WORLD TRADE WT/MIN(96)/ST/130/Rev.1
10January 1997
ORGANIZATION(97-0049)
Original: English MINISTERIAL CONFERENCE
Singapore, 9-13December 1996
THE SEPARATE CUSTOMS TERRITORY OFTAIWAN,
PENGHU, KINMEN AND MATSU
Statement byH.E. Dr.Wang Chih-Kang
Minister forEconomic Affairs
(Speaking asanObserver)
Revision
Itismygreatest pleasure toleadthedelegation oftheSeparate Customs Territory ofTaiwan,
Penghu, Kinmen andMatsu toattend thefirstMinisterial Conference oftheWorld Trade Organization.
Iwould particularly liketoextend mydeepest gratitude tothehosting member, Singapore, formaking
thearrangements,andbelievethatwiththehardworkofallconcerned,particularly,AmbassadorRossier,
theChairman oftheGeneral Council, andMr.Ruggiero, theDirector-General, thisConference will
beasuccessful milestone.
Theworld trading system hasevolved since theestablishment oftheGeneral Agreement on
Tariffs andTrade about halfacentury agotocreate asolid multilateral framework supported bya
setofwell-negotiated rules. Thisrule-making process, together withthenegotiation onmarket access,
experienced abreakthrough intheUruguay Round. Inthetwoyears aftertheestablishment oftheWTO,
Members havestrivened toimplement theirmarket access commitments andputintopractice thenewly
negotiated rules. Andnow, thetimehascome todiscuss thedevelopment thusfar.Idobelieve that
afterthisConference, wewillwalkaway from herewithanever-more solid direction infurthering
WTO ’sobjectives.
Wecome toSingapore thistimetoattend thisConference withtwoprimary objectives: (1)
tolisten towhatWTO Members havetosayandconvey ourviews ontheagenda issues setforthis
Conference, and(2)toseekthesupport oftheMembers forourearly accession totheWTO.
Singapore Ministerial Conference
Now, ourviews ontheagenda issues setforthisConference.
First, fullandtimely implementation oftheWTO Agreements isextremely important forthe
world trading system; itshould begiven toppriority atthisConference. Without it,thecareful balance
ofinterests reached intheUruguay Round willbelost,andthebalancing exercise inthedevelopment
ofanagenda forthepost-UR erawillbemade more complicated thanitshould be.
AsforMembers having difficulty implementing theWTO Agreements, programs should be
established fortheWTO Secretariat orexperienced WTO Members toprovide thenecessary technical
assistance. Wewould appreciate theopportunity toparticipate insuchtechnical assistance programs,
which willsurely helpintheimplementation ofouraccession commitments.WT/MIN(96)/ST/130/Rev.1
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Intheareaoftradeandenvironmental protection, weunderstand thattheissueofenvironmental
protection isreceiving increasing attention. However, environmental protection measures adopted by
eachMember should notunnecessarily impede trade flow. Inourview, thediscussions andstudies
thattheCommittee onTrade andEnvironment hascarried outishelpful; particularly, studies and
discussionsaimingatidentifyingwaystoreconcilethepossibleconflictsbetweentradeandenvironmental
concerns. Bearing inmind thatdifferences doexistinways ofliving, cultures andlevels ofeconomic
developmentamongstWTOMembers,technicalandfinancialsupportfromthemoredevelopedMembers
isofcourse expected. Furthermore, involvement ofother multilateral efforts specifically addressing
theenvironmental matters mayalsohelpsubstantially totheresolution ofthiscross-cutting issue and
helpensure sustainable development.
Fortheunfinished negotiations intheservices area, wewould liketoseetotheirconclusion
inorder toachieve greater liberalization oftrade inservices. Infact,onourpathtoward theAsia
Pacific Operation Center, wehavealready scheduled toopen allthemajor service sectors, suchas
financial, media, telecommunications, airandmaritime transportation services.
Intheareaofbuilt-in issues, we,asanobserver, havestudied them closely. Wewould like
toseetheschedules setoutinthose agreements befollowed. Inaddition, forthose whose economies
areintransition, theirinterests should alsobetaken intoaccount inthefuture negotiation.
Intheareaoffurtherliberalization,wesupporttheproposedInformationTechnologyAgreement
(ITA) which webelieve willhelpachieve thefullliberalization ofthemarket forinformation products.
Wewould liketoseebroad-based participation intheprocess, andparticipants which mayhavedifficulty
intheshort runbegiven flexibility. Weourselves areprepared totalktoourtrading partners onthe
related coverage andphasing issues, andwould make ourbestefforts tolimitourrequests forflexibility.
Intheareaofnewissues, webelieve thatmember economies should firstform anadequate
consensus before newmeasures areadopted. Consensus mayperhaps bebuiltthrough establishment
ofappropriate working groups.
Withrespect totheissueoftrade andinvestment, while weagree thattheextent towhich the
twoarerelated needbefurther explored, wethink thatthework under theTRIMs canbestrengthened
byexpanding through negotiation thelistontrade related investment measures.
Ontheissueofcompetition policy, wefullyaccept itsrelevance totrade. Given thecomplexity
ofthisissue aswellasthedifference inthemarket structures andlevels ofeconomic development
among WTO Members, itwould behelpful ifadiscussion forum onthisissue canbeestablished to
helpachieve theneeded consensus.
Thecompetition issue isnotcompletely newtotheWTO. Forexample, Articles VIIIand
IXoftheGATS provide preliminary rulesdealing withmonopolies andanti-competitive tradepractice;
andSection 8oftheTRIPS recognizes theneedtocontrol anti-competitive practices incontractual
licenses.
WTO Accession
Now, turning toouraccession. Wesubmitted ourapplication forGATT membership on
January 1,1990 andlaterchanged theapplication tothatforWTO membership in1995. Although
sixyears havepassed andouraccession isyettobecompleted, wewould nevertheless liketoexpress
ourappreciation tothose WTO Members whohaveparticipated inouraccession process. Iwould
liketoespecially notethat,withthesupport andassistance from ourtrading partners, ouraccessionWT/MIN(96)/ST/130/Rev.1
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process hasmade clearadvances recently. Thesamemomentum, Ibelieve, isthekeyforourbecoming
aWTO Member inthenearfuture.
Interms oftheprogress made inourbilateral accession negotiations, wehavesofarcompleted
bilateral negotiations with12WTO Members, while theremaining 14areintheirfinalstages. We
sincerely hopethatthese Members willfulfill theiroriginal intent insupporting ouraccession, such
that,ourcause --one inwhich wehavesovigorously strive for,would soonberealized. Itgoeswithout
saying thatthesooner weaccede totheWTO, theearlier ourtrading partners would reapthebenefits
ofouraccession commitments. Interms ofthemultilateral process, ithasbeentwoyears since the
seventh Working Party heldonNovember 21,1994. Although aninformal Working Party meeting
washeldinDecember 1995, wedothink thattomaintain themomentum ofouraccession process
aWorking Party meeting early nextyearisimperative. Wearetherefore seeking thesupport ofthe
Members formoving forward theWorking Party process.
Inaneffort toexpedite ouraccession, ourauthorities havebeenworking onthelegislative
actions required foreffecting ouraccession commitments. Thisisamassive legalexercise. Ourintention
istomake allourlawsandregulations consistent withtheWTO requirement upon ouraccession, or
afteratransition period assetoutinourprotocol ofaccession. Thesame exercise isalsonecessary
forobtaining legislative approval ofourmarket access commitments.
Thefollowing isprovided togiveWTO Members anideaofwhatweintend tobring tothe
world trading community through ourWTO accession.
I. Trade inGoods /Tariffs andNon-tariff Measures
Tariffs
Thetariff reductions negotiated sofarwillresult intheaverage nominal ratesonagricultural
products being reduced from18.46% in1992toaround 11%attheendoftheimplementation period
(fiveyears inprinciple); while thetrade weighted average rateonindustrial products willbereduced
from5.43% in1992 toaround 3.5% attheendoftheintended implementation period (four years in
principle). Asubstantial partofthistariff reduction planisfront-loaded.
Despite thefactthatouraccession isstillpending, wehaveonourowninitiative implemented
apartoftheplan.Inparticular, weannounced reduction oftariffrateson758product items on14July
1995. Theadministrative branch alsointends topropose tothelegislative branch further tariffreduction
formore than1000 items. Wewillcontinue toreview thepossibility ofhaving more tariff reduction
inthefuture.
Itisworth emphasizing thattheAgreement onAgriculture oftheUruguay Round requires
Members whoaredeveloped economies tolower theirtariffs by36%, using 1986 asthebaseyear.
Inourcase, tariffreductions intheperiod between 1986and1992hasfarexceeded therequired 36%.
Such reductions, together withthetariff reduction commitment tobemade inconjunction withour
accession, would reach acombined totalofover60%.
Inthecaseofindustrial products, theUruguay Round requires thattariffs aretobereduced
byatleastone-third, using 1986 asthebaseyear. Ouraverage nominal ratein1986 was24.4% and
waslowered to6.38% inJuly1995, representing atariff reduction ofover74%.WT/MIN(96)/ST/130/Rev.1
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Non-tariff Measures
Allourimport restrictions onindustrial products willbelifted orotherwise replaced by
WTO-consistent measures. Arearestriction oncarimports willbereplaced byasystem oftariffquota.
Despite thesensitivity ofouragriculture sector, themarket access commitment sofarisvery
substantial andcontains, inthemain, thefollowing:
1. Arearestrictions which weremaintained forpurposes ofbalancing bilateral tradewill
beeliminated infullwithsubstantial tariffreductions. Takeapples, forexample, which
iscurrently subject toarearestriction withatariff rateof50%. After accession, the
arearestriction willbelifted, andthetariff ratewillbereduced to20%attheendof
theintended implementation period.
2. Allimport restrictions willbereplaced byWTO-consistent measures toachieve gradual
liberalization.Somewillbeliftedwithoutanyincreaseinthecurrenttarifflevels.Others
willbereplaced bytariff quota measures. Theminimum access towhich lowtariff
applies issetat4%-8%, asopposed totheURstandard of3%-5% setbytheAgreement
onAgriculture fordeveloped economies. Thein-quota rateinmostcases areonehalf
ofthecurrently applied rates.
3. Calculation oftariff quotas isbased onthetrade volume oftheperiod between 1990
and1992, asopposed totheperiod between 1986and1988usedintheUruguay Round.
Asourconsumption ofagricultural products hasbeenintheincreasing trend inthe
lasttenyears, theuseofalaterperiod entails greater market access.
II. Streamlining theImport Licensing Procedures
Intheinterest ofachieving liberalization andmeeting theobjectives oftheAgreement onImport
Licensing Procedures, wehave, since 1July1994, reformed ourimport licensing system toadopt a
negative listsystem, where “freeimport istheruleandrestriction onlisted items istheexception ”.
TheNegative ListSystem isimplemented under the“Consolidated ListofCommodities Subject to
Import Restriction andCommodities Entrusted toCustoms forImport Examination, ”anadministrative
regulation oftheBoard ofForeign Trade, theMinistry ofEconomic Affairs.
Evenpriortotheimplementation oftheNegative ListSystem, wehadalready simplified import
procedures andrelaxed import restrictions substantially. Wehavecontinued toassess thepossibility
offurther simplification. Ourintention istoreduce import licensing requirements totheminimum.
Statistics mayserve toindicate thesignificance ofthisprogram. Thenumber ofitems required toapply
fortheimport license stood at1,483 or15.93% asof30June1994andwasreduced to276or2.92%
asof31October 1996.
Inconformity withtheAgreement onImport Licensing Procedures, wehavereduced asmany
aspossible thenumber ofadministrative bodies involved ingranting theimport license. Since the
implementation oftheNegative ListSystem, there havebeen144items (eight digits) forwhich the
number ofadministrative bodies thatneedbeapproached inacquiring theimport license hasbeen
reduced. Thegoalistoreduce thenumber ofagencies tonotmore thanone.
Toensure transparency ofthesystem, wehavecompiled amanual entitled, “Compilation of
Operational Rules fortheRegulations Governing theImport ofCommodities ”,which covers, among
others,the“ConsolidatedListofCommoditiesSubjecttoImportRestrictionandCommoditiesEntrusted
toCustoms forImport Examination ”.WT/MIN(96)/ST/130/Rev.1
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III. Intellectual Property Rights
Wehavestriven formore thanadecade toprovide protection forintellectual property rights
comparable tointernational standards. Ourcurrent regime notonlycovers thetraditional IPRprotection
areas, suchasprotection ofcopyrights, trademarks, andpatents, butalsoextends totheprotection
oflayout-designs ofintegrated circuits andtradesecrets. Before theTRIPS Agreement hadincorporated
border measure provisions, wehave already established anexport monitoring system toprevent
circulation ofpirated computer software. Weintend tocontinue ourefforts inimproving IPRprotection,
andwillensure fullimplementation oftheTRIPS Agreement when webecome aWTO Member. The
IPRgranting procedures willcontinue tobesimplified through computerization.
IV. Government Procurement
Wearenegotiating ouraccession totheAgreement onGovernment Procurement. Every effort
hasbeenmade tomeettherequests oftheAgreement ’sexisting signatories. Wehave revised ouroffer
listinorder toimprove access toourgovernment procurement market. Wehope allbilateral
consultations canbeconcluded before thenextGovernment Procurement Committee meeting scheduled
toconvene inFebruary 1997, andareseeking thesupport ofourtrading partners forearly conclusion
ofthebilateral process. Based onpaststatistics, anestimation ofamarket ofUS$10billion annually
willbeopened toforeign suppliers afterouraccession totheAgreement onGovernment Procurement.
Inorder toaccede totheAgreement andtoensure compliance bythecovered entities without
failure,wewillenacttheLawofGovernmentProcurementtoregulatetheprocurementofgoods,services
andconstruction services bygovernment entities. And, prior tothepromulgation ofthelaw,interim
measures havealready beenundertaken which include theestablishment ofacomputerized database
forcollecting anddisseminating procurement information, publication ofagovernment procurement
gazette, publicizing tender notice andaward notice onthegazette, extension oftime-limits forreceiving
tenders, andprescribing solicitation requirements inafairandreasonable manner.
V. Services
Since 1980, wehavebeenvigorously pursuing liberalization ofourservices market. Theefforts
havebeenintensified inconjunction withourWTO accession process, andrestrictions formally placed
onmany service industries havebeensubstantially relaxed orlifted. Ouroffers ascontained inthe
draft schedule ofcommitments arecomprehensive, covering more than100sub-sectors. Our
commitments dealwithmost, ifnotall,ofourtrading partners 'interests. WeaskforonlyoneMFN
exemption andaverylimited number ofexceptions tothenational treatment rule.
Inaneffort tofurther promote theliberalization onservices, wehaveadopted measures to
improve market access andreform regulatory regimes inthefollowing service areas: investment in
thefinancialmarkets,movementofcapitalandnaturalpersons,telecommunications,banking,insurance,
securities, andtransportation. Specific measures adopted include thefollowing:
A. Entry andTemporary StayofNatural Persons
1. Intra-corporate transferees areallowed toenterandtemporarily stayinChinese
Taipei foraperiod upto3years.
2. Theinitial period forbusiness visitors tostayinChinese Taipei hasbeen
extended from 60daysto90days.WT/MIN(96)/ST/130/Rev.1
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3. Theratio andtotalamount limitations foremploying foreign white-collar
workers havebeeneliminated.
4. Asingle window hasbeenestablished todealwithapplications foremploying
foreigners.
5. Efforts willbecontinued tosimplify theprocedures ofapplying forentry and
stayinChinese Taipei.
B. Investment inSecurities Market
1. Access tothelocal securities market waspreviously limited toinstitutional
investors. Allforeign investors (notonlyinstitutional investors butalsoother
judicial persons andnatural persons) arenowprovided withtheaccess.
2. Thelimitation thatforeigners caninvest insecurities market nomore thana
totalofUS$7.5 billions hasbeeneliminated.
3. Theceiling onaforeign institutional investor ’sholding ofthestocks ofalisted
company hasbeenraised from 5%to7.5%.
4. Theceiling onallforeign investors ’aggregate holding ofthestocks ofalisted
company hasbeenraised from 10%to20%.
C. Foreign Exchange Regulation
1. Theamount offreely settled foreign exchange forcompanies andentities has
beenincreased from US$5 million toUS$20 million peryear.
2. Forforward foreign exchange transactions, a"negative list"approach instead
ofa"positive list"approach isadopted. Alltransactions related toactual needs
arepermitted, except those concerned withpersonal service receipts and
payments, unrequited transfers, andinvestments thatmake useofinward and
outward remittances forwhich prior approval isnotrequired. Thelimitation
oncontract duration offorward foreign exchange transactions hasbeendeleted.
3. Foreign exchange banks areallowed toengage inallforeign currency
derivatives transactions without prior approval oftheCentral Bank.
D. Telecommunications Services
1. TheTelecommunications Lawisamended toallow foreign direct investment.
2. Since 1July1996, thebusiness operation unitoftheDirectorate General of
Telecommunications hasbeenseparated toform acorporation, ChungHwa
Telecom Co.Ltd.; theDirectorate General ofTelecommunications hasthen
become apurely regulatory agency, acting asthesupervising body thatisto
oversee andpromote theindustry ’sfaircompetition.
3. Toconform totheMFN principle, wehavedeleted thereciprocity requirement
forforeigners toprovide telecommunication services.WT/MIN(96)/ST/130/Rev.1
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4. Wehaveopened upvalue-added network services market (including storeand
forward, store andretrieve facsimile services, codeandprotocol conversion
services).
5. Inliberalizing thebasic telecommunications service market, wehaveissued
nineCT-2 operation licenses in1994; 53licenses inthefollowing fourkinds
ofwireless communication services areas willbeissued attheendof1996
orearly1997:CellularMobilePhone,RadioPaging,MobileData,andTrunked
Radio.
E. Financial Services
1. Insurance
(a) Foreignersarepermittedtoprovide"cross-borderservice"formaritime
shipping andcommercial aviation insurance.
(b) Limitation onnational treatment foraforeign insurance company to
actasapromoter ofChinese Taipei ’sinsurance company hasbeen
eliminated.
(c) Limitation onnational treatment forforeign insurance companies to
establish branches inChinese Taipei hasbeeneliminated.
(d) Limitation onnational treatment forforeign insurance companies to
increase thenumber ofbranches hasbeeneliminated.
(e) Limitation ontheorganization form ofreinsurance andretrocession
service providers hasbeeneliminated.
2. Securities services
(a) Therestriction thatforeign securities firms mustsetuparepresentative
office foroneyearbefore setting upabranch hasbeeneliminated.
(b) Thereciprocity requirement fortheestablishment ofalocal branch
office orarepresentative office hasbeenlifted.
(c) Thelimitation ontheforeign equity holding ratioinalocalsecurities
brokerage firmhasbeenlifted.
(d) Therestriction thataforeign futures brokerage firmcanoperate
business onlybyestablishing abranch inChinese Taipei hasbeen
eliminated.
(e) Thelimitation ontheforeign equity holding ratioinalocal futures
brokerage firmhasbeenlifted.
(f) Therestriction thataggregate foreign equity holding inasecurities
investment trustenterprises cannotexceed 49%oftheshares ofthe
company hasbeeneliminated.WT/MIN(96)/ST/130/Rev.1
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3. Banks andother financial services
(a) Thewaiting period forforeign banks tosetupanadditional branch
hasbeenreduced from 5years to2years.
(b) Banks areallowed toengage inshort term billsunderwriting and
certification business.
(c) Theequity ratio limitation forforeign money brokers toinvest in
foreign exchange brokers hasbeeneliminated.
F. Transportation
1. Therestriction ontheorganization forms ofbusiness operation forselling and
marketing airtransport services hasbeeneliminated.
2. Markets forcomputer reservation system ofairtransport andforairfreight
forwarding services havebeenliberalized. However, theequity holdings by
foreigners ofanairfreight forwarding company cannotexceed one-third of
theequity, andthenumber offoreigners asdirectors inthatcompany cannot
exceed one-third oftheboard. Onareciprocal basis, foreign airfreight
forwarding business maysetupitsbranch office inChinese Taipei.
3. Thelocalbranch ofaforeign transport operator ispermitted tooperate with
itsownmotor vehicles intheinland freight transportation ofcontainerized
cargoes forimports orexports.
Conclusion
Withtheliberalization measures thathavebeentaken sofarandwillbetaken afterouraccession,
ithasbrought megreat pleasure totakethismomentous opportunity toshare withMembers ofthe
WTO ourcommitments tofreetrade andourdedication andwillingness tomeet andpromote the
principles oftheWTO. Weareprepared tomeetthechallenges oftherulesandobligations oftheWTO.
Iamtherefore seeking WTO Members 'support andcooperation inexpediting ouraccession process
andbringing theprocess toitsmuch deserved conclusion.