WORLD TRADE
ORGANIZATIONTN/MA/W/19/Add.1
16 May 2003
(03-2615)
Negotiating Group on Market Access Original:  English
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
The Issue of Newly-Acceded Members
Submission by the Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu
Addendum
The following communication, dated 14 May 2003, has been received from the Permanent
Mission of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.
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I. INTRODUCTION
1. The government of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu
emphasized in its submission on 20 December 2002 (TN/MA/W/19) the importance that it attaches to
providing flexibility to those newly-acceded Members (NAMs) that encounter special problems and
thus have special needs with respect to the market access negotiations of non-agricultural products.
2. We support the view that NAMs should particip ate fully in the Doha Round of negotiations
and make contributions to further advancing the liberalization of the multilateral trade system.
However, it is also evident that there are difficulties facing the NAMs when it comes to fulfillingDoha conclusions so soon after, or even in th e same timeframe as, they implement their WTO
accession commitments.  In this paper, we wish to share some ideas on the reasons and ways to grant
appropriate flexibility to the NAMs, while at the same time enhancing the momentum for their further
positive participation in and contribution to the negotiations on market access for non-agricultural
products.
II. NATURE OF THE ISSUE AND PURPOSES OF BRINGING THE ISSUE TO THE
ATTENTION OF THE MEMBERS
3. The issue we discuss here is not one that would affect many Members. Since it is unique to a
limited number of Members, there is a special need to bring it to the other Members’ attention. We areof the firm belief that there is sound justification to request Members to give serious consideration to
this issue.
4. When acceding to the WTO, an acceded Me mber needs to implement its commitments in
accordance with the schedule set forth in its accession protocol. Some commitments are of a naturethat require the acceded Member to carry them out immediately or upon its accession. Some,
especially many tariff reduction commitments, will need several years to complete the
implementation. It is possible, for instance, that  before completing its tariff reduction commitments
made in connection with accession, for the Member to be hit by another obligation to reduce tariffs
arising from multilateral negotiations on market access. Thus, during the implementation period forTN/MA/W/19/Add.1
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the accession obligations of this NAM, there could be dual reduction obligations, one from its
accession, and the other from related multilateral negotiations. Practical and theoretical questions with
regard to such a situation are apparent.
5. Practically speaking, it will be extremely difficult for those industries subject to two
concurrent sharp tariff reductions to survive. In theory, it would not be fair to them and could be
against the very purpose of tariff reductions, which should be made to enable the expansion of trade,
not to destroy industries. Industries could be effectually eliminated should double reductions be in
place concurrently for their respective sectors.
6. The purpose that we propose in further consideration of the questions in relation to NAMs is
to find an appropriate way to cope with the practical problems encountered by them and provide atheoretical basis to deal with their issues. It shou ld not be considered as an attempt to prevent or
hinder trade liberalization. As a matter of fact, the Separate Customs Territory of Taiwan, Penghu,
Kinmen and Matsu fully supports paragraph 16 of Doha Declaration which sets up the goal of
negotiations as to reduce or, as appropriate, eliminate tariffs. We acknowledge the importance of
orderly opening up and freeing the markets to the expansion of international trade. We will be makingour best endeavors to work together with all Members to find appropriate and reasonable schemata
and approaches to achieving freer international trade. Neither are we proposing any a priory exclusion
of any tariff item from product coverage. Instead, we are here to propose a scheme or an approach to
practically coping with this unique situation to avoid difficulties that some Members are facing when
a formula of tariff reduction is adopted in the current multilateral negotiations.
III. RATIONALES AND APPROACHES PROPOSED
7. Some might argue that it would be unfair to  allow a new Member of the WTO to immediately
receive the advantages of over fifty years of various trade concessions and commitments enjoyed by
the existing Members, while also permitting the said Member to delay its tariff reductions arisingfrom multilateral negotiations. We agree that this argument is not without merit. The government of
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu is also firmly of the view that
all NAMs should endeavour to make similar contributions to the Doha Development Agenda so as to
increase the momentum for the negotiations.
8. However, it should also be a very practical assumption that, when a country makes a
commitment on tariff reduction, especially in conjunction with its accession, usually it is the greatesteffort that it could make for other Members. The utmost commitments are reflected in the extent of
the tariff reduction, the implementation period and staging of the reduction. In other words, the
package of commitments is usually made with deliberately negotiated balance, taking into account the
ability of the Member and its industries to adjust. In particular, the accession negotiations on tariffs
are usually done through the request-offer process. Reduction commitments on each product shouldbe at the maximum level, with which a domestic in dustry can cope and still survive. Based on the
commitments, the enterprises should be able to reas onably expect that the implementation period and
staging arrangement could be the basis for making their business decisions in relation to their
investment or other business activities. Suppose, before the completion of the initial implementation
period, the relevant tariffs are subject to another substantial reduction from multilateral negotiations,the industries could suffer losses arising from mistru st of the government activities. There is no such
question for the non NAMs, which already completed either their accession commitments or Uruguay
Round commitments, for the reason that industries should not have the expectation that after
completing tariff reductions, the tariffs will always remain the same and not be subject to any further
reductions. This is also why we consider it as a unique problem for the NAMs.
9. Also from the perspective of current multilateral negotiations, most Members would agree
that the pressures created by the Doha negotiations alone on the national economic and industrialTN/MA/W/19/Add.1
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development of Members are great. If a Member is to carry out the major concessions from
multilateral negotiations, in addition to their no t-yet-completed substantial commitments made in
conjunction with its accession, it would be difficult for the Member to persuade its industries to accept
the new concessions. Consequently, it is understandable that these NAMs, in the face of enormous
pressure from their local industries, could be hesita nt to participate fully in the Doha negotiations.
This issue could in turn slow the momentum for further liberalization in the non-agricultural market
access negotiations. If the NAMs could be given special consideration, it would enhance the
willingness of the NAMs to make positive contributions to the current negotiations.
10. As to the concept of NAMs, we do not have any special stance. However, we consider that a
scope that covers those Members yet to complete  their tariff reduction commitments arising from
accession negotiations should be within the scope for the reason that the situations of these Membersare similar.
11. In our view, the most practical way to encourage NAMs to actively participate and make a
commensurate contribution to the ongoing negotiations is to grant them longer grace periods. One of
the methods of granting such a transition period is to decide the length of time on a Member-by-Member basis. However, it would be very costly and time consuming for Members to decide which
Members should enjoy a longer period, and which should enjoy a shorter one.
12. We propose a simpler method: give a single period for those Members, which have not
completed their commitments on non-agricultural products, a definite across-the-board grace period,such as a six-year period, to allow them to fulfill their respective accession commitments while
agreeing to undertake additional liberalization as part of the Doha Development Agenda.
13. In addition to the above-mentioned reasons, we hereby submit additional rationale for the six-
year grace period: According to Article 2 of the Protocol to the General Agreement on Tariff andTrade 1994, tariff reductions agreed upon by each Member shall be implemented in five equal rate
reductions, and the final rate shall become effective no later than the date four years after the date of
entry into force of the WTO Agreement. In other words, Members (as of 1995) shall complete the
fulfillment of their concession commitments made in the Uruguay Round by 1 January 1999. The
mandate of the Fourth Ministerial Conference held in Doha is for WTO Members to finish
negotiations by 1 January 2005. Existing WTO Members have not been required to fulfill any
concession obligations for most non-agricultural products between 1999 and 2005, i.e. their nationalindustries will have enjoyed a grace period of six years before having to adjust to a new round of
liberalization concessions. Taking this into account, it is only fair to the NAMs if they are given a
similar period to adjust their industries. If Members could give favourable consideration to providing
NAMs with a grace period of six years, on a product-sp ecific basis, from the year of completing their
accession commitments to the year that implementation of Doha commitments begins, it would bothhelp the industries of NAMs and the successful completion of the current multilateral negotiations on
non-agricultural trade by their governments.
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