WT/REG283/2  
28 June 2013  
(13-3363)  Page: 1/3  
Committee on Regional Trade Agreements  Original: English/Spanish  
 
  FREE TRADE AGREEMENT BETWEEN EL SALVADOR, HONDURAS AND THE SEPARATE 
CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
(GOODS AND SERVICES) 
QUESTIONS AND REPLIES 
 The following communication, dated 21 June 2013,  is being circulated at the request of the 
delegations of El Salvador, Honduras and the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu. 
  
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 This document reproduces the questi ons addressed to the Parties and the 
responses submitted. 
 
Question from the delegation of Argentina 
 
1.1.  Paragraph 3.25 on page 22 of the Secr etariat document refers to the provisions 
in paragraph (d) of Article 8.05 of the Agreement in which the Parties undertake 
to establish harmonized systems for procedur es for control, inspection and approval 
of SPS measures, and explains that this ha s not yet been done. Mo reover, paragraph (e) 
of Article 8.07 sets up the procedure and ti me-frames to obtain additional technical 
information in case of provisional SPS measures. Finally, Article 8.08 regulates 
the procedure to obtain recogn ition of disease-free areas. 
How does El Salvador intend to reconc ile this international obligation under 
the Agreement with its current domestic legislation (Executive Agreement No. 54, 
published on 5 April 2001) which establishes a legal prohibition on imports of cattle, 
sheep, goats, pigs and other cloven hoofed animals, and products and byproducts 
of those species, from countries affect ed by or with a suspected presence 
of foot and mouth disease?  
 When the Parties decide to bring into e ffect a harmonized system for procedures 
for control, inspection and approval of sanitary and phytosanitary measures, as referred to in Article 8.05(d) of the FTA between El Salvador, Honduras and Chinese Taipei, it will 
be implemented in accordance with intern ational regulations and current legislation 
(Executive Agreement No. 54 of 2001).  
 As regards the procedure and time-frames for obtaining technical information in case 
of provisional SPS measures, as referred to in Article 8.07(e) of the FTA, current legislation indicates that this is a definitive measure.  
 The recognition of disease-free areas will be governed by the provisions of Article 8.08 
of the FTA, in accordance with international standards, guidelines or recommendations.  WT/REG283/2 
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  Questions from the delegation of the European Union 
 
Subsidies and State-aid 
Domestic support 
 1.2.  Paragraph 3.45 of the report recalls  that according to Article 3.08 of the 
Agreement, the Parties recognize that dome stic support measures to the agriculture 
sector could be of crucial importance for ag riculture but also distort trade and affect 
production. To ensure transparency , the Agreement foresees that the 
Committee on Trade in Goods, as set in Articl e 3.16 of the Agreement, shall analyse their 
domestic support measures. However, acco rding to paragraph 3.6 of the report, 
the Committee has never met until February 2013. 
 Could the Parties explain how the transpar ency in the domestic support measures 
adopted by the Parties has been guaranteed to present, considering that the Committee 
had never met? 
  The Committee on Trade in Goods of the Free Trade Agreement (hereinafter referred 
to as "FTA") between El Salvador, Honduras and the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu has a number of different functions (see Article 3.16) including implementation and administration of the Chapte r on National Treatment and Access to Markets, 
the review and recommendation of proposals for mo difications or additions, the analysis of the 
status of domestic support measures of the Parties. 
  In this context, the Parties have framed in paragraph 1 of Article 3.08 of this FTA application 
their obligations on domestic support in conformity with the provisions of the WTO Agreement 
on Agriculture, which includes the transparency provisions relating to the domestic support measures of Members. 
 
 Furthermore, pursuant to paragraph 2 of Article 3.08, the Parties agree to ensure transparency in domestic support measures not only by analysing them in the Committee on Trade in Goods, but also through the timely exchange of information among Parties or through 
consultations at the request of a Party at any time. To date, the Parties have maintained 
a constant and fluid exchange of information thro ugh various official channels of communication. 
 
Local (Commercial) presence 
 
1.3.  The report (paragraph 4.18) recalls that according to Article 11.05 
of the Agreement, no Party may require a service provider of the other Party 
to establish or maintain a local representati ve office or any other form of enterprise, 
or to be resident locally as a condition fo r the "cross-border" provision of a service. 
 We consider this as very important in general the inclusion of such horizontal 
standards in bilateral trade agreements. 
  Can the Parties explain why they have  chosen particularly this standard? 
 
 This provision is a product of the negotiations and included in several bilateral Trade Agreements agreed by some of the Cont racting Parties, with respect to the Chapter 
on Cross-Border Trade in Services in this FTA. 
  It is important to emphasize that this horizontal standard, as agreed, must be read alongside Annexes I and II, which refer to existi ng and future non-conforming measures with 
respect to the Chapters on Cross-Border Trade in Services and Investment in the 
Agreement (paragraph 4.37).  WT/REG283/2 
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  Sector-specific commitments 
 
1.4.  The report describes the Agreement's liberalization commitments in trade in services and investment and in addition  Table 4.2 compares the services schedule 
of the Separate Customs Territory of Ta iwan, Penghu, Kinmen and Matsu in the 
Agreement vis-a-vis  its GATS schedule. 
a. Could the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
indicate if in its annex of non-conformi ng measures (Annex I to the Agreement) 
is there any additional market access offered to Honduras and El Salvador 
compared to current legislation in force in the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu? 
b. If so could the Separate Customs Te rritory of Taiwan, Penghu, Kinmen 
and Matsu provide further information on which sectors and what degree 
of liberalization was extended to El Salvador and Honduras? 
 Compared to current legislation in force in the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu, there is no additional market access offered to El Salvador and Honduras in Annex I of non-conforming measures to the Agreement, with the exception 
of transport services concerning internal waterw ay transport, cabotage, and pilotage. As regards 
foreign capital, Article 5.3 of The Law on Ship s was revised in 2010, increasing the equity for 
a foreign limited company or a foreign company limited by shares invested in the vessels of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu from 1/3 to 1/2. 
 
Annex 1 
Market access indicators 
 1.5.  According to the report, by 2027, the en d of implementation period for El Salvador 
and Honduras: 
 73.1% of El Salvador's tariff lines will be duty free for imports from 
the Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu, of which 
75.9% for agricultural products and 72.7% for non-agricultural products. 
 77.8% of Honduras' tariff lines w ill be duty free for imports from 
the Separate Customs Territory of Taiwan , Penghu, Kinmen and Matsu, of which 
76.1% for agricultural products and 78.1% for non-agricultural products. 
And by 2022, the end of implementation period for the Separate Customs Territory 
of Taiwan, Penghu, Kinmen and Matsu: 
 
 the shares of duty-free lines for imports from El Salvador and Honduras are 
expected to rise to 97.4% overall, with  87.8% lines for agricultural products 
and 99.3% lines for non-agricultural products. 
 Could the Parties explain which is the ju stification for applying an asymmetric 
tariff liberalizations? 
 
 Given the differences between the Parties in terms of their level of economic development and the respective sizes of their economies, the Parties are agreed that the liberalization goals 
of this FTA are both appropriate and justified. 
 
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