WORLD TRADE
ORGANIZATIONTN/MA/W/19
20 December 2002
(02-7045)
Negotiating Group on Market Access Original:  English
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS
Submission by the Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu
The following communication, dated 19 December 2002, has been received from the
Permanent Mission of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.
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Introduction
1. We particularly welcome that the non-agricultural market access negotiations, as mandated
by the Doha Ministerial Declaration, are comprehensive and without a priori exclusions of any
products. The negotiations should therefore incorporate all tariff items.  For the negotiations to
achieve the ultimate result of effectively removing tariff and non-tariff barriers, we believe it is
essential that Members not only participate fully in the negotiations in a meaningful way, but alsomake their priorities known as early as possible in the negotiating process.
2. In this, its first submission to the negotiating group, the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu wishes to set out its views on the various approaches under
consideration and  to suggest ways in which th e most ambitious goals of the Doha mandate on
non-agricultural market access may be achieved.  This submission addresses the areas of negotiating
modalities, base rates, nomenclature, tariff bindings, staging, high tariff, tariff peaks and tariffescalations, nuisance tariffs, special consideration for newly-acceded members, non-tariff measures
and special and differential treatment.
Negotiating Modalities
3. Studies by both the WTO and UNCTAD show that, while the achievement over the last 50
years in reducing industrial tariffs has been very impressive, there remain substantial disparities
within the tariff structures of WTO Members.  For many developed Members this is particularly the
case in relation to tariff peak and tariff escalation issues, while for most developing Members a wide
divergence continues to exist between rates bound at ceiling levels and applied tariff rates.  There isstill a considerable amount of work to be done, therefore, within the limited time frame provided to us
under the Doha Declaration.
4. Bearing in mind the ambitious objectives agreed in the Doha mandate, Members should
resolve to achieve a more fruitful outcome than was attained in the Uruguay Round in the case ofnon-agricultural tariff reductions.  In this regard, Members have suggested various modalities,
including zero-for-zero, a harmonizing formula, request-and-offer, and target tariff rates.  It is worth
noting that not a single Member appears to have a strong objection to a cocktail approach to
negotiations.
5. Taking this fact into account, the Separate Customs Territory of Taiwan, Penghu, Kinmen and
Matsu favours a sector-by-sector approach to the non-agricultural market access negotiations.  AllTN/MA/W/19
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sectors should be covered.  In our view, it is not necessary to or desirable to employ a single
negotiating modality to conducting the market access negotiations.  A variety of modalities can be
utilized, and these can differ from sector to sector.  Using this multiple modality approach has the
advantage of providing maximum flexibility for Memb ers in the negotiating process.  For example, in
one sector liberalization could be in the form of tariff elimination (on either a “zero for zero” or“ITA” basis), in another it could be achieved through the harmonization of tariffs, and in another by
reductions in target tariff rates.  Furthermore,  we would like to see participation in existing
zero-for-zero agreements broadened to include the critical mass of trading partners participating in
world trade for each of the sectors involved, in orde r that the most meaningful level of liberalization
may be achieved.
6. Importantly, it seems to us that the use of a variety of approaches to tariff liberalization on a
sector-by-sector basis would allow the different levels of development of Members, and in particular
the needs of the developing and least developed Members, to be taken into account.
7. In addition, we would like to emphasize that special consideration should be given to the
treatment of exhaustible natural resource sectors.
Base Rates
8. With regard to the base rates to be used in these negotiations, we acknowledge that, in the
case of a number of Members, significant gaps remain between bound and applied rates.Nevertheless, my delegation considers that bound rates, which signify Members’ legal commitments
in this organization, are the only legitimate rates to use as basis for the negotiations.
9. In the case of unbound duties, we consider that applied rates that are in effect in 2002 should
be employed as the negotiating base rate, but in conjunction with the standstill and no-rollbackprinciple.  This approach would provide predictability in the negotiating process as well as enhance
the coverage of bindings, which in turn adds stability to the global trade regime.
Nomenclature
10. As for the nomenclature issue, in principle we are in favour of all schedules of concessions
being in a common nomenclature.  Considering  that only 24 Members circulated their HS2002changes according to the document G/MA/TAR/4/Rev.2 and most of the IDB data are based on HS
1996, it would seem sensible to use HS 1996, for the most part, as the common nomenclature.
However, to be fully consistent with the proposal to use bound rates as base rates for the negotiations,
in those instances where the nomenclature in which individual Member have bound their tariffs under
the WTO differs from HS 1996, we are of the view that the Member concerned should be free to usetheir bound nomenclature.  This approach, nevertheless, would require such Members to provide tariff
nomenclature concordance tables to assist trading partners when engaging in bilateral negotiations.
Furthermore, as this negotiation is mandated to be completed by 1 January 2005, some Members may
be required to transpose their tariff schedules from HS 1996 to the HS 2002 version before the
completion of this negotiation.  For those Members having to make this transposition, the preparationof concordance tables for use by other Members during the negotiations should be required in the
interests of transparency.
Tariff Bindings
11. According to the WTO document on Members’ Tariff Profiles, 77 out of the 126 WTO
Members reviewed have not bound their tariff rates on all non-agricultural tariff lines.  This being so,
one objective of the negotiations on market access for non-agricultural products should be to increase
Members’ bindings to full coverage for all relevant tariff items.  This approach would increase theTN/MA/W/19
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predictability of the global trade regime and could lead to greater trade liberalization.  In this context,
our view is that all Members should commit to bind all of their non-agricultural tariff lines at the
conclusion of these negotiations, with the exception of least-developed country Members, who may
determine the coverage of their binding undertakings on an autonomous basis.
Staging
12. In our considerations of what length of implementation period to allow for staging tariff
concessions that are agreed to during these negotiations, we believe that experience from the Uruguay
Round is probably the most relevant.  We suggest that  the general rule for staging should be to allow
for implementation over five years, in principle, commencing either from the conclusion of
implementation periods already committed to by each Member in its Tariff Schedule, or from theconclusion of these negotiations, whichever is the later.
High Tariff, Tariff Peaks and Tariff Escalation
13. Tariff peaks and tariff escalation remain significant barriers to market access for the exports
of developing countries, due principally to the fact that the most commonly used peak and tariff
escalation practices are applied precisely to those industrial products for which developing and least
developed countries have the greatest comparative export advantage.
14. We support the overall aim of reducing high tariffs, tariff peaks, and tariff escalation.
However, like some other Members we feel that the definition of the terms “high tariffs,” “tariff
peaks,” and “tariff escalation” needs to be clarified if negotiations are to be conducted effectively.
15. In view of the fact that the WTO Secretariat has already presented a paper (TN/MA/S/4) that
provides a clear approach to defining the terms “international peaks” and “national peaks,” we wouldsuggest that this same approach may be employed as a benchmark for working towards clarification
of these definitions.
16. Since tariff peaks and tariff escalation are believed to have the greatest trade distorting effects
(e.g. compared with nuisance tariffs), it is suggested that Members should give priority to reducing
tariff peaks and rationalizing tariff escalation.  In this regard, because tariff structures vary greatly
from Member to Member, we support the use of a request-and-offer approach.
Nuisance Tariffs
17. On nuisance tariffs, it is worthy of note that the administrative costs of collecting minimal
tariffs are not always greater than the revenues collected, especially in the case of some high-valueitems.  Moreover, such tariffs can sometimes provide significant amounts of customs revenue.
Accordingly, we must carefully define the scope of “nuisance” tariffs and eliminate only those
considered to be truly burdensome.
Special Consideration for Newly-Acceded Members
18. My delegation would like to reiterate its concerns regarding those newly-acceded Members
that are still in the process of implementing significant first-stage market access concessions on non-
agricultural products in compliance with their accession commitments.  In these cases, the timetable
agreed for the phasing-in of their accession commitm ents acknowledges the fact that their industries
need time to adjust to the new demands of WTO Membership. We would therefore urge Members to
take this situation into account where it exists, by allowing such newly-acceded Members a longer
staging period and credit for autonomous liberalization.TN/MA/W/19
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Non-Tariff Barriers (NTBs)
19. Not only do NTBs cause uncertainty and friction in international trade, but they can increase
transaction costs for exporters and importers as well.  Furthermore, severely restrictive NTBs can
function in much the same way as extremely high tariffs.    
20. To facilitate discussion on NTBs, we support some Members’ suggestion that Members
should first identify the potential non-tariff barriers about which they are concerned.  On the basis of
the results of Members’ NTB notifications, Members will be in a better position to discuss the subject
and categorize these NTBs according to whether they are ‘issue-specific’ and ‘sector-specific’. NTBs
that are issue-specific should be addressed, where possible, in other relevant Committees or
Negotiating Groups.  The only NTBs that would be addressed in this Negotiating Group wouldtherefore be:  (1) those issue-specific NTBs that other Committees or Negotiating Groups have no
mandate to address; and (2) sector-specific NTBs.
Special and Differential Treatment (S&D)
21. Bearing in mind that the issue of the special needs and conditions affecting the trade of
developing countries (including the least-developed countries) is one of the cornerstones of the Doha
Development Agenda, my government would like to see a balanced package resulting from these
negotiations, which caters for the needs and interests of developing and least-developed countries.  To
achieve this, a systematic, transparent and comprehensive application of S&D will be required.
22. We therefore believe there should be continued emphasis on a coordinated evaluation of the
capacity-building needs of these countries and on providing the appropriate measures to help them
participate actively in the multilateral trading system.  Accordingly, we recommend designing
capacity-building programmes that are individually ta ilored to the particular needs of each of the
Members concerned, which  also contain certain milestones and assessment criteria to show what
progress a country is making internally with the capacity-building assistance already provided.  This
would help to avoid duplication of the assistance provided and  ensure that the effects are optimized.
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