WT/REG297/M/1  
 
24 July 2013  
(13-3969) Page: 1/4  
Committee on Regional Trade Agreements 
Sixty-ninth Session    
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN GUATEMALA AND THE 
SEPARATE CUSTOMS TERRITORY OF TAIW AN, PENGHU, KINMEN AND MATSU,  
GOODS AND SERVICES 
NOTE ON THE MEETING OF 3 JULY 2013 
Chairman: Ambassador Francisco Lima Mena (El Salvador) 
1.1.  The 69th Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/4130/Rev.1 dated 21 June 2013. 
1.2.  Under Agenda Item B.IV of this session, the CRTA considered the Free Trade Agreement 
between Guatemala and the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu 
(Chinese Taipei), goods and services (hereinafter 'the Agreement'). 
1.3.  The Chairman said that the Agreement had entered into force on 1 July 2006. It had been 
notified to the WTO by the Parties on 11 July  2011, under Article XXIV:7(a) of the GATT 1994 and 
the Understanding on the Interpretation of Article XXIV of GATT 1994 as an Agreement 
establishing a free trade area (document WT/REG297/N/1) and under GATS Article V:7(a) as an 
agreement providing for the liberalization of trade in  services within the meaning of Article V of the 
GATS (document S/C/N/595). The text of the Agreement was available, together with its Annexes, on the Parties' official websites. The Factual Presentation on the goods and services aspects 
(documents WT/REG297/1 and Add.1 dated 20 March 2013 and 3 June 2013 respectively) had 
been prepared by the Secretariat on its own responsibility in full consultation with the Parties, in 
accordance with paragraph 7(b) of the Transpar ency Mechanism for Regional Trade Agreements 
(document WT/L/671) ("TM"). In addition, writte n questions and replies on this Agreement had 
been distributed in document WT/REG297/2 dated 28 June 2013. He proposed to organize the 
consideration of the Agreement by first asking the Parties and then other Members to give any general comments and then turn to the specifics of the Agreement using the Factual Presentation, 
documents WT/REG297/1 and WT/REG297/1/Add.1, to  guide the discussion. They would then go 
through the Questions and Replies document.  
1.4.  The representative of Chinese Taipei th anked the Secretariat for the preparation of the 
factual presentation and Guatemala for the work  on preparing for the consideration, and the 
European Union, Colombia and Australia for thei r written questions, which had all been duly 
answered. She explained briefly the background to the Agreement, its purpose and contents 
followed by Chinese Taipei's perspectives on the benefits seen since the Agreement had come into 
effect, and what gains were expected in the future. 
1.5.   Chinese Taipei and Guatemala had alread y been enjoying a close and growing bilateral 
trading relationship for several years before they started to consider a free trade agreement. 
Beginning on 1 March 2005, there had been four rounds of negotiations, with both Parties finally 
putting their signatures to the Agreement on 22 September of the same year. The Agreement 
officially had come into effect on 1 July 2006. 
1.6.  Being a reciprocal and mutually beneficial agreement, the Agreement proposed to eliminate 
or reduce tariffs and other restrictive trade barriers on substantially all the trade between the 
Parties. It also aimed to make full and comple mentary use of both economies and to strengthen 
trade, investment and technological cooperation to enhance business opportunities for both WT/REG297/M/1 
 
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  Parties, thereby creating more employment opport unities and improving the welfare of the people. 
At the same time, the Agreement was intended to help sharpen the international competitiveness of both Parties, enabling each to respond more effectively to the growing challenges of globalization and liberalization.  
1.7.  The Agreement was built on the rights  and obligations of the Marrakesh Agreement 
establishing the WTO. It consisted of 21 chapters covering: trade in goods; trade barriers; investment; trade in services; intellectual property rights; dispute settlement; transparency and 
other institutional issues. In addition, it contained a Maritime Transport Agreement and an 
Air Services Agreement in the interests of trade and trade facilitation. 
1.8.  In terms of the liberalization of trade in  goods, immediately after the Agreement had come 
into effect, Chinese Taipei had offered Guatemala zero tariffs on 5,649 items (accounting for 
63.9% of their total number of tariff lines). Guatemala had offered to Chinese Taipei zero tariffs on 
4,263 items (accounting for 64.9% of their total tariff lines). At the end of the implementation period, Chinese Taipei would have offered free access to its market for 97.4% of Guatemalan 
products, and Guatemala would have offered free access to its market for 73.6% of Chinese 
Taipei's exports. This, Chinese Taipei believe d, clearly demonstrated the extremely high 
commitment of both Parties to the liberalization of trade in goods. 
1.9.  On the liberalization of trade in services, the Agreement adopted a negative list approach 
with only a few service sectors that were listed by both Parties to which none or conditional access was granted, while their markets were open to the re st of the services sectors. She considered this 
to be a further demonstration of both Parties' high commitment to trade liberalization. 
1.10.  As for the effectiveness of the Agreement, there had been some indications of its positive 
effect on both trade volume and investment. According to Chinese Taipei's customs statistics, the volume of bilateral trade between the Parties ha d increased by 25% in the first year of the 
Agreement's implementation, reaching a total valu e of US$167.89 million. Even though bilateral 
trade had declined due to the global financial crisis in 2008, it had begun to recover in the following year, with an increase of 3% in 2009, and then a massive 44% increase in 2010. 
Specifically, imports from Guatemala in 2010 had amounted to US$71.64 million, a rise of 77%, 
and exports to Guatemala had reached US$81.69 m illion, up by 24% on the previous year. The 
combined value of their two-way trade had continued to rise over the last two years, to US$175.90 million in 2011 and US$187.41 million in 2012.  
1.11.  As far as investment was concerned, as of April 2013, Chinese Taipei had invested 
US$381.2 million in 58 projects in Guatemala covering the manufacturing industry （such as 
instant noodle factories, jelly and egg roll factor ies, zipper processing factories, the construction 
industry （road construction and community housing), agriculture （pitaya fruit, cymbidium orchids 
and cereals ）and services （hotel, restaurant, automotive repair and maintenance, in all, creating 
2,413 employment opportunities. 
1.12.  In conclusion she stated that Chinese Taipei had every confidence that the Agreement 
would develop to its full potential and make a substantial contribution to its own and global trade. 
1.13.  The representative of Guatemala thanked the Secretariat for the preparation of the factual 
presentation on the Agreement and the delegation  of Chinese Taipei for the preparation of the 
review. The Agreement was Guatemala's 9th free trade agreement, and Chinese Taipei was an 
important trading partner. The Agreement had be en signed by the Parties on 22 September 2005 
and had entered into force on 1 July 2006. Sinc e its entry into force Guatemala had gradually 
increased its exports, thereby gradually reducing its trade deficit with Chinese Taipei. 
1.14.  The Agreement aimed, inter alia,  at promoting the expansion and diversification of trade in 
goods and services, eliminating barriers to trade and facilitating the cross border movement of goods and services, promoting fair competition, encouraging, protecting and substantially 
increasing investment, and establishing a framework for improved bilateral cooperation. According 
to the tariff elimination schedule, the Agreement was to be implemented over 15 years, during which the Parties hoped to intensify bilateral trade. WT/REG297/M/1 
 
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  1.15.  With respect to trade in goods, the Agreement had been in force for six years and based on 
the liberalization schedule, more than 78% of Chinese Taipei's tariff lines and 63% of Guatemala's tariff lines were duty free, which covered substantia lly all the trade in accordance with Article XXIV 
of the GATT 1994. 
1.16.  As regards investment, Guatemala was a net re cipient of foreign direct investment (FDI). In 
view of Chinese Taipei's tradition of investing in other countries Guatemala saw the inclusion of the investment Chapter in the Agreement as a very positive step, which laid the foundations for the 
promotion and protection of FDI. 
1.17.  Finally, the Parties' commitments in services under the Agreement represented an 
important improvement over their commitments under the GATS. 
1.18.  Guatemala thanked the delegations that had submitted written questions in advance and 
hoped that their replies had been satisfactory, and was ready to answer any further questions. 
1.19.  The Chairman then opened the floor for the general comments. 
1.20.  The representative of Australia thanked the Parties for their responses to their questions 
which were under review in the capital. Any fo llow up questions would be submitted by the 
appropriate deadline.  
1.21.  The representative of the European Union thanked both the Secretariat and the Parties for 
their good presentations. He noted positively that  there were significant improvements in the level 
of commitments made by the Parties under GATS in  the area of services. The EU had submitted on 
16 April questions asking for clarification on some provisions, including on intellectual property rights, SPS measures and the coverage of tariff reductions. He thanked the Parties for their 
replies, which were being analysed, and the EU might come back with subsequent questions. 
There was only one thing to flag that might require follow up questions from the EU, and that was how the Parties saw that the low coverage of tariff reductions fulfilled their obligations under 
Article XXIV of GATT 1994 in respect of substantial trade coverage. This was a general comment 
from the EU which did not expect an immediate answer to it.  
1.22.  The representative of Chinese Taipei thanke d the EU for their questions and stated that at 
the end of the implementation period 97.4% of Chinese Taipei's tariff would be duty free which 
was the result of negotiations that had taken into consideration each Party's interests and concerns.  
1.23.  The representative of Guatemala agreed with Chinese Taipei and added that there was no 
consensus about the understanding of what subs tantially all the trade was. It did not imply 
liberalizing all trade but was obviously more than  a little trade. Indeed in the Agreement a good 
percentage of tariff items were duty free and completion of the tariff elimination schedule would 
substantially increase trade between the Parties, and thus the Parties believed it was compatible 
with what they had said in their statements about substantially all the trade under Article XXIV of GATT being covered. 
1.24.   The Chairman then went through the specifics of the Agreement, in line with the factual 
presentation, by broad sections. 
1.25.  On the questions and replies in document WT/REG297/2 the representative of the 
United States thanked the Parties and the Secretar iat for the materials provided and the excellent 
presentations that had enabled them to consider th e Agreement. In line with the written questions 
posed by the delegations of Colombia, and the Eu ropean Union the United States noted and also 
questioned the low level tariff elimination, particularly by Guatemala. The United States also 
looked forward to the notification of non-notified RTAs listed in Table 5.1. and in this regard he 
noted in the question and answer document Chines e Taipei's response on when it intended to 
notify the Agreement with China, the Economic  Cooperation Framework Agreement (ECFA) FTA. 
Chinese Taipei seemed to be arguing that since it had submitted an early announcement with the 
text and annexes and since the Agreement was on ly a framework Agreement, with follow up 
agreements to be negotiated, it did not need to be formally notified at present. The U.S. strongly disagreed. Paragraph 3 of the TM clearly stated that as a rule notification would occur no later than WT/REG297/M/1 
 
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  directly following the Parties' ratification of the RTA or any Party's decision on the application of 
the relevant parts of the Agreement and before th e application of preferen tial treatment between 
the Parties. The ECFA had been in force, provid ing for preferential treatment between the Parties 
since September 2010. The U.S. urged Chinese Taipei and China to notify the Agreement under 
GATT Article XXIV and GATS Article V as soon as possible.  
1.26.  The representative of Colombia thanked Gu atemala and Chinese Taipei for their replies to 
their questions circulated in document WT/REG297/2 dated 28 June 2013. The responses had been 
sent to the Capital and any follow-up questions would be submitted by 10 July.  
1.27.  The representative of Chinese Taipei than ked the U.S. for the questions regarding the ECFA. 
He noted that the TM required notification only when the ratification and application had taken 
effect. In this regard Chinese Taipei reiterated that the EFCA was only a framework agreement 
with follow up agreements to be negotiated, signed  and to take effect through respective domestic 
procedures. The ECFA would be formally notified to the WTO as well as the follow up agreements after those agreements had been signed and became effective.  
1.28.  The Chairman said that the consideration of the Goods and Services Aspects of the Free 
Trade Agreement between Guatem ala and the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu (Chinese Taipei), had allowed the Committee to clarify a number of questions 
and the oral discussion of this RTA could be concluded in accordance with paragraph 11 of the 
Transparency Mechanism. If any delegations wished to ask follow up questions they were invited to do so and to forward submissions in writing to the Secretariat by 10 July 2013 and Parties were 
asked to submit replies in writing by no later than 24 July 2013. In accordance with paragraph 13 
of the Transparency Mechanism all written submissi ons, as well as minutes of this meeting would 
be circulated promptly, in all WTO official languages, and would be made available on the WTO website.  
1.29.  The Committee took note of the comments made. 
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