
stores at below cost prices.  The publicly-owned re tail stores appeared to have up to 40 per cent of 
market volume.  This factor, combined with thei r prices, made it difficult for private retailers to 
compete in the market place.  Th ese members considered that the publicly-owned retail stores should 
be subject to the Fair Trade Law.   
145. The representative of Chinese Taipei responded that the UCA and the Military PXs were not 
entirely exempted from the operation of the Fair Trad e Law, and that the exemption was limited to the 
organisation of the UCA because it fell within th e definition of horizontal collaboration among the 
stores participating in the organisation of the UCA.  Otherwise, all other business practices of the 
UCA were subject to the Fair Trade Law.  He further added that publicly owned businesses did not de 
jure or de facto discriminate against imported pro ducts and did not create obstacles to the importation 
and distribution of imported products in terms either  of price or of quantity.  Some members of the 
Working Party asked that Chinese Ta ipei take steps to control the persons allowed to gain access to 
the UCA and Military PX stores, the quantity of pr oducts allowed to be purchased by the public 
employees, establish and publish new procurement and product listing guidelines which reflected 
market dynamics, and establish a fairer price setti ng procedure.  These members also asked whether 
the UCA and Military PX stores received any subsidi sation in their operations.  The representative of 
Chinese Taipei said that shopping centres, supermar kets and discount stores in many cases offered 
merchandise at the same or lower pri ces than those of the Military PX stores.  Because of the prices of 
private stores, the incidence of resale of products purchased at Military PX stores was almost non-existent.  In addition the Military PX Headqua rters had made rules to prohibit the resale of 
products purchased in the Military PX stores.  Conc erning the purchasing decisions of the Military PX 
stores, the representative of Chinese Taipei noted that needs of milita ry personnel and the condition of 
the market were examined.  The decision to purch ase was advertised in newspapers.  All suppliers, 
whether importers of foreign goods or local manufacturers who could meet the limited purchase 
volume requirements of the Military PXs stores were e ligible to enter into negotiations to supply the 
stores.  The Fair Trade Commission, i.e. the admini strative agency responsible  for enforcing the Fair 
Trade Law, had been monitoring very closely the business practices of UCA. It had fined different 
UCA stores for their failure to prev ent the entry by individuals who did not have legal access to these 
stores.  It had also fined several private stores who held themselves out as UCA stores in order to 
deceive consumers.  The Fair Trade Commission had lo oked into the pricing practices of suppliers of 
the UCA stores to see whether there was any abuse of  market power by the UCA stores.  As a result 
of the Fair Trade Commission's investigation, the Fair Trade Commission launched a business 
correction campaign requiring large-scale marketing entities including, among others, UCAs, to eliminate as of 1 July 1995 the practice of imposing contractual obligations on suppliers to offer the 
most favorable pricing. 
146. Some members of the Working Party stated that Chinese Taipei must  agree to additional 
transparency in the operation of all of its State- trading enterprises, particularly in the area of 
agricultural products, e.g. by demonstrating that mark -ups on State-traded imports do not discriminate 
against imported goods vis-à-vis  domestically-produced goods, and in  the area of export subsidies.  
The representative of Chinese Taipei said that th e operations of the State-owned enterprises were 
based on commercial considerations such as quantity, price, quality, supply stability and risk and that 
there was no discrimination against imports.   
147. The representative of Chinese Taipei said that  the following State enterprises would be 
notified as State-trading enterprises under Article XV II for the purposes of the Understanding on the 
Interpretation of Article XVII of the GATT 1994: Chinese Petroleum Corporation; Taiwan Sugar 
Corporation; Taiwan Salt Indus trial Corporation, Taiwan Toba cco and Wine Monopoly Bureau; 
China Engraving and Printing Works; Council of Ag riculture (rice imports); and Taiwan Provincial 
Fruit Marketing Cooperative.  The Working Party took note of that commitment.  WT/MIN(01)/4 
 Page 45 
 
 
 148. The representative of Chinese Taipei stat ed that the TTWMB, which was owned and 
managed by the Ministry of Finance, would also  be notified under Article XVII as long as it maintains 
its current nominal import/distribution monopol y and other special privileges under law and 
regulation in the distribution, or trade of tobacco and alcohol products.  The Working Party took note 
of that commitment.  
149. The representative of Chinese Taipei stated that the statutory import/distribution monopoly 
would be abolished with the impl ementation of new laws establishing a tobacco and alcohol tax and 
administration system.  The representative of Chinese Ta ipei also stated that some private trade in rice 
and sugar would be permitted as reflec ted in Part I of Annex I to the Draft Protocol of Accession.  The 
Working Party took note of these commitments.  
150. The representative of Chinese Taipei stated  that upon accession to the WTO, import and 
export procedures of state trading enterprises would  be fully transparent and in compliance with the 
WTO Agreement.  In this regard, Chinese Taipei w ould  provide complete information for any such 
activities as required in WTO questionnaire G/STR/3 .  In addition, to assist in monitoring 
implementation of its commitments, Chinese Taipei  would  provide, upon the request of a WTO 
Member, specific information, which would be main tained on a confidential basis and not disclosed to 
the public, on all elements of particular import trans actions by the following state trading enterprises: 
the Council of Agriculture (rice imports), the Ta iwan Provincial Fruit Marketing Cooperative, the 
Taiwan Tobacco and Wine Monopoly and the Taiw an Sugar Corporation, for so long as those 
enterprises met the definition of  state trading ente rprises within the meaning of the WTO Agreement.  
He further stated that such information would  in clude all elements affecting the price, such as the 
product, quality, grade, contract price, terms of de livery, financing provisions, discounts, government 
assistance, transportation, and insurance rates, but may exclude the name of the other party to the 
transaction.  The Working Party t ook note of these commitments.   
151. The representative of Chinese Taipei stated th at for all state trading enterprises within the 
definition of Article XVII of the GATT 1994, Chinese Taipei would ensure that any fees or charges 
assessed to importers or end-users by these enterpri ses would not afford protection in excess of the 
tariff rate provided for imports listed in the Schedul es in Annex I  to Chinese Taipei's Draft Protocol 
of Accession, plus fees and charges consistent with  Article VIII of the GATT.  Imports in excess of 
the level of the tariff quotas specified in the Sche dules in Annex I to Chinese Taipei's Draft Protocol 
of Accession would  not be reserved for state-owned or state-operated enterprises, and would be able 
to  be imported and distributed by private firms and other non-state-trading enterprises.  He stated that 
state trading enterprises within the definition of Article XVII of the GATT 1994 would not be used as 
a conduit for subsidized exports, nor would notif ication of these enterprises under Article XVII 
exempt them from other requirements under WTO Agre ements, such as Article 4(2) of the Agreement 
on Agriculture.  He further stated that Chinese Taip ei would not take any measure to influence or 
direct these enterprises as to the quantity, valu e, or country of origin of goods purchased.  
Furthermore, Chinese Taipei would not export rice imported under its minimum access commitment.  
The Working Party took no te of these commitments. 
152. The representative of Chinese Taipei also undert ook that all State-trading enterprises within 
the definition of Article XVII of the GATT 1994 w ould operate in a transparent manner and in 
compliance with that Article and with the other re levant Articles of GATT 1994, in particular with 
Articles I, II, III, XI and XIII.  The Working Party took note of these commitments. 
 State Ownership and Privatization 
153. Some members of the Working Party enquired whether State owned enterprises would be 
privatized.  The representative of Chinese Taipei sai d that the policy was to privatize most State 
owned enterprises.  The statutory framework re quired to implement this policy was in place. WT/MIN(01)/4 
Page 46 
 
 154. In response to further requests for informati on, the representative of Chinese Taipei stated 
that information on the privatization of State owned enterprises could be obtained through the web 
site of the Council for Economic Planning and Deve lopment. Since 1989, more than 50 offerings 
(including CSC's two DR issues in 1992 and early 1997, representing 360 million shares and 
203 million shares respectively), and several sales  of assets had been conducted.  The sales of 
government owned companies had yielded total pro ceeds of nearly NT$ 400 billion, corresponding to 
US$12.5 billion (based on 2000 data). Up to Dec. 2000,  twenty-four of the targeted SOEs had been 
successfully privatized, including, Chung Kuo Insu rance Co. Ltd. (CIC), China Petrochemical 
Development Corporation (CPDC), BES Engineering Corporation, China Steel Corporation (CSC), 
Yang Ming Marine Transport Corporation (YMTC), Liquefied Petroleum Gas Supply Administration, 
Yuan Rong Industrial Gas Co., Ltd, Chang Hwa Co mmercial Bank, First Commercial Bank, Hua Nan 
Commercial Bank, Taiwan Business Bank, Taiwan Fire  and Marine Insurance Co. Ltd., Taiwan Life 
Insurance Co., Ltd, Taiwan Navigation Co. Ltd., Ka ng Shan Ropery Factory, Taiwan Development & 
Trust Corporation, Taiwan Fertilizer Company, Th e Farmers’ Bank of China, Chiao Tung Bank, Bank 
of Kaohsiung, Taipei Bank, Taipei City Governme nt Printing House, Hsin Sheng Press Enterprise 
Co., Ltd., and Taiwan Motor Transport Co., Ltd.  In addition, 3 plants of the Taiwan Machinery 
Manufacturing Corporation (TMMC) have been privati zed by private placement. The details of the 24 
privatized enterprises were as follows: 
Privatized State-Owned En terprises in Chinese Taipei 
Company Date of Privatization % Government 
Shareholding 
(2000 data) 
Chung Kuo Insurance Co. Ltd. 5 May 1994 30.60 
China Petrochemical Development Co. 20 June 1994 15.73 
BES Engineering Corporation 22 June 1994 0.00 
China Steel Corporation 12 April 1995 40.52 
Yang Ming Marine Transport Corp oration 15 February 1996 42.62 
Liquefied Petroleum Gas Supply Administration 16 March 1996 0.00 
Yuan Rong Industrial Gas Co., Ltd 1 January 1998 39.82 
Chang Hwa Commercial Bank 1 January 1998 23.38 
First Commercial Bank 22 January 1998 36.31 
Hua Nan Commercial Bank 22 January 1998 37.92 
Taiwan Business Bank 22 January 1998 39.35 
Taiwan Fire and Marine Insurance Co. Ltd. 22 January 1998 29.03 
Taiwan Life Insurance Co. Ltd. 20 June 1998 28.92 
Taiwan Navigation Co. Ltd. 30 June 1998 37.42 
Kang Shan Ropery Factory 1 August 1998 0.00 
Taiwan Development & Trust Corporation 8 January 1999 34.06 
Taiwan Fertilizer Company 1 September 1999 45.29 
The Farmers' Bank of China 3 September 1999 45.29 
Chiao Tung Bank 13 September 1999 33.08 
Bank of Kao-Hsiung 27 September 1999 48.85 
Taipei Bank 30 November 1999 44.55 
Taipei City Government Printing House 31 December 2000 0.00 
Hsin Sheng Press Enterprise Co., Ltd. 31 December 2000 0.00 
Taiwan Motor Transport Co., Ltd. 1 July 2001 0.00 
 
Recent changes had made it easier for the shares of SOEs to be listed on the Taiwan Stock Exchange 
and the OTC market. The revision of legislation had b een announced in 2000.  In addition, the priority  WT/MIN(01)/4 
 Page 47 
 
 
 shares issued to employees of SOEs had been ra ised, with each employee now entitled to purchase 
shares, equal in value up to 48 months' pay, instead of just 24 months as before.  
Privatization Timetable as of 2001 
Date Schedule for Privatization 
December 2001 Food Products Factory 
December 2001 Kao-Hsiung Ammoni um Sulphate Corporation 
December 2001 Aerospace Industria l Development Corporation  
December 2001 Central Reinsurance Corporation 
December 2001 China Shipbuilding Corporation  
December 2001 Tao-Yuan Furniture Factory 
December 2001 Tang Zong Iron Works Co. Ltd. 
July 2002 Taiwan Salt Industrial Corporation 
December 2002 Taiwan Railway Freight Co. Ltd.  
December 2003 Chinese Petroleum Corporation  
December 2003 Plastics Works 
December 2003 Lung-Chi Chemical Plant 
December 2003 Veterans Pharmaceutical Plant 
June 2004 RSEA Engineering Corporation 
June 2004 Taiwan Railway Administration  
Undecided Chung Hsing Paper Corporation  
Undecided Agricultural and Indu strial Enterprise Co. Ltd.  
Undecided Chunghwa Telecom Co. Ltd. 
Undecided Taiwan Machinery Manufacturing Corporation  
155. The representative of Chinese Taipei confirmed the readiness of Chinese Taipei to ensure the 
transparency of its ongoing privatization program and to keep WTO Members info rmed of its progress.  
He stated that his authorities would provide annu al reports to WTO Members on developments in its 
programme of privatization as l ong as it was in existence.  The Working Party took note of this 
commitment. 
 Taiwan Tobacco and Wine Monopoly Bureau (TTWMB) 
156. The representative of Chinese Taipei said that the privatisation of the TTWMB was under 
review independently of the tax reform plan.  He provided inform ation concerning the calculation 
methodology, and stated that the units used by Chines e Taipei were 1000 sticks fo r cigarettes, and litres 
for alcohol.  He explained that the prices of domestic wine and tobacco products were equal to the sum 
of operating costs plus the Monopoly Tax.   
157. With regard to tobacco products, some member s of the Working Party said that the future 
operations of the TTWMB should provide equal opport unities to all tobacco product exporters.  The 
representative of Chinese Taipei replied that following the reforms the TTWMB would have no 
regulatory function, nor a monopoly on the distribution of tobacco a nd alcohol products.  The TTWMB 
would, pursuant to the Tobacco and Alcohol Administ ration Law, be restructured so that it would only 
operate as a business venture.  Within the governme nt of the Separate Customs Territory, the regulatory 
functions would be carrie d out by the Ministry of Finance.  Moreover, the TTWMB would have no 
influence upon the market access of tobacco exporters.  He submitted to the Working Party the summary 
of the Tobacco and Alcohol Reform Plan re produced in Attachment B to this Report. WT/MIN(01)/4 
Page 48 
 
 158. The representative of Chinese Taipei stated th at from the date of acce ssion, TTWMB would be 
reformed to bring its operations in the area of international trade and domestic distribution into 
conformity with GATT 1994 and the other obligations  of the WTO.  He added that Chinese Taipei 
would establish an open and equita ble trade and distributi on system in these products and would ensure 
national treatment and non-discrimi natory treatment for these products.  From the date of accession, 
TTWMB would not have a regulator y function concerning t obacco and alcoholic beverages and would 
operate on a commercial basis s ubject to the same laws, regulati ons, rules, decrees, directives, 
administrative guidance, policies and measures applicable to  other firms in Chinese Taipei.  Any special 
or monopoly privileges granted to TTWMB in the do mestic distribution and international trade of 
alcohol and tobacco products would be  eliminated from that date.  Both domestic and foreign firms 
would be eligible to participate in the distribution a nd trade of these products on an equal basis, as noted 
in the Schedules in Annex I to the Draft Protocol of Accession.  The Working Party took note of these 
commitments. 
159. The representative of  Chinese Taipei confir med that from th e date of accession, TTWMB 
would  be a business operation without any regulator y function.  Within the government of the Separate 
Customs Territory, the regulatory functions would be carried out by the Ministry of Finance.  All 
special or monopoly privileges granted to TTWMB in the domestic distribution and international trade 
of alcohol and tobacco products w ould be eliminated, and both dome stic and foreign firms would be 
eligible to participate in the distribution and trade of these products on an equal basis, as noted below 
and in the Schedules in Annex I to the Draft Protocol .   The representative of Chinese Taipei further 
stated that the reform of TTWM B would also include the gradual elimination of its monopoly on the 
production of alcohol and tobacco products. Production of tobacco and alcohol products would be 
opened to other domestic a nd foreign firms according to the following schedule:  
 Time Schedule Category 
Stage 1 X brewed alcoholic beverages excep t beer, reprocessed alcoholic beverages 
(fruit), rice spirit 
Stage 2 X+1 year cooking alcoholic beverages, dis tilled spirits, reprocessed alcoholic beverages
Stage 3 X+2 year beer, alcohol 
Note: X = Accession Year 
160. The representative of Chines e Taipei stated that any subs idies provided for the domestic 
production of tobacco and grapes would be bound and gr adually reduced as provided for in the Schedule 
attached to the Draft Protocol of Accession.  All firms producing tobacco or al cohol products in Chinese 
Taipei would have access on an equal basis to im ported and domestic inputs, including any remaining 
benefits from such subsidies, for their production and processing activities consis tent with the provisions 
of the WTO.  He added that Chinese Taipei woul d, on the implementation da te of the Tobacco and 
Alcohol Administration Law, begin processing applications for firms seeking authorization to produce 
alcohol products liberal ized in the first stage, and for other al cohol products liberalized at other stages, 
six months in advance of the date when such activities  were liberalized, in order to provide new entrants 
with the possibility of operating under the reform progra m from its inception.  He further stated that all 
enterprises in Chinese Taipei that produce these pr oducts would be subject to the same protection, 
formalities, fees, and penalt ies under law, without regard to their ow nership or length of  establishment.  
He stated that fees charged would not be exce ssive or unduly burdensome and that penalties for 
violation of the Tobacco and Alcohol Tax and Admini stration Laws would not ex ceed in severity the 
penalties applied for similar violatio ns in other sectors.  To ensure adequate transparency after reform, 
Chinese Taipei would provide WTO Members with  annual reports on the volumes of tobacco and 
alcoholic products manufac tured in Chinese Taipei and on taxes pa id by TTWMB by taxable category.  
Until TTWMB was priv atized , this report would be accomp anied by an annual independent accounting 
review of the operations of TTWMB based on standa rd and customary accounting procedures, including 
a fiscal balance sheet that reports on costs, expe nditures, and revenues of TTWMB, and on its profits 
and losses. Realizing that sales into the domestic market of larg e quantities of sm uggled or counterfeit 
imports of alcohol and tobacco products undermined Chinese Taipei's market  for legally marketed  WT/MIN(01)/4 
 Page 49 
 
 
 products, and wishing to discourage such activities in the future, the representative of Chinese Taipei 
confirmed that all contraband smuggl ed or counterfeit imports of alc ohol and tobacco products seized 
would be destroyed or otherwise disposed of, taki ng into account the practice s of WTO Members in a 
similar situation, and that Chinese Taipei would take  additional efforts to prev ent such illegal imports.  
In this regard, Chinese Taipei would ensure th at certain alcoholic beverage imports would be 
accompanied by a certific ate of origin simila r to that issued by the regulat ory authorities in the country 
of origin.  The Working Party took note of these commitments. 
 Government Procurement 
161. In response to questions concerning the Chinese Taipei's procurement policies, the 
representative of Chinese Taipei stated that the Proc urement Department of the Central Trust of Chinese 
Taipei was a non-exclusive procurement agent for government entities and State enterprises which 
solicited offers and products from foreign sources.  It did not exer cise nor operate as an import 
monopoly.  The Trading Department of the Central Trust of Chinese Taipei acted as a non-exclusive 
import/export agent for government organisa tions, public and private enterprises.  
162. In response to a series of questions from members of the Working Party concerning tendering 
requirements for government procurem ent contracts, the representative  of Chinese Taipei said that 
tender requirements set by the proc urement agencies were based on factors such as performance, design, 
international standards, domestic standards, or refere nce brands (or equivalents to the reference brands).  
Any special tender requirements were clearly described in the tender documents.  The threshold above 
which open tenders were required was NT$50 mil lion, except in circumstances that allowed for 
non-competitive tenders.  The divisi on of contracts in order to avoid the tender threshold was subject to 
an administrative penalty. Chinese Taipei's tender notices were required to contain similar types of 
information as that required by the WTO Governme nt Procurement Agreement.  All unsuccessful 
bidders were, at their request, informed of the re asons why they did not win a contract.  There was no 
provision for an unsuccessful bidder to appeal  against a decision not to award a tender. 
163. In response to questions the representative of  Chinese Taipei said that a bidder could be 
required to submit a commitment to implement an in dustrial co-operation plan (ICP) to the amount of a 
certain percentage of the contract price.  Some members of the Working Party said that the increased use of the requirement that tenderers agree to technology transfers was in consistent with the Agreement on 
Government Procurement. 
164. Some members of the Working Party said that  Chinese Taipei should apply for and commence 
negotiations on accession to the Ag reement on Government Procurement (AGP).  The representative of 
Chinese Taipei said that Chinese Taipei had carefully  examined the request and had decided to accede to 
the Government Procurement Agreement.  He adde d that  prior to acceding to the Government 
Procurement Agreement, Chinese Taipei would  take steps to improve the procedural aspects of the 
current practices.  The representative of Chinese Taipei said that Chinese Taipei had prepared a draft 
Government Procurement Law which would replace the existing procurement requirements set by the 
various audit laws and regulations .  The draft Law took  full account of the AGP requirements, including 
the establishment of a bid challenge procedure.  Th e Government Procurement Law would take effect on 
May 27, 1999.  A Government Procurement G azette was being officially published from 
1 November 1996 after a ten-month long trial publicati on.  The ceiling limitation of 49 per cent for the 
acquisition of interests in existing construction firms had been abolished from 3 November 1995. 
Foreign experience could be counted in the dete rmination of qualification for Class A construction 
company licenses.  From 1 June 1997 the area restri ction in the procurement practices had also been 
lifted.  The issues of the industrial cooperation pr ogram (ICP), and the limit ation on foreign suppliers' 
market access/lowering of the threshol d were being dealt with in the accession negotiations for the AGP.   WT/MIN(01)/4 
Page 50 
 
 165. Some members of the Working Party noted that  negotiations were con tinuing regarding Chinese 
Taipei's commitments regarding product coverage and implementation of procedures associated with the 
procurement process.  In particular, additional cl arity was required regardi ng procedures to address 
disputes arising in the c ontext of the procurement and contract pe rformance process.  The representative 
of Chinese Taipei noted that the contract performan ce process did not fall within the coverage of any 
WTO rules. 
166. The representative of Chinese Taipei stated that Chinese Taipei had notified the Committee on 
Government Procurement of its in tention to accede to the Agreement on Government Procurement and 
had initiated negotia tions to that end by the submission of an offer.   The representative of Chinese 
Taipei confirmed that Chinese Taipei would acce de to the Agreement on Government Procurement 
(GPA) within one year of its accession to the WTO.    If, however, new government procurement laws 
necessary to comply with the GPA were enacted pr ior to Chinese Taipei's accession to the WTO, 
Chinese Taipei would accede to the GPA within one year of enactment of those laws or at the time 
Chinese Taipei accedes to the WT O, whichever was later.  The Wo rking Party took note of these 
commitments. 
  Agreement on Textiles and Clothing 
167. The representative of Chinese Taipei stated that the quantitat ive restrictions on imports of 
textiles and clothing products origin ating in Chinese Taipei under ar rangements between Chinese Taipei 
and WTO Members that were in force on the date prior to the date of accession of Chinese Taipei to the 
WTO would be notified to the Textiles Monitoring Body  (TMB) as being the base levels for the purpose 
of application of Article 2 of the Agreement on Te xtiles and Clothing. The representative of Chinese 
Taipei stated that for the purpose of Chinese Taipei's accession to the WTO, the phrase "day prior to the 
date of entry into force of the WTO Agreement " contained in Article 2.1 of the Agreement on Textiles 
and Clothing would be deemed to refer to the day prio r to the date of accession of Chinese Taipei to the 
WTO.  To these base levels the increase in growth  rates provided for in Articles 2.13 and 2.14 of the 
Agreement on Textiles and Clothing would be app lied, in stages, from the date of accession of 
Chinese Taipei to the WTO.  The Working Party took note of these commitments.   
  Barter Trade 
168. Some members of the Working Party requested  information on the treatment of imports under 
barter arrangements.  The representative of Chinese Taipei said that Chinese Taipei had only had 
agricultural barter trade with Korea.  Since 1992 the barter of Korean apples a nd pears for Chinese 
Taipei bananas had been stopped.  In 1997, a new agreement had been made between Korea and Chinese Taipei, which provided for barter of Korean apples and pears for Chinese Taipei bananas, 
lychees, mangoes, garlic, onions and oranges.  Un der the existing bilateral arrangement, Korea was 
provided with access to the local market in respect of apples (which were cu rrently subject to area 
restriction) and nashi pear s (which were currently unde r import ban) up to a specified volume.  He noted 
that following the elimination of the area restrictions  on apples and quantity re strictions on nashi pears, 
there would be no need to maintain this arrangemen t after Chinese Taipei's accession to the WTO.  The 
barter trade arrangemen t had been terminated from 1 October 1997. 
169. In response to further questions concerni ng purchase requirements, the representative of 
Chinese Taipei said that no mandatory counter pu rchase requirements were  imposed.  The current 
practice of encouraging the purchase of locally manufactured components was granted to foreign 
investors who had exported substantia l quantities of components or pa rts back to their home countries 
but had no monetary implications or value.  The purpose of the scheme was to encourage export of 
locally made automotive parts by giving a public announcement of the Government's appreciation for 
increased export volume by particular suppliers.  The scheme was not a subsidy program nor did it 
impose any mandatory requiremen t to make local purchases.    WT/MIN(01)/4 
 Page 51 
 
 
   Agricultural Policies 
170. Some members of the Working Party noted that Chinese Taipei had indicated that it did not 
apply subsidies to exports of  products, and accordingly these members stated that Chinese Taipei 
should agree to bind its export subsidies at zero in its Schedule of Concessions .  In response, Chinese 
Taipei agreed that its schedules would include a commitment to bind export subsidies at zero.  These 
members noted however, that Chinese Taipei exported th e surpluses of rice genera ted by artificially high 
internal price supports sustained by an import ba n on competitive products.  On average from 1990 to 
1992, exports had represented some 10 per cent of production and so me 160,000 tons.  These members 
asked that Chinese Taipei explain how the difference between the price paid to producers and the export 
price was funded as well as the meaning of the expression "a comfortable rate of self sufficiency in rice".  
Information was also requested on total price suppor t expenditures of Chinese Taipei and the use of 
government assisted loans as provided in the Statute for Agricultural Developmen t.  Some members also 
enquired whether the import ban on ri ce was of a general application and requested its elimination. 
171. The representative of Chinese Taipei stated th at Chinese Taipei's policy was to liberalise the 
agricultural sector.  In response to  questions, the representative of Chin ese Taipei indicated that the price 
support mechanisms operated to purch ase agricultural products from farm ers at guaranteed prices, which 
were set above the production co st of the product.  In res ponse to further questions the representative of 
Chinese Taipei informed members of the Working Party that Chinese Taipei operated a system to 
compensate farmers for damage caused by competition from imports of agricultural products.  Relief 
was accorded if producers of major agricultural pr oducts suffered serious injury as a result of the 
liberalisation of imports due to trade negotiations or  policy changes.  If the quantity of such products 
imported during the injury period had increased by 20 per cent or more compared with a reference 
period of the previous three years; or the importe d products had been subsid ised or had otherwise 
benefited from unfair trade practices.  Serious injury  was deemed to occur when the market price fell 
below the cost of production.  The sixteen products  eligible for relief under the Regulations were as 
follows: citrus, apples, plums, peaches, guavas, pears,  wax apples, grapes, tea leaves, beef, pork, duck 
meat, bred shrimps, pineapples, chicken meat and cl ams.  In 1995, the legislation was amended to the 
"Rules for Redressing Damage to Farmers Caused by Agricultural Imports. "  It broadened the eligible 
products to all agricultural products.  The repr esentative of Chinese Taipei also submitted to the 
Working Party information concerning the draft Plan on implementation of this program.  The 
representative of Chinese Taipei confirmed that m easures taken to redress damage to farmers caused 
by agricultural imports would be included in the calculation of Chinese Taipei's AMS calculations and 
AMS reduction commitments according to the Agreem ent on Agriculture; measures taken for fishery 
products would be consistent with  subsidy rules as set out in the SCM Agreement.  The Working 
Party took note of this commitment.   
172. The representative of Chinese Taipei  also submitted In formation Concerning 
Domestic Support and Export Subsidies in  documents WT/ACC/SPE C/TPKM/4/Rev.3 and 
WT/ACC/SPEC/TPKM/10/Rev.1.   
173. In response to questions, the representative of  Chinese Taipei noted that the AMS would be 
scaled down consistent with the requirements of the WTO Agreement on Agriculture, i.e., phase-downs 
would be completed by the year 2000.  The purpose of  the rice price support was to maintain a stable 
food supply and to maintain farmers' income.  The rice price support mech anism consisted of two 
elements: planned pur chase and supplementary purchase.  The purchase was made twice in a year 
divided into two crops.  Aged rice was exported at  prices lower than the production costs due to the 
 lower quality when compared to new rice.  The Co uncil of Agriculture mandated the Central Trust to 
auction off the rice with the base price taking into account the interna tional rice price.  The feed plants, 
livestock farming business and aq uaculture business could apply to the Council of Agriculture through 
the Feedstuff Association for the purchase of feed rice.  The price was set at 90 per cent of the wholesale price for imported maize at the time of purchase price payment.  The difference between the guaranteed WT/MIN(01)/4 
Page 52 
 
 price paid to producers and the e xport price was funded by the government budget.  The guaranteed 
purchase price was the only price s upport measure employed by Chinese Taipei.  Rice imports needed a 
Consent Letter of the Council of Agriculture.  Beca use of overproduction consen t letters were not given 
and rice could not be imported.  He added that soybeans, corn and sorghum were eligible for crop 
purchase under the Rice Production and Ricefields Diversification Programme.  In addition, the 
importation of soybeans, corn and sorghum had been liberalised, and the duties for those products were 
1.5 per cent, 1 per cent and 1 per cent, respectively.  He also stated that Chinese Taipei would gradually 
reduce excess rice production.  A proposal on rice imports had been submitted to the Working Party in 
documents WT/ACC/SPEC/TPKM/5/Corr.4, WT/ACC/SPEC/TPKM/5/Rev.1 and Section 1B of the Schedule of Concessions and Commit ments on Goods in Annex I to the Draft Protocol of Accession.  
Chinese Taipei's standards for pa ddy, milled and brown rice were provided to members of the Working 
Party.   
174. Some members of the Working Party expre ssed continued concern a bout Chinese Taipei's 
practice of auctioning central rice stocks for export only.  These member s noted that only livestock feed 
businesses had access to these stocks  for domestic use, and only at fixe d prices.  In the view of these 
members, this practice was an export subsidy.  In response, the representative of Chinese Taipei stated 
that in addition to livestock feed businesses, livestock and fish farmer s also had access to the rice stocks.  
Chinese Taipei did not consider that the practice amounted to an export subsidy.  However, in order to alleviate members from the concern, the representative of Chinese Taipei stated that purchasers of rice 
from the central stock would not be required to expo rt the purchased rice.  Ch inese Taipei also stated 
that upon accession, anyone having the right to trade in rice in Chinese Taipei would have access to 
aged rice from central stocks on the same terms offe red to exporters, and that no further trade-based 
restrictions would be imposed.  The Working Party took note of these commitments. 
175. The representative of Chinese Taipei stated that the ban on imported rice would be lifted upon 
Chinese Taipei’s accession to the WT O. Chinese Taipei intended to st ructure market access for rice 
imports along the lines of Annex 5 of the Agreement on Agriculture. The rice import quota would be 
144,720 metric tons (calculated on a brown rice basis) in the first year after accession.  Chinese Taipei 
agreed to negotiate with interested WTO Me mbers upon accession as to whether there could be a 
continuation of this special treatment beyond the fi rst year after accession pursuant to Annex 5 of the 
Agreement on Agriculture and to conclude this ne gotiation no later than 12 months after accession.  
With a view to maintaining a transparent rice im port arrangement, Chinese Taipei would consult with 
any WTO Member upon request.  The representative of  Chinese Taipei further stated that 1990-92 
would be used as the base period in the calculation of rice imports and for any calculations under 
paragraph 6 of Section A referre d to above as 1990-92 was used concurrently as the base period in 
tariff negotiations, as well as the calculations for AMS and SSG trigger price.  In response to further 
requests for information on its proposed SSG syst em, the representative of Chinese Taipei provided 
members of the Working Party with a detailed description of the proposed program in document 
WT/ACC/SPEC/TPKM/9/Rev.1. 
176. In response to questions concerning exports of sugar, to bacco leaves and bananas, the 
representative of Chinese Taipei stated that Chinese Ta ipei's sugar exports fluctuated with changes in the 
United States import quota allocated to Chinese Taipei.  All exports of sugar were to the United States.  
The sugar supply was the monopoly of Taiwan Sugar Co rporation, which was an  enterprise under the 
supervision of the Ministry of Economic Affairs with shares partly held by pr ivate parties.  Taiwan 
Sugar Corporation had its own sugar cane farms; it al so contracts with farmers for processing the sugar 
cane and sharing the sugar made from sugar cane sour ced from such farmers.  The sugar cane growers 
could share 55 per cent of the sugar, which in turn  could be purchased by Ta iwan Sugar Corporation for 
export or sale in the domestic mark et.  The purchase price was calculated on the basis of domestic price 
if the sugar was sold to the domestic market; an d on the basis of export guaranteed price or the 
settlement price after payment to the Sugar Stabilization Fund, if th e sugar was to be exported.    WT/MIN(01)/4 
 Page 53 
 
 
 177. The representative of Chinese Taipei stated that the Sugar St abilization Fund had been in 
existence since 1966 for the purpose of stabilizing su gar export and farmers' in come.  The Fund operated 
as follows: when the export price was higher than  a threshold payment was made to the Fund; the 
payment amount was calculated according to the scale of the price difference and at a cumulative rate.  
When the export price was lower than the export guar anteed price, payment to the farmers for the price 
difference was made out of the Fund.  Taiwan Sugar Corpor ation, however, had to bear the price 
difference all by itself.  The export price had been lower than the export guaranteed price in recent years.  
The price difference had been paid out of the Fund contributed by the price difference resulting from the 
export price exceeding the export guaran teed price in the past.   Sugar pr ices were of tw o types: one was 
for sugar of general use, and the other was for suga r used for processing exported food products.  The 
domestic price for sugar of general use was set by the Ministry of Economic Affairs; while the prices for 
sugar of export processing use was determined on th e basis of London spot ma rket price (F.O.B.) for 
sugar plus importation cost.  The food processing co mpanies applied to Taiwan Sugar Corporation for 
purchase of the needed sugar and paid the domestic price in the first instance.  When the products were exported, the differences were settled Since 1 July 1994, the Fund had st opped operating. 
178. The representative of Chinese Ta ipei stated that all tobacco e xports were of tobacco purchased 
by the Taiwan Tobacco and Wine Monopoly Bureau ( TTWMB).  Banana exports were dealt with by the 
Fruit Transportation and Marketing Cooperative.  Wh en the export price of bananas was lower than the 
export guaranteed price, the differ ence was covered by a fund administ ered by the Cooperative; when 
the export price was higher than the export guaranteed price, contributions were made to the fund 
according to the scale of the diff erence and at a cumulative rate.  Farmers could choose whether to sell 
their products to the domest ic market or to the Cooperative for expor t.  The prices for domestic sales and 
for export were determined according to the demand and supply.  Generally, expo rt prices were higher 
than the domestic price.  The representative of Ch inese Taipei also stated that soybeans, maize and 
sorghum were purchased by the Provincial Food Bureau , and summer vegetables were mostly purchased 
by the Taipei Agricultural Produce Marketing Compan y on the basis of guaran teed minimum prices.  
Guaranteed purchases of wine grapes and wheat had been terminated in the first part of 1997 and 1995, 
respectively.  
179. Some members of the Working Party requested an  assessment of the effect  of the price support 
programmes operated by Chinese Taipei  on the exportation of Chinese Taipei's agricultural products.  In 
response, the representative of Chinese Taipei replie d that he did not consider  that the price support 
programme constituted a subsidy on exports..  
180. The representative of Chinese Taipei stated  that upon accession, in accordance with the 
provisions of the Agreement on Agriculture, Chinese Ta ipei would eliminate all of its WTO-inconsistent 
quantitative restrictions and bind all tariffs applied on imports of agri cultural products listed in Annex I 
of the Agreement.  Further, in accordance with Ar ticle 3, Part II of the Agreement on Agriculture, 
Chinese Taipei would not provide export subsidies,  nor support in favour of domestic producers, in 
excess of the commitment levels specified in the Sche dule in Annex I to the Draft Protocol of Accession  
and confirmed that from the date of accession, suppor t previously granted for the production of tobacco 
and grapes would be calculated into AMS.  The Working Party took note of these commitments. 
181. Chinese Taipei's commitments on agricultural tariffs, on domestic support and export subsidies 
for agricultural products were reproduced in the Sc hedule of Concessions and Commitments in Annex I 
to the Draft Protocol of Accession of Chinese Taipei  to the WTO.  The Working Party took note of these 
commitments.   
VII. TRADE RELATED INTELLECTUAL PROPERTY REGIME 
182. Some members of the Working Party noted that in recent years, Chinese Taipei had introduced 
a number of improvements to the protection of inte llectual property rights and that Chinese Taipei was WT/MIN(01)/4 
Page 54 
 
 apparently ready to assume in fu ll the obligations set out in the WTO Agreement on TRIPS.  In their 
view the problems faced by Chinese Taipei in this  area related to enforcement rather than to the 
intellectual property rights legislation itself.  Inform ation was requested with regard to the entry into 
force of the Patent Law, the Trademark Law, the Integrated Circuit Protec tion Law and the Industrial 
Design Law.  Information was al so requested on the existence of bilateral agreements, the border 
measures to combat counterfeiting, th e procedures applicable to the in fringement of intellectual property 
rights, the protection accorded to  pharmaceutical inventions, the pr otection accorded to geographical 
indications and to appellations of origin for wines and spirits.   
183. In response, the representative of Chinese Taip ei said that the Action Plan to Comprehensively 
Protect Intellectual Property Rights approved on 29 June 1993 had set out the following eight directions 
for efforts to strengthen the protection of intellectu al property rights:  (i) im proving the relevant legal 
framework;  (ii) strengthening the re levant administrative organization;  (iii) enhancing the enforcement 
of the relevant laws a nd regulations;  (iv) increasing educati on and promotion; (v)  increasing the 
capability to negotiate with other economies; (vi) st rengthening investigation and research capabilities; 
(vii)  providing adjustment assistance to the industries concerned;  and (viii)  monitoring the implementation of the plan.  Some members of the Working Party responded that they had noted 
continued high levels of piracy of computer software  in Chinese Taipei and export of pirated software 
embodied in semiconductors.  Member s of the Working Party expressed concern regarding the failure to 
impose penalties, in particular administrative penalties and seizure of infringi ng product and machinery 
predominately used to produce such produc ts, sufficient to deter piracy.   
184. The representative of Chinese Taipei stated th at in January 1999 Chinese Taipei had established 
the Intellectual Property Office whose responsibilit y was exclusively for dealing with intellectual 
property matters.   
  Copyright and related rights 
185. Concerning copyrights, the representative of Chin ese Taipei noted that according to Article 4 of 
the Copyright Law, copyrights of economies or terr itories which have established reciprocity with 
Chinese Taipei were protected by Chinese Taipei.  Protection also extended to foreign works published 
for the first time in the territory of Chinese Taipei , or foreign works which were published in Chinese 
Taipei within thirty days of their first publication in territ ories outside of Chinese Taipei.  Chinese Taipei 
had revised the Copyright Law to meet the requireme nts of TRIPS.  The main revision includes:  
(a)  amending the definitions for public broadcas t and public performance;  (b)  giving explicit 
protection for performers' performance;  (c)  dele ting provisions concerning compulsory licenses for 
translation; and (d)  affording a life-plus-50-years or 50 years te rm of retroactive protection in 
consistency with the obligation under Article 18 of  the Berne Convention.  The Amendment had been 
promulgated since 21 January 1998, and effective since 23 January 1998, except the retroactive 
protection provisions which would not take effect until Chinese Taipei's accession to the WTO.   
186. In response to a question concerning Chinese Ta ipei's current protection for computer programs, 
the representative of Chinese Taipei stated  that  computer programs had be en protectable since 1985 
under the Copyright Law.  The pr otection term was 50 years.  
187. The representative of Chinese Taipei commit ted that Chinese Taipei  would amend relevant 
Articles to protect computer program s as literary works and to extend th e term of protection to life plus 
50 years or 50 years from date of publication.    The Working Party took not e of these commitments. 
188. The representative of Chinese Taipei stated that in his opi nion, the Copyright Law was in 
conformity with the Berne Conventi on and the TRIPS Agreement.  He provided details of the Copyright 
Law provisions to the Working Party.  He said that  Chinese Taipei had prom ulgated one Ac t and eight 
implementing regulations: Copyright Intermediary Organization Act; The Illustrated Contents of Each Kind of Works in Paragraph 1 of Article 5 of the Copyright Law; The Certain Amount in Item 2 and 3  WT/MIN(01)/4 
 Page 55 
 
 
 of Paragraph 1 of Article 87bis of the Copyright  Law; Regulations Governing Application for 
Approval of Compulsory License of Musical Works and Royalties for Use Th ereof; Standards for 
Compensation for Fair Use of Works in Paragra ph 4, Article 47 of Copyright Law; Regulations 
Governing Registration of Plate Rights; Implemen tation Regulations for Suspension of Release of 
Goods Infringing on Copyright or Plate Right by Customs Authorities; Regulations of Copyright 
Dispute Mediation; Organic Charter of the Copyright Examination and Mediation Committee of the 
IPO, MOEA. 
189. In response to the assertion by  some members of the Working Pa rty that Chinese Taipei did not 
appear to protect against the transmission of in fringing copyright material  on its cable television 
network, the representative of Chin ese Taipei indicated that the Government Information Office (GIO) 
had determined that a priority target was a crack down on illegal cable tele vision networks that 
transmitted illegal copyrigh ted television programmes without author ization.  In the event of such a 
transmission being made, the GIO severed the cable connection of the broadcaster and referred the 
matter to the prosecuting authorities.  After the Cable TV Law had been promulgated in 1993, the GIO 
had the authority to impose fines on those cable TV networks which transmitte d copyrighted televisions 
programmes without authorization, and refer cases to the prosecuting authorities.  
190. The representative of Chinese Taipei also not ed that a bilateral ag reement on protection of 
copyright with the United States had taken effect on 16 July 1993 and had been reinforced by a bilateral 
agreement regarding reciprocal tr eatment on the priority rights of trademarks and patents of 
10 April 1996.  In his view, the agreement in some cas es gave a higher standard of protection than the 
Berne Convention.  The text of this agreement was made available to the Working Party as well as the 
Agreement Concerning the Protection and Enforcemen t of Rights in Audiovisual Works between the 
Coordination Council for North American Affairs and the American Institute in Taiwan.  The 
representative of Chinese Taipei we lcomed any opportunity of entering in to bilateral agreements on the 
enforcement and recognition of intellectual prope rty rights with its other trading partners.  
191. In this connection, the representative of Chin ese Taipei noted that Ar ticle 4 of the Copyright 
Law provided that copyright protection for works crea ted outside Chinese Taipei could be granted on 
the basis of reciprocity.  The reciprocity required for granting protection to fo reign copyrights could be 
established by way of (i) a treaty or agreement, (i i) unilateral action by other economies through their 
laws, regulations, or other legal instruments which pr ovide protection to Chinese Taipei's copyrights, or 
(iii) customary practices.  Chinese Ta ipei was willing to discuss with interested parties to find a mutually 
accepted way to establish such reciprocity.  In add ition to the reciprocity established with the United 
States, Chinese Taipei had decided to protect wo rks originating in the United Kingdom; Hong Kong, 
China; New Zealand; Macao, China;   and Switzerland through unilate ral administrativ e action following 
those five economies actions protecting works of Chinese Taipei origin. 
 Trademarks 
192. In response to questions, the re presentative of Chinese Taipei st ated that Article 37(7) of the 
Trademark Law was applied to provide protection fo r well known foreign marks in accordance with 
Article 6 bis of the Paris Convention, i.e.  even when the goods were not similar to the goods in respect 
of which a trademar k was registered. 
193. In response to further questions concerning the Trademark Law and the statement by a member 
of the Working Party that Chinese Taipei's Intellectual Property Office applied the standards for 
trademark registration in a manner that was not consistent with the re quirements of the TRIPS 
Agreement, the representative of Chinese Taipei pr ovided details of the system of protection and the 
respective time limits which, in his opinion, were basically  consistent with the TRIPS Agreement.  He 
stated that the Intellectual Prope rty Office had recently adopted seve ral measures to facilitate the 
examination process and to maintain consistency.  Statistics revealed that in Chinese Taipei applications WT/MIN(01)/4 
Page 56 
 
 for trademark registration filed by foreign applicants had a consistently high approval rate.  Concerning 
the question of geographic denominatio ns of origins, he confirmed that the Trademark Law did not deal 
with geographic denominations of origin.  However, if an application for a tr ademark was made and the 
trademark could cause confusion as to the geographic origin of the marked goods, the application could 
be rejected.  If appellations of origin were used as trademarks their use would violate Article 37 of the 
Law.   
194. The representative of Chinese Taipei said that the Trademark Law, Articles 4, 5, 23, 25, 34, 37 
and 61 had been  amended to achieve: 
(i) to broaden the scope of reciprocal granting of the right of priority to cover the situation 
where there was no formal agreement but the right of priority was granted to Chinese 
Taipei's owner of trad emark through practice; 
(ii) to include a combination of colours in the group of items that were capable of 
constituting a trademark so as to be consistent  with Article 15 of the TRIPS Agreement;  
and  
(iii) to extend administrative protection to  well known marks by providing that no 
applications may be filed for registration of a trademark design which was identical 
with or similar to another person's well-known trademark or mark and likely to cause 
the public to form a mistaken belief.  Th is amendment had been passed in April 1997 
and has come into force on 1 November 1998. 
  Geographic indications 
195. On geographic indications, he noted that curr ently, the Trademark Law did not have specific 
provisions for the protection of geogr aphic indications and appellations of origin for wines and spirits.  
However, as a general rule, if a manufacturer's us e of geographic indications  as trademarks caused 
confusion to the general consumers as to the ge ographical origin of the product concerned, the 
Intellectual Property Office could on its initiative or upon petition by interested parties turn down the 
application of trademark registration or cancel the existing registration, as the case may be, according to 
Article 37, sub-paragraph 6 of the Tr ademark Law.  If appellations of origin were used as trademarks, 
there would be a violation of Articl e 37, sub-paragraph 10 regarding indications of origin.  The relevant 
trademark application would be turned down or the registration would be cancelled.  Chinese Taipei 
believed that the above protection should meet the requirement for the protection of geographical 
indications and appellations of origin cont emplated in the WTO TRIPS Agreement.   
 Patents 
196. Concerning patents, the representative of Ch inese Taipei noted that  under paragraph 1 of 
Article 42 of the 1986 Patent Law, a patent holder ha d the exclusive right to make, sell, or use his 
invention.  Therefore, a product pa tent gave protection to the product no matter which process was used 
in the manufacturing of the product.  Paragraph 2 of  the same Article provided that if the patented 
invention was a process, the patent protection ex tended to the product using the process in the 
manufacturing.  However, if the product was subject to another party's patent, the use of the process 
invention required the consent of that other party.  The above rules applied to all inventions, including 
pharmaceutical inventions.  The Pa tent Law, (as amended in 1994) provided statutory bars to an 
invention patent in Article 21.  Article 56 of the amended Patent Law confer red on the patentee of a 
patented article and patented manuf acturing process the exclusive right s to manufacture, sell, use or 
import. Article 80 stipulates that  where the product manufactured in accordance with a patented 
manufacturing process was under a pr oduct patent granted to others, th e owner of such process patent 
would not put his process inventi on into practice without the cons ent of the product patentee.    WT/MIN(01)/4 
 Page 57 
 
 
 197. In response to quest ions concerning whether ph armaceutical inventions c ould be the subject of a 
product patent giving protection to the product indepe ndently of the process with which it had been 
manufactured, the representative of  Chinese Taipei said that a pate nt was granted on the invention, 
regardless of which process was us ed in the manufacture of the goods.  He said that the examining 
authority could grant extensions of the time limit s for the submission of supplementary information 
supporting a patent  application. 
198. He added that the 1994 Patent Law, Articles 21,  51, 56, 57, 78, 79, 80, 82, 88, 91, 105, 109, 117 
and 122 had been amended to achieve the following objectives: 
(i) to delete the requirement of reciprocit y in respect of the granting of patents for 
micro-organisms, extension of patent prot ection terms and the granting of exclusive 
import rights so as to be consistent with  Articles 3 and 4 of the TRIPS Agreement; 
(ii) to limit compulsory licensing in respect of semi -conductor technology to public 
non-commercial use or to remedying anti-compe titive practice, so as to be consistent 
with Article 31(c) of the TRIPS Agreement; 
(iii) to provide patent owners and his/her excl usive licensees the right to request destruction 
or other necessary disposition of the infri nging goods, raw materi als or instruments 
used, in connection with the infringement, so as to meet the requirement of Article 46 of the TRIPS Agreement which calls for giving the judicial authority to order 
disposition outside the channels of commerce; 
(iv) to provide for shifting the burden of proof in respect of process patents as required by 
Article 34 of the TRIPS Agreement;  and  
(v) to provide for longer term of protecti on for industrial design, so as to meet the 
minimum requirement of 10 years of the TRIPS Agreement. 
These amendments had been passed in April 1997 and w ould enter into force at th e time of accession.  
Chinese Taipei also committed to amend Article 134 of the Patent Law so that upon accession patents 
issued prior to January 1994 that were still in effect  would have a term of protection of 20 years and  12 
years as from the date of filing for the inventi on patents and new design patents respectively.  The 
Working Party took note of these commitments. 
 
 Protection of undisclosed information 
199. In response to questions concerning whethe r Chinese Taipei protec ted trade secrets, the 
representative of Chinese Taipei said that the Tr ade Secrets Law was promul gated on 17 January 1996.  
He assured the Working Party that the protection of trade secrets would conform with the requirements 
of the TRIPS Agreement.   
  Enforcement 
200. Concerning enforcement of intellectual prope rty laws, the representa tive of Chinese Taipei 
noted that in addition to the administrative measures to be taken by the Intellectual Property Office, the 
Fair Trade Law and the Commodity Labelling Law al so provided for the protection of intellectual 
property.  Article 21(1) of the Fair Trade Law prov ided that enterprises (i .e. firms or individuals 
engaging in trade) could not make an y false or misleading marking of pl ace of origin or manufacturing  
or distribute, export or import goods bearing such ma rking.  Violators could be fined up to one million 
NT Dollars.  The fine had been raised to NT$25 million as a resu lt of the amended Fair Trade Law WT/MIN(01)/4 
Page 58 
 
 which had been promulgated on 3 February 1999.  Under the Commodity Labelling Law, importers and 
manufacturers were required to in clude information relating to the na me and address of the manufacturer 
on product labels.  An offender found guilty of violati ng this law and failing to rectify the impropriety 
within a prescribed time-limit would be punished by a fine of 5,000 to 50,000 yuan (equivalent to 
NT$15,000 to NT$150,000).  In the case of grievous offe nce, the violator may also be subject to such 
disciplinary action as suspension or cessation of busin ess operations.  In add ition, persons using false 
designations could be liable under Article 339 of the Criminal Code as having committed the offence of 
forgery. 
201. Concerning the enforcement of intellectual prope rty rights, the representa tive of Chinese Taipei 
said that Chinese Taipei provided training concerning intellectual pr operty rights (intellectual property 
rights) to judges, prosecutors and other law enfo rcement officials.  Ne wly appointed judges and 
prosecutors could not practice until  they had completed an eighteen month training programme which 
included an introduction to intellectual property ri ghts.  Additional training was provided to incumbent 
public prosecutors.  Chinese Taipei had also taken steps to co-ordinate the relevant agencies in the 
enforcement of intellectual property rights.  The Pu blic Prosecutors' Office attached to the Chinese 
Taipei High Court had conducted five seminars sinc e 1 July 1992 for representatives from government 
agencies including Customs, the Government Inform ation Office (GIO), the Board of Foreign Trade 
(BOFT), and the Police Administration. Specific publi c prosecutors had been appointed  to deal with 
intellectual property rights infringement cases.  Publ ic prosecutors were direct ed to handle intellectual 
property rights complaints expeditiously and to pre ss for harsh sentences whenever the circumstances 
warranted.  Judgements which appeared not to have a deterrent effect would be appealed to the High 
Court. All prosecutors were direct ed that the discretion to commute  prison terms to fines should be 
exercised very carefully in intellectual property rights cases.   
202. To facilitate the investigation of inte llectual property rights infringement cases, on 
31 March 1993, the Public Prosecutor's  Office had integrated all intellectual property rights agencies to 
form a task force.  In a letter of 20 August 1996, al l prosecutors had been directed to investigate cases 
where Chinese Taipei residents infringed copyrights in  the PRC.  If the result of the investigation met 
the requirements under Article 251 of the Criminal  Procedure Code, prosecutors should prosecute the 
case. Article 100 of the Copyright Law provided that a prosecutor could initiat e an investigation and 
issue an indictment in the absence of a complaint.  If a complaint had initiated the investigation, Article 
100 also provided that the prosecutor could continue with the investigation or prosecution even if the 
injured party withdrew the complaint.  When a sear ch warrant and the seizure of goods was considered 
appropriate, prosecutors were requi red to proceed promptly.  In addition to the Copyright Law, all 
prosecutors had been directed that the discretion to  not prosecute a case under the Criminal Code should 
be exercised very carefully in in tellectual property rights crimin al cases.  Judges had also been 
encouraged to impose the heaviest penalties possib le on intellectual property rights infringers, and 
special  intellectual property rights divisions had been established in Dist rict Courts.  Specific 
prosecutors had been designated to deal with intellec tual property rights cases.  The Public Prosecutors' 
Office attached to the Chinese Taipei High Cour t had conducted several on-the-job seminars since 
1 July 1992 for new and current prosecutors. The government would continue to hold educational 
seminars and courses for new and current prosecutors and judges on a regular basis to keep them 
informed of the new developments relating to intellectual property rights issues.  
203. To further deter the export of counterfeit com puter software, the Board of Foreign Trade of the 
Ministry of Economic Affairs promulgated the Gu idelines for Handling Cases Where the Export of 
Products related to Computer Progr ams was Suspected of Copyright Infringement in 1996.  In this 
connection, the representative of Chinese Taipei noted that in November 1992, export licensing 
requirements were introduced  for the following products in orde r to control the export of infringing 
goods:  
8473.30.10.00 Computer PC board (only PC board s with semiconductor chips and computer 
software within the chip); 8473.30.10.00 Printe r PC board (only PC boards with semiconductor  WT/MIN(01)/4 
 Page 59 
 
 
 chips containing computer software); 9504.10.00. 10 Television video game PC boards with 
semiconductor chips containing computer software; 9504.10.00.10 Video games of a kind used 
with a television receiver;  9504.90.90.00 Other ar ticles for funfairs, ta ble or parlour games 
(palmtop electronic games cont aining computer software); 9504.90.90.00 Other articles for 
funfairs, table or parlour games (cassettes  for palmtop electronic games); 9504.10.00.20 
Cassettes for television video games; 8471.20.00. 00 Digital automatic data processing machines 
(containing in the same hosing at least a CPU and output unit, whether combined or not); 
8471.92.20.10 Dot matrix printer; 8471.92.20.20 Laser printer; 8471.92. 20.30 Daisy printer; 
8471.92.20.90 Other printer; 8524.90.30.00 Recorded  data processing system magnetic disks 
(only disks containing computer software); 8524.11. 90.00 Other digital integrated circuits (used 
in computers, printers or TV video games and containing chips with computer software);  8542.19.90.00 Other monolithic integrated circuits (used in computers, printers or TV video 
games and containing chips with computer softwa re);  8542.20.00.00 Mixed integrated circuits 
(used in computers, printers or TV video games and containing chips with computer software);  
8542.80.90.90 Other integrated circuits and micro as semblies (used in com puters, printers or 
TV video games containing chips with computer software).   
204. He noted that the export licen sing requirements on the above computer-related products were 
eliminated on 15 July 1998.  Since that date (and  pursuant to a memorandum of understanding signed 
with the United States) the Customs had been delega ted to examine packages of  software consigned for 
export, to determine whether they conformed to the export permit, invoice and packaging list or other 
export documents.  The examinatio ns were carried out at random w ith 30-50 per cent of such exports 
being examined.  All exports of an exporter who had been previously found to ha ve exported intellectual 
property rights infringing products were subject to inspection, whether or not these exports were 
described as computer software.  All exports susp ected of being counterfeit were seized, unless the 
exporter could provide evidence to offset such susp icion.  The seized products would be confiscated 
when the intellectual property rights right-holder ob tained a final judgment from the Courts confirming 
that the products were infringing intellectual prope rty rights.  Public Prosecutors were required to 
prosecute forgers of docu ments including documents which were us ed to support the exportation of 
intellectual property rights infringing products.  In response to fu rther questions, the representative of 
Chinese Taipei noted that CD, VCD, CD-ROM and DVD manufacturers in Chinese Taipei were 
required to inscribe the source  identification code (SID) on al l CDs, VCDs, CD-ROMs and DVDs 
manufactured.  This measure was aimed to further deter the circulation of pirated CDs, VCDs, CD-
ROMs and DVDs.  Concerning pate nts and trademark infringements, the representative of Chinese 
Taipei stated that the Anti-Count erfeiting Committee (ACC) under th e Ministry of Economic Affairs 
worked closely with the Customs and the Prosecutors Office.  The ACC had been designated as the 
coordination agency to assist the effective operation of the export monitoring system.  The ACC was 
responsible for the enforcement of anti-counterfeiting efforts i nvolving trademark, patents and 
copyright.  The ACC directed the work of the inte llectual property rights Enforcement Supervisory Task 
Force since July 1989.  The ACC was empowered to re fer suspected counterfeiti ng cases directly to the 
Courts for prosecution.  Following conviction, the ACC could re quest the BOFT to impose punitive 
measures according to the degree of seriousness of th e offence.  The BOFT could refuse to issue export 
permits for a period of one year to the companies concerned.  He added that the inspection by the 
Customs emphasized the examination of the produc t name, brand names, qua lities, specifications, 
product serial numbers, model number s, countries of manufacture, net weights etc.  Trademark holders 
with sufficient information could file a petition to  the Court for the provisional attachment of the 
counterfeit goods or inform the prosecutor.  The Cu stoms could only seize the goods when informed by 
the Court or the trademark authority.  If Customs suspicions were aroused concerning the export of 
certain goods, it would refer the matter to the ACC.   There was no such me chanism to deal with 
imported goods.  He also stated that consultations with the United States on the protection for 
pharmaceuticals had been concluded.  On 7 July 1993,  the Department of Hea lth had issued revised 
public notices regarding sa fety monitoring which applied to all pharmaceuticals regardless of their 
origin.   WT/MIN(01)/4 
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 205. In reply to questions concerning border measur es and the seizure by the Customs of infringing 
products, the representative of Chin ese Taipei indicated that in re lation to patented goods, it was 
necessary for the right holders to obtain a Court order before any seizure could be made by the Customs.  
All infringements of intellectual property rights had to be dealt with in the same manner as patent rights.  
The only exception was Article 90 bis of the Copyright Law, which provided that right-holders upon the 
posting of an appropriate bond could petition the Cust oms to seize imports reas onably suspected to be 
infringing copies.  The goods would be confiscated upon a Court judgment confirming the infringement.  
In response to questions concerning the seizure of parts imported into Chinese Taipei for the purpose of 
being assembled into infringing goods which would be exported to a thir d country, the representative of 
Chinese Taipei replied that Chinese Taipei had neve r encountered such a situation, but the goods could 
be seized if a Court order was obtained.  
206. Some members of the Working Party asked wh ether any additional measures were planned in 
order to combat the infringement of intellectual property rights, taking into account that existing 
measures did not appear to be having a sufficient deterren t effect on certain commercial scale 
counterfeiting operations, such as wa tches.  Some members also noted the continued high levels of 
piracy of computer software embodied in semi-conductors.  Th ese members expressed concern 
regarding the failure to impose penalties, in partic ular administrative penaltie s and seizure of infringing 
products and machinery used to produce such products, su fficient to deter piracy.  The representative of 
Chinese Taipei replied that Chinese Taipei had issued an Action Plan for Enforcement and Protection of 
Intellectual Property Rights.  The Action Plan laid down a framework for the improvement of 
intellectual property protection, incl uding the upgrading of the standards of protection, the application of 
stiff administrative measures, the strengthening of judicial enforcement and the education of the general 
public to respect intellectual property rights.  An  inter-agency Task Force had been established to 
co-ordinate and supervise the enforcement of inte llectual property rights.  Chinese Taipei was 
determined to enjoy a reputation as a territory that respected intellectual property rights.  
207. The representative of Chinese Taipei noted that  efforts to ensure fully conformity with the 
Agreement on TRIPS were ongoing.  Amendments to the Trademark Law passed in April 1997 had 
entered into force on 1 November 1998.  The amendmen ts to the Patent Law passed in April 1997 would 
enter into force upon accession.  Th e draft frameworks for the Integrat ed Circuits Lay out Protection Law 
had been promulgated on 11 August 1995 and entere d into force on 11 February 1996. Some members 
of the Working Party expressed th eir appreciation to the representative of Chinese Taipei for the 
information on efforts to implement the TRIPS Agr eement.  These members re-emphasized the need for 
effective enforcement of Chinese Taip ei s intellectual property laws as  part of its obligations under the 
TRIPS Agreement.  The Working Part y took note of thes e commitments. 
208. Recognizing that sales into th e domestic market of smuggled or  counterfeit imports of alcohol 
and tobacco products undermine Chines e Taipei's market for legally ma rketed products, and wishing to 
discourage such activities in the future, the repr esentative of Chinese Taip ei confirmed that all 
contraband smuggled or counterfeit im ports of alcohol and tobacco produc ts seized would be destroyed, 
or otherwise disposed of, taking into account the pr actices of WTO Members in a similar situation, and 
that Chinese Taipei would take  additional efforts to prevent such illegal imports.  In this regard, Chinese 
Taipei would ensure that certain alcoholic beverage impor ts would be accompanied by a certificate of 
origin similar to that issued by the regulatory aut horities in the country of origin in order to combat 
counterfeiting.  The Working Party took note of these commitments. 
209. The representative of Chinese Taipei stat ed that Chinese Taipei would fully apply the 
provisions of the Agreement on TRIPS by the date of  accession, without recourse to any transitional 
period.  Chinese Taipei would furtherm ore ensure by the date of accession: 
(a) full protection of geographi cal indications (including agai nst trademarks which contain 
or consist of such an indication), as well as of well-known marks (including the 
enhanced protection pursuant to Article 16.2 and 3 of  the TRIPS Agreement);  WT/MIN(01)/4 
 Page 61 
 
 
 (b) the establishment of a registration syst em for trademarks which incorporates all 
conditions as set out in  the TRIPS Agreement; 
(c) the amendment of Chinese Taipei Copyright Law to comply with Article 14(1) of the 
TRIPS Agreement;    
(d) the extension to all WTO members of a dvantages currently given on the basis of 
reciprocity, the elimination of any reciproc ity requirements;  and in particular,  
(e) effective enforcement (including implementa tion of the special requirements related to 
border measures). 
The Working Party took note of these commitments. VII. POLICIES AFFECTING TRADE IN SERVICES 
210. Several members of the Working Party stre ssed that Chinese Ta ipei must undertake a 
substantial package of initial commitments in its Services Schedule with mi nimum exceptions from 
MFN treatment.  Chinese Taipei engaged in market access negotiations on servic es with members of the 
WTO.  The results of those negotiations are reproduce d in Part II of Annex I to the Draft Protocol of 
Accession.  The representative of Chinese Taipei agreed that Chinese Taipei would schedule its best 
offer on maritime services in  th e ongoing  WTO negotiations on services  in Geneva.  He also stated 
that an enquiry point would be establ ished as of the date of accession. 
211. The repr esentative of Chinese Taipei confirmed that MOTC would license additional 
facilities-based operators effective from July 2001; and, consistent with Chinese Taipei’s 
commitments under the GATS, there would be no lim itations on the numbers of licenses after Chinese 
Taipei becomes a member of the WTO. In add ition, MOTC would deregulate international voice 
simple resale service from July 2001. From that  time, market access to services-based competition 
would be fully open. The Working Pa rty took note of these commitments. 
212. Some members of the Work ing Party welcomed Chinese Taipei’s commitment to permit 
attorneys of foreign legal affairs (AFLA) to establis h a partnership with or employ a lawyer licensed 
in Chinese Taipei upon Chinese Taipei’s accession to th e WTO.  They also noted that Chinese Taipei 
would grant AFLA status to all foreign lawyers who were employed in Chinese Taipei by the date of 
Chinese Taipei's accession and who complete a two- year employment period, in accordance with the 
"Regulation Concerning Chinese Taipei Lawyers' Em ployment of Foreigners and Administration " 
thereof.  The cooperative arrangements between a Chinese Taipei lawyer and an AFLA would not 
constitute a violation of provision of Article 50 of the Lawyers' Law. WT/MIN(01)/4 
Page 62 
 
 IX. TRANSPARENCY 
213. Some members of the Working Party noted th at Article X of the GATT 1994 required that all 
laws, regulations, judicial decisions and administrative rulings relating to trade be published promptly so 
that governments and trader s could become acquainted with them.  Similarly, Article III of the GATS 
required prompt publication (at the latest by the time of entry into force - except in emergency 
situations) of all relevant measures of general application which pertain to or affect the operation of the 
GATS Agreement.  These members also noted that transparency obligations arose from Article 63 of the 
TRIPS Agreement.  They also requested that such laws, regulations, judicial decisions and 
administrative rulings relating to trade be systematically and immediately translated into a WTO official language.  
214. Some Working Party members emphasized the importance of pr ior notice of laws, regulations 
and other measures affecting trade in goods, services  and intellectual property ri ghts, in particular the 
right to provide comments on proposed measures prio r to their enactment and implementation.  These 
members of the Working Party also noted that some  of the WTO Agreements expressly provided for 
such a notice and prior comment process and urged Ch inese Taipei to extend the coverage of this 
process to all measures related to the WTO.  
215. The representative of Chines e Taipei stated that the follo wing laws would be among those  
repealed, amended or newly made by the date of accession to the WTO for the purpose of putting into 
effect Chinese Taipei's accession commitments: 
- Foreign Trade Act 
- The Commodity Inspection Law 
- The Trademark Law  
- The Patent Law 
- Company Law 
- Customs Law Articles 
- Statute for Commodity Tax 
- Business Tax Law 
- The Securities and Exchange Law  
- The Certified Public  Accountants' Law 
- Commercial Port Law 
- Lawyers' Law 
- Architects' Law 
- Statute Governing Privileges and Immuniti es of the Foreign Missions and their 
Personnel in Chinese Taipei 
- Law of Pharmaceutical Affairs 
- Law Governing Food Sanitation 
- The Publication Law 
- Central Bank Act 
- Banking Law 
- 
Copyright Law 
- Copyright Intermediary Organization Act 
- Tobacco and Alcohol Administration Law 
- Tobacco and Alcohol Tax Law 
- Statute Governing the Organization of Depart ment of National Treasury, Ministry of 
Finance 
- Provincial Statute for Monopoly of T obacco and Wine in Taiwan Province 
- Customs Import Tariff and Classifi cation of Import Export Commodity 
- Statute for Establishment and Mana gement of Export Processing Zones 
- Statute for Agriculture Development 
- Food Management Law  WT/MIN(01)/4 
 Page 63 
 
 
 - Statute for Inspection Procedure Governi ng Construction Works and Procurement and 
Disposal of Properties by Government Agencies 
- Statute for Vocational Assistance for Retired Servicemen 
- Law for the Administration of State-owned Enterprises 
- Government Procurement Law 
216. An illustrative list of the amendments that would be introduced to some of the above-mentioned 
laws was reproduced in Attachment D to this Report.  The represen tative of Chinese Taipei further 
stated that Chinese Taipei would ensure that from th e date of accession, all laws, regulations, judicial 
decisions and administrative rulings relating to trad e would be published promptly so that governments 
and traders could become acquainted with them.  The Working Party took note of these commitments. 
217. The representative of Chinese Taipei further st ated that Chinese Taipei would ensure that from 
the date of accession, all laws, re gulations, judicial deci sions and administrative rulings of general 
application relating to trade in goods , as well as measures subject to the transparency provisions of the 
GATS and TRIPS Agreement would be translated and published in an official WTO language no later than 90 days after enactment or issuance.  Such meas ures would, however, be published in the official 
language of Chinese Taipei prior to the date such m easures were to be implemented or enforced except 
in cases of extreme emergency publicat ion would be done on an expedited basis thereafter.  In respect of 
enquiry points required to be es tablished under the WTO Agreement or the Draft Protocol, the 
representative of Chinese Taipei st ated that Chinese Taipei would es tablish or designate an enquiry 
point where, upon request of any in dividual or enterprise, all inform ation relating to the measures 
required to be published may be obt ained.  Replies to enquiries fo r information would generally be 
provided within 30 calendar days af ter receipt of a request.  In exceptional cases, replies may be 
provided within 45 calendar days after receipt of a request.  Rep lies would be complete and would 
represent the authoritative view of Chinese Taipei .  The Working Party took note of these commitments. 
218. The representative of Chinese Taipei noted  the existence of requirements in some WTO 
Agreements for prior notice and a reasonable time  to present comments on proposed measures.  He 
stated that Chinese Taipei had an open and transp arent system for adopting la ws, regulations and other 
measures.   
219. The representative of Chinese Taipei stated that upon accession, Chines e Taipei, would provide, 
except in cases of extreme emergency, a period fo r appropriate authorities, including those of other 
WTO members, to comment on all laws, regulations and other measures pertaining  to or affecting trade 
in goods, services, or TRIPS of at least 60 calendar da ys before such measures were implemented.   If 
prior comment was not possible in such cases of  emergency, comments would be accepted and 
considered immediately after implementation.  The Working Party took note of these commitments. 
 Notifications 
220. The representative of Chinese Taipei said that the latest upon entry to force of the Draft Protocol 
of Accession, Chinese Taipei would submit all notificatio ns (other than those required to be made on an 
ad hoc basis) required by any Agreement constituti ng part of the WTO Agreement.  Any regulations 
subsequently enacted by Chinese Taipei which gave effect to the laws enacted to implement any 
Agreement constituting part of th e WTO Agreement would also confor m to the requirements of that 
Agreement.  The Working Party took note of these commitments. 
X. OTHER TRADE AGREEMENTS 
221. In response to questions from some member s of the Working Party, the representative of 
Chinese Taipei stated that Chinese Taipei was not a party to any trade agreement which provided for the 
granting of preferences to trad e in goods and/or services.  WT/MIN(01)/4 
Page 64 
 
  Agreement on Trade in Civil Aircraft 
222. In response to questions conc erning the aerospace sector, the re presentative of Chinese Taipei 
said that its aerospace industry did not presently have the capability to assemble civil aircraft or compete 
internationally.  Chinese Taipei di d not provide any subsidies specifically for the aerospace industry.  
Some members of the Working Party said that a modern and sophisticated economy such as Chinese 
Taipei, which was also a major participant in the globalization of the world's aeronautics and space 
industry, should accept the Agreement on Trade in Civil Aircraft upon accessi on to the WTO.  They 
further added that due to the adva nced state of the indus trial development of Chinese Taipei and the 
plans to expand the aircraft and components indust ry, the acceptance by Chinese Taipei of the 
Agreement on Trade in Civil Aircraft was a prerequisite to accession to the WTO. 
223. The representative of Chinese Taipei stated that Chinese Taip ei would become a signatory to 
the Agreement on Trade in Civil Aircraft at the same time that it acceded to the WTO. 
XI. CONCLUSIONS 
224. The Working Party took note of the explanations  and statements of Chin ese Taipei concerning 
its foreign trade regime, as  reflected in this Report.  The Work ing Party took note of the commitments 
given by Chinese Taipei in relation to certain specif ic matters which are reproduced in paragraphs 12, 
15, 19, 21, 22, 36, 37, 39, 40, 44, 45, 50, 55, 61, 66, 68, 69, 71, 72, 73, 78, 80, 82, 84, 86, 89, 97, 106, 
113, 116, 117, 121, 126 bis, 127, 135, 137, 140, 141, 147, 148, 149, 150, 151, 152, 155, 158, 160, 166, 
167, 171, 174, 180, 181, 187, 198, 207, 208, 209, 211, 216, 217, 219 and 220 of this Report and noted 
that these commitments had been incorporated in the Draft Protocol of Accession 
225. Having carried out the examination of the fore ign trade regime of Chinese Taipei and in the 
light of the explanations, assurances and commitments given by the Chinese Taipei representatives, the 
Working Party reached the conclusion that Chinese Taipei be invited to accede to the Marrakesh 
Agreement Establishing the World Tr ade Organization on the terms set out in the draft Protocol of 
Accession reproduced in the Appendix to th is Report, including the Annexes thereof.  WT/MIN(01)/4 
 Page 65 
 
 
 APPENDIX 
 
 
ACCESSION OF THE SEPARATE CUSTOMS TERRITORY  
OF TAIWAN, PENGHU, KINMEN AND MATSU 
 
 
 
Draft Decision of [… November 2001]  
 
  [The Ministerial Conference, 
 
 Having regard to  paragraph 2 of Article X II and paragraph 1 of Article IX of the Marrakesh 
Agreement Establishing the World Trade Organiza tion, and the Decision-Making Procedures under 
Articles IX and XII of the Marrakesh Agreement Establishing the World Trade Organization agreed 
by the General Council (WT/L/93), 
 
 Taking note  of the application of the Separate Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu for accession to the Marrakesh Agreem ent Establishing the World Trade Organization 
dated 7 December 1995,   
 
 Noting  the results of the negotiations directed toward the establishment of the terms of 
accession of the Separate Customs Territory of Ta iwan, Penghu, Kinmen and Matsu to the Marrakesh 
Agreement Establishing the World Trade Organi zation and having prepared a Protocol on the 
Accession of the Separate Customs Territory  of Taiwan, Penghu, Kinmen and Matsu 
(WT/ACC/…/…), 
  Decides  as follows: 
 
 The Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu may accede to the 
Marrakesh Agreement Establishing the Worl d Trade Organization on the terms and 
conditions set out in the Protocol annexed to this Decision.] 
  WT/MIN(01)/4 
Page 66 
 
 DRAFT PROTOCOL  OF ACCESSION OF THE SEPARATE CUSTOMS TERRITORY OF 
TAIWAN, PENGHU, KINMEN AND MATSU TO THE MARRAKESH AGREEMENT 
ESTABLISHING THE WORLD TRADE ORGANIZATION 
  The World Trade Organization (hereinafter referred to as the "WTO "), pursuant to the approval 
of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement 
Establishing the World Trade Organizati on (hereinafter referred to as the "WTO Agreement "), and the 
Separate Customs Territory of Taiwan, Penghu, Ki nmen and Matsu (hereina fter referred to as "Chinese 
Taipei "), 
 
 Taking note of the Report of the Working Party on the Accession of Chinese Taipei to the WTO 
Agreement reproduced in document WT/ACC/TPKM/18, dated ........ (hereinafter referred to as the 
"Working Party Report"), 
 
 Having regard to the results of the negotiations  on the accession of Chinese Taipei to the WTO 
Agreement,  
 
 Agree as follows: 
 
PART I -  GENERAL 
 1. Upon entry into force of this Draft Protocol pur suant to paragraph 10, Ch inese Taipei accedes to 
the WTO Agreement pursuant to Article XII of that Agreement and thereby becomes a Member of the 
WTO.   
2. The WTO Agreement to which Chinese Taipei accedes shall be the WTO Agreement, including 
the Explanatory Notes to that Agreement, as rectified, amended or otherwise modified by such legal 
instruments as may have entered into force before the date of entry into force of this Protocol.  This 
Protocol, which shall include the commitments referred to in para graph 224 of the Working Party 
Report, shall be an integral part of the WTO Agreement. 
 
3. Except as otherwis e provided for in paragraph 167 of  the Working Party Report, those 
obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be 
implemented over a period of time starting with th e entry into force of that Agreement shall be 
implemented by Chinese Taipei as if it had accepted that Agreement on the date of its entry into force. 
 
4. The Special Exchange Agreement between the WTO and Chinese Taipei reproduced in Annex 
II to this Draft Protocol forms an in tegral part of th is Draft Protocol. 
 
5. Chinese Taipei shall at the time of its accession to the Marrakesh Agreement Establishing the 
World Trade Organization (WTO Agreement) accept th e Plurilateral Trade Agreement on Trade in Civil 
Aircraft listed in Annex 4 of the WTO Agreement. 
 
6. Chinese Taipei may maintain a measure inconsistent with paragra ph 1 of Article II of the GATS 
provided that such a measure was recorded in the list  of Article II Exemptions annexed to this Draft 
Protocol and meets the conditions of the Annex to the GATS on Article II Exemptions.  
PART II - SCHEDULES 
 7. The Schedules reproduced in Annex I to this  Draft Protocol shall become the Schedule of 
Concessions and Commitments annexed to the General Agreement on Tariffs and Trade 1994 
(hereinafter referred to as the "GATT 1994 ") and the Schedule of Specif ic Commitments annexed to 
the General Agreement on Trade in Services (hereinafter referred to as "GATS ") relating to Chinese  WT/MIN(01)/4 
 Page 67 
 
 
 Taipei.  The staging of the conces sions and commitments listed in th e Schedules shall be implemented 
as specified in the relevant pa rts of the respective Schedules. 
 8. For the purpose of the reference in paragraph 6(a)  of Article II of the GATT 1994 to the date of 
that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments 
annexed to this Draft Protocol shall be the date of entry into  force of this Draft Protocol. 
 
PART III - FINAL PROVISIONS 
 
9. This Draft Protocol shall be open for acceptance, by signature or otherwise, by Chinese Taipei 
until 31 March 2002.  
10. This Draft Protocol shall en ter into force on the thirtieth day following the day upon which it 
shall have been accepted by Chinese Taipei.   
11. This Draft Protocol shall be deposited w ith the Director-General of the WTO.  The 
Director-General of the WTO shall promptly furnish a certified copy of this Draft Protocol and a notification of acceptance by Chinese Taipei theret o pursuant to paragraph 9 to each Member of the 
WTO and to Chinese Taipei.   
  This Draft Protocol shall be re gistered in accordance  with the provisions of Article 102 of the 
Charter of the United Nations.   
  Done at [… ]  this [date] day of [month] two thousand and one ....., in a single copy in the 
English, French and Spanish languages, each text being authentic, except that a Schedule annexed hereto 
may specify that it its authentic  in only one of these languages. WT/MIN(01)/4 
Page 68 
 
 ANNEX I 
 
SCHEDULE CLIII - SEPARATE CUSTOMS TERRITORY  
OF TAIWAN, PENGHU, KINMEN AND MATSU 
 
Part I - Goods 
Document WT/ACC/TPKM/18/Add.1 
 
 
Part II - Services 
Document WT/ACC/TPKM/18/Add.2 
   WT/MIN(01)/4 
 Page 69 
 
 
 ANNEX II 
 
SPECIAL EXCHANGE AGREEMENT  
BETWEEN  
THE SEPARATE CUSTOMS TERRITORY OF  
TAIWAN, PENGHU, KINMEN AND MATSU  
AND  
THE WORLD TRADE ORGANIZATION  
(HEREINAFTER REFERRED TO AS THE "WTO ") 
 
 Whereas paragraph 6 of Article XV of th e General Agreement on Tariffs and Trade 1994 
(hereinafter referred to as the General Agreement 1994), provides that  any WTO Member which was not 
a member of the International Monetary Fund (hereinafter re ferred to as the "Fund ") shall, within a time 
to be determined by the WTO af ter consultation with the Fund, become a member of the Fund, or, 
failing that, enter into a special exchange agreement with the WTO; 
 
 Whereas paragraph 7 of the said Article provides that such special exchange agreement shall 
provide to the satisfaction of th e WTO  that the objective of the General Agreement 1994 will not be 
frustrated as a result of action in exchange matters by the Member  in question, and taking into account 
that the terms of such an agreement shall not impose  obligations inconsistent with those imposed by the 
Fund; 
 
 Whereas the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (hereinafter 
referred to as "Chinese Taipei ") desires to accede to the Marrakesh Agreement Establishing the World 
Trade Organization (hereinafter referred to as the "WTO Agreement ") in pursuance of Article XII 
thereof; 
 
 The World Trade Organization  
and 
  Chinese Taipei, acting through its represen tative duly authorized for this purpose, 
 
 Hereby agree as follows: 
 WT/MIN(01)/4 
Page 70 
 
 ARTICLE I 
 
Orderly Exchange Arrangements 
 
1. Chinese Taipei shall collaborate with the WTO to promote exchange rates which reflect 
underlying economic fundamentals, to maintain orderly exchange arrang ements with other Members of 
the WTO, to avoid competitive exchange alterations, and to assist, in accordance with Articles II and III 
of this Special Exchange Agreement, in the elimin ation of restrictions on the making of international 
payments and transfers within the multilateral system, and to promote international trade and investment. 
 
2. Recognizing that the essential purpose of the international monetary system is to provide a 
framework that facilitate s the exchange of goods, services, and capital among countries, and that helps 
sustain non-inflationary economic growth, Chinese Taipei undertakes to assure orderly exchange 
arrangements and to promote a stable system of exchange rates.  In particular, Chinese Taipei shall:  
 (i) Endeavour to direct its economic and financial policies toward the objective of 
fostering sustained, non-inflat ionary economic growth with macroeconomic stability; 
 
 (ii) Permit exchange rates to reflec t underlying economic and financial conditions; 
  (iii) Avoid manipulating excha nge rates or the international monetary system in order to 
prevent effective balance-of-payments adjustment or to gain an unfair competitive 
advantage over other members; and 
 
 (iv) Follow exchange policies compatible with the undertakings under this Article. 
 
ARTICLE II 
 Avoidance of Restrictions on Current Pa yments and Multiple Currency Practices 
 
1. Chinese Taipei shall not, without the approval of the WTO, impose restrictions on the making 
of payments and transf ers related to current account transactions. 
 
2. Chinese Taipei shall not engage in, nor pe rmit its Ministry of Finance, Central Bank, 
Stabilization Fund, or other agency, to engage in an y discriminatory currency  arrangements or multiple 
currency practices except as approved by the WTO. 
 3. Exchange contracts which invol ve the currency of any Member or Chinese Taipei and which 
are contrary to the exchange control regulations of  that Member or Chinese Taipei maintained or 
imposed consistently with the Arti cles of Agreement of the Fund or with the provisions of a special 
exchange agreement entered into pursuant to paragr aph 6 of Article XV of the General Agreement 1994 
or this Special Exchange Agreement, shall be unenforc eable in the territories of Chinese Taipei or in the 
territories of any Member. 
 
ARTICLE III  
Controls of Capital Transfers 
 
1. Chinese Taipei undertakes that it shall seek to avoid the imposition of capi tal controls to address 
balance-of-payments and macroec onomic objectives.  However, Chinese Taipei may exercise such 
controls as are necessary to regulate internatio nal capital movements, if these movements are 
destabilizing to the balance of payments or jeopar dize macroeconomic stabil ity, so long as Chinese  WT/MIN(01)/4 
 Page 71 
 
 
 Taipei does not exercise these controls in a manner which will restrict payments for current transactions 
or which will unduly delay transfers of funds in settlement of commitments. 
 2. Chinese Taipei undertakes that measures affecting capital flows wi ll be in accordance with this 
Special Exchange Agreement, the Genera l Agreement 1994, and the WTO Agreement. 
 
3. If Chinese Taipei institutes new capital contro ls or tightens existing capital controls, it shall 
immediately after instituting or tightening such controls consult with the WTO.  
ARTICLE IV 
 Restrictions on Payments - General 
 1. In the event that Chinese Taipei, with the approval of the WTO, as provided in Article II, or consistent with consultations with the WTO, as pr ovided in Article III, as the case may be, imposes a 
measure to restrict payments a nd transfers for balance-of-payme nts and macroeconomic stability 
purposes, it shall:  
(a) initiate good faith consultations with the WTO on economic adjust ment measures to address the 
fundamental underlying economic problems  giving rise to the measures; and 
 
(b) adopt or maintain economic policies consistent with such consultations. 
 2. A measure adopted or maintained under Articl e II of this Special Exchange Agreement shall: 
 
(a) avoid unnecessary damage to the commercial , economic or financial interests of another 
Member; 
 (b) be temporary and be phased out w ithin a clearly-specified time-frame; 
 
(c) be the least burdensome type of action available;  
(d) be consistent with this Special Exchange  Agreement and the econo mic policies  adopted 
pursuant to paragraph 1(b) of this Article; and  
(e) be applied on a most-favou red-nation treatment basis. 
 3. A measure adopted or maintained under Article III of this Special Exchange Agreement shall to 
the extent practicable conform to the provisions set forth in sub-paragraphs (a) through (e) of paragraph 
2 of this Article.  
ARTICLE V 
 
Furnishing of Information 
 
1. Chinese Taipei shall furnish the WTO with such  information within the general scope of section 
5 of Article VIII of th e Articles of Agreement of the Intern ational Monetary Fund as the WTO may 
require in order to carry out its functions under the WTO Agreement. 
 
2. Chinese Taipei shall be under no obligation to fu rnish information in such detail that the affairs 
of individuals or corporations are disclosed.  Chin ese Taipei undertakes, however, to furnish the desired 
+information in as detailed and accu rate a manner as is practicable. 
 WT/MIN(01)/4 
Page 72 
 
 ARTICLE VI 
 
Miscellaneous Provisions 
 
1. For purposes of this Specia l Exchange Agreement, the term "Payments for current 
transactions " means payments which are not for the purpos e of transferring capita l, as defined by the 
International Monetary Fund. 
 
2. The WTO shall at all times have the right to communicate its views informally to  Chinese Taipei on any matter aris ing under this Agreement. 
 
3. Whenever the WTO consults with the Fund on ex change matters or in other appropriate cases 
particularly affecting Chinese Taipei , the WTO shall take measures, as are satisfactory to the Fund, to 
ensure effective presentation of Chinese Taipei's case to the Fund, including, without limitation, the 
transmission to the Fund of any views comm unicated by Chinese Taipei to the WTO. 
 
4. The Understanding on Rules and Procedures Gove rning the Settlement of Disputes of the WTO 
shall apply to disputes ar ising under this Agreement. 
 
5. This Agreement shall enter into force on the date of entry into force of the Protocol of 
Accession of Chinese Taipei to the WTO.   WT/MIN(01)/4 
 Page 73 
 
 
 ATTACHMENT A 
 
Price Controls List 
 
 The tariff items subject to price controls and th eir justification and legal basis are as follows:   
 
1.  Price Controls Mandated by Law: Electricity and Salt;   
 2.  Price Controls to Implement Specific Policies:   Sugar; agricultural policy to stabilize farmers' 
income and production cost;   
 3.  Price controls on other necessities: Natural gas: mandated by the "Statute for Monitoring 
Private Enterprises Operating Public Utilities "; price to be determined by the Public Utility Rate 
Commission .    
 (i)  Electricity:  The legal basis for pr ice controls was the Electricity Law;  
  (ii)  Salt: The HS number is 2501.  The legal basis for price control was the Statute for Salt 
Administration;   
  (iii)  Sugar.  The legal basis for price c ontrol of the sugar sold  by the Taiwan Sugar 
Corporation was the "Managerial Strategy for Sugar and Future Sugar Import Regime " 
published by the Ministry of Economic Affairs;   
 
 (iv)  Natural gas: The HS number is 2711.21. 00.  The legal basis for price control was the 
Statute for Monitoring Private Enterprises Operating Public Utilities.   WT/MIN(01)/4 
Page 74 
 
 ATTACHMENT B 
 
Revised Summary of the Tobacco a nd Alcohol Reform Plan (June 2001) 
 
 The following outlines Chinese Taipei's intentions for the to bacco and alcohol reform plan: 
 
Tobacco and Alcohol Taxes 
  The TTWMB reform plan includes a classifica tion of tobacco products and alcoholic beverages 
for the purposes of internal taxes (tobacco and al cohol taxes). Tobacco products are classified into 
cigarettes, pipe tobacco, cigars, and others. Cigarettes  are subject to specific tax of 590 NT dollars per 
1,000 sticks; pipe tobacco, cigars, a nd others are subject to specific ta x of 590 NT dollars per kilogram.  
 
 Alcohol products are classified  into brewed alcoholic bevera ges (including beer and other 
brewed alcoholic beverages), distilled alcohol beve rages (including whisky, brandy, rum, gin, and 
vodka), reprocessed alcohol beverages, rice wine ( "Mi Chiu "), cooking wine, other alcoholic beverages, 
and alcohol. 
  The reform of the TTWMB will ensure the levy of tobacco and alcohol tax in a transparent and 
non-discriminatory manner with eq ual treatment accorded to import ed and domestic products. The 
setting of the rates of tariffs and taxes has taken into account the cu rrent monopoly tax level, Uruguay 
Round "zero for zero " offers, and the practices of comparable economies of the WTO members. The 
tariff rates will be incorporated into Chinese Taipei's market access schedules. 
 Administration of Tobacc o and Alcohol Products 
 
 This section covers the various aspects of th e administration of tobacco and alcohol products 
with the implementation of the reform plan. 
  The planting and purchase of tobacco leaves are to be arranged between the manufacturers and 
tobacco farmers by contracts. Produc tion of cigarettes will not be open to the private sector within two 
years after the reform.  
 In terms of the production of alcohol products , the manufacturing of ma chinery and equipment 
for alcohol and tobacco production, printing of tradem arks, and packaging paper are not regulated in the 
Tobacco and Alcohol Administration Law. Production of alcohol products  will be open to the private 
sector in stages within three years after the implementation of the new system.  
  Chinese Taipei plans to liberalize productio n/manufacture of wine upon the date of the 
implementation of the new system; liberalization of spir its production will be effected one year after the 
implementation of the new system. It is the intention of Chinese Taipei to attain full liberalization within two years. 
 
 Any person wishing to engage in the produc tion of alcohol and tobacco products will be 
required to obtain permission from the authority.   
  After the implementation of the new system , tobacco and alcohol manufacturers legally 
established will be permitted to im port alcohol and tobacco products in bulk for repackaging, provided, 
however, such manufacturers shall have authorizatio n from the original manufacturers of the imported 
products and shall be able to produce th e relevant certific ates of origin. 
 
 In addition, tobacco and al cohol manufacturers may contra ct out or accept contract 
manufacturing, subject to the approval of the competent authority. 
  WT/MIN(01)/4 
 Page 75 
 
 
  In the importation of alcohol and tobacco products , a license is required for an importer of the 
products; the license bearer can not have prior reco rd of tax default or criminal offence within a 
prescribed time. Chinese Taipei has incorporated se rvices related to the di stribution of tobacco and 
alcohol products in its draft schedule of specific commitments on trade in services. 
 
 The legal and regulatory framework for produc tion and distribution of  alcohol and tobacco 
products will not impose particular  restriction on foreign firms engaging in related commercial 
activities. The time table and rule s for liberalizing the production/manufac ture of particular tobacco and 
alcohol products will apply equally to fore ign as well as dome stic private firms. 
 
 Labelling requirement with respect to tobacco  and alcohol products is stipulated under the 
Tobacco and Alcohol Administ ration Law. All alcohol pr oducts will be re quired to be labelled with the 
warning "excessive drinking endangers health. " 
  Product inspection will be governed by the stan dards established by the health authority and 
administered by that authority accordingly.  
  Advertising and promotion for tobacco products are subject to the Tobacco Hazards Prevention 
Act (promulgated 19 March 1997). Chines e Taipei has to a large extent lifted restrictions and allowed 
advertising of beer, wine and othe r alcohol beverages on radio and TV  in specified time period of the 
day. After implementation of the Tobacco and Alcohol Administrati on Law, advertising of alcohol 
products in all media will be perm itted, subject however to regulatio n in relation to the content and 
timing of the advertising. All advertising regulation will be consistent with the principle of national 
treatment. The advertisement shall not contain c ontents which run counter to public order and good 
moral, and public interest; enc ourage and promote drinking; cause harm to adolescents, pregnant 
women's mental or physical well-beings; include forged, exaggerated, or false facts or misleading 
contents; and any other situations prohibited by  the competent authority through public notice. 
  Trading order will be maintained according to the Fair Trade Law and ot her relevant laws and 
regulations. 
 Contraband 
  Chinese Taipei has incorporated penal prov isions into the draft Tobacco and Alcohol 
Administration Law to serve the legal basis for en hanced efforts to protect against smuggled and 
counterfeit products. The alcohol and tobacco administration ag ency will be given the authority to carry 
out inspection on the business operations of manufa cturers and traders. Inspection and interception of 
contraband will be subject to the Alcohol and Tobacco Administration Law (passed 4 June 1999), 
Alcohol and Tobacco Tax Law (draft), Statute for Anti-smuggling Law and Statute for Interception by 
the Customs, and other relevant laws and regulati on. Under the new administration system, contraband 
and counterfeit products will be dest royed or otherwise disposed of, ta king into account the international 
practices. 
 
 Any violation of the Tobacco and Alcohol Admini stration Law will be s ubject to administrative 
or criminal penalties, depending on the type or seriousness of the violation. WT/MIN(01)/4 
Page 76 
 
  
 
ATTACHMENT C 
 
 
 The Consolidated List of Commodities Subj ect to Import Restrictions and Commodities 
Entrusted to Customs for Import Examination, J une 1997 Edition, has been deposited with the WTO 
Secretariat (Accessions Division, Room 1126). 
   WT/MIN(01)/4 
 Page 77 
 
 
 ATTACHMENT D 
 
Illustrative List of Law Amendments  
 
Title of Law  Background of Amendment 
Foreign Trade Act 
 Article 6: 
The amendment is to remove previous authorization to take trade 
restrictive measures when encounteri ng bilateral imbalances of trade.  
The new version changes the condition for taking such action to 
imbalance in international payments. 
Article 18: 
The amendment deletes the words "drastic or large" in describing the 
amount of increase in imports as a condition to initiate domestic 
safeguard action.  This is to follow the use of language in the 
Safeguard Agreement. 
The amendment also provides a legal basis for the authority to set 
rules to initiate safeguard action as  contemplated in the Agreement on 
Textiles and Clothing. 
Article 20.1: 
This is a new addition to the Law which is intended to provide the 
legal basis for the authority to regulate the pre-shipment inspection 
activities of firms mandated by foreign governments.  It also gives 
binding effects of the decisions of dispute resolution panel of the 
WTO Preshipment Inspection Agre ement on the private parties 
concerned, namely, the preshipment inspection company and the 
exporter. 
The Commodity Inspection Law The amendment exercise is to achie ve the following three objectives: 
(i) to incorporate international standards in the domestic 
standard-setting process, so as to  ensure that domestic inspection 
standards follow international trends, the inspection regime meets the 
requirements of the TBT Agreement, 
(ii) to accord national treatment to  foreign products in terms of 
application of simplified procedures and exemption which were 
previously available only to domestic products, 
(iii) to accept and recognize foreign inspection certificates in order 
to be in line with the spirit of the TBT Agreement, particularly that 
calling for mutual recognition. 
The Trademark Law 
 The amendments to this Law are to achieve the following objectives: 
(i) to broaden the scope of reciprocal granting of the right of 
priority to cover the situation wher e the there is no formal agreement 
but the right of priority is granted to Chinese Taipei's owner of 
trademark through practice, 
(ii) to include combination of colours in the group of items that 
are capable of constituting a trademar k so as to be consistent with 
Article 15 of the TRIPS Agreement, 
(iii) to extend administrative protection to well known marks by 
providing that no applications may be filed for registration of a 
trademark design which is identical with or similar to another person's 
well-known trademark or mark and likely to cause the public to form a 
mistaken belief. WT/MIN(01)/4 
Page 78 
 
 Title of Law  Background of Amendment 
The Patent Law 
 The amendments to this Law are to  achieve the following  objectives: 
(i) to delete the requirement of reciprocity in respect of the 
granting of patents for micro-organisms, extension of patent 
protection terms and the granting of exclusive import rights so as to be 
consistent with Articles 3 and 4 of the TRIPS Agreement, 
(ii) to limit compulsory licensing in respect of semi-conductor 
technology to public non-commercial use or to remedying anti-
competitive practice, so as to be consistent with Article 31(c) of the 
TRIPS Agreement, 
(iii) to provide patent owners a nd his/her exclusive licensees the 
right to request destru ction or other necessary disposition of the 
infringing goods, raw materials or instruments used, in connection 
with the infringement, so as to meet the requirement of Article 46 of 
the TRIPS Agreement which calls for giving the judicial authority to 
order disposition outside the channels of commerce, 
(iv) to provide for shifting the burden of proof in respect of 
process patents as required by Article 34 of the TRIPS Agreement, 
(v) to provide for longer term of protection for industrial design, 
so as to meet the minimum requirement of 10 years of the TRIPS 
Agreement. 
(vi) to extend the term of protection for patents issued prior to 
January 1994 that are still in effect upon accession to 20 years and 12 
years as from the date of filing for invention patents and new design 
patents respectively. 
Company Law 
 The amendment is to delete the reciprocity requirement for 
recognition of foreign companies and public offering of foreign 
companies' shares and corporate bonds so as to fulfil Chinese Taipei's 
commitments under the GATS. 
Customs Law  This set of amendments is to achieve the following objectives: 
(i) to provide a legal basis for application of tariff-quotas 
negotiated by Chinese Taipei as substitution measures for existing 
restrictions, 
(ii) to provide for a duty of secrecy on customs personnel in 
respect of information submitted for assessment of import duties, so as 
to meet the requirement of Article 10 of the Agreement on Customs 
Valuation, 
(iii) to provide a legal basis for the establishment of the rules of 
origin and the authority to require the submission of the certificates of 
origin, 
(iv) to revise the customs va luation rules according to the 
Agreement on Customs Valuation, 
(v) to delete the provisions that limit the drawback of import 
duties to imports of machinery by certain high-tech or important 
companies whose products are solely for export, 
(vi) to revise the provision relating to determination of normal 
value for purposes of anti-dumping administration so as to make it 
consistent with Article 2 of the Anti-dumping Agreement.  WT/MIN(01)/4 
 Page 79 
 
 
 Title of Law  Background of Amendment 
Statute for Commodity Tax 
 The amendments are to achie ve the following objectives: 
(i) to delete rules relating to t obacco and alcohol products as this 
part of the Law will be  replaced by the new Tobacco and Alcohol Tax 
Law, a separate body of law, 
(ii) to delete allowance for deduction of 12 per cent promotion 
expenses in the calculation of tax base, when goods are not circulated 
through exclusive distributors, as a reflection of Chinese Taipei's 
accession commitment, 
(iii) to exclude harbour construction dues from the tax base for 
commodity tax. 
(iv) to reduce the tax levied on motor vehicles with a displacement 
over 2001 cubic centimetres from 35% to 30% within 6 years after the 
implementation of this Statute.   
(v) to eliminate the tax deduction provided to manufacturers of 
automobiles and motorcycles using domestically developed and 
designed parts. 
Business Tax Law 
 The amendments are to exclude harbour construction dues from the 
tax base of the business tax and to require that the business tax base 
shall include tobacco and alcohol ta x as provided in the new Tobacco 
and Alcohol Tax Law. 
The Securities and Exchange Law  Article 54: This amendment is to delete the requirement that the 
certain business personnel of securities firms be Chinese Taipei 
residents. 
Article 95: This amendment is to delete the limitation that only one 
stock exchange can be established in one geographical area, 
Article 128: This amendment is to delete the limitation that only 
Chinese Taipei residents can be shareholders of a stock exchange in 
company form. 
The Certified Public Accountants Law  The amendment is to delete the reci procity requirement for foreigners 
to take the examination and be qualified as certified public 
accountants in Chinese Taipei. 
Commercial Port Law  To eliminate harbour construction dues, which was levied on ad 
valorem basis, and collect harbour service fee based on, inter alia, the 
gross register tonnage of vessels entering the harbour, the weight of 
cargo loaded and unloaded in the harbour, and the number of 
departing passengers in order to be  consistent with Article 8 of the 
GATT 1994. 
Lawyers' Law 
 This set of amendments is directed: 
(i) to provide a statutory basis for allowing Chinese Taipei 
lawyers to hire foreigners to work as consultants or legal assistants, 
(ii) to delete the reciprocity requirement for foreigners to take the 
bar examination and become qualified to practice Chinese Taipei law, 
(iii) to provide the statutory basis and qualification standards for 
allowing foreign lawyers to practice the laws of their home countries 
and international law in Chinese Taipei. 
Architects' Law 
 The amendment is to delete the reci procity requirement for foreigners 
to take the architects' examination and become qualified to practice in 
Chinese Taipei. 
Statute Governing Privileges and Immunities of the Foreign Missions 
and their Personnel in Chinese Taipei This addition to the Law is to extend privileges and immunities to 
WTO related personnel for purposes of Article 8 of the Marrakesh 
Agreement Establishing the World Trade Organization. WT/MIN(01)/4 
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 Title of Law  Background of Amendment 
Law of Pharmaceutical Affairs 
 This amendment is to lift the restriction on and provide rules for 
regulating repackaging of imported pharmaceutical products. 
Law Governing Food Sanitation  The amendment is to provide the labelling of food products with an 
option to use the date of manufacture or the expiry date as a code for 
product identification. 
The Publication Law This law was repealed on 25 January 1999. 
Central Bank Act  The amendment is to replace current limitation on foreign liabilities of 
banks operating in Chinese Taipei  with reserve requirements. 
Banking Law 
 This amendment is to compliment the amendment of Article 23 of the 
Central Bank Act in respect of the authority in the setting of the 
deposit reserve ratio and reserv es for other liabilities. 
Copyright Law 
 The amendments to this Law are to achieve the following objectives: 
1) To amend the definitions for public broadcast and public 
performance; 
2) To provide computer programs with the same level of 
protection as that of literary works; 
3) To include explicit protection for performances; 
4) To revise the provisions regarding the ownership of works 
created in the course of empl oyment or under commission. These 
revisions are aimed at reducing tension which have existed 
between the employers and employees under the old law; 
5) To revise the provisions regarding the moral right of 
integrity in order to accommodate th e use and circulation of works; 
6) To expand the subject matter of works protected by the 
public display rights; 
7) To delete provisions mandating the competent authority to 
set the minimum prices for the transfer of economic rights of 
works and the royalties for the use of such works. This change is 
made because that market mechanism should be allowed to 
determine these prices; 
8) To delete provisions concerning compulsory licenses for 
translations in accord ance with TRIPS and the Berne Convention; 
9) To amend provisions regarding compulsory mechanical 
licensing for musical works. This is based on the ideal of 
promoting the circulation of musical works; 
10) To abolish the copyright registration system; 
11) To afford a life plus 50 years or 50 years term of 
retroactive protection for works not protected prior to Chinese 
Taipei's accession to the WTO. 
Copyright Intermediary Organization 
Act 
 
 The new legislation is to promote and to facilitate the use of 
copyrighted works by the general public through well-established 
professional copyright intermediary organizations, following 
examples from international practices.  WT/MIN(01)/4 
 Page 81 
 
 
 Title of Law  Background of Amendment 
Statute for Establishment and 
Management of Economic 
Processing Zone 
 
 The amendments to this Statute are to promote international trade by 
means of the following: 
1) To replace the original polic y objective of export- oriented 
by international trade promotion; 
2) To expand the scope and dept h of business within the zone, 
including trade, consultation, R&D and technical services; 
3) To encourage investments by the elimination of restrictions 
on establishing businesses within the zone; 
4) To increase administrative efficiency within the zone by 
simplifying the customs clearance process, consistent with the 
Negative List provided by Article 11 of the Foreign Trade Act; 
5) To delete the provision which excludes duty drawback on 
imported machinery sold to in-zone enterprises by firms located in 
areas where tariff is leviable in  order to eliminate the possible 
tendency to encourage purchase of  locally-produced machinery; 
6) To eliminate the local sale restriction; 7) To provide that the customs duties levied on the products 
produced in this zone and sold in the local market shall be based on 
ex-factory prices minus value added attributable to this zone. 
Tobacco and Alcohol  Administration 
Law 
 
 Following the tobacco and alcohol reform plan, the new Law is to 
provide legislative mandate to the administrative authorities for the 
opening-up of the tobacco and alc ohol products. The new Law aims 
to achieve the following: 
1) To provide a legal basis for the authorities to regulate the 
manufacture and the distribution of  tobacco and al cohol products; 
2) To provide defini tions of tobacco and alcohol products;  
3) To forestall international trade disputes by preventing the 
prevalence of counterfeit products and ensuring established 
standards are implemented and en forced in the manufacture of 
tobacco and alcohol products; 
4) To protect national health interests by including measures 
such as guidelines on labelling tobacco and alcohol products and 
regulations on advertisements. 
Statute Governing the Organization of National Treasury, Ministry of 
Finance 
  The amendments of this Statut e reflect the administrative 
modifications made with the refo rm of the tobacco and alcohol 
monopoly. A department will be a dded to the current organizational 
structure to implement administrative requirements established in the 
new Tobacco and Alcohol  Administration Law. 
Tobacco and Alcohol Tax Law 
 The new legislation is to achieve the following: 
1) To provide defini tions of tobacco and alcoholic beverages; 
2) To establish a new tax system in light of the reform of the 
tobacco and alcohol monopoly to facilitate tax collection; 
3) To establish tax collection procedures to facilitate the 
enforcement of the new tax regime. 
Food Management Law 
  The amendment to this Law had been made to implement Chinese 
Taipei's commitment on lifting the  rice import ban upon accession 
to the WTO, and to provide a legal basis for collecting mark-up.  
Customs Import Tariff and Classification of Import & Export 
Commodities It is amended in accordance with th e Schedule of Concessions of the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
as annexed to this Working Party Report. WT/MIN(01)/4 
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 Title of Law  Background of Amendment 
Statute for Agriculture Development 
 
 The amendments to this Statut e are to achieve the following: 
1) To introduce competitive pricing system by deleting 
"uniform pricing" for exported agricultural products, to complement 
the enforcement of the Fair Trade Law and open-market 
mechanisms; 
2) To expand the Statute to include special safeguard 
provisions consistent with the WTO Agreement on Agriculture; 
3) To introduce measures to prevent the monopolization of the 
market. 
Statute Governing the Organization of the Public Construction 
Commission 
 
 The amendments to this Statute reflect the re-structured and 
expanded responsibilities of the Public Construction Commission. 
The changes include: 
1) To establish a committee within the Commission to handle 
complaints by suppliers on government procurement projects 
2) To establish an information office within the Commission as 
a centralized information system on public construction and 
government procurement projects; 
3) To provide technical assistance and support to other 
government agencies in matters relating to government procurement. 
Statute for Inspection Procedure 
Governing Properties by 
Government Agencies The statute was repealed on 4 June 1999 as the Government 
Procurement Law took effect on 27 May 1999. 
Government Procurement Law To mandate government  procurement procedures to be consistent 
with the rules of WTO Government Procurement Agreement. 
To institute dispute settlement procedure in the context of 
government procurements. 
Government Procurement Law took effect on 27 May 1999. 
Fair Trade Law 
 
 The amendment is to achie ve the following objectives: 
1) To increase the pecuniary burden on persons and enterprises 
that violate the Fair Trade Law. 
2) To enhance the Commission’s ability to impose more 
significant fines on enterprises that do not comply with Commission 
directives and dispositions. 
3) To conform with the principle of "disposing cases through 
administrative channels before resorting to the judicial system". 
Article 41 
With respect to enterprises that violate the provisions of this Law, 
the Fair Trade Commission may specify a time period within which 
the enterprise is required to cease or rectify its conduct or within 
which it must adopt corrective measures; in addition, the Fair Trade 
Commission may impose a fine of between fifty thousand and 
twenty-five million NT Dollars. If within the specified time-period 
the enterprise fails to cease or rectify its conduct, or to take 
corrective measures, the Fair Tr ade Commission may continue to 
specify a time period within which the required to cease or rectify its 
conduct or within which it must adopt corrective measures, and may 
impose successive fines of between  one hundred thousand and fifty 
million  NT Dollars until the acts in  question cease or are rectified or 
until the corrective measures are adopted. 
The Statute for the Establishment 
and Administration of a Science-
Based Industrial Park To delete the provision which excludes duty drawback on machinery 
sold in this zone in order to eliminate the possibility of encouraging 
park-based enterprises to purch ase locally-produced machinery.  WT/MIN(01)/4 
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 Title of Law  Background of Amendment 
Telecommunication Act To relax the percentage  of foreign equity ownership of local 
telecommunication business for direct and indirect investment in 
accordance with the commi tments made in the Service Schedule. 
Law for the Administration of State 
Owned Enterprises To eliminate the prefer ential treatment on procurement of locally-
produced material and equipment by state owned enterprises. 
 
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