RESTRICTED
WORLD TRADE WT/ACC/SPEC/TPKM/1
14July1997
ORGANIZATION(97-2930)
Working Party onthe Original: English
Accession ofChinese Taipei
ACCESSION OFCHINESE TAIPEI
Statement byVice-Minister Ke-Sheng Sheu, Head ofDelegation,
attheMeeting oftheWorking Party ontheAccession oftheSeparate Customs Territory
ofTaiwan, Penghu, Kinmen andMatsu totheWTO
heldon28February 1997
Iamverypleased toleadmydelegation toattend thissession oftheWorking Party forthe
WTO accession oftheSeparate Customs Territory ofTaiwan, Penghu, Kinmen, andMatsu. Onbehalf
ofmyGovernment,IwouldliketoexpressourgratitudetotheSecretariatforitsassistanceinorganizing,
andMembers 'support for,thismeeting.
Since theWorking Party'sinformal meeting more thanoneyearago,wehavecontinued our
bilateral market access negotiations andinitiated thenecessary domestic legislative process. Wewould
liketotakethisopportunity tobrieftheWorking Party ontheprogress sofar.Wealsointend togo
through themain improvements andchanges wehavemade toarather important document, i.e.the
Checklist ofAccession Issues, soastoup-date theWorking Party onourposition vis-à-vis thevarious
issues concerned.
Intheseventh Working Party meeting, twoyears ago,theChairman, afterinviting comments
frommembers oftheWorking Party, asked theSecretariat tostartthedrafting oftheWorking Party
Report andtheProtocol ofAccession. Inthismeeting, wewould alsoliketohavetheviews ofthe
Working Party members onthegeneral structure andmain content ofthese twodocuments.
I. Progress ofBilateral Market Access Negotiations
Asofnow, wehaveheldmore than170rounds ofbilateral discussions withtheEuropean
Union and25other WTO Members. Inaneffort tomeetourtarget, wehaveintensified consultations
andconcluded bilateral negotiations withUruguay, Colombia, Mexico, Chile, Korea, Australia, Japan
andIceland inthepastfewmonths. There arenow18Members thathave concluded bilateral
negotiations withus.Withtheremaining 8Members, theoutstanding issues arerather limited. Our
goalistocomplete allbilateral negotiations intheshort run. Toachieve thisgoal, wewillneedthe
cooperation andassistance ofourtrading partners.
1. Recent Liberalization Efforts
Although wehavenotcompleted ouraccession process, we,onourowninitiative, lowered
ourtariffs on758items inJuly1995. Afurther tariffreduction planfor1,130 items hasbeensubmitted
totheLegislature, andwillbeimplemented when approved. Suchreductions apply toallourtrading
partners onanMFN basis.WT/ACC/SPEC/TPKM/1
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Inaddition, weexpressed oursupport fortheproposed Information Technology Agreement
intheSingapore Ministerial Meeting, lastDecember, andparticipated inthesubsequent negotiations
inJanuary andFebruary thisyear. Wearenowpreparing theschedule oftariff commitments for
verification byother participants. Wewillimplement thecommitments, assoonastheymeet the
approval ofourLegislature. Thecommitments willalsobeincorporated intoouraccession schedule
andbecome partofourWTO commitments.
2. Main Results ofBilateral Negotiations
Intheprevious Working Party meetings, wereported theresults ofthetariff negotiations as
ofthen. Following theinformal Working Party meeting inDecember 1995, wecontinued toimprove
ourtariffoffers. Butatthisfinalstageofthetariffnegotiations, further improvements areparticularly
difficult tomake astheoffered ratesareapproaching theutmost limits ofourindustries, orevenhave
exceeded thelimits. Despite this,wehavebeenworking hardwiththeindustries toexplore every
possibility ofimproving ouroffers.
Thefollowing statistics mayprovide members oftheWorking Party withanindication ofthe
significance ofourtariff offer asofnow.
Thetariffs onindustrial products (including fishery products) willreach thetrade-weighted
average of4.68percentinthefirstyearofouraccession, and3.26percentattheendoftheintended
implementation period, using the1995 trade volume asthebase.
Inthecaseofagricultural tariffs, thefirst-year nominal ratewillbe13.12 percent, andthe
rateattheintended implementation period willbe11.34 percent.
3. Non-Tariff Measures
Intheprevious Working Party meetings andourresponses totheChecklist ofAccession Issues,
wemade clear ourintention tobring ournon-tariff measures intoconformity withtheWTO rules.
Inparticular, wehavecarried outaverycomprehensive reform oftheimport licensing regime, and
athorough assessment ofourimport regulatory regime. Wehavealsomade commitments tocomply
withthevarious WTO Agreements dealing withnon-tariff measures. Notifications required bysuch
Agreements arebeing prepared andwillbesubmitted soonafterouraccession.
Wehaveexamined theexisting lawsandproposed legislative amendments inorder toensure
ourcompliance withtheWTO rulesafterouraccession. Wearealsoreviewing andrevising therelevant
administrative rules dealing withnon-tariff measures soastomeetWTO requirements.
4. Administration ofImport Tariff-rate Quotas
Wehavemade commitments toeliminate allWTO-inconsistent measures atthetimeofour
accession, orafteratransition period aspermitted bytheWorking Party. Tariff-rate quotas arethe
main measures wewillbeusing afterouraccession toreplace current import restrictions oncertain
agricultural products andpassenger cars. Tariff-rate quota administration thenbecomes anissue. The
special treatment, along thelinesofAnnex VoftheAgreement onAgriculture, thatwillbeaccorded
toourriceimports afterouraccession alsorequires acertain amount ofquota administration.
Wehavecarefully studied thevarious possibilities foradministering thequotas, inparticular
theallocation thereof, andhavedeveloped aplanfortariff-rate quota administration. Theproposed
planiscirculated together withthisstatement asAttachment I.WT/ACC/SPEC/TPKM/1
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Iwould however liketotakethisopportunity tobriefmembers oftheWorking Party onthe
proposed plan.
(a) Allocation toState Trading Enterprises
Sugar hasbeenthemonopoly ofTaiwan Sugar Corporation, aState enterprise. Therefore,
alltariff quotas willgotothecompany. Wewillnotify thispractice according toArticle XVII ofthe
GATT 1994, despite thefactthattheout-quota imports willnotbesubject toTaiwan Sugar 'smonopoly,
andcanbecarried outbyordinary business operators.
Riceimports, toalargeextent (88.2 percentinthefirstyearofouraccession), willbecarried
outbyTaiwan Food Bureau, abranch oftheprovincial government. Therestwillbedistributed to
business operators through auction. Wewillalsonotifying thispractice according toArticle XVII
oftheGATT 1994.
(b) Allocation ofGlobal Quota through Auction
There aretwenty items ofagricultural products which havebeensubject toimport bansand
aretobesubject toatariff-rate quota regime afterouraccession. Asthere isnohistorical record to
serve asthebasis forallocation ofquotas andafirst-come-first-served system doesnotseem tobe
practical, auction becomes themostefficient, transparent, andfairsystem. Theauction system asit
iscurrently being planned hasthefollowing features toensure thattheauction isafaircompetitive
process:
(i) allregistered importers andforeign exporters through localagents arequalified toparticipate
intheauction;
(ii) quotas arevalid untiltheendoftherelevant year;
(iii) there willbenomore thanfourauctions inayear, withthelastonetobeconducted atleast
three months before theendofthatparticular year;
(iv) public notice, withrespect tothequota amount andnumber ofauctions thatwillbeconducted
inaparticular year, willbegiven inDecember ofthepreceding yearorthebeginning ofthe
nextyear.
ItisourunderstandingthatallocationofquotasthroughauctionisnotuncommonamongWTOMembers.
WewelcomecommentsandsuggestionsfromthemembersoftheWorkingPartyandwillseektoimprove
theproposed plan, where appropriate.
(c) Country Quota forPassenger Cars
Passenger carsaretheonlyindustrial product thatwillbesubject totariff-rate quotas after
WTO accession. Wehaveheldaseries ofbilateral consultations withthesupplier countries onthe
amount ofquotas tobeallocated toeachofthem. Thequotas willbeallowed togrow attheannual
rateof20percent. Ourintention istoremove thistariff quota system nolaterthantheyear2006.
5. Tobacco andAlcohol TaxandRegulatory Reform
After ourreport totheWorking Party lasttimeonourproposed planforreform ofthetobacco
andalcohol regulatory andtaxregimes, wehavecontinued towork withinterested trading partners
toresolve their particular concerns. Wearepleased toreport totheWorking Party thatweareWT/ACC/SPEC/TPKM/1
Page4
approaching theendofthatprocess. Atthesame time, theAdministrative Branch hasbeenactively
preparing thelegislation required forcarrying outthereform plan. Thedraftlegislation wassubmitted
toourLegislature lastDecember foritsapproval. Asummary ofthereform planisprovided inAnnex II
oftherevised Checklist ofAccession Issues circulated together withthisstatement.
Weareyettofinalize thetariff ratesandinternal taxratesforalcohol andtobacco products.
Theratesarecarefully considered inorder tocomply withtheprinciples ofnational treatment and
most-favoured-nation. Ourintention istoensure thatthecurrent market access offoreign suppliers
willnotbeunduly affected.
Withrespect totheregulatory regime, thedraftTobacco andAlcohol Administration Lawhas
beenrevised several times soastoensure thattheregulation willbetransparent, notoverly burdensome
totraders andinvestors, andfairtoallparties participating inthemarket.
Thereform istobecarried outwithin sixmonths afterouraccession; or,iftheLegislature
gives itsapproval before ouraccession, wewillimplement thenewsystem within sixmonths after
thelawsbecome effective.
6. Services
There are12members engaged inbilateral negotiations withusonourservice commitments.
After twoyears ofbilateral negotiations, there areonly5members thatrequire further consultations,
butoutstanding issues arerather limited.
Since ourfirstsubmission inJuly1994, thedraftschedule ofspecific commitments hasbeen
revised three times. Therevisions arerespectively dated October 1994, March 1995, andMay1996,
andhavebeencirculated through theSecretariat. Afurther revision isbeing prepared which will
incorporate results ofthenegotiations afterthelastrevision inMay1996.
Itisworth mentioning thatalthough wehavenotcompleted ouraccession process, wehave
never stopped orslowed down liberalizing ourservices market. Wehaveactually carried outsome
ofthecommitments made inourdraftschedule inkeeping pacewithourplantoestablish anAsia-Pacific
Regional Operations Centre.
7. Government Procurement
Weexpressed ourintention inJune1994tobecome asignatory oftheGovernment Procurement
Agreement, andsubsequently submitted ourdraftentity andproduct lists. Since then, wehaveheld
several rounds ofbilateral negotiations withourmajor partners onthemargin ofthemeetings ofthe
Government Procurement Committee, including oneheldthisweek inGeneva. Weexpect tocomplete
thebilateral negotiations andother necessary procedures andbecome asignatory atthetimeofour
WTO accession. Ofcourse, ourtrading partners 'cooperation andflexibility areessential toour
achieving thisgoal.
Domestically, wehaveprepared adraftGovernment Procurement Lawwhich takesfullaccount
oftherequirements oftheGovernment Procurement Agreement andsubmitted thedraftlawtothe
Legislature inDecember 1996. Forimplementation ofthenewlaw,weneedtorestructure thePublic
Construction Commission inorder toexpand itsresponsibility andmake itthecompetent authority
oftheGovernment Procurement Law. Therequired legislative change intheorganizational charter
oftheCommission isalsobeing processed.WT/ACC/SPEC/TPKM/1
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Tobring ourcurrent practices closer totherequirements oftheGovernment Procurement
Agreementwhilependingaccession,wehavetakenseveralinterimmeasuresincluding:theestablishment
ofacomputerized databaseforcollecting anddisseminating procurement information, publication
ofagovernment procurement gazette, publicizing tender notices andaward notices inthegazette,
extension oftime-limits forreceiving tenders, andprescribing solicitation requirements inafairand
reasonable manner.
Withtheprogress report Ihaveprovided, Iwould liketotakethisopportunity toexpress our
gratitude tomembers oftheWorking Party fortheirsupport ofouraccession. Forthose members
thathavenotconcluded bilateral negotiations withus,wewould continue toexert ourutmost efforts
tofindsolutions totheoutstanding problems. Wewould alsoexpect suchmembers tocooperate fully
inbringing thenegotiations toanend. Itisourhopethatthebilateral negotiations canbeconcluded
before ourlegislature 'sreview oftheWTO-related legislative proposals submitted bytheAdministrative
Branch, which isscheduled forMarch andApril thisyear.
II. Domestic Legislative Process
Inpreparation forWTO accession, wehaveconducted acomprehensive review ofallourlaws
andregulations, based ontheWTO Agreements andthespecific commitments wehavemade asof
now. Thisresults intheneedfornewlegislation andaverysubstantial change totheexisting legislation.
These legislative changes aredivided intotwoparts.
Thefirstpartisaseries ofamendments tovarious lawscollectively called the"Series ofLaws
Related totheAccession totheWTO". Thissetofamendments isspecifically required tobring certain
provisions ofvarious relevant lawsintoconformity withtheWTO rules; andtheirimplementation
isconditional uponouraccession. Thesecond partisasetofnewlegislation aswellasamendments
ofsubstantial parts ofother relevant laws.
Thefirstsetistobereviewed andapproved bytheLegislature inconjunction withtheWTO
accession. Thesecond set,although alsorelevant totheWTO accession, istobeseparately reviewed
andapprovedbytheLegislatureaccordingtotheirrespectivelegislativetimingrequirements.Therefore,
theymaybeimplemented before ouraccession, butinnoevent laterthanthatofthefirstsetwiththe
possible exception ofthelawsrelating toouraccession totheGovernment Procurement Agreement.
Thefirstsetcomprises ofamendments tothefollowing laws: Foreign Trade Act,Commodity
Inspection Law, Trademark Law, Patent Law, Company Law, Customs Law, Statute forCommodity
Tax,Business TaxLaw, Securities andExchange Law, Certified Public Accountants Law, Commercial
PortLaw,Highway Law,Lawyers 'Law,Architects 'Law,Statute Governing Privileges andImmunities
ofForeign Missions andTheir Personnel, LawofPharmaceutical Affairs, LawGoverning Food
Sanitation,PublicationLaw,CentralBankActandBankingLaw.Thissetofamendmentswassubmitted
totheLegislature inDecember 1996. Wewilldeposit theEnglish translation ofthisseries of
amendments withtheSecretariat. Toassist understanding ofthisrather complex exercise, wehave
prepared abackground summary oftheamendments, which iscirculated together withthisstatement
asAttachment II.
Thesecond partcomprises ofthefollowing: theamendments totheCopyright Law, thenew
Copyright Intermediary Organization Act,thenewTobacco andAlcohol Administration Law, thenew
Tobacco andAlcohol TaxLaw, theamendments totheStatute Governing theOrganization ofthe
Treasury, abolition oftheProvisional Statute forMonopoly ofTobacco andWine inTaiwan Province,
theamendments totheStatute forEstablishment andManagement ofExport Processing Zones, the
amendment totheStatute forAgriculture Development, theamendment totheFood Management Law,WT/ACC/SPEC/TPKM/1
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thenewGovernment Procurement Law, theamendment totheStatute Governing theOrganization for
thePublic Construction Commission, theamendments totheStatute forInspection Procedure Governing
Construction Works andProcurement andDisposal ofProperties byGovernment Agencies, andthe
amendment totheStatute forVocational Assistance forRetired Servicemen. With twoexceptions,
proposals forallthenewlegislation andamendments inthissecond parthavebeensubmitted tothe
Legislature. Wewillprovide theEnglish translation andasummary ofhowthisnewlegislation and
theamendments relate toourWTO accession atalaterstage.
III. Checklist ofAccession Issues
TofacilitatethedraftingoftheWorkingPartyReportandtheProtocolofAccession,theWorking
Party, through theassistance oftheSecretariat, produced aChecklist ofAccession Issues. InJuly1994,
wesubmitted ourresponses totheChecklist, based onthenegotiation results asofthen. InDecember
ofthesame year, wesubmitted arevised version oftheresponses. Wenowhaveanewversion of
theresponses, which incorporates theimprovements andchanges since December 1994. Thisnew
version iscirculated together withthisstatement asAttachment III.
Themain improvements andchanges incorporated intothisthird version oftheresponses
areasfollows:
1. Therequest fortransition periods forTRIPS andTRIMs isdropped, wewillimplement these
twoagreements upon ouraccession (Responses 2,3).
2. Weagree toamend theForeign Trade Acttoreplace the"trade imbalance clause" withabalance
ofpayments clause along thelinesofArticle XIIoftheGATT 1994 (Response 5).
3. Therequest fortransition periods forcertain fishproducts isdropped; theimport bansforthree
fishproducts willbereplaced byWTO-consistent tariff quotas, andtheimport quota onsquid
willberemoved bythetimeofouraccession (Response 3).
4. There arechanges totheadvertising regulation oftobacco andalcohol products (Response 7(b)).
5. Arearestriction ongovernment procurement istobelifted uponaccession (Responses 6(a)(i),
and10(b)).
6. Allcosmetics except eyeliner, mascara, andmedicated cosmetics arenotrequired tofile
pre-market notification/registration since 3May1995 (Response 6(d)).
7. Thenewsystems fortobacco andalcohol products aretobeimplemented within sixthmonths
aftertheaccession (Response 7(c)).
8. The14agricultural items thatrequire special safeguard arelisted out,(Response 8(f))
9. Weindicate ourintention tonotify State enterprises other thanthe8enterprises under the
auspices oftheMinistry ofEconomic Affairs (Response 10(a)).
10. TheLegislature hascompleted itsfirstreading oftheproposed amendment totheStatute
GoverningtheExportProcessingZones,whicheliminatestheratiorestrictiononEPZs'products
entering domestic market (Response 14).WT/ACC/SPEC/TPKM/1
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11. Weupdate thestatus withrespect tothedraftspecial exchange agreement, which wecirculated
intheinformal Working Party meeting ofDecember 1995 (Response 15).
12. Wehaveremoved theoriginal Annex IIIwhich provides theproposed amendments tothe
Customs Lawinorder tobeconsistent withtheCustoms Valuation Agreement, astheproposed
amendments havebeenincorporated intotheSeries ofLawAmendments Related totheWTO
Accession.
13. Wehaveremoved theoriginal Annex IVwhich provides information onImplementation and
Administration oftheAgreement onTechnical Barriers toTrade, aswehavecommitted to
meetthenotification requirement ofthatagreement.
14. Wehaveprovided arevised tobacco andalcohol reform planinAnnex IIofthecurrent version
oftheResponses totheChecklist ofAccession Issues.
WiththeabovereportonthechangestotheResponsestotheChecklistIssues,wewouldwelcome
commentsandsuggestionsfrommembersoftheWorkingParty,whichinturnwouldhelpthepreparation
oftheWorking Party Report andtheProtocol ofAccession. Wewould alsoliketotakethisopportunity
tolisten towhatmembers havetosayonthegeneral structure andcontent ofthetwodocuments.WT/ACC/SPEC/TPKM/1
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ATTACHMENT I
TheQuota Administration PlanforCertain Agricultural Products
TheSeparate Customs Territory ofTaiwan, Penghu, Kinmen andMatsu (hereinafter
"Chinese Taipei") willreplace alltheimport bansitimposes oncertain agricultural products with
WTO-consistent substitution measures. Thesubstitution measures, aswehaveinformed theWorking
Party,includetheAnnex5treatmentoftheWTOAgricultureAgreementandtariff-ratequotas.Annex5
treatment willonlybeapplied totheimport ofriceandriceproducts. Themeasures oftariff-rate quotas
willbeapplied totheimports oftherestoftheagricultural products currently subject toimport bans.
Forimports falling within theprescribed quota amount, tariff willbeapplied atalower rate,i.e.the
in-quota rate. Theplanforallocation ofsuchquotas isasfollows:
I. Allocation toaState-trading Enterprise
Wewillliberalize theimport ofsugar through tariff-rate quotas afterourWTO accession.
Thequotas willbeallocated toTaiwan Sugar Co.,currently amonopoly intheimportation andlocal
supply ofsugar.
Taiwan Sugar Co.currently notonlyimports sugar butalsopurchases sugar canelocally.
There aresixty thousand households ofsugar canefarmers having supply contracts withTaiwan
Sugar Co.Under thecontracts, Taiwan Sugar Co.isrequired topurchase sugar from these farmers
ataprice generally higher thantheinternational price.
Although Chinese Taipei isimplementing aplantoadjust itsdomestic sugar production inorder
toaccommodate more sugar imports, during theimplementation period oftheplan, Taiwan Sugar Co.
needs tocontinue thecontracts withthesugar canefarmers inorder fortheadjustment totakeplace
smoothly. With thequotas tobeallocated toit,Taiwan Sugar Co.canimport acertain amount of
sugar atalower tariff, which tocertain extent canbalance theheavy burden ithasinfacilitating the
government 'spolicy bypurchasing locally produced sugar. Itisworth mentioning thatgiven the
difference intheinternational anddomestic prices, themore Taiwan Sugar Co.imports, themore
itwillprofit fromtheimportation. Therefore, Taiwan Sugar Co.isexpected tomake maximum profits
outofthequotas byfullyutilizing them.
AsaState-trading enterprise, Taiwan Sugar Co.willobserve thedisciplines setforth in
Article XVII oftheGATT 1994.
II. Allocation through anauction process
Chinese Taipei willliberalize theimports ofpeanuts, freshpears (excluding European pears),
drygarlic bulbs, betelnuts,meatoffowls, liquid milk, animal offal, mackerel, redbeans, dryshiitake
(forestmushroom),shaddock,drylongans,youngcoconuts,bananas,pineapples,mangoes,persimmons,
carangid fish,sardines anddrydayliliesbymeans oftariffratequota. Thequotas forthesaidproducts
areplanned tobeallocated through anauction process.
There arenoimport records forthese products duetotheexisting import bans. Therefore,
itisimpossible toallocate thequotas based onahistorical record ofimports. Ontheother hand, to
allocate quotas onafirst-come-first-served basismaycause unfairness, inefficiency orlesscommercial
certainty forimporters. Because thequotas onlyrepresent asmall percentage ofdomestic consumption
andthedifference islargebetween domestic andinternational prices, ifafirst-come-first-served system
isadopted, speculation onquotas mayhappen andcause greatuncertainty. Inorder toensure fairness,WT/ACC/SPEC/TPKM/1
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transparency andhighutilization ofquotas, Chinese Taipei plans toadopt auction forquota allocation.
Thedetails oftheplanned auctions areasfollows:
1. Theamount ofabidwillnotbefixed sothatbothlarge andsmall amounts ofimports are
possible. However, inorder toprevent amonopoly ofthequota, eachbidmaynotbeinan
amount exceeding acertain percentage ofthetotalauctioned amount. Thepercentage will
beprescribed based onthecharacteristics oftheproducts concerned.
2. Bidsarerequired tobesubmitted bymail.
3. Each bidshallspecify thepremium abidder iswilling topayinorder toobtain thequota.
Bidssubmitted willbearranged inapriority order according tothepremium amount tobe
paid. Theorder starts fromthehighest-premium bidtothelowest-premium bid.Theauctioned
amount thenwillbeallocated tothebidders based ontheamount eachrequires insuchorder.
Inother words, abidder paying ahigher premium willobtain thepriority tofilltheamount
herequires. Incaseseveral bidsoffer thesame premium, andtheamount available isnot
sufficient tofilleachofsuchbids, thesequence ofsuchbidswillbedetermined randomly.
4. Holders ofallocated quotas cansource globally.
5. Aminimum willbesetforpremium inorder tocover theexpenses required foranauction
process.
6. Theim/exporters registered withtheBoard ofForeign Trade ofChinese Taipei andtheforeign
traders/farmers associations recognized byexporting countries arealleligible forbidding.
However, foreign bidders whoobtain aquota shallcommission theim/exporters registered
withtheBOFT toimport.
7. Anannual quota willbedivided intotwoorfourdifferent segments, which willbeauctioned
outatdifferent timeperiods ofayear. Thelastauction ofeachyearwillbeheldatleastthree
months before theendoftheyear.
8. TheCouncil ofAgriculture willannounce inDecember thequota ofeachproduct concerned,
theamount ofquota tobeauctioned eachtimeandtheschedule ofeachauction forthenext
whole year. TheCentral Trust, anagency which willbeentrusted bytheagricultural authority,
willpublish theauction notice ofeachauction 21daysbefore thedeadline forbidsubmission.
9. Toavoid waste ofquota, abidder whoobtains aquota shalldeposit withtheauctioning agency
aperformance bond. Ifthequota allocated tohimisnotfullyutilized during theprescribed
period, thebondwillbeforfeited andthebidder willbesuspended frombidding foroneyear.
10. Theacquired quota willnotberequired tobeimported inonesingle shipment.
11. Theacquired quota willbevalid forayear. Unused quota cannot rollovertonextyear.WT/ACC/SPEC/TPKM/1
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ATTACHMENT II
ABackground Summary oftheSeries ofLawAmendments Related totheWTO Accession
Title ofLawandArticles
AmendedBackground ofAmendment
Foreign Trade Act
Articles 6,18,20.1Article 6:
Theamendment istoremove previous authorization totake
trade restrictive measures when encountering bilateral
imbalances oftrade. Thenewversion chances thecondition
fortaking suchaction toimbalance ininternational
payments.
Article 18:
Theamendment deletes thewords "drastic orlarge" in
describing theamount ofincrease inimports asacondition
toinitiate domestic safeguard action. Thisistofollow the
useoflanguage intheSafeguard Agreement.
Theamendment alsoprovides alegalbasis fortheauthority
tosetrules toinitiate safeguard action ascontemplated inthe
Agreement onTextiles andClothing.
Article 20.1:
Thisisanewaddition totheLawwhich isintended to
provide thelegalbasis fortheauthority toregulate thepre-
shipment inspection activities offirms mandated byforeign
governments. Italsogives binding effects ofthedecisions
ofdispute resolution panel oftheWTO Preshipment
Inspection Agreement ontheprivate parties concerned,
namely, thepreshipment inspection company andthe
exporter.
TheCommodity Inspection Law
Articles 1,4,7,8,10,11,27,
28Theamendment exercise istoachieve thefollowing three
objectives:
(i) toincorporate international standards inthedomestic
standard-setting process, soastoensure that
domestic inspection standards follow international
trends, theinspection regime meets therequirements
oftheTBTAgreement,
(ii) toaccord national treatment toforeign products in
terms ofapplication ofsimplified procedures and
exemption which were previously available onlyto
domestic products,
(iii) toaccept andrecognize foreign inspection certificates
inorder tobeinlinewiththespirit oftheTBT
Agreement, particularly thatcalling formutual
recognition.WT/ACC/SPEC/TPKM/1
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Title ofLawandArticles
AmendedBackground ofAmendment
TheTrademark Law
Articles 4,5,23,25,34,37,61Theamendments tothisLawaretoachieve thefollowing
objectives:
(i) tobroaden thescope ofreciprocal granting ofthe
rightofpriority tocover thesituation where the
there isnoformal agreement buttherightofpriority
isgranted toChinese Taipei 'sowner oftrademark
through practice,
(ii) toinclude combination ofcolours inthegroup of
items thatarecapable ofconstituting atrademark so
astobeconsistent withArticle 15oftheTRIPS
Agreement,
(iii) toextend administrative protection towellknown
marks byproviding thatnoapplications maybefiled
forregistration ofatrademark design which is
identical withorsimilar toanother person 'swell-
known trademark ormark andlikely tocause the
public toform amistaken belief.
ThePatent Law
Articles 21,51,56,57,78,79,
80,82,88,91,105,109,117,
122Theamendments tothisLawaretoachieve thefollowing
objectives:
(i) todelete therequirement ofreciprocity inrespect of
thegranting ofpatents formicro-organisms,
extension ofpatent protection terms andthegranting
ofexclusive import rights soastobeconsistent with
Articles 3and4oftheTRIPS Agreement,
(ii) tolimitcompulsory licensing inrespect ofsemi-
conductor technology topublic non-commercial use
ortoremedying anti-competitive practice, soastobe
consistent withArticle 31(c) oftheTRIPS
Agreement,
(iii) toprovide patent owners andhis/her exclusive
licensees therighttorequest destruction orother
necessary disposition oftheinfringing goods, raw
materials orinstruments used, inconnection withthe
infringement, soastomeettherequirement of
Article 46oftheTRIPS Agreement which callsfor
giving thejudicial authority toorder disposition
outside thechannels ofcommerce,
(iv) toprovide forshifting theburden ofproof inrespect
ofprocess patents asrequired byArticle 34ofthe
TRIPS Agreement,
(v) toprovide forlonger termofprotection forindustrial
design, soastomeettheminimum requirement of
10years oftheTRIPS Agreement.
Company Law
Articles 373,383Theamendment istodelete thereciprocity requirement for
recognition offoreign companies andpublic placement of
foreign companies 'shares, soastofulfil Chinese Taipei 's
commitments under theGATS.WT/ACC/SPEC/TPKM/1
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Title ofLawandArticles
AmendedBackground ofAmendment
Customs Law
Articles 3.1,4.3,4.4,11.1, 12,
12.4, 12.6, 27,27.1, 46.1,
46.2, 47.2, 51Thissetofamendments istoachieve thefollowing
objectives:
(i) toprovide alegalbasis forapplication oftariff-
quotas negotiated byChinese Taipei assubstitution
measures forexisting restrictions,
(ii) toprovide foradutyofsecrecy oncustoms
personnel inrespect ofinformation submitted for
assessment ofimport duties, soastomeetthe
requirement ofArticle 10oftheAgreement on
Customs Valuation,
(iii) toprovide alegalbasis fortheestablishment ofthe
rules oforigin andtheauthority torequire the
submission ofthecertificates oforigin,
(iv) torevise thecustoms valuation rules according tothe
Agreement onCustoms Valuation,
(v) todelete theprovisions thatlimitthedrawback of
import duties toimports ofmachinery bycertain
high-tech orimportant companies whose products are
solely forexport,
(vi) torevise theprovision relating todetermination of
normal value forpurposes ofanti-dumping
administration soastomake itconsistent with
Article 2oftheAnti-dumping Agreement.
Statute forCommodity Tax
Articles 3,5,13,14,15,17,
18,32Theamendments aretoachieve thefollowing objectives:
(i) todelete rules relating totobacco andalcohol
products asthispartoftheLawwillbereplaced by
thenewTobacco andAlcohol TaxLaw, aseparate
body oflaw,
(ii) todelete allowance fordeduction of12percent
promotion expenses inthecalculation oftaxbase,
when goods arenotcirculated through exclusive
distributors, asareflection ofChinese Taipei 's
accession commitment,
(iii) toexclude harbour construction duesfrom thetax
baseforcommodity tax.
Business TaxLaw
Articles 16,20Theamendments aretoexclude harbour construction dues
from thetaxbaseofthebusiness taxandtorequire thatthe
business taxbaseshallinclude tobacco andalcohol taxas
provided inthenewTobacco andAlcohol TaxLaw.
TheSecurities andExchange
Law
Articles 54,95,128Article 54:Thisamendment istodelete therequirement that
thecertain business personnel ofsecurities firms beChinese
Taipei residents.
Article 95:Thisamendment istodelete thelimitation that
onlyonestock exchange canbeestablished inone
geographical area,WT/ACC/SPEC/TPKM/1
Page13
Title ofLawandArticles
AmendedBackground ofAmendment
Article 63:Thisamendment istodelete thelimitation that
onlyChinese Taipei residents canbeshareholders ofastock
exchange incompany form.
TheCertified Public Accountants
Law
Article 47Theamendment istodelete thereciprocity requirement for
foreigners totaketheexamination andbequalified as
certified public accountants inChinese Taipei.
Commercial PortLaw
Article 7Theamendment istosubject goods, circulated internally
through international commercial ports, tothelevyofthe
harbour construction duesinorder tobeconsistent withthe
principle ofnational treatment. Theamendment alsomakes
clear thattherevenue ofharbour construction duesshallbe
usedexclusively forthedevelopment ofcommercial harbours
soastoensure thelevytobeconsistent withArticle VIIIof
theGATT 1994 which regulates thelevyofservice fees.
Highway Law
Article 35Theamendment istoprovide legislative mandate tothe
administrative authority fortheopening ofthemarkets for
rental services ofpassenger cars, freight trucking and
container trucking asareflection ofChinese Taipei 's
commitment under theGATS.
Lawyers 'Law
Articles 20.1, 42,45,46,47.1
to47.14, 48,49,50,50.1Thissetofamendments isdirected:
(i) toprovide astatutory basis forallowing Chinese
Taipei lawyers tohireforeigners towork as
consultants orlegalassistants,
(ii) todelete thereciprocity requirement forforeigners to
takethebarexamination andbecome qualified to
practice Chinese Taipei law,
(iii) toprovide thestatutory basis andqualification
standards forallowing foreign lawyers topractice the
lawsoftheirhome countries andinternational lawin
Chinese Taipei.
Architects 'Law
Article 54Theamendment istodelete thereciprocity requirement for
foreigners totakethearchitects 'examination andbecome
qualified topractice inChinese Taipei.
Statute Governing Privileges and
Immunities oftheForeign
Missions andtheirPersonnel in
Chinese Taipei
Article 7-1Thisaddition totheLawistoextend privileges and
immunities toWTO related personnel forpurposes of
Article 8oftheMarrakesh Agreement Establishing the
World Trade Organization.
LawofPharmaceutical Affairs
Article 53Thisamendment istolifttherestriction onandprovide rules
forregulating repackaging ofimported pharmaceutical
products.
LawGoverning Food Sanitation
Article 17Theamendment istoprovide thelabelling offoodproducts
withanoption tousethedateofmanufacture ortheexpiry
dateasacodeforproduct identification.
ThePublication Law
Article 8Thisamendment istodelete reciprocity requirements inthe
granting ofpublishing rights toforeign nationals.WT/ACC/SPEC/TPKM/1
Page14
Title ofLawandArticles
AmendedBackground ofAmendment
Central Bank Act
Article 23Theamendment istoreplace current limitation onforeign
liabilities ofbanks operating inChinese Taipei withreserve
requirements.
Banking Law
Article 42Thisamendment istocompliment theamendment of
Article 23oftheCentral Bank Actinrespect oftheauthority
inthesetting ofthedeposit reserve ratioandreserves for
other liabilitiesWT/ACC/SPEC/TPKM/1
Page15
ATTACHMENT III
CHECKLIST OFACCESSION ISSUES
Revised Responses Provided on28February 1997
Thefollowing revised preliminary responses areprepared byChinese Taipei toaddress the
issues submitted totheWTO Secretariat byAustralia, Canada, theEuropean Communities, Japan,
NewZealand, Switzerland andtheUnited States forChinese Taipei 'scommitments foraccession to
WTO. Theprevious twoversions ofthisdocument arerespectively dated 26-27 July1994(Document
Spec(94)33) and21December 1994 (Documents Spec(95)1 andSpec(95)1/Corr.1).
1. Status
Itshould bemade clear thatChinese Taipei wishes toaccede totheWTO asadeveloped economy
withalltheobligations thisimplies.
Response:
With theexception setoutintheresponses tothefollowing issues oftheChecklist, Chinese
Taipei isprepared toaccede totheWTO asadeveloped economy, withalltheobligations thisimplies
foradeveloped economy comparable tothatofChinese Taipei.
2. WTO Multilateral Agreements
Acondition ofaccession willbethatChinese Taipei complies withallWTO agreements, including
TRIMs andtheSubsidies Agreement. Incaseofthelatter, Chinese Taipei 'scompliance will
encompass itsaerospace sector.
Response:
Chinese Taipei isprepared tocomply withallWTO agreements, including TRIMs andthe
Subsidies Agreement, except those setoutherein.
Chinese Taipei isnowprepared toremove itsprevious reservation ofafive-year transition
tobring itslocal content requirement fortheautomobile andmotorcycle industries inlinewiththe
TRIMs requirement. Chinese Taipei willbring itslocal content practices inlinewiththeTRIMs
requirement upon accession.
With respect totheSubsidies Agreement, Chinese Taipei isprepared toremove itscurrent
reservation foritsaerospace industry when itdecides toaccept thedisciplines oftheAgreement on
Trade inCivil Aircraft. Chinese Taipei hasnotfinalized itsdecision astowhether itwillaccept the
Civil Aircraft Agreement.WT/ACC/SPEC/TPKM/1
Page16
3. Transition Periods
Chinese Taipei should undertake toimplement theUruguay Round results without anytransition
periods forderogations.
Chinese Taipei should provide acomplete listing ofthetransition periods thatitisrequesting
inorder tobring itstrade regime intofullconformity withtheWTO. Acceptance oftheuseof
transition periods, thelength oftimeinvolved andthepaceofliberalization thereunder must be
approved bytheWorking Party.
Response:
Chinese Taipei isprepared toaccept thedisciplines oftheWTO upon itsaccession without
transition periods, except inthefollowing cases:
(a) Fishproducts:
Thecurrent import banonmackerel, carangid andsardine willbereplaced bytariffratequota
afteraccession.
Import quotas onsquid willberemoved byChinese Taipei uponitsWTO accession; imports
willthenbesubject onlytotariffs.
(b) Agricultural products:
Thecurrent import bansonriceandriceproducts willbereplaced byspecial treatment along
thelinesofAnnex 5oftheAgreement onAgriculture.
Therestoftheagricultural products currently subject toimport banswillbefreefrom such
restriction uponChinese Taipei 'saccession totheWTO. Some suchproducts willbesubject
tonosubstitution measures afteraccession. Some others willbeaccorded withWTO consistent
substitution measures suchasincreased tariffs ortariff quotas. Fordetails, please refer to
Annex I.
(c) Harbour Construction Dues:
Chinese Taipei willneedatransition period offiveyears foramendment oftheCommercial
Harbour Lawandreallocation ofbudget tobring itspractices relating toharbour construction
duesinlinewiththeWTO requirement.
(d) Mixing Requirement onCoalImports
Chinese Taipei requires atransition offiveyears tophase outthemixing requirement oncoal
imports.
(e) Amendment ofExisting Laws toReflect Chinese Taipei Accession Commitments
Although Chinese Taipei hasalready started thepreparation fornewlegislation andamendments
totheexisting lawsthatarerequired toreflect itsaccession commitments, ithastorequest
foratransitional period foritslegislative branch topassthese amendments.WT/ACC/SPEC/TPKM/1
Page17
Ingeneral, Chinese Taipei needs sixmonths aftertheaccession tocomplete thenecessary
legislative changes andanadditional period ofsixmonths tocomplete thecorresponding
regulatory chances (e.g.theimplementing regulations oftherelevant laws). Thetransition
period isparticularly needed when newlegislation hastobeintroduced (asopposed tothe
amendment ofexisting laws) tohonour Chinese Taipei 'sWTO commitments.
4. Compliance withArticle IoftheGeneral Agreement
(a) Area Restrictions: Area restrictions willhave tobeeliminated inamanner satisfactory
toWorking Party members asacondition ofaccession.
Response:
Allarearestrictions onimports ofagricultural andindustrial products willbeeliminated upon
Chinese Taipei 'saccession totheWTO. Protection forsome suchproducts willbeaccorded through
theuseofsubstitution measures. Forsubstitution measures, please refertoResponse 6(a).
(b) Aclear indication should begiven ofarearestriction asaheading orasub-heading with
aspecific, butnotnecessarily exhaustive, listoftheitems subject toit.
Response:
Please refertoabove Response 4(a).
(c) Bilateral Preference: Chinese Taipei should provide acomprehensive listing ofalltrade
preferences (tariff andnon-tariff measures) which itextends onabilateral basis; these
must bedealt withtothesatisfaction oftheWorking Party.
Response:
After theremoval ofarearestrictions therearenotradepreferences (tariff andnon-tariff) which
ChineseTaipeiextendsonabilateralbasis,exceptitsgovernmentprocurementpractice,whichisallowed
tohaveareciprocity requirement under theAgreement onGovernment Procurement.
5. Foreign Trade Act
Alltheprovisions intheForeign Trade Act,including theso-called "trade imbalance clause",
should bebrought intoconformity withWTO.
Response:
Chinese Taipei isprepared toamend theForeign Trade Acttorepeal the"trade imbalance
clause" withabalance ofpayments clause along thelineofArticle XIIoftheGATT 1994.WT/ACC/SPEC/TPKM/1
Page18
6. Licensing andother Non-Tariff Measures
(a)(i) Area Restriction
- Fruits
- Alcoholic beverages andcigarettes
- Passenger carsandsmall commercial vehicles
- Automobile chassis
- Motorcycles
- Government Procurement
Response:
Thearearestriction onalcoholic beverages andcigarettes waslifted on1September 1994.
Thearearestriction applying toimports offruit, passenger carsandsmall commercial vehicles,
automobile chassis andmotorcycles willbeeliminated upon Chinese Taipei 'saccession totheWTO.
- Fruits
Allarearestrictions onfruits willbelifted upon accession. Forapples, notonlythearea
restriction willbelifted, thecurrently applied tariff rateisalsotobereduced substantially.
Foryoung coconuts, bananas, pineapples, mangoes, andpersimmons1,thearearestriction will
besubstituted byaWTO-consistent measure, i.e.tariffratequota. Fortheother fruitcurrently
subject toarearestrictions, restriction willbelifted without anysubstitution measure. Please
refertoAnnex Ihereof.
- Passenger cars, small commercial vehicles andautomobile chassis
Arearestriction willbelifted uponaccession. Substitution measures willbetariff-rate quotas;
thediscussion ontheamount ofcountry quota tobedistributed toeachtrading partner concerned
hasnowbeenconcluded, withtheexception ofasmall number ofcountries.
- Motorcycles
Area restrictions onmotorcycle imports willbelifted upon accession.
- Government Procurement
Thearearestrictionongovernmentprocurementistobelifteduponaccession.However,certain
elements ofdiscrimination mayexistinChinese Taipei 'snegotiated package foraccession to
theGovernment Procurement Agreement, aspermitted bytheAgreement. Theissue willbe
dealtwithaccording totheterms ofaccession totheAgreement onGovernment Procurement.
1After theNegative Listwasimplemented, thearearestrictions onbananas, pineapples, mangoes,
andpersimmons werechanged intoimport bansinorder toreflect theactual situation oftheimport
regulation imposed thereon.WT/ACC/SPEC/TPKM/1
Page19
(ii) Discriminatory Treatment
- Automation equipment andpollution prevention equipment
Response:
Thisrefers tothesubsidy measures ofChinese Taipei inrelation tothepurchase ofautomation
equipment andpollution prevention equipment. Thesubsidy isgranted inaform oftaxcredit to
purchasersoftheequipment,withdifferenttaxcreditapplyingtodomesticallymanufacturedandimported
equipment. Chinese Taipei willnotify thispractice totheCommittee onSubsidies andCountervailing
Measures andphase itoutaccording totheSubsidies Agreement.
(iii) Discriminatory regulation onstandards
- Bigcommercial vehicles
Response:
Chinese Taipei believes thisissuearises fromitsrequirement ofproducing certificates ofweight
issued bycredible agencies, where suchagencies existintheexporting countries. Itisdeveloping
asystem thatcanprovide acarsafety certification system forgeneral application. When suchasystem
isinplace, thecurrent requirement oftheweight certificates willbeeliminated.
(iv) Local Content Requirement
- Automobiles andmotorcycles
Response:
Chinese Taipei willphase outthelocalcontent requirement forautomobiles andmotorcycles
upon itsaccession. Please alsorefertoResponse (iii)above.
(v) Counter purchase requirements
- automobiles
Response:
Chinese Taipei doesnotimpose anymandatory counter-purchase requirement. Thecurrent
practicetoencouragepurchaseoflocallymanufacturedcomponentsand/orpartsisaprizeofnomonetary
value granted toforeign investors inChinese Taipei whohave exported substantial amounts of
components and/or parts backtotheirhome countries.
(b) Chinese Taipei 'simport bans, quantitative restrictions andother non-tariff measures must
beeliminated orjustified under specific WTO provisions. WTO justifications formeasures
which Chinese Taipei proposes toretain willhavetobeagreed byWorking Party members.
Area restrictions foragricultural products andforautomobiles andmotorcycles must be
eliminated from thetimeofaccession.
Response:
Chinese Taipei isprepared toeliminate import bans, quantitative restrictions andothernon-tariff
measures which arenotjustifiable under specific WTO provisions, withtheexceptions ofthose that
havebeenreported to,andthetransition measures havebeenapproved by,theWorking Party. AreaWT/ACC/SPEC/TPKM/1
Page20
restrictions foragricultural andindustrial products willbeeliminated atthetimeofaccession.
Substitution measures willbeusedtoprovide thenecessary room foradjustment tothedomestic sectors.
Thesubstitution measures forthese agricultural products requiring special protection afterthelifting
ofnon-tariff measures aresetoutinAnnex Ihereof. Asmentioned, arearestrictions onautomobiles
willbereplaced byWTO-consistent tariff quotas.
(c) Allbansandrestrictions setoutinthe"Negative list"aswellasallrequirements forimport
licensing bymore thanoneregulatory entity, should beeliminated ormodified asrequired
inorder tobring Chinese Taipei 'sregime intofullconformity withtheWTO, including
theAgreement onImport Licensing Procedures.
Response:
Please refertoResponse (vi)(b). Inaddition, although theAgreement onImport Licensing
Procedures allows import licensing entities foreachimport tobemore thanone,itisChinese Taipei 's
intention towork towards asystem thattheimport licences foreachofitsimports shallnotrequire
more thanoneregulatory entity. Such agoal, however, maynotbeachieved intheshort run,due
tothetimerequired fortheinstitutional restructuring. Nevertheless, Chinese Taipei would liketo
inform theWorking Party thatitnotonlycommits tobring itsimport regime intofullconformity with
theAgreement onImport Licensing Procedures, butwillalsocontinue itsefforts toreview andsimplify
thescheme asmuch asitcan.
(d) Possibly remaining import licensing procedures onmedicine, other chemical andmedical
devices should notcause anyundue delay orrestriction toexports intoChinese Taipei.
Response:
Chinese Taipei willensure thatthepossibly remaining import licensing procedures onmedicine,
other chemicals andmedical equipment would notcause anyundue delay orrestriction toexports into
Chinese Taipei.
Asamatter offact,thedocuments required byChinese Taipei forimports oftheabove products
are"technicalregulation"innatureandaremoreappropriatelycalled"marketlicences."Therequirement
issetforprotection ofhealth andapplies todomestic products ofthesame kindaswell. Therefore,
itismore appropriate forthem toobserve theTBTAgreement instead oftheLicensing Agreement.
Theprocedures forassessment ofconformity bytheabove medicine, chemicals, andmedical
equipments totherelevant technical regulation inChinese Taipei areinlinewiththeTBTAgreement
requirements. Forexample, theaverage timerequired forgranting amarket licence tonewmedicine
inChinese Taipei iswellwithin therange ofthedeveloped economies. Chinese Taipei alsoaccepts
asabasisofitsdecision theresults oftheclinical testsconducted inthecountry oforigin oftheproduct
concerned. Therefore, onlyasmall-scale clinical trialisrequired tobeconducted locally.
Apartofcosmeticsproducts(25items)hasbeenexemptfromtherequirementofmarketlicences
since7August 1991. Thereafter, Chinese Taipei made afurther move. Allcosmetics except eyeliner,
mascara, andmedicated cosmetics haveevenbeenfreefrom thepre-market notification/registration
since 3May1995.WT/ACC/SPEC/TPKM/1
Page21
(e) Remaining import licensing procedures ofanykind, including, butnotlimited to,quotas,
non-automatic andautomatic licences andtariff-rate quotas, should beadministered in
fullconformity withtheAgreement onImport Licensing Procedures.
Response:
Chinese Taipei isprepared tocommit thatitsimport licensing procedures willbeadministered
infullconformity withtheAgreement onImport Licensing Procedures.
7. Operations oftheTTWMB andthemonopoly taxontobacco andwine
(a) Thetaxation system must respect theMFN principle
Response:
Theintention ofChinese Taipei istorespect fullytheMFN principle. However, given the
diversity oftobacco andwine products andthefeatures oftheproducts ofdifferent countries,
Chinese Taipei hasconsulted fullywithitstrading partners withaviewtodeveloping asystem that
isfairandequitable forsuppliers fromdifferent countries. After suchconsultations, Chinese Taipei
hasdecided totreatalldistilled spirits including brandy, whisky, rum, ginandvodka, andliqueurs
aslikeproducts andapply thetobacco andalcohol taxonthese products atthesame rate.
(b) While itcanbeaccepted thatrules ofadvertising oftobacco andalcohol products can
bemore restrictive thanthose forother products, theyshould notbeused toprotect a
domestic industry ordiscriminate (either dejureordefacto) against imported products.
Response:
Chinese Taipei hasnointention touseadvertising rulestodiscriminate against imported tobacco
andalcohol products. Theadvertising forcigarettes willbegoverned byanewlawentitled "Tobacco
Hazard Prevention Act"while there willbenorestriction onthemedia inwhich alcohol products can
beadvertised. Thecurrent limitation ofaone-year advertising period fornewalcohol products will
belifted. Theadvertising rules andtheimplementation thereof willtakeintoaccount international
practice andwillbeconsistent withnational treatment andmost-favoured-nation treatment.
Please refertoAnnex IIforacomparison oftheexisting andfuture advertising rules.
(c) Operation oftheTTWMB needs tobesignificantly altered prior toaccession toproduce
increasedtransparencyandconsistencywithGATT1994provisions.Inparticular,Chinese
Taipei must develop theinformation oncostofproduction requested earlier andindicate
howitintends toensure thatthisenterprise observes theprovisions ofGATT 1994, in
particular those ofArticles I,III,X,XI,XVI, andXVII.
Response:
Alteration oftheTTWMB 'soperation requires legislative actions, including theabolition of
theStatute providing rulesforitsorganization andcreating itsmonopoly position. Thebestsolution
tothose problems thatChinese Taipei 'strading partners haveinthetobacco andalcohol trade isto
expedite thereform andhavethereform plancarried outattheearliest possibility. Chinese Taipei
hassubmitted thedraftlegislation required forimplementing thereform plantothelegislative body.
After thereform, TTWMB willbeseparated fromtheGovernment andbecome anindependent businessWT/ACC/SPEC/TPKM/1
Page22
operation unit. Under suchcircumstances, itsoperation andcoststructure willbethesame asthose
ofother business enterprises, andthere willbenoproblem inallocating thecostthatshould beborne
bytheTTWMB within theGovernment. Transparency canthusbeassured. Thelegislative process,
establishment oftheaccompanying regulatory framework, andtheadministrative preparation for
implementation oftheplanareexpected tobecompleted within sixmonths afterChinese Taipei 's
accession, orevenearlier, ifthelawsarepassed bythelegislative branch before accession.
(d) Thefuture functioning oftheTTWMB shall provide equal opportunity toalltobacco
products exporters.
Response:
After thereform, TTWMB willhavenoregulatory function normonopoly inthedistribution
oftobacco andalcohol products. Therefore, ithasnoinfluence onthemarket access ofthetobacco
product exporters. Theequal opportunity willbeensured bytheregulator whoatthegovernment
level istheMinistry ofFinance, andbythelawstobemade togovern theproduction andtrade in
suchproducts, i.e.theTobacco andAlcohol Administration Lawwhich isnowpending atthelegislative
body.
(e) Ifportions ofthecurrent official monopoly aretobeliberalized, these plans must befully
reviewed fortheir trade impact prior toaccession.
Response:
Chinese Taipei hasprovided asummary ofthereform planintheposition paper itproduced
inJune1994, inparticular, Annex VIIthereof. Chinese Taipei welcomes comments by,andisprepared
toanswer anyspecific questions of,themembers oftheWorking Party. Through thisexercise, Chinese
Taipei believes thatitsfuture regime fortrade intobacco andalcohol products willbeimproved. The
reformplanhasbeensubstantiallymodifiedafterseveralroundsofconsultationswiththetradingpartners
concerned. Anup-dated version ofthereform planisprovided inAnnex IIhereto.
(f) IftheMonopoly Taxistobeeliminated infavour ofamore traditional tariff/tax system,
theWorking Party willneedtoexamine thebasis upon which domestic taxes willbelevied
andhownational treatment forimports ofalcoholic beverages andcigarettes istobe
ensured.
Response:
Thebasis upon which domestic taxwillbelevied hasbeenprovided totheWorking Party in
theJune1994PositionPaper,inparticular,AnnexVIIthereof.Sincethen,severalroundsofconsultation
withthetrading partners concerned havebeenheldandsubstantial modifications havebeenmade to
theinitially proposed taxregime. Chinese Taipei believes thatthecurrent version oftheproposal meets
therequirement ofnational treatment. Please refertoAnnex IIhereto.
8. Agriculture
(a) Chinese Taipei should commit itself toeliminating allimport quotas before accession.
Response:
Import quotas, nototherwise WTO justifiable, willbeeliminated upon accession.WT/ACC/SPEC/TPKM/1
Page23
(b) Chinese Taipei must eliminate non-tariff measures orjustify these indetail under specific
rules provisions andofferimproved market access through comprehensive tariff bindings .
Response:
ChineseTaipeihasprovidedjustificationsfornon-tariffmeasuresappliedtoagriculturalproducts
inadocument entitled "Explanation ofNTMs/Import Regulations" provided inAnnex IIofthe
20June1994Position Paper. Withrespect tothose measures forwhich justifications cannot befound,
Chinese Taipei setoutanoutline ofitsliberalization planinAnnex IIIandAnnex IVofits20June1994
Position Paper. Inthe26July1994andthe21December 1994versions oftheChecklist ofAccession
Issues, Chinese Taipei further setoutthethencurrent liberalization plan, which tookintoaccount the
bilateral negotiation result asofthen. Theliberalization planassetoutinAnnex Iofthisversion of
Checklist represents themost up-to-date position ofChinese Taipei. Itisnoteworthy thatthe
liberalization plans, provided inAnnex Ihereto, represents averysubstantial improvement from the
previous plansummarized inAnnexes IIIandIVofthe20June1994 Position Paper andtheearlier
versions ofthisChecklist.
Chinese Taipei isprepared tobindallthetarifflinescovered bytheAgreement onAgriculture
andallthefishproducts withcertain exceptions (notexceeding 1percentofitstotaltariff lines).
(c) Chinese Taipei mustthensubmit acomprehensive, complete, WTO-consistent agricultural
schedule, reflecting acomprehensive commitment tofullliberalization andincluding
commitments onexport subsidies andinternal supports.
Response:
Please refertoAnnex Iofthisdocument forliberalization ofexisting NTMs applied atthe
border. Chinese Taipei hasprovided information onitsinternal support andexport practices for
agricultural products inAnnex VIofthe20June1994 Position Paper andwillrefine theinformation
provided therein afterconsultation withtrading partners. Chinese Taipei isprepared toreduce such
supports andexport subsidies, ifany,according totheAgreement onAgriculture. Chinese Taipei
would appreciate theassistance oftheSecretariat andmembers oftheWorking Party inthepreparation
oftheagricultural schedule, which willbeformally submitted afteritsWTO accession.
(d) Chinese Taipei must reduce trade distorting domestic supports.
Response:
Please refertoResponse 8(c).
(e) Chinese Taipei must eliminate export subsidies upon accession.
Response:
Please refertoResponse 8(c).
(f) TheUruguay Round tarification andUruguay Round Special Safeguard wereprocedures
developed forthose countries which were already GATT contracting parties atthe
conclusion oftheRound andarenotapplicable tonewaccession.WT/ACC/SPEC/TPKM/1
Page24
Response:
AsChinese Taipei isundergoing radical liberalization ofitsagricultural trade, itneeds aspecial
safeguard mechanism alone thelinesoftheSpecial Safeguard System provided intheAgreement on
Agriculture, andtheunderstanding ofitsneedbytheWorking Party isappreciated. Chinese Taipei
requires Special Safeguards (SSG) forthefollowing items: peanuts, fresh pears (excluding European
pears), sugar, garlic bulbs, betelnuts,meatoffowls, liquid milk, animal offal, redbeans, driedshiitake,
fresh shaddocks, persimmons, dried daylilies andporkbellies.
(g) Beef: Chinese Taipei musteliminate anytariff distinctions based onproduct specifications.
Response:
Chinese Taipei isconsulting withitstrading partners ontheresolution ofthebeefissue ina
waythatisacceptable toalltheparties concerned. Chinese Taipei believes thattheconsultations held
sofarhaveproduced aworkable framework andthattheissue canbeeventually resolved.
(h) Fish: Chinese Taipei must eliminate itsquantitative orother non-tariff measures forfish
products. Provision totheWorking Party ofatransparency pathtofullliberalization
isnecessary.
Response:
Chinese Taipei hasdeveloped aplanforeliminating non-tariff border measures applied tofish
products, which issetoutinAnnex Ihereto. Chinese Taipei plans tofullyliberalize squid imports
bythetimeofaccession. Inthecaseofmackerel, carangid fishandsardine, thecurrent import control
willbereplaced bytariff-rate quotas, which willinturnbeeliminated sixyears afterChinese Taipei 's
accession.
9. Implementation oftheAgreement onSanitary andPhytosanitary Measures
Chinese Taipei needs todemonstrate thatitcanmeet therequirements oftheStandards andSPS
Agreements intheareaofmeasures taken forSPSreasons andjustify allSPSmeasures onacase-
by-case basis. Inparticular, Chinese Taipei needs toeliminate thefollowing practices:
- Quarantine controls areapplied toimported agricultural commodities without adequate
notification, consultation oraclear scientific basis fortheir application.
- Certain certificates nominally granted forhealth, sanitation, orquarantine reasons are,
infact,never granted, andtherefore actasdefacto bans onimportation.
- Inanumber ofcases, thedenial ofcertification seems arbitrary, nocriteria areavailable
totraders toindicate under whatconditions certificates canbeobtained, andnoexplanation
isgiven when thecertification isnotapproved.
Response:
Chinese Taipei hasheldbilateral SPSconsultations withmore than10countries onthebasis
oftheSPSAgreement. Substantial progress hasbeenmade. Itisgenerally feltthatsuchconsultationsWT/ACC/SPEC/TPKM/1
Page25
improve theunderstanding between thecountries andChinese Taipei andhelpresolve mostoftheissues
intheSPSarea, andtheprocess should continue inthefuture.
Inthefuture, Chinese Taipei willfollow the"Transparency ofSanitary andPhytosanitary
Regulations" setoutinAnnex BoftheSPSAgreement toensure transparency, inparticular, the
publication andnotification procedures provided therein.
- Newquarantine regulations applying toair-freighted fresh fruits impose excessive burdens
onexporters andactasabarrier totrade.
Response:
Chinese Taipei 'squarantine practices inrespect ofair-freighted fresh fruitisacommon SPS
measure employed bydeveloped countries. ItisChinese Taipei 'sunderstanding thatother countries
alsosendinspectors totheexporting countries toinspect air-freighted freshfruits before theshipment
forexport. Chinese Taipei heldaSPSmeeting withtheWorking Party member whoraised theSPS
issue related toair-freighted fresh fruitinOctober 1994 andsentSPSpersonnel toconduct on-site
inspections. Theissue wasresolved asaresult.
10. State-trading Enterprises
(a) Chinese Taipei should notify totheWorking Party theState-owned firms covered by
Article XIIoftheGATT 1994 andtheUnderstanding ontheArticle andbewilling to
explain howthose notnotified should beconsidered tobeconsistent withGATT provisions,
aswellasnotify other enterprises withspecial privileges, powers ormonopolies related
toimports orexports which have been granted bytheGovernment.
Response:
Chinese Taipei isprepared tonotify the8State enterprises under theMinistry ofEconomic
Affairs according toArticle XVII oftheGeneral Agreement. Initially, thereweretenStateenterprises
ofthiskindbutrecently twoofthem havebeenprivatized. These twoprivatized enterprises donot
enjoin import monopoly orotherprivileges granted bytheGovernment. Chinese Taipei willalsonotify
other State enterprises which fallwithin thedefinition ofArticle XVII.
Withrespect toTTWMB, itisapartofTaiwan Provincial Government andenjoys onlynominal
import monopoly inrespect oftobacco andalcohol products. Chinese Taipei willnotify TTWMB
under Article XVII, iftheWorking Party thinks itisappropriate todoso.However, afterthereform
ofthetobacco andwine monopoly system, TTWMB willbeabusiness operation unitindependent
from thegovernment without anytrading monopoly.
(b) Chinese Taipei must agree toadditional transparency intheoperation ofitsState trading
enterprises, particularly intheareaofagricultural products, e.g.bydemonstrating that
mark-ups onState-traded imports donotdiscriminate against imported goods vis-a-vis
domestically-produced goods, andintheareaofexport subsidies.
Response:
Mark-ups onState-traded imports havenever discriminated andwillnotdiscriminate against
imported goods. Thereselling price oftheproducts imported bythese statetrading enterprises hasWT/ACC/SPEC/TPKM/1
Page26
beenthesameorevenlower thantheproducts produced locally, andthesituation willremain thesame
inthefuture.
11. Industrial Subsidies
(a) Many oftheindustrial promotion plans thatChinese Taipei implements actasdisguised
subsidies. Chinese Taipei needs todiscuss these measures inlight oftheprovisions of
theAgreement onSubsidies andCountervailing Measures.
Response:
Chinese Taipei hasbeenparticipating inthemeetings oftheCommittee ontheAgreement on
Subsidies andCountervailing Measures asanobserver. Attherequest oftheCommittee onSCMs,
Chinese Taipei hassubmitted totheCommittee allrelevant lawsandregulations. Chinese Taipei is
preparing andwillformally submit afteraccession thenotification onitssubsidy practices according
toArticles 25and28oftheAgreement onSCMs.
(b) There canbenoexemption, transitional orotherwise, from subsidies disciplines ofany
sector orproduct (e.g.aerospace industry).
Response:
Chinese Taipei 'sreservation withrespect toitsaerospace industry willberemoved, when it
decides toaccept thediscipline oftheAgreement onTrade inCivil Aircraft.
12. Elimination oralteration ofHarbour Construction Duestomeetthecriteria ofArticle VIII
This surcharge of0.5percentadvalorem isarevenue charge tofund harbour up-keep and
expansion based onimport taxation, notacharge foraspecific service rendered. Alteration of
thistaxtobring itintoconformity withGATT 1994must beaccomplished inadvance ofaccession.
Response:
Chinese Taipei intends tophase outtheinconsistent practice associated withthelevywithin
aperiod offiveyears. Thefive-year transition isnecessary toamend therelevant lawsandreallocate
budget, taking intoaccount thesubstantial resulting reduction ofgovernment revenue.
13. Application oftheCommodity Tax
(a) Thecurrent application ofthistaxviolates Article IIIoftheGATT 1994 byproviding
fora12percentvaluation uplift forimports prior toapplying thetax.
Response:
Chinese Taipei isprepared toamend itslawstoremove thisallowance of12percentfor
promotional expenses, when goods arenotcirculated through exclusive distributors.
(b) Thepoint ofsaleatwhich thetaxisapplied (ex-factory) isnotcomparable tothepoint
ofsaleofimports (duty-paid c.i.f.).WT/ACC/SPEC/TPKM/1
Page27
Response:
Chinese Taipei isalsoprepared toamend itslawstouseselling prices asthebaseforlevying
thecommodity tax.
14. Export Processing Zones
(a) Theincentives provided forinvestment inthese zones appear tobeincompatible withthe
Subsidies Agreement.
(b) Chinese Taipei should ensure thattheimported component ofsales from thezones into
Chinese Taipei commerce willbeassessed normal taxes, tariffs, andother border measures.
(c) TheWorking Party should besatisfied that theregime within theEPZs ensures
GATT/WTO consistent treatment ofgoods, services andintellectual property.
Response:
Chinese Taipei hasnowdecided tolevytariffs onEPZproducts entering thedomestic market
onthebasis oftheirex-factory prices minus value-added asaresult ofmanufacturing orprocessing
activities intheEPZs. Theformula tobeusedincalculating thevalue added istotakeintoaccount
therelevant practices ofother countries. Thisshould alleviate theconcerns ofsome contracting parties
thatthecurrent system mayserve asadisincentive forEPZproducts entering thedomestic market.
However, Chinese Taipei hassubmitted proposed amendments totheStatute Governing theEPZs to
thelegislative bodytoremove theratiorestriction ontheEPZproducts entering thedomestic market.
Therestriction inactual practice isnolonger enforced, although theamendment process hasnotbeen
completed. Thelegislative body hascompleted itsfirstreading oftheproposed amendment.
Other practices related toEPZs aregenerally WTO consistent, except forexemption ofimport
duties forimported machinery usedbyEPZfirms. However, suchexemption isnotconditional upon
thefirms'products being exported andtherefore doesnotconstitute export subsidy. Thepractice is
ofminimal trade effects; itseffects arefarbelow thethreshold of5percentforactionable subsidies
under theSubsidies Agreement.
15. Special Foreign Exchange Agreement withtheGATT
Chinese Taipei must conclude anagreement asprovided forinArticle XVoftheGATT 1994.
Response:
Chinese Taipei submitted adraftofthespecial exchange agreement andbriefed totheWorking
Party ofthecontents ofthedraftagreement inthe14December 1995Informal Working Party meeting.
16. Customs Valuation Code
Chinese Taipei needs toaddress certain inconsistencies initslawsvis-à-vis provisions ofthecode.
Response:
Although Chinese Taipei 'sCustoms LawinitsArticle 12provides foruseofdutypaying value
list(pre-determined value ofimported products) atthediscretion oftheExecutive Yuan, theExecutiveWT/ACC/SPEC/TPKM/1
Page28
Yuan has,byanadministrative order, eliminated theuseofsuchpre-determined value forassessing
import duties. TheMinistry ofFinance hasproposed anamendment totheCustoms Lawtoremove
thediscretionary power granted totheExecutive Branch, andispreparing arevision oftherelevant
implementing regulations.
Theproposed amendments related tocustoms valuation areprepared according totheWTO
Agreement onCustoms Valuation andsummarized inthe"Background Summary oftheSeries ofLaw
Amendments Related totheWTO Accession" hereto.
17. Standards
Chinese Taipei needs toreform itsstandards regime tobring itintoconformity withtheAgreement
onTechnical Barriers toTrade, particularly intheareaofnotification procedures.
Response:
Chinese Taipei isnowreviewing andrevising itsstandards withaviewtobringing theminto
conformity withtheTBTAgreement. Ithasalsoincorporated notification procedures intothedraft
amendments toitsrelevant laws.
Amendments totheexisting lawinorder tobring therelevant regime intoconformity with
theAgreement onTechnical Barriers toTrade havebeenproposed tothelegislative body andare
summarized inthe"Background Summary oftheSeries ofLawAmendments Related totheWTO
Accession" hereto.
18. TRIMs e.g.,those applied totheproduction ofautomobiles andmotorcycles
Chinese Taipei needs tonotify itsTRIMs andspecify itsschedule fortheelimination (e.g.the
localcontentprovisionsonmotorvehiclesandmixingrequirementsforcoalandcementproduction).
Response:
Chinese Taipei isprepared tophase outitsexisting localcontent requirement applied tothe
production ofautomobiles andmotorcycles upon itsaccession.
Themixing requirement forcoalisimposed onimporters ofcoal. Importers arerequired to
purchase localcoalatleastinanamount equal toacertain percentage ofthequantity ofcoaltheywish
toimport. Theprescribed percentage isdeminimis. Therequirement inChinese Taipei 'sviewis
anArticle IIIissue rather thanaTRIMs issue andtherefore neednotbenotified under theTRIMS.
Chinese Taipei hasdecided tophase outthemixing requirement inaperiod offiveyears after
itsaccession.
There isnomixing requirement forcement production.WT/ACC/SPEC/TPKM/1
Page29
19. TRIPS implementation from thedateofaccession
Chinese Taipei should implement theTRIPS Agreement atthetimeofitsaccession.
Response:
Chinese Taipei isprepared toimplement theTRIPS atthetimeofitsaccession.
20. Services, including financial andinsurance services
(a) Chinese Taipei must undertake asubstantial package ofinitial commitments initsServices
Schedule withminimum exemption from MFN
Response:
Chinese Taipei hasprepared adraftschedule ofinitial commitments thatcovers almost allthe
service sectors (butnotnecessarily allthesub-sectors) under theServices Sectoral Classification List
(MTN.GNS/W/120 of10July1991). Subsequent toDecember 1994, Chinese Taipei hascirculated
twoup-dated versions ofthedraftservices schedule, inMarch 1995andMay1996 respectively. All
MFN exemptions, except one,havebeenremoved from itsdraftschedule ofinitial commitments.
(b) Nodiscrimination shallbeapplied byChinese Taipei between companies providing services
ofcomparable type.
Response:
After careful review ofitsdraftschedule, Chinese Taipei finds noelement ofdiscrimination
between companies providing services ofcomparable type. There maybecases where different
requirements areimposed onforeign service providers forreasons ofprudential supervision orofthe
difference inthebasiclegalsystems between Chinese Taipei andthecountry where theservice provider
isincorporated. None ofthese requirements istodiscriminate against foreign service providers.
21. Adherence totheAgreement onTrade inCivil Aircraft upon accession
Given theadvanced stateoftheindustrial development ofChinese Taipei andtheplans already
made public toexpand theaircraft andcomponents industry, theparticipation ofChinese Taipei
intheAircraft Agreement isaprerequisite foraccession.
Response:
Chinese Taipei hasnotfinalized itsdecision onwhether andunder whatconditions itwilladhere
totheAgreement onTrade inCivil Aircraft.
22. Adherence totheGovernment Procurement Code atthetimeofitsaccession
Given theimportance ofofficial procurement inChinese Taipei, e.g.areported current annual
budget ofapproximately US$22 billion, itisimportant forChinese Taipei toadopt Code procedures
andbegin aprocess ofopening itsprocurement.WT/ACC/SPEC/TPKM/1
Page30
Response:
Chinese Taipei fileditsapplication foraccession totheGovernment Procurement Code in
June1994, andsubmitted itsfirstofferinMarch 1995andarevised oneinFebruary 1996. Afurther
revised offerwasjustsubmitted inFebruary 1997 inorder tocomplete itsnegotiations foraccession
totheAgreement onGovernment Procurement. Inrecent years, Chinese Taipei hasbeenundertaking
aseries ofreforms onitsgovernment procurement regime. These reforms include thepublication
ofagovernment procurement gazette fordissemination oftender andaward notices, theextension of
minimum time-limits fortendering, andthepreparation oftechnical specifications fortendering ina
reasonableway.AdraftGovernmentProcurementLawconformingtotherequirementsoftheAgreement
onGovernment Procurement wassubmitted inDecember 1996tothelegislative body forreviewing.
23. Tariffs
(a) Bindings: Chinese Taipei should binditsentire tariff schedule upon accession. Thisshould
include tariff rateceilings forindustrial andagricultural products atlevels appropriate
toChinese Taipei 'sstatus asadeveloped economy.
Response:
Chinese Taipei isprepared tobindallitstariff lineswiththeexception ofasmall fraction of
products (notexceeding 1percentofthetotaltariff lines).
(b) Chinese Taipei must beprepared tocutitstariffs (andbindthose rates) atthetimeof
accession rather than"backloading" most cutsoverstages going wellbeyond thetimeof
accession.
Response:
Inthecaseofagricultural products, thetariffcutsatthetimeofaccession represent two-thirds
ofthetotalcuts. Thisisafrontloading rather thanbackloading ofthetariff cuts. Fortariff reduction
overstages, Chinese Taipei inprinciple willcarry itoutinequal annual instalments. There arevery
fewcases ofbackloading withrespect toindustrial tariffs; these areusually intended tobalance the
needtoprotect domestic industries indifficulty andtoaccommodate trading partners 'requests fordeeper
cuts.Instances ofthiskindhavebeendiscussed withinterested trading partners inbilateral negotiations,
andinChinese Taipei 'sview, havebeenlargely resolved withsuchtrading partners.
(c) Tariff System: Chinese Taipei should adopt anadvalorem approach throughout itstariff
(asopposed tospecific tariffs oramixed system) inorder toincrease predictability and
transparency ofitstariff regime.
Response:
Advalorem tariffs areadopted for98percentofChinese Taipei 'starifflines. Infuture reviews
ofitstariff system, Chinese Taipei willtakeintoaccount comments oftheWorking Party members.
(d) Phased Tariff Reductions: Theaccountability ofphased tariff reductions, asproposed
byChinese Taipei, isafurther tariff issue toberesolved between Chinese Taipei and
Working Party members.WT/ACC/SPEC/TPKM/1
Page31
Response:
Inorder togiveitsindustries sufficient timetomake theadjustment, Chinese Taipei would
appreciate theWorking Party'sunderstanding ofitsneedforaphased tariffreduction schedule. Chinese
Taipei hasconducted bilateral negotiations with26WTO Members ontariffs andnon-tariff measures.
Thephased tariff reduction asproposed byChinese Taipei hasbeenreviewed byanddiscussed with
suchMembers. Chinese Taipei believes thattheissuehasbeenlargely resolved tothemutual satisfaction
ofbothsides.
24. Anti-Dumping andCountervailing Laws
Chinese Taipei needs toaddress certain apparent inconsistencies initslawsvis-à-vis provisions
ofthese Agreements.
Response:
Chinese Taipei willrevise itsimplementing regulations foranti-dumping andcountervailing
measures andcomplete therevision atthetimeofitsaccession totheWTO.WT/ACC/SPEC/TPKM/1
Page32
ANNEX I
toAttachment III-Checklist ofAccession Issues
Agriculture Liberalization Plan
1. ANNEX 5totheAgreement onAgriculture:
Serial
NumberProduct Current
Import
RegulationCurrent
RateMinimum Access
(Percentage of
Domestic
Consumption)Out-of-Quota Tariff
Rate
lst.Year 8th.Year lst.Year 8th.Year
1 Rice and
Rice Products111 0%
17%
20%
30%
40%
45%
50%Annex 5
FormulaAnnex 5
FormulaAnnex 5
FormulaAnnex 5
Formula
2. TARIFF RATE QUOTA (TRQ):
Serial
NumberProduct Current
Import
RegulationCurrent
RateQuota
(Percentage of
Domestic
Consumption)Out-of-Quota Tariff
Rate
(Percentage of
Tariff Equivalent)
Year 1Year 6 Year 1 Year 6
1 Peanuts import ban
orconsent
letter50%
40%
35%
30%
15%
10%
5%4% 8% 100% 85%
2 Fresh Pears (excl.
European Pears)import ban 50% 4% 8% 100% 85%
3 Sugar consent
letter25%
35%26% 41% 90% 76%
4 DryGarlic Bulbs import ban 40%
45%4.2% 8% 80% 68%
5 Betel Nuts import ban 35% 4% 8% 100% 85%
6 Meat ofFowls import ban 40%
20%4% 8% 100% 85%
7 Liquid Milk* import ban 20%
32.5%
35%
40%4.5% 9% 80% 68%WT/ACC/SPEC/TPKM/1
Page33
Serial
NumberProduct Current
Import
RegulationCurrent
RateQuota
(Percentage of
Domestic
Consumption)Out-of-Quota Tariff
Rate
(Percentage of
Tariff Equivalent)
Year 1Year 6 Year 1 Year 6
8 Animal Offal import ban 35%
50%4% 8% 100% 85%
9 Mackerel import ban 50%
NT$14/KG
or45%
42.5%
40%
37.5%
NT$11/KG
or37.5%
37.5%15% 25% 100% 85%
10 RedBeans import ban 20%
40%
45%13% 21% 80% 68%
11 DryShiitake
(Forest
Mushroom)import ban 50% or
NT$221/KG4% 10% 80% 68%
12 Shaddocks import ban 50% 4% 10% 70% 60%
13 DryLongans and
Longan Pulpimport ban 30% 10% 30% 80% 68%
14 Young Coconuts quota to3
countries
only50% or
NT3/KG17.6% 22% 50% 43%
15 Bananas import ban 25% 4% 10% 70% 60%
16 Pineapples import ban 30% 4% 10% 50% 43%
17 Mangoes import ban 50% 4% 10% 80% 68%
18 Persimmons** import ban 50% 4% 10% 80% 68%
19 Carangid import ban 40%
42.5%
50%4% 10% 80% 68%
20 Sardines import ban 37.5%
42.5%
40%
42.5% or
NT$81/KG
50%15% 30% 100% 85%
21 DryDayLilies import ban 45% 4% 10% 80% 68%
* Importation ofsweetened condensed milk willbeliberalized upon accession.
** After 6years ofimplementation period, atariff-only regime willbeinplace withtheratereduced to
35percent.WT/ACC/SPEC/TPKM/1
Page34
3. TOBELIBERALIZED AFTER RAISING TARIFF RATES UPON ACCESSION:
Serial Number Product Current
Import
RegulationCurrent Rate Accession Rate
Year 1 Year 6
1 Pork Bellies import ban 15% NT$18/KG
(60%)NT$15/KG
(50%)
2 Fresh Longans import ban 10% 20% 17%
3 Lychees import ban 10% 20% 17%
4. TOBELIBERALIZED UPON ACCESSION:
Serial Number Product Current Import Regulation
1 Wheat Flour Already liberalized
2 Meslin Flour Already liberalized
3 Potatoes Import ban
4 Oranges Area restriction
5 Limes andLemons Area restriction
6 Grapefruits Area restriction
7 Grapes Area restriction
8 Peaches Area restriction
9 Plums Area restriction
10 Apples Area restriction
11 Papayas Import ban
12 Other Mandarins Area restriction
13 Other Citrus Fruits Import ban
14 Ducks, cutintopieces Import ban
15 Whole Ducks Area restriction
16 Turkeys, cutintopieces Area restriction
17 Guavas Import ban
18 Squid Import banWT/ACC/SPEC/TPKM/1
Page35
ANNEX II
toAttachment III-Checklist ofAccession Issues
Revised Summary oftheTobacco andAlcohol Reform Plan
PartA
I. Classification ofTobacco Products andAlcoholic Beverages forthePurposes ofInternal Taxes
(Tobacco andAlcohol Taxes)
1. Tobacco Products
Tobacco products areclassified intocigarettes, pipetobacco, cigars andothers. Cigarettes
aresubject toaspecific taxofxdollars per1,000 sticks; pipetobacco, cigars andothers are
subject toaspecific taxofxdollars perkilogram.
2. Alcohol Products
Alcoholproductsareclassifiedintobrewedalcoholicbeverages(includingbeerandotherbrewed
alcoholicbeverages),distilledalcoholbeverages(includingwhisky,brandy,rum,ginandvodka),
reprocessed alcohol beverages, ricewine("MiChu"), cooking wine, other alcoholic beverages
andalcohol, andaretobetaxed asfollows:
(a) Brewed Alcoholic Beverages
(i) Beer: specific taxofxdollars perlitre.
(ii) Other Brewed Alcoholic Beverages:
specific taxofxdollars perlitreperdegree ofalcohol content.
(b) Distilled Alcoholic Beverages (including, among others, whisky, brandy, rum, gin,
vodka):
specific taxofxdollars 1perlitre.
(c) Reprocessed Alcoholic Beverages:
Specific taxofxdollars perlitreofalcohol contents exceeding specific 20percent
byvolume, specific taxofxdollars perlitreperdegree ofalcohol contents lessthan
20percentbyvolume.
(d) RiceWine ("Mi Chu")
specific taxofxdollars perlitre.
(e) Cooking Wine:
specific taxofxdollars perlitre.WT/ACC/SPEC/TPKM/1
Page36
(f) Other Alcoholic Beverages:
specific taxofxdollars perlitreperdegree ofalcohol content.
(g) Alcohol:
specific taxofxdollars perlitre.
II. Thetobacco andalcohol taxwillbeapplied inatransparent andnon-discriminatory manner
withequal treatment accorded toimported anddomestic products.
III. Thesetting oftheratesoftariffs andtaxes hastaken intoaccount thecurrent monopoly tax
level, Uruguay Round "zero forzero" offers andthepractices ofcomparable economies oftheWTO
Members. Thetariff rateswillbeincorporated intoChinese Taipei 'smarket access schedules.
PartB
I. Production andSale
1. Production
(a) Planting andpurchase oftobacco leaves aretobearranged between themanufacturers and
tobacco farmers bycontracts. Production ofcigarettes willnotbeopentotheprivate sector
within three years afterthereform.
(b) Production ofAlcohol Products:
Themanufacturing ofmachinery andequipment foralcohol andtobacco production, printing
oftrademarks andpackaging paper arenotregulated intheTobacco andAlcohol Administration
Law. Production ofalcohol products willbeopentotheprivate sector instages within three
years aftertheimplementation ofthenewsystem.
Chinese Taipei plans toliberalize production/manufacture ofwinewithin oneyearafterthe
implementation ofthenewsystem; liberalization ofspirits andbeerproduction willbeeffected
twoyears aftertheimplementation ofthenewsystem. Itistheintention ofChinese Taipei
toattain fullliberalization within three years.
(c) Qualification forengaging intheproduction ofalcohol andtobacco products:
(i) permits from theauthority willberequired. Theapplicant mustfulfil thefollowing
requirements: minimum capital, organization form(companies limited byshares only),
acquiring afactory licence andnorecord ofcriminal offence ortaxdefault;
(ii) withtheimplementation ofthenewsystem, tobacco andalcohol manufacturers legally
established willbepermitted toimport alcohol andtobacco products inbulkfor
repackaging provided, however, suchmanufacturers shallhaveauthorization fromthe
original manufacturers oftheimported products andshallbeabletoproduce therelevant
certificates oforigin;
(iii) tobacco andalcohol manufacturers maycontract outoraccept contract manufacturing,
subject totheapproval ofthecompetent authority.WT/ACC/SPEC/TPKM/1
Page37
2. Importation andWholesale
Alicence isrequired foranimporter andawholesaler ofalcohol andtobacco products; the
licence bearer cannothaveprior record oftaxdefault orcriminal offence within aprescribed time.
Chinese Taipei hasincorporated services relating tothedistribution oftobacco andalcohol products
initsdraftschedule ofspecific commitments ontrade inservices.
3. Thelegal andregulatory framework forproduction anddistribution ofalcohol andtobacco
products willnotimpose particular restriction onforeign firms engaging inrelated commercial activities.
Thetimetableandrulesforliberalizing theproduction/manufacture ofparticular tobacco andalcohol
products willapply equally toforeign aswellasdomestic private firms.
II. Product Labelling
Thelabelling requirement isstipulated under theTobacco andAlcohol Administration Law.
Allalcohol products willberequired tobelabelled withthewarning "excessive drinking endangers
health".
III. Product Inspection
Product inspection willbegoverned bythestandards established bythehealth authority and
administered bythatauthority accordingly.
IV. Advertising andPromotion
Advertising andpromotion fortobacco products aresubject totheTobacco Hazards Prevention
Act(draft). Chinese Taipei hastoalarge extent lifted restrictions andallowed advertising ofbeer,
wineandother alcohol beverages onradio andtelevision during aspecified timeperiod oftheday.
After implementation oftheTobacco andAlcohol Administration Law, advertising ofalcohol products
inallmedia willbepermitted, subject however toregulation inrelation tothecontent andtiming of
theadvertising. Alladvertising regulation willbeconsistent withtheprinciple ofnational treatment.
Theadvertisement shallnothaveanyofthefollowing situations:
- running counter topublic order andgood moral, andpublic interest,
- encouraging andpromoting drinking,
- causing harm toadolescents, pregnant women 'smental orphysical well-being,
- containing forged, exaggerated, orfalsefactsormisleading contents,
- other situations prohibited bythecentral competent authority through public notice.
V. Trading Order
Trading order willbemaintained according totheFairTrade Lawandother relevant laws
andregulations.
VI. Inspection onBusiness Operation andInterception ofContraband
Chinese Taipei hasincorporated penal provisions intothedraft Tobacco andAlcohol
Administration Lawtoserve asthelegalbasis forenhanced efforts toprotect against smuggled and
counterfeit products.
TheAlcohol andTobacco Administration Agency willbegiven theauthority tocarry out
inspection onthebusiness operations ofmanufacturers andtraders.WT/ACC/SPEC/TPKM/1
Page38
Inspection andinterception ofcontraband willbesubject totheAlcohol andTobacco
Administration Law(draft), Alcohol andTobacco TaxLaw(draft), Statute forAnti-smuggling Law,
Statute forInterception bytheCustoms andother relevant lawsandregulation.
VII. Disposal ofContraband
Under thenewadministration system, contraband andcounterfeit products willbedestroyed
orotherwise disposed of,taking intoaccount international practices.
VIII. Penalties
Violation oftheTobacco andAlcohol Administration Lawwillbesubject toadministrative
orcriminal penalties, depending onthetypeorseriousness oftheviolation.
Comparison ofthePresent andtheFuture Regulations onAdvertisement
andPromotions forTobacco andAlcohol
Classification Present Regulations Future Regulations
Wine, Beer Spirits Tobacco Alcohol Tobacco
Newspaper allowed prohibited prohibited allowed prohibited
Magazine allowed allowed, but
brand new
products may
advertise fora
period ofthe
firstoneyearallowed, but
each
manufacturer
maybelimited
to120
advertising
placements in
amagazine
eachcalendar
yearallowed prohibited
Cable
Televisionallowed from 9:00p.m.to
6:00a.m.nextdayprohibited allowed from
9:30p.m.to
6:00a.m.next
dayprohibited
Television
Broadcastingallowed from 9:00p.m.to
6:00a.m.nextdayprohibited allowed from
9:30p.m.to
6:00a.m.next
dayprohibited
Sponsorship
forSports and
Cultural
Activitiesprohibited prohibited prohibited allowed prohibitedWT/ACC/SPEC/TPKM/1
Page39
Classification Present Regulations Future Regulations
Wine, Beer Spirits Tobacco Alcohol Tobacco
Special
Promotionsallowed, but
importers may
berequired to
provide
30-day prior
notification to
theTTWMB
oftheactivity
orevent
plannedprohibited allowed, but
importers may
berequired to
provide
30-day prior
notification to
theTTWMB
oftheactivity
orevent
plannedallowed prohibited
Others according toitems 1,2,5 and6ofArticle 6of
the1986 Bilateral Agreement withtheU.S.allowed according to
Article 10of
thedraft
Tobacco
Hazards
Prevention
Act