RESTRICTED  
  
WT/TPR/G/377  
18 July 2018  
(18-4496) Page: 1/16 
Trade Policy Review Body   Original: English  
 
TRADE POLICY REVIEW  
REPORT BY  
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN , PENGHU , KINMEN AND MATSU 
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  is attached.  
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on  the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu . WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  Conten ts 
1   INTRODUCTION  ................................ ................................ ................................ ..........  3 
2   ECONOMIC AND TRADE E NVIRONMENT  ................................ ................................ ....... 3 
2.1   Macroeconomic Environment  ................................ ................................ .........................  3 
2.2   Developments in External Trade  ................................ ................................ ....................  4 
2.3   Development of Foreign Investment  ................................ ................................ ..............  5 
3   DEVELOPMENT OF TRADE  AND INVESTMENT POLIC IES................................ ...............  6 
3.1   Macroeconomic Policy  ................................ ................................ ................................ .. 6 
3.2   Trade and Investment Policy  ................................ ................................ .........................  6 
3.3   Industrial Policy and Reform  ................................ ................................ .........................  8 
3.4   Energy Policy  ................................ ................................ ................................ ..............  9 
3.5   Labor Reform  ................................ ................................ ................................ ..............  9 
3.6   The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu in the Global 
Trading System  ................................ ................................ ................................ ................. 10 
3.6.1    Participating in the multilateral trade regime  ................................ ............................... 10 
3.6.2    Using the WTO dispute settlement mechanism to maintain trade rules  ........................... 10 
3.6.3    Promoting trade an d development, and providing assistance and cooperation  ................. 10 
3.7   Regulatory Reform and Liberalization  ................................ ................................ ............ 11 
3.8   Bilateral and Multilateral Economic Integration  ................................ ............................... 14 
3.9   Digital Economy  ................................ ................................ ................................ ......... 15 
4   CONCLUSION AND FUTURE OUTLOOK  ................................ ................................ ....... 16 
Tables  
 
Table 2.1 Key economic indicators of national accounts, 2014 –17 ................................ .............  4 
Table 2.2 Trade statistics, 2014 –17 ................................ ................................ .......................  4 
Table 2.3 Key export and import products of the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu, 2014 –17 ................................ ................................ ....................  5 
Table 2.4 International investment statistics, 2010 -13 and 2014 –17 ................................ .........  6 
  WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  1  INTRODUCTION  
1.1.  As a key link in global supply chains, the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu has responded to the global economic downturn in the wake of the last financial 
crisis by continuing our efforts to liberalize trade and enhance trade facilitation measures between 
2014 and 201 7. Despite these efforts, slow global recovery has led to insufficient global market 
demand, and this was reflected in the decline of trade growth in both 2015 and 2016. However, 
trade grew significantly in 2017.  
1.2.  In order to revitalize the economy, the Sep arate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu actively implemented the Four -Year National Development Plan (2013 -2016). 
This plan's main objective was to stimulate economic momentum by accelerating systemic 
adjustments, relaxing regulations, hastening various national structural reforms, and increasing 
the potential for economic growth. Subsequently, key policies, namely the Four -Year National 
Development Plan (2017 -2020), the New Southbound Policy and the "5+2" Industrial Innovation 
Plan, wer e also formulated and are being implemented to accelerate various structural reforms and 
advance the transformation of economic structures. With the sustained implementation of these 
plans, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  expects to continue 
to improve its internal economic structures and increase its potential for economic growth.  
1.3.  Furthermore, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu has 
worked to improve the domestic regulatory environment for d oing business during the review 
period. According to the World Bank's Doing Business report, the ease of doing business ranking 
for the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu improved from 
19th place in 2014 to 11th place in 2016; i n 2017, however, its ranking dropped to 15th place, 
revealing that there is still some room to improve the domestic business environment. Regarding 
regulatory reform, the government has also stressed the importance of increasing the 
transparency of the leg al framework, to further improve the domestic environment for doing 
business.  
1.4.  During the review period, one key legislation milestone was the Financial Technology 
Development and Innovative Experimentation Act (the Act), which came into force on 
30 April 2018. This Act was enacted to establish a Fintech innovative experimentation mechanism 
and create a safe environment for Fintech R&D and pilot trials of the financial industry and related 
sectors, while maintaining financial market order and protecting cons umers' rights. This Act is 
applicable to experimenters that use innovative methods to engage in any financial services 
business requiring approval from the Financial Supervisory Commission (FSC). Natural persons, 
proprietary businesses, partnerships, and l egal persons, as well as non -residents through an 
agent, all may apply to conduct innovative experiments. The government thus hopes to further 
enhance innovation in the financial services sector.  
1.5.  Despite the economic challenges faced by many WTO Members i n the last four years, the 
multilateral trading system has once again proven to be a valuable mechanism underpinning 
opportunities for growth. As such, during the review period, the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu has continu ed to participate actively in the regular work of the 
WTO and has been closely following the development of economic cooperation and integration at 
the regional level. As a major beneficiary of economic globalization, the Separate Customs 
Territory of Taiw an, Penghu, Kinmen and Matsu is always willing and ready to contribute to 
Aid-for-Trade and other assistance initiatives by making financial and other forms of contributions 
and assistance to developing country members, as well as to related WTO agencies.  
2  ECONOMIC AND TRADE E NVIRONMENT  
2.1  Macroeconomic Environment  
2.1.  While the global economy slowly recovered between 2014 and 2017, uncertainties are on the 
rise, reflecting the fragility of the recovery. The Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu is fully aware that potential risk factors could still inhibit or undermine the 
momentum of global economic recovery, including trade policy measures, geopolitical tensions and 
natural disasters.  WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  2.2.  As shown in Table 2.1, the real GDP growth rate of the  Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu was 2.86% in 2017, which was significantly higher than the 
previous year (1.41%), indicating the resilience of the economy. At the same time, the investment 
expenditures of some domestic manuf acturers slowed down, resulting in a modest 0.11% decrease 
in the gross fixed capital formation for the year. The government is determined to take advantage 
of this overall improving economic situation by, inter alia, accelerating the transformation of the  
industrial structure and comprehensively expanding investment in infrastructure, with the aim of 
generating new growth momentum to make the domestic economy even more vigorous and 
robust.  
Table 2.1 Key econom ic indicators of national accounts, 2014 –17 
(2011 = 100 ) 
Indicator  2014  2015(r)  2016(r)  2017(p)  
Gross domestic product      
At current prices (NT$  million)  16,111,867  16,770,671  17,152,093  17,444,666  
Annual change (%)  5.79 4.09 2.27 1.71 
At 2011 constant prices (NT$  million)  15,529,606  15,654,835  15,875,635  16,329,209  
Annual change (%)  4.02 0.81 1.41 2.86 
GNI per capita (US$)  23,330  23,109  23,258  24,936  
Gross fixed capital formation (GFCF)      
At current prices (NT$  million)  3,493,834  3,493,267  3,584,910  3,580,972  
Annual change (%)  3.41 -0.02 2.62 -0.11 
Inflation rate (CPI  change, %)  1.20 -0.30 1.39 0.62 
r Revised version.  
p Preliminary version.  
Note:  Data has been updated based on the benchmark revision released on 13 February 2018.   
Source:  Directorate -General of Budget, Accounting and Statistics.  
2.3.  Regarding the economic structure of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu, the services industry remained the most important economic sector, 
accounting f or 62.9% of the GDP in 2017 and providing approximately 59.3% of employment. This 
was followed by the manufacturing sector that contributed around 30.8% to the GDP in 2017. The 
agricultural sector's share of the GDP was 1.7%.  
2.2  Developments in External Trade   
2.4.  Due to an upswing in the global economy and sluggishness during the reference period, both 
the imports and exports of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
in 2017 reached double -digit growth. The trade surplus also experienc ed positive growth during 
the review period, expanding by 16.5 % over the previous year.  
Table 2.2 Trade statistics, 2014 –17 
(US$ billion)  
Year Total exports  Growth rate (%)  Total imports  Growth rate (%)  Trade balance  
2014 320.09  2.8 281.85  1.4 38.24  
2015 285.34  -10.9 237.22  -15.8 48.12  
2016 280.32  -1.8 230.57  -2.8 49.75  
2017 317.25  13.2 259.27  12.5 57.98  
Note:  Methodology for trade statistic collection was converted to the G eneral Trade System approach 
in 2016 and was backdated to 2014. Thus, the change rate in 2014  was based on the estimation 
of 2013 data as a reference point.  
Source:  Customs Administration, Ministry of Finance.  
2.5.  The geographical distribution of trade of the Separate Customs Territory o f Taiwan , Penghu , 
Kinmen and Matsu was heavily concentrated in Asia during the review period. In 2017, for 
example, 72.41% of exports and 59.23% of imports took place with Asian trading partners, 
followed by North America (12.34% of exports and 12.30% of i mports) and Europe (9.19% of 
exports and 12.12% of imports). Main trading partners included China; ASEAN; the United States; 
Japan; Europe; Hong Kong, China; and the Republic of Korea; together this  group of WTO WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  Members accounted for 85.60% of the Separate  Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu's total trade.  
2.6.  The major category of products exported by the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu was electrical machinery and equipment, accounting for 44.5% of total 
export s. This was followed by machinery and mechanical appliances, plastics and articles thereof, 
and optical instruments and accessories. Electrical machinery and equipment accounted for 26.0% 
of total imports, followed by mineral fuels, and machinery and mecha nical appliances.  
Table 2.3 Key export and import products of the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu, 2014 –17 
(US$ million, % of total trade value)  
Exports  Imports  
Product/Year  2014  2015  2016  2017  Product/Year  2014  2015  2016  2017  
Electrical 
machinery and 
equipment  125,334  119,995  124,047  141,305  Electrical 
machinery and 
equipment  59,074  55,288  58,406  67,286  
39.2%  42.1%  44.3%  44.5%  21.0%  23.3%  25.3%  26.0%  
Machinery and 
mechanical 
appliances  32,738  30,397  30,196  36,605  
Mineral fuels  65,598  37,657  31,716  40,432  
10.2%  10.7%  10.8%  11.5%  23.3%  15.9%  13.8%  15.6%  
Plastics and 
articles thereof  21,599  18,627  17,573  20,276  Machinery and 
mechanical 
appliances  29,503  28,818  33,577  34,662  
6.7%  6.5%  6.3%  6.4%  10.5%  12.1%  14.6%  13.4%  
Optical 
instruments 
and 
accessories  20,789  16,035  14,827  16,395  Optical 
instruments 
and 
accessories  11,245  10,291  10,245  10,603  
6.5%  5.6%  5.3%  5.2%  4.0%  4.3%  4.4% 4.1%  
Mineral fuels  20,574  10,795  9,821  10,905  Organic 
chemicals  10,823  8,146  7,374  9,307  
6.4%  3.8%  3.5%  3.4%  3.8%  3.4%  3.2%  3.6%  
Vehicles other 
than railway or 
tramway 
rolling -stock 10,414  10,234  9,333  9,720  
Iron and steel  10,415  7,306  6,442  7,969  
3.3%  3.6%  3.3%  3.1%  3.7%  3.1%  2.8%  3.1%  
Organic 
chemicals  12,038  8,687  7,832  9,543  Vehicles other 
than railway or 
tramway 
rolling -stock 7,223  7,468  7,340  7,953  
3.8%  3.0%  2.8%  3.0%  2.6%  3.1%  3.2%  3.1%  
Iron and steel  10,647  8,044  7,714  9,653  Plastics and 
articles thereof  7,809  6,778  6,445  7,016  
3.3%  2.8%  2.8%  3.0 %  2.8%  2.9%  2.8 %  2.7%  
Articles of iron 
or steel  7,811  7,255  6,706  7,689  Miscellaneous 
chemical 
products  7,289  6,153  5,973  6,225  
2.4%  2.5%  2.4%  2.4%  2.6%  2.6%  2.6%  2.4%  
Copper and 
articles thereof  3,773  3,470  3,453  4,735  Copper and 
articles thereof  5,543  4,459  4,340  5,672  
1.2%  1.2%  1.2%  1.5%  2.0%  1.9%  1.9%  2.2%  
Source:  Customs Administration, Ministry of Finance.  
2.7.  As for trade in services during the review period, servi ces exports amounted to 
US$42.2  billion  on average annually, whereas service imports averaged US$52.4 billion. This 
indicates that the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu remained a 
net importer of trade in services. However, due to the shrinkage in net payments from 
manufacturing services, charges for the use of intellectual property, and other business services, 
the deficit exhibited a decreasing trend over the last four years.  
2.3  Development of Foreign Investment  
2.8.  Outbound foreign direct investment (FDI) from the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu generally showed growth trends on a year-by-year basis from 2014 
to 2017. On average, outbound and inbound investment durin g 2014 -2017 amounted  to 
US$20.5  billion and US$7.6 billion, respectively. The government is highly committed to continuing 
its efforts to create an investment -friendly environment by effectively addressing the "five 
shortages" (i.e., the shortages of land, water, power, skill ed professionals and labor) that hinder 
attracting foreign investment. Strategies and measures taken by the government to address these 
shortages include (1) releasing state -owned land at discount prices, making use of idle private 
land in government -devel oped zones, and developing and repurposi ng land for industrial use; 
(2) development of new resources, water conservation, water allocation and emergency backup WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  systems to ensure water reliability for industrial purposes; (3) phasing out nuclear power, 
stabilizing electricity supplies, and curbing air pollution; (4) addressing the shortage of skilled 
professionals through personnel retention, recruitment and cultivation techniques; and 
(5) matching workers to unfilled positions while developing the work force, improving wages and 
working conditions, and promoting industry -academia cooperation to bridge the 
education -to-employment gap.  
2.9.  Regarding the sectoral distrib ution of outbound FDI, in addition to investment in the financial 
and insurance services sector, the major sectors receiving investment from the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu were electronic parts and components 
manufacturi ng and retail services. Approximately 84.55% of outbound investment went to China, 
the British Overseas Territories in the Caribbean, Singapore, the United States, and Viet  Nam. 
2.10.   Regarding inbound FDI, the manufacturing sector attracte d the majority of inve stment 
in 2017. Most inbound FDI in the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu went to the electronic parts and components manufacturing sector, followed by the 
information and communication sector, and the finance and insurance sec tor. The leading sources 
of inbound investments were the Netherlands, the British Overseas Territori es in the Caribbean, 
the United  Kingdom, Japan, and American Samoa, accounting for 74.12% of the total inbound FDI.  
Table 2.4 International investment statistics, 2010 -13 and 2014 –17 
(US$ million  and % of change from previous period ) 
Year 2010 -13 average  2014 -17 average  
Outbound FDI  17,706.96  (-5.77%)  20,474.21  (6.17%)  2014: 17,570.25  
2015: 21,710.68  2016: 21,793.83  
2017: 20,822.07  
Inbound FDI  5,021.62  (11.75%)  7,552.29  (9.14%)  2014: 6,104.66  
2015: 5,040.91  2016: 11,284.69  
2017: 7,778.90  
Note:  Amounts are of examined and approved FDI.  
Source:  The Investment Commission, Ministry of Economic Affairs.  
3  DEVELOPMENT OF TRADE  AND INVESTMENT POLIC IES 
3.1  Macroeconomic Policy  
3.1.  The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu has long been a free 
market economy. Overall macroeconomic policy is an important source of support for economic 
and trade development. Faced with new global economic and trade situations following the global 
financial crisis, the government promoted "All -round Construction" and the "Economic Power -up" 
Plans as the two main components. The aim was to launch a concerted effort for all -round national 
construction, accelerate systemic adjustment, and relax regulations to boost potential economic 
growth.  
3.2.  To foster domestic economic development, priority has been given to meeting the 
infrastructure needs over the next three decades . To this end, the "Forward -looking Infrastructure 
Development Program" was formally launched in 2017 to provide a framework for future 
infrastructure development. The program focuses on eight areas of infrastructure development: 
(1) railway projects to pr ovide safe and fast transportation; (2) water environment construction to 
build resilience to climate change; (3) green energy infrastructure to ensure environmental 
sustainability; (4) digital infrastructure to create a smart and connected nation; (5) urb an and 
rural projects to balance regional development; (6) child care facilities to reverse declining birth 
rate trends; (7) food safety infrastructure to ensure food quality and protection; (8) human 
resources infrastructure to nurture talent and boost em ployment.  
3.2  Trade and Investment Policy  
3.3.  On average, between 2014 and 2016 the trade dependency rate of the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu was 103%, with export dependency at 56%, and 
import dependency at 47%. This very high de gree of trade dependence implies that the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu is relatively more sensitive to changes in 
the global trade environment.  WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  3.4.  Consequently, diversifying overseas markets and broadening the scope of trade policy were 
the main trade policy directions of the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu during the review period. The objectives are to enhance trade promotion initiatives to 
access emerging markets in Southeast Asia, South Asia,  and Oceania through implementation of 
the New Southbound Policy, and to improve links with technologically advanced countries. As a 
crucial link in global value chains, the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu will continue, alon g with all members, to pursue free trade to the fullest extent on a 
mutually beneficial basis to achieve a better shared future. In addition, creating a friendly business 
environment is also a key component of its investment policy, and recent efforts have  primarily 
targeted reducing investment barriers and promoting a more accessible and transparent regulatory 
environment. It is committed to expanding domestic demand and developing trade in services, 
enhancing its international competitiveness, reducing it s dependence on specific trading partners 
and certain imported and exported products, and reducing trade barriers.  
3.5.  As an important participant in both the Asia –Pacific and the wider global supply chains and 
trading systems, it is essential for the Separate  Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu to respond rapidly to changes in the global economic environment. Given this, the 
government continues to strengthen economic and trade relations with important trading partners 
such as the EU, the US,  Japan and Korea, to enhance linkages with various supply chains and to 
enhance technology cooperation. Furthermore, it launched the New Southbound Policy to provide 
an overarching framework for the development of a new and comprehensive relationship with 
additional partners in the Asia –Pacific region, and to redefine the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu's critical role in this region for the 21st century.  
3.6.  Specifically, the New Southbound Policy is designed to boost links with  partners in this region 
through activities in the following four key areas:  
 Economic and trade cooperation: The Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu will forge new partnerships with the objectives of integrating and 
expanding sup ply chains, connecting domestic demand with markets, and undertaking 
cooperative infrastructure projects.  
 Exchanges of skilled personnel: The Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu is intensifying bilateral exchanges and training of  young scholars, 
students and industry professionals with partner countries and promoting innovative 
ways to share complementary human resources with a people -centered focus.  
 Resource sharing: Capitalizing on the Separate Customs Territory of Taiwan, Pengh u, 
Kinmen and Matsu's soft powers to promote bilateral and multilateral cooperation in 
culture, tourism, medical care, technology, agriculture, and small and medium -sized 
enterprises. The aim of this outreach is to improve the quality of life in partner co untries, 
as well as to create opportunities for deepening the economic engagement of the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu with the respective 
partners.  
 Regional connectivity: Expanding institutional cooperation with partner co untries and 
strengthening consultation and dialogue. Effectively utilizing private groups, overseas 
expatriate networks, and other channels to enhance stability and prosperity in the 
region.  
3.7.  Taking partner countries' needs into account, the focus of the Ne w Southbound Policy is 
currently to implement five flagship programs and three prospective areas to bring about positive 
mutual benefits. The five flagship programs are (1) Regional Agricultural Development, (2) Medical 
and Public Health Cooperation and th e Development of Industrial Chains, (3) Industrial Talent 
Development, (4) Industrial Innovation and Cooperation, and (5) the New Southbound Policy 
Forum and Youth Exchange Platform. The three prospective areas are cross -border e -commerce, 
tourism, and inf rastructure development.   
3.8.  Regarding investment policy, during the review period, the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu paid close attention to providing a business -friendly 
environment that would help to attract FDI. We review ed our domestic reforms on investment in WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  relation to the findings in the World Bank's Doing Business Index (DBI). The core strategy was to 
enhance the ease of doing business, improve regulatory transparency, and adhere to global best 
practices.  
3.3  Industrial Policy and Reform  
3.9.  In the past four years, several major industrial development programs such as the Backbone 
Enterprises Program, and the Industry Upgrading and Transformation Program have been 
launched to facilitate the potential of carefully selected ind ustries to lead the transformation of 
industrial innovation models. The objectives of these programs are to advance economic growth, 
increase employment opportunities and improve income distribution by boosting industrial 
optimization and transformation.  
3.10.   The flagship 5+2 Industrial Innovation Plan was launched in 2016 to serve as the primary 
industrial development policy undertaking. The aim of this plan is to transform industrial 
innovation, moving towards high -value -added, service -oriented and solutions -oriented business 
models. It envisions achieving industrial innovation, job creation, equitable wealth distribution, and 
sustainability. The seven (5+2) innovative industrial pillars are: the Asia Silicon Valley, Smart 
Machinery, Green Energy Technology, Bi omedical Industry, Defen ce Industry, New  Agriculture, 
and the Circular Economy. Details of each are briefly outlined below.  
 Asia Silicon Valley Development Plan: This plan has two primary objectives: first, 
promoting innovation and R&D for IoT devices and applications; and second, upgrading 
the startup ecosystem. Its strategies include optimizing the economy's startup and 
entrepreneurship ecosystem, enhancing linkages with renowned clusters worldwide, 
building a complete IoT supply chain by integrating the economy's hardware advantages 
with software applications, and constructing diversified demonstration sites for smart 
products and services.  
 Smart Machinery: The Smart Machinery Industry Promotion Program is composed of two 
parts, "Industrialization of Sma rt Machinery" and "Intelligent Transformation of 
Industrial Machinery." The aim is to develop total solutions and establish a smart 
machinery industry ecosystem via "Industrialization of Smart Machinery" while applying 
total solutions to help enterprises a dopt smart manufacturing via "Intelligent 
Transformation of Industrial Machinery." Along the way, we will take account of the 
requirements for intelligent transformation among small and medium enterprises (SMEs) 
and encourage the adoption of digitalization  in the production process so that a network 
of connected devices can be realized through the Smart Machine Box (SMB). We will help 
domestic industries upgrade smart manufa cturing and expect to have 9,000  devices 
connected to the network by the end of 2022 . For businesses already equipped with 
smart technology, we provide assistance to speed up their move to reach smart 
manufacturing through R&D projects.  
 Green Energy Technology Development: A safe, stable, efficient and clean energy supply 
system that also  creates sustainability is considered a way for the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu to achieve its vision of a nuclear -free 
homeland. By 2025, the proportion of domestic power generated by renewable energy 
and gas is expected  to increase to 20% and 50%, respectively, while that by coal 
generation will be reduced to 30%. We aim to make solar energy and wind energy key 
components of future green energy development. A testing hub that integrates energy 
creation with energy saving , energy storage, and system integration technologies has 
recently been established as an initial step in this direction.  
 Biomedical Industry: The Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu aims to make itself into a major hub for biome dical R&D in the Asia -Pacific region. 
First, we intend to promote the integration of biomedical supply chains by consolidating 
individual regional companies into bio -tech clusters. We will also work to attract 
overseas investment as a means of enhancing do mestic biomedical R&D capabilities and 
facilitate global deployments. Moreover, we will help integrate medical services into 
peripheral bio -tech industries to foster the development of specialized medicine. Our WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  goal is to develop 20 new drugs and 80 differ ent high -value medical devices which are 
able to enter the international market by 2025.  
 Defen ce Industry: The defen ce and aerospace industries are two of the principal areas in 
the government's 5+2 innovative industries program. In the past, many critical  
technologies have migrated to the civilian sector. Thus, our government intends to 
promote both the defen ce and aerospace industries to underpin the development of all 
relevant sectors.  
 New Agriculture: The three main pillars in this program are to establish new agriculture 
paradigms, construct a safety system for agricultural products, and enhance the 
capabilities of agricultural marketing. The strategies, such as promoting agricultural 
insurance programs, encouraging organic and environmentally -friendly farming, 
promoting green environmental payments on farmland, and setting up an on -line trading 
platform for agricultural products are being implemented to stabilize farmers' income 
and make full use of the multi -functional value of agriculture in a s ustainable way.  
 Circular Economy: The Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu is dedicated to establishing a circular economy of supply and demand for energy 
resources using concepts of recycling and resource efficiency. By 2025, we expect the 
rate of recycled domestic resources to increase to 17%, and the targets for incineration 
and landfill reduction to increase to 7% for general waste and 3% for industrial waste 
treatments, respectively. To reach these goals, we will assist compan ies in developing 
and adopting environment -friendly technologies with lower levels of pollution, fewer 
carbon emissions, greater safety, and higher recyclability in order to realize the circular 
economy. In the process, we have started the "New Material Re cycling Industry Park" 
project in Dalinpu, Kaohsiung to demonstrate the economic benefits of using fewer 
resources and establishing a sustainable business. The hope is to create a sustainable 
circular model by means of well -designed energy and resource lin ks. 
3.4  Energy Policy  
3.11.   The fact that 98% of energy resources are imported indicates the lack of energy 
self-sufficiency in the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. As part 
of global efforts to reduce greenhouse gas emission following the Paris Agreement, the 
government has embarked on an energy transition policy to initiate energy transition and reform 
of the electricity industry, while promoting the development of independent green energy 
industries to tackle the challenges of rapid c hanges in various political and economic 
circumstances.  
3.12.   Our energy transition policy is to become a nuclear -free homeland and raise the proportion 
of renewable energy generation to 20% by 2025. Based on the precondition of stable energy 
supply, we anticipa te that the remaining 80% of the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu's energy will be generated by thermal power plants. To accomplish 
this, we aim to increase power generation by natural gas -fired plants to 50% and reduce power 
generation by coal -fired plants to 30%. We are planning to actively develop renewable energy, 
including solar, wind and geothermal energy. In the meantime, we are promoting conservation to 
maximize energy efficiency. We are also hastening construction of t he new LNG receiving station 
to increase imports of natural gas, contributing to the decrease of pollution and carbon emissions 
attributed to thermal plants.  
3.5  Labor Reform  
3.13.   In order to make the relevant provisions of the Labor Standards Act more consistent w ith 
the practical needs of employers and employees, the revised provisions of the Labor Standards Act 
were promulgated on 31  January  2018, and implemented on 1 March. The recent amendments to 
the Labor Standards Act are designed to uphold the principles of  security and flexibility, while 
achieving the following policy goals: two days off for workers per week, consistent regulations 
regarding  holidays, flexible use of overtime work hours and  annual leaves, a minimum of 
11 consecutive hours of rest between sh ifts, and so on. In addition, to provide for more effective 
enforcement, the Ministry of Labor has strengthened supervisory mechanism of the government WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  and autonomous bargaining mechanism within enterprises, and implemented multiple controls for 
administra tive supervision to protect labor rights.  
3.6  The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu in the Global 
Trading System  
3.6.1   Participating in the multilateral trade regime  
3.14.   During the review period, the Separate Customs Territory of Taiwan, Pen ghu, Kinmen and 
Matsu was committed to participating actively in the WTO on all fronts, including the regular work 
of committees and councils, the DDA, and the Ministerial Conferences, in particular regarding 
finalization of the Trade Facilitation Agreemen t (TFA) and its ratification. The Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu also firmly supports the elimination of subsidies 
contributing to IUU fishing, the promotion of e -commerce, and the participation of micro, small 
and medium en terprises in international trade. The Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu has also actively engaged in various negotiations regarding accession, 
plurilateral negotiations on ITA expansion, the Environmental Goods Agreement (EGA),  and the 
Trade in Services Agreement (TiSA) negotiations. The Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu is committed to supporting and engaging in future negotiations, with 
the goals of fulfilling our obligations as a WTO member and co ntributing to opportunities to 
develop and enhance a new global trade order.  
3.6.2   Using the WTO dispute settlement mechanism to maintain trade rules  
3.15.   Regarding the participation in the dispute settlement mechanism, over the past four years, 
the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu has launched three 
separate disputes against Canada, Indonesia, and India as a complainant and participated in 
several disputes as a third party. Our use of the WTO dispute settlement mechanism demonstrates 
our determination to safeguard our trade interests. The Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu will continue to make good and judicious use of the trade dispute 
settlement mechanism as an important means to ensure our trade interests.  
3.6.3   Promoting trade and development, and providing assistance and cooperation  
3.16.   The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu fully appreciates the 
importance of trade and development, as well as projects related to aid for trade to facilita te the 
integration of developing countr y member s into the world trading system. During the review 
period, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu contributed to both 
the Advisory Centre on WTO Law (ACWL) and the Standards and Tra de Development Facility 
(STDF).  
3.17.   The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu also continued to 
work with like -minded members to implement international cooperation projects, establishing a 
diverse range of stable cooperative relations  and sharing its own development experience to 
promote the economic and social development of partner countries during the review period. Some 
of the bilateral cooperation projects undertaken included: the ICT Technical Cooperation Project in 
Belize to imp rove the efficiency of customs clearance; the Tropical Vegetable and Fruit Cultivation 
and Extension Project in Fiji to improve production techniques and expand export markets; and 
the Sweet Potato Production and Marketing Project in Swaziland to promote a gro-processing 
development and marketing capacities. The WTO has showcased these as successful projects. 
Using the multilateral mechanism, the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu has assisted developing countr y member s with socia l and economic development. Measures 
undertaken included donations to international institutions, the establishment of special funds to 
cooperate with international institutions, and project collaboration with international institutions. In 
this last regar d, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu's 
International Cooperation and Development Fund maintains cooperation with international 
development banks, covering education, development of small and medium enterprises, 
agriculture,  and environmental sustainability.  
3.18.   The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu fully understands 
that advancing the integration of developing countries and the LDCs into the global trading system WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  is the key to achieving the 2030 Age nda for Sustainable Development and the 17 Sustainable 
Development Goals (SDGs). The Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu is committed to continuing its assistance to developing countries to achieve the 
United  Nations' SDGs by str engthening a diverse range of stable cooperation relationships with aid 
agencies, international organizations, and international non -governmental organizations that 
address such critical global issues as reduction of poverty and inequality, while mitigatin g the 
challenges of climate change.  
3.7  Regulatory Reform and Liberalization  
3.19.   Regulatory reform has been one of our policy priorities. In order to boost economic 
development, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu accelerates 
regulat ory adjustment and deregulation by reviewing unreasonable regulations based on the 
principles of maximizing benefits for the public, as well as simplifying administrative procedure to 
provide greater convenience. Facing the development of the global digita l economy and numerous 
start-ups, competent authorities reformed relevant regulations, and the National Development 
Council (NDC) established the regulatory adaptation platform for start -ups to respond to questions 
about how they should apply related laws and regulations. On the other hand, the NDC works as a 
platform to coordinate among the competent authorities on recommendations put forward by the 
business community, including overseas chambers of commerce, to facilitate the harmonization of 
domestic reg ulations with international standards. As a result of inter -departmental meetings and 
coordination efforts,  major progress in various financial and economic areas from 2014 is 
summarized below:  
Financial sector  
 The liberalization of procedures for establis hing offshore insurance units (OIU) in 2015, 
allowing insurance services providers to offer international insurance services and to 
expand the scale of the domestic insurance services market and its level of globalization.  
 Restrictions on securities compan ies providing specific international securities business 
were relaxed, effective from 2015. Offshore securities branches of a securities company 
undertaking business with overseas customers are no longer subject to the application of 
related provisions of the Trust Enterprise Act, the Securities Investment Trust and 
Consulting Act, or the Futures Trading Act.  
 With prior approval from the financial regulator, local subsidiaries of offshore financial 
institutions may outsource customer financial information m anagement to overseas 
service providers.  
 In 2018, the Financial Supervisory Commission (FSC) has amended regulations 
governing the Go Incubation Board for Startup and Acceleration Firms by relaxing the 
conditions for start -up firms to apply. Those firms no w have the opportunity to acquire 
needed capital through the open market.  
 In 2015, the FSC promulgated the Act Governing Elec tronic Payment Institutions. 
By January 2018, six electronic payment institutions have already obtained licenses 
issued by the FSC to extend electronic payment services and build a comprehensive 
digital cash flow environment.  
 The FSC has relaxed the investment limits for the insurance industry investment futures 
fund and futures ETF. The measure will increase flexibility in the use of  funds in the 
insurance industry and promote investment efficiency. In 2017, to assist the green 
industry obtain funds and promote environmental sustainability, as well as the sound 
development of a diversified domestic bond market, the FSC supervised the formulation 
of a concrete green bond promotion plan by Taipei Exchange TPEX and also approved its 
General Introduction to the Taipei Exchange Operational Directions for Green Bonds.  
 In 2018, the FSC issued an order allowing foreign central and local govern ments to issue 
international bonds on professional boards in the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu. This measure is aimed at enriching the roster of bonds in WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu an d spurring 
sound development of the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu's bond market.  
 In order to let insurers have higher capacities and a broader spectrum in terms of their 
overseas and foreign currency investments, the FSC ha s amended some provisions of 
the Regulations Governing Foreign Investments by Insurance Companies since 2015. 
The main points of the amendments include allowing insurance companies to participate 
in foreign currency -denominated syndicated loans; invest in foreign municipal bonds, 
foreign private debt funds and real estate funds, foreign currency NCD issued by 
domestic banks or the branches of foreign banks in the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu; and loosening restrictions on i nsurers' investments 
in foreign corporate bonds and real estate.  
Intellectual property  
 Legislative amendments to the Patent Act to relax requirements relating to the grace 
period for patent applications were adopted in 2016. These amendments included new 
grace period provisions and extended the term from 6 to 12 months. This improved the 
possibility for a patent to be granted if the applicant made a public disclosure before 
making the application, which will benefit inventors in terms of protecting their r ights.  
 Following the addition of criminal liability to the Tr ade Secrets Act in 2013, 
Taiwan  Intellectual Property Office (TIPO) continued to help corporations establish a 
correct trade secret management system and develop strategies for coping with 
infringements. TIPO also continued to hold seminars with judicial personnel to help 
judicial and enforcement personnel better understand the practices of industries. In 
addition, TIPO worked with the EU and the US to host trade secret seminars to exchange 
views on respective legal regimes and relevant practices.  
 In 2017, TIPO conducted a comprehensive review of the current guidelines for 
pharmaceutical patent term extension. After careful consideration of the feedback from 
different sectors, TIPO completed the dr aft amendment to the guidelines, which then 
took effect on April 1, 2018. This change is expected to afford greater protection to 
medical and pharmaceutical innovation, enabling them to tap into innovative potential 
while boosting the economy.  
 In 2017, the  partial amendment to the Pharmaceutical Affairs Act was passed. This Act 
introduced patent linkage to facilitate resolutions to patent infringement disputes 
between patentees and generic drug companies prior to market entry of the generic 
drugs. It will p rotect the intellectual property of patentees and reduce the risk of patent 
infringement by generic drug companies. The competent authority, namely the Ministry 
of Health and Welfare, will set up a platform for uploading patent information, as well as 
implement subsidiary regulations. After that, the amendment will take effect.  
 During the review period, the government continued working to revise the Copyright Act 
in response to rapid advancements in digital technology and the internet.  
Movement of professio nals 
 To attract skilled domestic and overseas professionals, the government has relaxed 
requirements for foreign professionals with respect to visas, employment, residence, 
finance, taxes, insurance as well as the international living environment, and prop oses 
27 reform strategies. The government is also strengthening the mechanism to attract 
outstanding students and youth entrepreneurs to come to the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu and has passed the "Act for the 
Recruitment and Employment of Foreign Professionals".  
 The creation of a "start -up entrepreneur visa" category and relaxation of restrictions on 
the employment of overseas white -collar workers for innovative new ventures in the 
Separate Customs Territory of Taiwan, Pen ghu, Kinmen and Matsu. Specific measures WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  include requirements regarding past work experience and the employer's turnover 
threshold for overseas professional workers to obtain a work permit, as ways to 
encourage cross -border flows of skilled professionals a nd start -ups. 
 In 2017, in order to solve the problem of applying for work permits and visas for 
spouses of overseas professionals, the Ministry of Labor (MOL) provided flexible 
regulations for part -time work to let spouses of overseas professionals take so me 
hourly -paid jobs and to meet certain qualifications required by employers.  
Tax reform  
 In order to establish a competitive, fair, and reasonable income tax system that complies 
with international taxation trends, the amendments to the Income Tax Act were  
promulgated on 7 February 2018. The main contents of the income tax reform are as 
follows:  
 The personal standard deduction was raised from NT$90,000 to NT$120,000 
(NT$240,000 for a taxpayer filing jointly with his or her spouse); the special deduction 
for wage income and the special deduction for the disabled were raised from 
NT$128,000 to NT$200,000, respectively; and the special deduction for pre -school 
children was raised per child per year from NT$25,000 to NT$120,000 to relieve the tax 
burden on salar y earners, middle -and-low income earners, and taxpayers who have 
children.  
 The highest marginal tax rate for the individual income tax was reduced from 45% to 
40% to encourage professionals to stay in the Separate Customs Territory of Taiwan, 
Penghu, Kinme n and Matsu.  
 By abolishing the partial imputation tax system on dividends, a new dividend tax regime 
was put into practice in 2018. This regime allows taxpayers to choose either to 
incorporate dividend income into their consolidated income and calculate th eir tax based 
on progressive income tax rates, with a tax credit of 8.5% of the total dividend amount, 
with a ceiling set at NT$80,000 per household; or to opt for the single tax rate of 28% 
on dividend income, and computed separately from their consolidat ed income.  
 The withholding tax rate on dividends accruing to non -residents was raised from 20% to 
21%. This will reduce the tax burden discrepancy between domestic and foreign 
investors.  
 The profit -seeking enterprise income tax rate was raised from 17% to 20%. However, 
profit -seeking enterprises with a taxable income of not more than NT$500,000 are 
subject to annual adjustments with a tax rate of 18% for taxable year 2018, a tax rate 
of 19% for taxable year 2019 and a 20% rate for taxable year 2020 and ther eafter.  
 The surtax rate on undistributed earnings of companies shall be reduced from 10% to 
5%. A profit -seeking enterprise organized as a sole proprietorship or a partnership that 
was not required to calculate and pay income tax, and the profit arising fr om the above 
business shall be included in the partners' or the sole proprietor's individual consolidated 
income.  
Fisheries management reform  
 The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu has actively 
strengthened the legal framework f or fisheries management in accordance with 
international trends and requirements. In this regard, three fisheries acts have been 
promulgated, including enactment of the Distant Water Fisheries Act and amendments to 
the Act to Govern Investment in the Opera tion of Foreign Flag Fishing Vessels and the 
Fisheries Act. These laws and regulations have transposed the measures adopted by 
international fisheries management organizations into domestic legislation, especially the 
Monitoring, Control and Surveillance ( MCS) measures such as authorization to fish, 
vessel position monitoring, observer program, landing declaration, port inspection, WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  number of fishing vessels and catch limits, restriction on fishing periods and areas, 
restriction on the type of fishing gear a nd fish species, transshipment, etc. Through the 
imposition of heavy fines or criminal sanctions as the main penalties and supplemented 
with other management actions such as suspension and revocation of fishing licenses, 
forfeiture of catch, fishing gear a nd fishing vessels, and clear requirements for the 
violating vessel to stop fishing and return to a designated port within a given timeframe, 
as well as imposing additional sanctions to recidivism, the Separate Customs Territory of 
Taiwan, Penghu, Kinmen a nd Matsu has succeeded in implementing stronger actions on 
deterring IUU fishing activities.  
3.20.   Regulatory transparency was also a main area of reform during the review period. The 
government continues to enhance the participation of stakeholders in the devel opment of 
regulations and to improve the quality of regulations by improving the rule -making process. 
Effective from 1 October 2016, for example, all proposals for new regulations or for revisions of 
existing regulations are subject to a mandatory 60 -day p ublic notice and comment period. 
However, government agencies are allowed to deviate from the 60 -day rule in case of 
emergencies, when obviously unable to announce changes in advance, or when the regulation 
must be promulgated within a shorter time. In add ition, a user -friendly website 
(http://join.gov.tw ) was established in 2016 for tracking proposed regulatory amendments and 
submitting comments, as well as to further elevate the level of transparency and public 
participa tion. It is worth mentioning that the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu ranked number one in the 2017 Global Open Data Index published by Open 
Knowledge International  (https://index .okfn.org/place/ ). 
3.8  Bilateral and Multilateral Economic Integration  
3.21.   At the end of 2017, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
had four bilateral free trade agreements (FTAs) and three economic cooperation agreements 
(ECAs) with eight WTO Members, namely Panama, Guatemala, Nicaragua, El Salvador, Honduras, 
Singapore, New Zealand, and Paraguay. In addition, 32 bilateral investment agreements (BIAs) 
with WTO Members are in force. Most of these agreements came into effect before this  current 
review period, thus the main focus was on monitoring and reviewing the implementation of these 
agreements. During the review period, the Separate Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu, and New Zealand fully implemented their commit ments on trade in goods, services and 
investment under the Agreement between New Zealand and the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (ANZTEC). In ANZTEC, the degrees 
of trade liberalization are 99.88% and 100% for products facing zero tariffs traded between the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu and New Zealand, respectively, 
while the services sector and investment market for both parties  are fully opened. By monitoring 
and revi ewing the implementation of ANZTEC, the functioning of ANZTEC was found to be sound 
and was effective in promoting bilateral trade. The first meeting to review the Agreement between 
Singapore and the Separate Customs Territory of  Taiwan, Penghu, Kinmen and  Matsu on Economic 
Partnership (ASTEP) was held in 2015 and aimed to continue promoting implementation of the 
agreement.  
3.22.   As a genuine supporter of the concept of open regionalism, the Separate Customs Territory 
of Taiwan, Penghu, Kinmen and Matsu has been playing a proactive role in the Asia -Pacific 
Economic Cooperation (APEC) forum since our accession in 1991. Major issues that the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu participated in during the review period 
in APEC included trade  and investment liberalization and facilitation, regional economic integration, 
next-generation trade and investment issues, the development of micro, small and medium 
enterprises (MSMEs), digital opportunities, inclusive trade and women's development, foo d 
security, and public health and medical cooperation.  
3.23.   Specifically, key initiatives for which the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu has been serving as a lead or main sponsor during the review period were the 
creation of the APEC Women and the Economy Sub -Fund (with the U.S. and Australia); the APEC 
Strengthening Public -Private Partnership to Reduce Food Losses in the Supply Chain (2013 –2018); 
the program on Improving Natural Disaster Resilience of APEC SMEs to Facilitate Trad e and 
Investment; the New Era of Growth for APEC SMEs through Online -to-Offline [O2O] Business 
Models program' the APEC Accelerator Network Initiative (ANN)' the program on Innovation for 
Women and Economics Development' the APEC Skills Development Capacit y Building Alliance WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  (ASD-CBA); and the Innovation for Women and Economic Development – Facilitating Women's 
Livelihood Development and Resilience with ICTs (2013 –2016). At the same time, we made 
substantive contributions to the Collective Strategic Study o n Issues Related to the Realization of 
the FTAAP and subsequent discussions. The Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu firmly believes that APEC is not only a mechanism for regional economic 
cooperation but also complements the mul tilateral trading system and is an important pillar for 
promoting global trade and investment liberalization.  
3.24.   In an effort to elevate our alignment with and readiness to participate in high -level regional 
trade agreements (RTAs) such as the Comprehensive a nd Progressive Agreement for Trans -Pacific 
Partnership (CPTPP), during the review period the government undertook a major regulatory 
review, benchmarking the rules and obligations under the CPTPP and other recent RTAs.  A number 
of legislative revisions hav e already been completed, including the revisions to the Pharmaceutical 
Affairs Act, the Cosmetic Hygiene and Safety Act, the Fisheries Act, etc.  Other proposals for 
legislative amendments, including amendments to the Plant Variety and Plant Seed Act, 
Agro-pesticides Management Act, Draft Digital Communication Act, Patent Act, Trademark Act, 
Copyright Act, and Postal Act have also been deliberated. The Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu will continue to review trade and investmen t regulations in 
order to develop a free and open economy and explore further opportunities to participate in 
regional economic integration mechanisms, including the CPTPP and RCEP.  
3.9  Digital Economy  
3.25.   The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu pays great attention 
to the issues associated with the development of next -generation trade and investment, 
particularly those related to the development of the digital economy. For develop ing countries, 
especially the least developed countries, connectivity with and access to opportunities underpinned 
by e-commerce remain important policy challenges that must be overcome. The Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu st rongly believes that removing digital trade 
barriers at all levels and having equal opportunities to access the internet are the only ways to 
ensure that all members of the WTO can benefit from e -commerce and participate more fully in 
global value chains.  
3.26.   Domestically, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu is 
accelerating industrial digital innovation. The Digital Nation and Innovative Economic Development 
Plan (DIGI+) was launched in 2017 to create an environment favorable to developing digital 
innovation and consolidating the forces driving industrial innovation and value -added applications. 
Meanwhile, other policy tools, such as digital infrastructures of the Forward -Looking Infrastructure 
Development Program and the AI Appli cation Development Action Plan, will be included in the 
DIGI+ program and will be promoted concurrently in order to tak e advantage of synergies. 
DIGI+  and the digital economy in general are considered to be measures complementing the 
Separate Customs Terri tory of Taiwan, Penghu, Kinmen and Matsu's current industrial policy 
(i.e. the 5+2 Industrial Innovation Plan) and are also enabling factors for creating future 
competitive niches that will hasten the Separate Customs Territory of Taiwan, Penghu, Kinmen an d 
Matsu's transformation into a smart digital economy. Refinement of the regulatory regime to 
create a digital -friendly environment was also an important part of the policy initiatives during the 
review period. The Personal Information Protection Act was a mended in 2015 to add, inter alia, 
new categories of personal information and to provide flexibility in protection enforcement. A new 
VAT registration regime for cross -border e -commerce suppliers was introduced in 2017 for VAT 
filing and payment for the sa les of internet -based services to ensure an equitable tax environment.  
3.27.   Internationally, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu is 
ready to share our experience and cooperate with developing partners to assist them in connecting  
with the world of e -commerce, and thus build a mutually beneficial trade environment. The 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu continues to maintain and 
operate the four model Digital Opportunity Centers (a former APEC program) l ocated in Indonesia, 
the Philippines, Thailand, and Vietnam as hubs for enhancing access to digital opportunities at the 
community level through education and other capacity -building activities. Also, a new generation, 
solar-powered DOC opened in Myanmar i n 2016. Joint partnerships between the private sector and 
overseas educational institutions of the Separate Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu also organized digital opportunity volunteer services to offer ICT -related training and 
other services abroad.  WT/TPR/G/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
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  3.28.   The Financial Technology Development and Innovative Experimentation Act ("the Act") 
came into force on 30 April 2018. The Act was enacted to establish a Fintech innovative 
experimentation mechanism and create a safe environment for Fintec h R&D and pilot trials for the 
financial industry and related sectors, while maintaining and orderly financial market and 
safeguarding consumers' rights. The Act is applicable to experimenters that use innovative 
methods to engage in any financial services  business that requires approval from the FSC. Natural 
persons, proprietary businesses, partnerships, and legal persons, as well as non -residents through 
an agent, all may apply for innovative experiments. The experimentation period lasts up to one 
year, a nd the applicant may apply for a one -time extension of up to six months. However, if the 
experiment involves laws that should be amended, the experimentation period extension is not 
subject to the one -time only extension limitation, and the overall period may be extended to up to 
three years.  
3.29.   To sum up, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
understands that development of the digital economy is not only important for the participation of 
MSMEs, youth and female entrepreneurs in economic activities and international trade; it also 
helps strengthen the growth of rural areas and reduces the rural -urban gap. Therefore, in the 
WTO, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu will continue to 
promote internationa l regulations that facilitate the development of e -commerce industries and 
assist these industries in expanding their business opportunities through cross -border 
e-commerce.  
4  CONCLUSION AND FUTUR E OUTLOOK  
4.1.  Despite all the current uncertainties in the global trade environment, the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu remains committed to maintaining the core values 
of the WTO and will continue to support the development and expansion of multilateral trade. As a 
firm supporter of the m ultilateral trading system, the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu will actively participate in regional economic integration through 
bilateral and multilateral trade and economic cooperation frameworks with a view to facilitate  
trade liberalization.  
4.2.  To fulfill its commitments, the government is striving to strengthen regulatory transparency, 
maintain environmental sustainability, enhance market openness, encourage fair competition, 
remove discriminatory trade barriers, improve the ease of doing business and investment, and 
facilitate regulatory harmonization in accordance with international standards. Currently, the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu's priority is to assume a greater 
role in internati onal economic cooperation and provide assistance to developing and least 
developed country members.  
4.3.  In the past four years, the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu's deregulation policies have facilitated industrial development a nd made overall 
improvements to the domestic regulatory environment for doing business. As for maintaining 
environmental sustainability, the government has introduced the energy transition policy to reduce 
greenhouse gas emissions and act in accordance wit h the Paris Agreement to achieve its targets. 
The government has also engaged in reform policies to achieve the 2030 Agenda for Sustainable 
Development and the Sustainable Development Goals (SDGs) to implement equitable economic 
development.  
4.4.  Looking ahead,  the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu will 
maintain its pre -existing commitments on trade and investment liberalization and also take actions 
to support the multilateral trading system. In the increase in business uncertainty around the 
globe, we call upon all members of the WTO to redouble efforts to work together in order to 
achieve the very real benefits and increased welfare we can all derive from trade and investment 
liberalization that creates economic opportunity and gro wth for the citizens of the global 
community.  
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