WT/REG350/2  
25 March 2015  
(15-1694)  Page: 1/6  
Committee on Regional Trade Agreements  Original: English/Spanish  
 
  AGREEMENT BETWEEN SINGAPORE AND THE SEPARATE CUSTOMS TERRITORY OF 
TAIWAN, PENGHU, KINMEN AND MATSU ON ECONOMIC PARTNERSHIP 
(GOODS AND SERVICES) 
QUESTIONS AND REPLIES 
The following communication, dated 24 March 2015, is being circulated at the request 
of the delegations of Singapore and the Separate  Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu. 
_______________ 
  
This document reproduces the questions addresse d to the Parties and the responses submitted. 
Question from the delegation of Australia 
 
1.1  While acknowledging that the ASTEP has on ly been in force since 19 April 2014, 
Australia would welcome any information on the gains in Services trade between the parties 
since Entry into Force? 
The latest available data for Singapore and the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu's trade in services is for the year 2013. As such, we are not able to provide any information on services trade between Singapore and the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu since the implementation of the ASTEP in April 2014. 
 
Questions from the delegation of the European Union 
 
Sanitary and phytosanitary measures 
 
1.2  Under the Agreement, both parties agreed to designate a coordinator to communicate 
on SPS related affairs. Could the parties clar ify how this coordination mechanism worked 
during the recent oil and food crisis that affected the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu? 
During the oil and food safety incidents, the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu continually released and published the latest inspection results and related 
information on official website for reference. Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu had also continued with pre-existing workin g arrangements in handling the 
oil and food incidents. In this regard, the Agri -Food and Veterinary Authority of Singapore had 
communicated and worked with the food safety auth orities from the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu via emails on the imports of the affected products. Both sides will 
discuss how to cooperate and coordinate through the SPS Coordinator mechanism established under 
Chapter 6, if any future event arises. WT/REG350/2 
- 2 - 
  Technical barriers to trade 
 
1.3  Could the parties clarify whether the TBT tr ade facilitation measure of the Agreement 
include mutual recognition of certification for electronic products, machinery and electrical 
machinery products? 
TBT trade facilitation under the ASTEP includes mutual recognition of certification for electronic 
products. As stipulated in Article 7.10 (Sectorial An nexes) of the ASTEP, the provisions of the Mutual 
Recognition Arrangement on Conformity Assessment between the Bureau of Standards, Metrology and 
Inspection and the Standards, Productivity and I nnovation Board, done on 28 November 2005, and 
the APEC Mutual Recognition Arrangement for Conformity Assessment of Telecommunications 
Equipment have been incorporated into and form an integral part of the ASTEP. The scope of mutual 
recognition of certification covered in the Mutual Recognition Arrangement on Conformity Assessment 
between the Bureau of Standards, Metrology and Inspection and the Standards, Productivity and 
Innovation Board is electronic and electrical equipment. Discussions on possible cooperation work 
under Article 7.5 (Trade Facilitation), such as mutual recognition, are in the nascent stage. Both sides 
would cooperate and jointly identify work in the field of standards, technical regulations, and conformity assessment procedures, and in particular, initiatives appropriate to particular issues or 
sectors. 
 Electronic Commerce 
 
1.4  Under the Agreement, both parties agreed no t to impose customs duties on electronic 
transmissions between them. 
Could the parties clarify whether this do es include online shopping cross-border 
transactions? 
 
Article 11.3 (Customs Duties and Internal Taxes) of the ASTEP does cover online shopping 
cross-border transactions, when the transactions involve digital products. 
 Government Procurement 
 
1.5  Chinese Taipei agreed to lower its threshold on government procurement of goods and 
services. Does this include the sub-governments' procurement? 
The threshold of 100,000 SDRs in the ASTEP on go vernment procurement of goods and services 
does not apply to the sub-central government entities. 
 Additional EU questions 
 1.6  According to a study conducted by the se mi-governmental Chung-Hua Institute for 
Economic Research (CIER) in October 2013 (C hinese text only), the FTA between Chinese 
Taipei and Singapore will have significant negative  impacts for EU's exports, in particular to 
chemical and plastics products (US$-20.67 m illion), electrical products (US$-29.3million) 
and machinery (US$-25.28 million) to Chinese Taipei's within zero tariff, liberalized market on relevant services and the adaptati on of trade facilitation measures. 
Could the parties clarify what are Chinese Ta ipei's commitments to Singapore under the 
Agreement on chemical and plastics products, el ectrical products and machinery in terms of 
tariff reduction and market liberalization? 
 
For the tariff reduction commitments of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu to Singapore on chemical, rubber, plastic products, electrical equipment, machinery 
and equipment, please see the table below. WT/REG350/2 
- 3 - 
  Tariff reduction commitments of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu to Singapore on chemic al, rubber, plastic products, electrical 
equipment, machinery and equipment 
Product Total 
itemsa Entry into force Five equal 
annual stages Ten equal 
annual stages 
Items Share (%) Items Share (%) Items Share (%) 
Chemical, 
rubber, plastic 
products 
(GTAP 33) 1,766 1,654 93.7  97 5.5 15 0.9  
Electronic 
equipment 
(GTAP 40) 198 189 95.5 1 0.5 8 4.0 
Machinery and 
equipment 
(GTAP 41) 1,433 1,357 94.7  27 1.9 49 3.4  
a HS-8 digit. 
 
1.7  Pharmaceutical products took 6% weight of total EU exports goods to Chinese Taipei in 
2013 according to DG Trade figures. After the Agreement took into effect, Singapore 
exports of pharmaceutical products to Chines e Taipei increased 34% while the EU 28 as a 
whole increased by 3.83% according to Chinese Taipei's Customs' figures. 
Could the parties clarify what are Chinese Ta ipei's commitments to Singapore under the 
Agreement on pharmaceutical products incl uding tariff reduction and trade facilitation 
measures? 
 
For the tariff reduction commitments of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu to Singapore on pharmaceutical products, please refer to the table below. 
 Tariff reduction commitments of the Separate Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu to Singapore on pharmaceutical products 
Product Total 
itemsa Entry into force Five equal annual 
stages Ten equal annual 
stages 
Items Share (%) Items Share (%) Items Share (%) 
Pharmaceutical 
products 
(SITC 54) 150 150 100  0 0 0 0  
a HS-8 digit. 
 
The Separate Customs Territory of Taiwan, Pe nghu, Kinmen and Matsu does not implement 
specific trade facilitation measures on pharmaceutical products from Singapore. 
 Questions from the delegation of Mexico 
 Technical barriers to trade 
 
1.8  With regard to cooperation in the fields of standards, technical regulations and 
conformity assessment procedures, has work alre ady begun on this issue? Is there a work 
programme? On what subjects is work  being carried out or due to begin? 
Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu are 
committed to make efforts on cooperation in the fields of standards, technical regulations and 
conformity assessment procedures. Both sides intend  to address the work proposed under Article 7.5 
(Trade Facilitation) of the Agreement at review meetings in the future. 
 WT/REG350/2 
- 4 - 
  Article 4.2 establishes that production proc esses may be performed in a third country, 
without goods losing their originating status , and stipulates certain conditions for the 
originating materials used. Is there a method ology for calculating the percentage of the 
value indicated in this Article? Is it possible to  verify the origin of such products in third 
countries where production processes have be en performed? How will producers of goods 
in the territory of a Party be able to determin e the value of materials incorporated in a third 
country? 
 
Article 4.12 deals with goods whose production process can be segmented in such a way that 
the bulk of the production still takes place in the territory of the Party. It is usually the low value manpower intensive segment (e.g. assembly line work ) that is done in the territory of the non-Party 
by an entity that is either related to the producer (e.g. subsidiary company) or under contract with the 
producer i.e. there is a direct relationship. In addi tion, to qualify for this outward processing method 
set out in Article 4.12, it is critical for the first an d last segments of production to take place in the 
territory of the Party by the same producer. This ensures that there is seamless documentation for 
verification purposes.  
For example, goods that have been manufacture d under this production process are goods for 
which the production process can be di vided into three stages as follows. 
  Stage 1: the fabrication of the semi-finished good by a producer in a Party; 
 Stage 2: the further processing of the semi-finished good in a non-Party; 
 Stage 3: the final processing and exporting of the outward processed good by the same 
 producer and Party as that in stage 1. 
 
The producer is required to track and categorize  the work carried out in each stage, and the 
origin and cost of all inputs involved in the three different stages. The producer is also required to 
maintain the relevant documentation. For the purpose of verification, customs of Singapore and the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu may require the following documentation to ascertain the origin of the relevant product based on Article 4.12.  
For stage 1, the producer will be required to pr oduce documentation such as the export invoice, 
export permit, bill of lading (BL)/manifest or any other relevant document for the export of the semi-finished good to the third party. 
 
For stage 2, the producer will be required to produce proof of the work carried out in the 
territory of the third party by means of delivery note, import permit in the third party, 
contract/purchase/work order and certification from the factory in the third party to attest to the work 
carried out in that party.  
For the last stage, the producer will be requir ed to provide proof of re-importation of the 
outward processed good by means of the third party factory's invoice, export invoice from the third 
party's exporter, BL/manifest, import permit and other relevant documents.  
Further, the producer will be required to produce the manufacturing cost statement for the 
good. The statement must be endorsed by the company's managing director and accountant.  
As the Value-Add for such processes is based on the Build-Up methodology, we would like to 
clarify that:  
a. The "total value of non-originating inputs" is merely a summation of the value of all 
non-originating materials used by the producer in the manufacturing Party for his production 
of the good, and all costs charged to him (including that for any materials incorporated during) for the outward processing. 
b. The "value of originating materials", on the other hand, is a summation of the value of all 
originating materials used by the producer in the manufacturing Party for his production of the good, both before and after the outward processing. 
c. The percentages indicated in the Article may be obtained by dividing the respective value 
against the customs value of the final good. WT/REG350/2 
- 5 - 
  Accordingly, it is not necessary to separately es tablish the value of materials incorporated in the 
third party during the outward processing since all inputs (both in terms of materials and costs) will 
count towards the total value of non-originating inputs.  
1.9  Article 4.4 sets out a list of operations that  do not confer origin. Do these operations 
prevail over the rules of orig in laid down in Annex 4B? 
Under ASTEP, the list of minimal operations intends to capture the operations or processes 
which contribute minimally to the essential characteristics of the goods and which by themselves, or in 
combination, do not confer origin. As set out in Article 4.2 (originating goods), one pathway to origin would be for the good to be produced in the territory of one or both Parties, using non-originating materials that conform to the requirements specified in Annex 4B as well as the other applicable 
provisions of this Chapter. 
 1.10  Pursuant to paragraph 4 of Article 4.11 (Transit through non-Parties) in order to prove 
that the transport of goods through a third country complies with paragraph 3 of this 
Article, documents supplied by the third count ry or by the competen t authorities will be 
used. What is meant by competent authorities?  Does it refer to the authorities of the 
exporting Party? Does each Party have specif ic regulations to determine which documents 
should be submitted for the purposes of this Ar ticle? In accordance with the provisions of 
this Article, will the importing Party be unabl e to accept transport documents such as air 
waybills, bills of lading or consignment notes, in  order to authorize transit, given that these 
documents are issued by a private operator? 
A competent authority may refer to any authority in the non-Party (which territory the goods 
are transited through) which is authorized to issue the relevant document or certification to prove 
compliance with the provisions in paragraphs 2 and 3 of the Article. 
 
Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu do not 
stipulate the specific documents that must be pres ented for the purpose of the Article, however, the 
documents must be sufficient to show compliance to paragraphs 2 and 3 of the Article. Both parties understand that there are transiting non-Parties whic h do not have a competent authority which issues 
the relevant official document. As such, we can accept legitimate freight documents such as air 
waybills, bills of lading, commercial invoices, consignment notes and a declaration from the 
carrier/private operator in lieu of such official document if they could prove the necessary.  
Questions from the delegation of Peru 
 
1.11  On the basis of the World Custom Organizati on, have the Parties agreed on an article 
on express shipments? If it is not the case, Peru would like to know the reason. 
There is no article on Express Shipments. The outcome of the negotiations is as such. 
 1.12  Have the Parties established common proced ures for the issuance of an advance 
ruling? If this is the case, does Article 5.8.  on Single Window have any format to develop 
this commitment? 
There are no common procedures between Parties for the issuance of advance rulings. 
Nonetheless, Parties agreed on the general modalities such as what type of advance rulings to be 
issued, to whom, when, and how it is to be issued.  
Questions from the delegation of Thailand 
 
National Treatment and MFN 
 
1.13  The report says that there are no provisio ns on MFN Treatment of services suppliers 
and investment in the Agreement. Consequently, Thailand would like to seek clarification on 
that and its implication where one party accords the better treatment to non-party. 
There are no MFN provisions under the Services and Investment Chapters of the Agreement. 
Hence, better treatment accorded by a party to a non-party will not be automatically accorded to the other party. WT/REG350/2 
- 6 - 
  Performance requirements 
 
1.14  According to Article Performance Requirem ents under Chapter of Investment which 
provides that the Parties may not impose or  enforce performance requirements on ..., 
including restrictions on sales of services, Th ailand would like to seek clarification on any 
measures subject to its scope and coverage an d the application of such measures deemed 
to be violation of commitments. 
Measures subject to the scope and coverage of  Article 9.9 Performance requirements are as 
listed in the Article. The first group of measures that are prohibited are those listed in paragraphs 1 (a) – (g) that condition the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment of an investor of a Party or of a 
non-Party on compliance with such measures, while the second group of prohibited measures are 
those that condition the receipt or continued receipt of an advantage on compliance with the requirements as listed in paragraphs 2 (a) – (d). Measures that do not conform with these obligations 
are scheduled in the lists of Non-Conforming Measures. 
 Movement of natural persons 
 1.15  Thailand would like to seek clarification on  the type of natural persons covered under 
the Services Chapter. 
Commitments on natural persons under the Services Chapter are similar to both Parties' existing 
WTO GATS commitments on natural persons. Singapore has made WTO commitments on 
intra-corporate transferees at the level of managers , executives and specialists. The Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu has made WTO commitments on business visitors, 
intra-corporate transferees, and contractual servic e suppliers of certain service sectors/subsectors. 
 Question on Annex 8B: I (the ASTEP's Legal text) 
 1.16  Thailand would like to seek clarificatio n whether Annex 8B:1 covers a rachet 
mechanism and its application. 
Annex 8B:1 covers a ratchet mechanism for me asures reserved under the Non-Conforming 
Measure (NCM), where any amendment to any non-conforming measure should not decrease the 
conformity of the measure as it existed immediately before the amendment.  
__________