WORLD TRADE
ORGANIZATIONTN/MA/W/20
24 December 2002
(02-7092)
Negotiating Group on Market Access Original:  English
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
Proposal of the People's Republic of China
The following communication, dated 20 December 2002, has been received from the
Permanent Mission of the People's Republic of China.
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I. GENERAL POSITION
1. As a result of the previous rounds of multilateral trade negotiations, the market access of
non-agricultural products has been improved substantially. However, it deserves our attention that the
existence of unbound tariffs, tariff peaks, tariff escalation and non ad valorem  tariffs still affect the
effective and balanced development of international trade.
2. China proposes that non-agricultural market access negotiations shall be conducted in
accordance with the mandate embodied in the Doha Ministerial Declaration with a view to balancing
the interests of the WTO Members at different levels of development. It shall safeguard the benefits of
developing country Members through implementing the principle of "less than full reciprocity",
especially through giving adequate consideration to newly-acceded Members that are  implementing
their tariff reduction commitments, so as to ensure the active participation of all Members and realize
the acceleration of international trade to the economic development of each Member.
II. SPECIFIC PROPOSAL
1. Base rates
3. Developed country Members shall take their applied rates in 2000 as their base rates for
reduction. Developing country Members shall take the simple average rate between their applied rates
in 2000 and their final bound rates committed in the Uruguay Round as their base rates for reduction.The newly-acceded Members shall take the simple average rate of their applied rates in 2000 and their
final bound rates committed in their accession negotiations as their base rates. Tariff reduction shall
be made on the basis of HS1996 and the final results shall be scheduled in HS2002.
2. Reduction formula
4. As the core of the negotiations, the method of tariff reduction has a direct bearing on the
outcome of the negotiations. To facilitate the negotiations and meet the requirement of eliminating
tariff peaks and tariff escalations as embodied in the Doha Ministerial Declaration, China proposes to
adopt a uniform formula for tariff reduction. Taking into consideration of the imbalance among the
development levels of all Members, the actual reductions achieved through formula approach shallfully reflect the needs and interests of all Members, in particular developing country Members and
shall abide by the mandate of the Doha Ministerial Declaration that the developing country Members
could make their reduction commitments in the principle of less than full reciprocity.TN/MA/W/20
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5. The formula proposed by China is as follows:
T0 : Base rate
T1 : Final rate
A : Simple average of base rates
P :  Peak factor,  P=T 0/A
B : Adjusting coefficient, e.g. for the year 2010, B=3; for the year 2015, B=1
See the attached Notes on the Formula for Tariff Reduction.
3. Sector approach
6. Sector approach could promote the negotiations forward and supplement the formula
approach. Members shall be free to decide their participation in light of their own needs.
4. Tariff peaks
7. China supports the reduction of tariff peaks in accordance with the requirements embodied in
the Doha Ministerial Declaration. Tariff peak is a relative concept. When defining tariff peak, we
must consider the discrepancies in the current tariff levels of all Members. Tariff peak of a Member
shall be defined as a tariff rate three times more than the simple average tariff level of that Member.
Members shall take this definition as the standard in the reduction of tariff peaks.
5. Tariff escalation
8. Members shall take concrete measures to greatly reduce the tariff escalations in their
respective tariff regime.
6. Non ad valorem tariff
9. Members shall convert their existing non ad valorem  tariffs into ad valorem  form through a
uniform method and take tariff rates resulted from the conversion as the basis for tariff reduction. The
tariff reduction commitments of all Members concluded in the negotiations shall be specified in the
form of ad valorem  tariffs in their schedules. Developed country Members shall eliminate all ad
valorem  tariffs on non-agricultural products, while developing country Members shall limit their
number of non ad valorem  tariffs to no more than 3% of the total number of tariff lines in their
national tariff nomenclatures.
7. Lowest tariffs
10. Developed country Members shall eliminate all their lowest tariffs, while developing country
Members shall be free to maintain their lowest tariffs since those tariffs are still important for revenuepurpose to a number of developing country Members.
8. Binding of tariffs
11. All Members shall bind their tariff rates after reduction, however longer transitional period
could be given to developing country Members and more flexible arrangement to least developedcountry Members.020
1T)PA(T)PBA(T
+ +× × +=TN/MA/W/20
Page 3
9. Special and differential treatment
12. Longer implementation period shall be given to developing country Members and more
flexibility to least developed country Members with  regard to binding of tariffs, conversion of ad
valorem  tariffs, elimination of tariff peaks and tariff escalations.
13. Those sectors and products of substantial export interest to developing country Members and
least developed country Members shall be subject to reduction as priorities in the negotiations. As
regards the newly-acceded Members, their reduc tion commitments shall be fully taken into
consideration and no further reduction shall be required.
14. As for non-tariff barriers, China will submit its proposal in the future.TN/MA/W/20
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Attachment
Notes on the Formula for Tariff Reduction
T0 : Base rate
T1 : Final rate
A : Simple average of base ratesP :  Peak factor,  P=T
0/A
B : Adjusting coefficient, e.g. for the year 2010, B=3; for the year 2015, B=1
The formula not only reflects the characteristics of harmonization and non-linear reduction, but
also provides flexibility as regards final reduction level. More reduction will be achieved on tariffrates higher than the average tariff rate; and less reduction will be achieved on tariff rates lower than
the average tariff rate. In addition, tariff dispersion will be greatly lowered. A reasonable final tariff
level will be retained as a result of the reduction, while tariff peaks will be effectively reduced.
Peak factor P is the ratio between a base rate and the average rate. Through the function of peak
factor P, tariff peaks could be effectively reduced and due consideration could be given to the current
tariff structures of all Members, which would ensure tariff reduction to be carried out in a morerational way and with less complexity.
    Through the function of adjusting coefficient B, the final reduction levels could be adjusted in a
flexible way. The actual value of B could be determined through negotiations. China proposes that the
adjusting coefficient B for 2010 is 3 and for 2015 is 1.020
1T)PA(T)PBA(T
+ +× × +=TN/MA/W/20
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A Sample: Tariff Reduction with the Formula
(B=3)
(%)
Base
Rate
(T0)For Members with
Average Base Rate
Equal to 5 (A=5)For Members with
Average Base Rate
Equal to 10 (A=10)For Member with
Average Base Rate
Equal to 20 (A=20)For Member with
Average Base Rate
Equal to 50 (A=50)
Final
Rate
(T1)Reduction
RateFinal
Rate
(T1)Reduction
RateFinal
Rate
(T1)Reduction
RateFinal
Rate
(T1)Reduction
Rate
1 0.93 0.07 0.94 0.06 0.96 0.04 0.98 0.02
2 1.73 0.13 1.76 0.12 1.84 0.08 1.93 0.04
3 2.44 0.19 2.50 0.17 2.66 0.11 2.84 0.05
4 3.07 0.23 3.16 0.21 3.43 0.14 3.72 0.07
5 3.64 0.27 3.77 0.25 4.14 0.17 4.57 0.09
6 4.15 0.31 4.33 0.28 4.81 0.20 5.39 0.10
7 4.61 0.34 4.84 0.31 5.43 0.22 6.19 0.12
8 5.04 0.37 5.32 0.33 6.02 0.25 6.96 0.13
9 5.43 0.40 5.77 0.36 6.58 0.27 7.71 0.14
10 5.79 0.42 6.19 0.38 7.11 0.29 8.43 0.16
11 6.12 0.44 6.59 0.40 7.61 0.31 9.13 0.17
12 6.43 0.46 6.96 0.42 8.08 0.33 9.81 0.18
13 6.72 0.48 7.32 0.44 8.54 0.34 10.47 0.19
14 6.99 0.50 7.66 0.45 8.97 0.36 11.11 0.21
15 7.24 0.52 7.98 0.47 9.38 0.37 11.73 0.22
16 7.48 0.53 8.29 0.48 9.78 0.39 12.33 0.23
17 7.70 0.55 8.59 0.49 10.16 0.40 12.92 0.24
18 7.91 0.56 8.87 0.51 10.53 0.42 13.50 0.25
19 8.11 0.57 9.15 0.52 10.88 0.43 14.05 0.26
20 8.29 0.59 9.41 0.53 11.22 0.44 14.60 0.27
21 8.47 0.60 9.67 0.54 11.55 0.45 15.12 0.28
22 8.64 0.61 9.91 0.55 11.86 0.46 15.64 0.29
23 8.80 0.62 10.15 0.56 12.17 0.47 16.14 0.30
24 8.95 0.63 10.38 0.57 12.46 0.48 16.63 0.31
25 9.09 0.64 10.61 0.58 12.75 0.49 17.11 0.32
26 9.23 0.65 10.82 0.58 13.03 0.50 17.58 0.32
27 9.36 0.65 11.03 0.59 13.30 0.51 18.03 0.33
28 9.48 0.66 11.24 0.60 13.56 0.52 18.48 0.34
29 9.60 0.67 11.44 0.61 13.82 0.52 18.91 0.35
30 9.72 0.68 11.63 0.61 14.07 0.53 19.34 0.36
31 9.83 0.68 11.82 0.62 14.31 0.54 19.75 0.36
32 9.93 0.69 12.01 0.62 14.55 0.55 20.16 0.37
33 10.03 0.70 12.19 0.63 14.78 0.55 20.56 0.38
34 10.13 0.70 12.36 0.64 15.00 0.56 20.95 0.38
35 10.22 0.71 12.53 0.64 15.22 0.57 21.33 0.39
TN/MA/W/20
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Base
Rate
(T0)For Members with
Average Base Rate
Equal to 5 (A=5)For Members with
Average Base Rate
Equal to 10 (A=10)For Member with
Average Base Rate
Equal to 20 (A=20)For Member with
Average Base Rate
Equal to 50 (A=50)
Final
Rate
(T1)Reduction
RateFinal
Rate
(T1)Reduction
RateFinal
Rate
(T1)Reduction
RateFinal
Rate
(T1)Reduction
Rate
36 10.31 0.71 12.70 0.65 15.44 0.57 21.70 0.40
37 10.40 0.72 12.86 0.65 15.65 0.58 22.07 0.40
38 10.48 0.72 13.02 0.66 15.85 0.58 22.43 0.41
39 10.56 0.73 13.18 0.66 16.05 0.59 22.78 0.42
40 10.64 0.73 13.33 0.67 16.25 0.59 23.12 0.42
41 10.72 0.74 13.48 0.67 16.44 0.60 23.46 0.43
42 10.79 0.74 13.63 0.68 16.63 0.60 23.79 0.43
43 10.86 0.75 13.77 0.68 16.82 0.61 24.12 0.44
44 10.93 0.75 13.91 0.68 17.00 0.61 24.44 0.44
45 10.99 0.76 14.05 0.69 17.18 0.62 24.75 0.45
46 11.06 0.76 14.19 0.69 17.36 0.62 25.06 0.46
47 11.12 0.76 14.32 0.70 17.53 0.63 25.36 0.46
48 11.18 0.77 14.45 0.70 17.70 0.63 25.66 0.47
49 11.23 0.77 14.58 0.70 17.87 0.64 25.95 0.47
50 11.29 0.77 14.71 0.71 18.03 0.64 26.24 0.48
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