WORLD TRADE  
ORGANIZATION  WT/REG268/1  
21 September 2010 
 (10-4831) 
Committee on Regional Trade Agreements  
  
 
  
 
 
FACTUAL PRESENTATION 
 
Free Trade Agreement  
between  
Panama and the Separate Customs Territory 
of Taiwan, Penghu, Kinmen and Matsu 
(Goods and Services) 
 
Report by the Secretariat 
 
 
 
 
This report, prepared for the considera tion of the Free Trade Agreement between 
Panama and Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu has 
been drawn up by the WTO Secretariat on its own responsibility and in full 
consultation with the Parties.  The fa ctual presentation reproduces as closely as 
possible the terminology used in the Agreement and in the comments 
provided.    The Secretariat notes that none of this terminology has implications for sovereignty.  The report has been dr awn up in accordance with the rules and 
procedures contained in the Decision for a Transparency Mechanism for Regional 
Trade Agreements (WT/L/671).  
 
Any technical questions arising from this report may be addressed to Ms Juneyoung Lee (tel.: +41 22 739 67 91).  WT/REG268/1 
 Page iii 
 
 
  TABLE OF CONTENTS 
 
 
  Page 
 
I. TRADE ENVIRONMENT 1  
A. M ERCHANDISE TRADE  1 
B. T RADE IN SERVICES AND INVESTMENT  6 
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 11  
A. B ACKGROUND INFORMATION  11 
III. TRADE IN GOODS 12  
A. I MPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  12 
1. General provisions 12 
2. Liberalization of trade and tariff lines 13 3. Panama's liberalization schedule 14 
4. Chinese Taipei's liberalization schedule 17 
5. Tariff-rate quotas 21 
(a) Panama 21 
(b) Chinese Taipei 21 
6. Import restrictions 22 
B. R
ULES OF ORIGIN  23 
C. E XPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  24 
D. R EGULATORY PROVISIONS ON TRADE IN GOODS  25 
1. Standards 25 
(a) Sanitary and phytosanitary measures 26 
(b) Technical barriers to trade 27 
2. Safeguard mechanisms 28 
(a) Global safeguards 28 
(b) Bilateral safeguards 28 
(c) Balance of payments safeguards 29 
3. Anti-dumping 29 4. Subsidies and state-aid 30 
(a) Domestic support 30 
(b) Export subsidies 30 (c) Subsidies and countervailing measures 30 
5. Customs-related procedures 30 
IV. CROSS-BORDER TRADE IN SERVICES AND INVESTMENT 30  
A. S
COPE AND DEFINITIONS  30 
B. D ENIAL OF BENEFITS  32 
C. G ENERAL PROVISIONS ON CROSS -BORDER TRADE IN SERVICES AND INVESTMENT  32 
1. Market access 32 
2. National and MFN treatment 33 
3. Commercial presence 33 4. Movement of natural persons 33 
5. Performance requirements 34 
6. Senior management and board of directors 34 7. Health, safety or environmental measures 35 WT/REG268/1 
Page iv  
 
  D. N ON-CONFORMING MEASURES ON TRADE IN SERVICES AND INVESTMENT  35 
1. Panama 35 
2. Chinese Taipei 36 
E. S ECTOR SPECIFIC PROVISIONS ON TRADE IN SERVICES  38 
1. Financial services 38 
2. Telecommunications 39 
V. GENERAL PROVISIONS OF THE AGREEMENT 41  
A. T RANSPARENCY  41 
B. E XCEPTIONS  41 
C. A CCESSION AND TERMINATION  41 
D. I NSTITUTIONAL FRAMEWORK  41 
E. D ISPUTE SETTLEMENT  42 
F. R ELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  45 
G. G OVERNMENT PROCUREMENT  45 
H. I NTELLECTUAL PROPERTY RIGHTS  45 
I. O THERS  47 
1. Competition 47 
2. Environment 47 
ANNEX I 48 
ANNEX II 53 
 
  WT/REG268/1 
 Page 1 
 
 
  I. TRADE ENVIRONMENT 
1. The Free Trade Agreement (FTA) between Panama and the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu (hereinafter referr ed to as 'Chinese Taipei') is Panama's first FTA 
with an Asian WTO Member.  The FTA is Chinese Taipei's second FTA notified to the WTO following the one with Nicaragua. 
2. The economies of the Parties are considerably di fferent in size and trade profiles.  In 2008, 
Panama's GDP was estimated at US$23 billion while  that of Chinese Taipei was US$402.9 billion.  
With total merchandise exports of US$1.2 billion and imports of US$9 billion, Panama was the 
world's 142
nd and 96th largest exporter and importer in 2008 compared to Chinese Taipei ranking at 
the 18th largest exporter and importer (its merchandise exports were US$255.6 and imports 
US$240.4).  In commercial services, Panama ranked 62nd and 87th in terms of exports and imports, 
(US$5.7 billion and US$2.5 billion, resp ectively), and Chinese Taipei ranked 28th and 29th exporter 
and importer (exports at US$34.4 b illion and imports at US$34.2 billion).  Their trade to GDP ratios 
averaged over 2006-2008 were 145 for Pa nama and 134.1 for Chinese Taipei.1 
A. MERCHANDISE TRADE  
3. Merchandise trade between the Parties remains rela tively small compared to their trade with 
the world.  In 2008 Panama was Chinese Taipei's 41st largest export market (0.09% of Chinese 
Taipei's exports) and its 56th largest source of imports (0.03% of its imports).2  Chinese Taipei was 
Panama's 19th largest import source (0.6% of Panama's imports) and fifth export (4.1% of Panama's 
exports) destination.3 
4. Recent developments in global and intra-Part y trade are presented in Charts I.1 and I.2 .  Over 
the period surveyed (2001-2008), Panama's imports gr ew rapidly, particularly since 2004, outpacing 
growth in exports and resulting in a widening of  its overall trade deficit, whereas Chinese Taipei 
maintained a trade surplus.  In its trade with Ch inese Taipei, Panama has run a deficit during this 
period with figures reported by Chinese Taipei, s howing strong export growth since 2004, while 
Panama's figures show little change in the bilatera l trade balance since the entry into force of the 
Agreement in 2004.4 
                                                      
1 WTO Statistics Database, Trade Profiles (March 2010). 
2 In 2008, Chinese Taipei's largest export markets were: China (26.1%), Hong Kong, China (12.8%), 
the United States (12.1%), the European Union (11%), and Japan (6.9%).  Its largest import sources: Japan 
(19.4%), China (13.1%), the United States (11%), the European Union (8.2%), and Saudi Arabia (6.3%).  WTO Statistics Database, Trade Profiles (March 2010).  
3 In 2008, Panama's main sources of imports were: the United States (29.7%), the European Union (27) 
(6.5%), Costa Rica (5.1%), China (5%), and Japan (4.3%), wh ile its exports were destined for: the United States 
(39.2%), the European Union (31.6% ), Costa Rica (5.8%), and China (4.3 %).  WTO Statistics Database, Trade 
Profiles (March 2010). 
4 Figures on bilateral trade with Panama reported by  Chinese Taipei, to UNSD  Comtrade include trade 
through Panama's Colon Free Zone whereas Panama does not report trade in its Colon Free Zone to UNSD 
Comtrade resulting in a significant discrepancy between Charts I.1 and I.2. WT/REG268/1 
Page 2  
 
  0246810
2001 2002 2003 2004 2005 2006 2007 20080100200300400500US$billion US$millionChart I.1 - Panama: Merchandise imports from and exports to world and Chinese Taipei, 
2001-2008
Note: Bilateral trade figures with Chinese Taipei do not include the "Zona Libre de Col όn".
Source : UNSD, Comtrade database and WTO-IDB (only for Panama's 2004 imports).Imports from Chinese Taipei
Exports to Chinese TaipeiTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
 
050100150200250300
2001 2002 2003 2004 2005 2006 2007 20080100200300400500600US$billion US$millionChart I.2 - Chinese Taipei: Merchandise imports from and exports to world and Panama, 
2001-2008
Note: Bilateral trade figures with Panama include the "Zona Libre de Col όn".
Source : UNSD, Comtrade database.Imports from Panama
Exports to PanamaTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
  WT/REG268/1 
 Page 3 
 
 
  5. The commodity structure of trade between the Pa rties, as well as of their imports and exports 
to the world in the period 2001-2003 (Chart I.3a) a nd 2006-2008 (Chart I.3b) is shown below on the 
basis of the Harmonized System (HS) sections. 
6. While there has been little change in the Par ties' structure of global exports and imports 
between these two periods, there appears to have been  a significant shift in the structure of bilateral 
trade.  While the share of Panama's three largest  export product categories – live animals, vegetables, 
and prepared foods has increased from 79.1% (2001-2003) to 83% (2006-2008) of total exports, 
imports by Chinese Taipei of prepared foods fro m Panama (at 38% the largest import category in 
2001-03) fell to 0.3% in 2006-08.  In contrast, the share of base metals, which at 37.5% were the second largest import category from Panama in 2001-03,  increased to 84.4% of the total in 2006-08.  
Base metals represented only 5.2% of Panama's gl obal exports in 2006-08 (ri sing from 2.7% of global 
exports in 2001-03).  In addition,  vegetables that are a major export from Panama are not a major 
import by Chinese Taipei from Panama, especially during 2006-2008. 
7. In comparison, Chinese Taipei's key major gl obal exports – machinery and base metals – 
continued to account for a major share of imports by Panama and even increased in importance during 
this period, from 32.1% to 54.6%. WT/REG268/1 
Page 4  
 
  Chart I.3a
Panama and Chinese Taipei : product composition of merchandise trade, annual 
average (2001-2003)
Panama's imports from Chinese Taipei Chinese Taipei's imports from Panama
Note: "Live animals" cover HS chapters 1-5 (Live animals; Animal products) and  "Vegetables" cover HS chapters 
           6-14 (Vegetable products).
Source:  UNSD, Comtrade database.Per cent
Total:  US$21 million Total:  US$5 million
Total:  US$3 billion Total: US$115 billion
Total:  US$802 million Total:  US$132 billionPanama's global exports Chinese Taipei's global exportsPanama's global importsChinese Taipei's global importsOther
4.5
Machinery  
19.8 Chemicals 6.1
Base metals
37.5Other 
2.3
Raw hides 4.7
Other 
5.0
Machinery
43.6
Base metals 
8.2Textiles 2.1Other
5.9
Chemicals
11.7Plastics 4.4Machinery
18.5
Vegetables 3.4
Textiles 4.5Wood pulp 4.4
Optical 6.2
Other 
5.7Other 
4.7
Vegetables
 22.2Minerals 4.6
Prepared foods  9.7Vehicles 3.8 Machinery 
53.6Chemicals 3.6
Textiles 
 9.2Minerals 
12.1Plastics 3.2
Base metals 
6.4
Optical 3.9Prepared foods 4.2
Vehicles 10.3Live animals 12.9
Live animals
47.2Textiles 1.7Misc. manufactured articles 1.6
Plastics 6.7Base metals 
12.3Plastics 10.9Optical 1.8
Chemicals
10.1Minerals 
17.1
Prepared foods 8.1Misc. manufactured articles 3.0Optical 1.9
Base metals 9.6Misc. manufactured articles 2.9Footwear 1.8
Vegetables 1.9
Base metals 2.7Textiles 
18.4
Misc. manufactured 
articles 11.8
Vehicles 9.8Prepared foods
38.0Chemicals 2.8Machinery 1.8
Vehicles 3.4Wood pulp 1.6
Minerals 1.9
Chemicals 2.8Wood pulp 1.7Prepared foods 1.8(including Vegetables 0.03) 
 
  WT/REG268/1 
 Page 5 
 
 
  Chart I.3b
Panama and Chinese Taipei : product composition of merchandise trade, annual 
average (2006-2008)
Panama's imports from Chinese Taipei Chinese Taipei's imports from Panama
Note: "Live animals" cover HS chapters 1-5 (Live animals;  Animal products) and "Vegetables" cover HS chapters 
           6-14 (Vegetable products).
 Source:  UNSD, Comtrade database.Per cent
Total:  US$36 million Total:  US$53 million
Total:  US$6.9 billion Total: US$221 billion
Total:  US$1.1 billion Total:  US$242 billionPanama's global exports Chinese Taipei's global exportsPanama's global importsChinese Taipei's global importsOther
2.8
Base metals
28.3Misc. manufactured articles 
6.4
Base metals
84.4Raw hides 3.3
Other 
4.6
Machinery
32.6
Chemicals 
11.2Vehicles 2.2Other
9.4
Vehicles
11.0Plastics 4.0Minerals
20.5Vegetables 3.1
Prepared foods 
6.2Wood pulp 3.5Textiles 3.2
Optical 5.5
Other 
4.1Other 
4.0
Vegetables
 36.3Base metals 5.2
Prepared foods  6.0Textiles 4.7
Optical
8.3Machinery 
47.4Vehicles  3.4
Plastics 
 7.5Textiles 
7.5
Minerals 
22.6Plastics 3.1
Base metals 
8.4
Chemicals 6.0Chemicals 2.6
Vehicles 10.9Live animals 10.9
Live animals
40.7Chemicals 2.3Precious stones 1.5
Minerals 6.1Machinery 
26.3Plastics 11.8Prepared foods 2.5
Base metals 
11.9Machinery 
19.6
Chemicals 9.3Misc. manufactured articles 3.0Optical 1.7
Base metals 11.0Misc. manufactured articles 1.7Articles of stone 1.7
Vegetables 1.6
Wood pulp 2.7Raw hides 1.2Optical 1.0 Other 
1.4(including Prepared foods 0.3; 
Vegetables 0.07 ) 
 
 WT/REG268/1 
Page 6  
 
  B. T
RADE IN SERVICES AND INVESTMENT  
8. Chart I.4 shows the breakdown of commercial services trade for Panama in 2001-2008.  
During this period, Panama has run a surplus in its global trade in commercial services compared to 
its global merchandise trade deficit as shown in Char t I.1.  The two biggest contributors to both 
exports and imports of services during this period were transportation and travel services followed by 
financial services. 
0123456
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
2001 2002 2003 2004 2005 2006 2007 2008
Note: no trade data on construction services except exports in 2007-2008; no data on exports of computer and information 
services in 2001-2003 and no import data  in 2001-2008; no data on exports of royalties and license fees in 2001-2008; no trade  
data of personal, cultural and recreational services in 2001-2008.Source: IMF, BOP CD-Rom.Chart I.4
Panama, total commercial services trade, 2001-2008
US$ billion
Transportation services
Travel
Communications services
ConstructionFinancial services
Computer and information services
Royalties and license feesOther business services
Government servicesInsurance services
 
 
9. Chart I.5 shows the breakdown of commercial services trade for Chinese Taipei in 2001-2008 
In contrast to its merchandise trade surplus, Ch inese Taipei has had an overall trade deficit in 
commercial services except 2008.  Its imports and exports of commercial services were relatively 
stable over the period surveyed.  Exports are domi nated by other business services and transportation 
and travel services while transportation and travel services represent leading imports, and other business services and especially royalties and license fees have been growing. 
  WT/REG268/1 
 Page 7 
 
 
  0510152025303540
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
2001 2002 2003 2004 2005 2006 2007 2008
Source: Chinese Taipei.Chart I.5
Chinese Taipei, total commercial  services trade, 2001-2008
US$ billion
Transportation services
Travel 
Communication services
ConstructionFinancial services
Computer and information services
Royalties and license feesOther business services
Personal, cultural and 
recreational servicesInsurance services
 
 
 10. Chart I.6 shows Chinese Taipei's bilateral commercial services trade with Panama in 
2001-2006 which it has had an overall trade surplus except in 2005.  Chinese Taipei's exports of 
services to Panama were US$2.73 billion in 2002, d eclining since then until 2005 when they increased 
again reaching US$729 million in 2006.  Its imports of services from Panama showed a more stable 
trend with import value in 2003 almost tripling in 2004 and rising to US$598 million in 2006.  Other 
business services and travel services were the largest exports and imports. 
 WT/REG268/1 
Page 8  
 
  0.00.51.01.52.02.53.0
Export Import Export Import Export Import Export Import Export Import Export Import
2001 2002 2003 2004 2005 2006
Note: no data on exports of transportation services in 2001-2006; travel in 2003-2004; construction services in 2001-2006; 
royalties and license fees in 2001-2006; personal, cultural and recreational services in 2001-2004; and no data on imports of 
construction services in 2003-2006.Source: Chinese Taipei.Chart I.6
Chinese Taipei, bilateral commercial services trade wi th Panama, 2001-2006
US$ billion
Transportation services
Travel 
Communication services
ConstructionFinancial services
Computer and information services
Royalties and license feesOther business services
Personal, cultural and 
recreational servicesInsurance services
 
 
 11. Panama's global investment position is depict ed in Chart 1.7.  Both inward and outward 
foreign investment stock in 2001-2008 has grown consistently although the value of its outward 
investment remains higher than inward investment.  WT/REG268/1 
 Page 9 
 
 
  051015202530
2001 2002 2003 2004 2005 2006 2007 2008051015202530
2001 2002 2003 2004 2005 2006 2007 2008Chart I.7
Panama, inward and outward foreign inv estment stock with world, 2001-2008
Inward OutwardUS$ billion US$ billion
Source: UNCTAD, Foreign Direct Investment database.
 
 
 
12. Chinese Taipei's global investment position is depi cted in Chart I.8.  Inward FDI has been 
relatively stable during the period surveyed ( 2001-2008) just below US$50 billion in 2008.  In 
contrast, its outward FDI stock has shown rapi d growth reaching US$175 ,140 billion in 2008. WT/REG268/1 
Page 10  
 
  050100150200
2001 2002 2003 2004 2005 2006 2007 2008050100150200
2001 2002 2003 2004 2005 2006 2007 2008Chart I.8
Chinese Taipei, inward and outward forei gn investment stock with world, 
2001-2008
Inward Outward US$ billion US$ billion
Source: UNCTAD, Foreign Direct Investment database.
 
 
13. Chart I.9 shows Chinese Taipei's  inward and outward stock of FDI with Panama over the 
period 2001-2008.  Compared to its global FDI positi on for which it has a considerable difference in 
the value of inward and outward investment, its  bilateral FDI position w ith Panama shows more 
balance between.  Investment from Panama has slowly increased over this period at between 
US$625 million and US$815 million.  Chinese Taipei's investment to Panama has also increased reaching US$1.2 billion in 2008. 
  WT/REG268/1 
 Page 11 
 
 
  0.00.51.01.5
2001 2002 2003 2004 2005 2006 2007 20080.00.51.01.5
2001 2002 2003 2004 2005 2006 2007 2008Chart I.9
Chinese Taipei, inward a nd outward foreign investme nt stock with Panama, 
2001-2008
Inward Outward US$ billion US$ billion
Source: Chinese Taipei.
 
 
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
A. BACKGROUND INFORMATION  
14. The Agreement was signed by the Parties on 21  August 2003 and entered into force on 
1 January 2004. 
15. The goods and services aspects of the Agreement were notified to the WTO by the Parties on 
28 July 2009 under Article XXIV:7(a) of the GATT 1994, and Article V:7(a) of the GATS, 
respectively (document WT/REG268/N/1 and S/C/N/501).  The text of the Agreement is available, 
together with its related Annexes, on the following official websites: 
Panama :  http://www.mici.gob.pa/TLC_nueva.php  
Chinese Taipei :  http://eweb.trade.gov.tw/kmi.asp?xdurl=kmif.asp&cat=CAT4032  WT/REG268/1 
Page 12  
 
  16. The Agreement is composed of 21 Chapters, as follows: 
Box II.1:  Composition of the Agreement  
Chapters Title 
Preamble  
Part One General Aspects 
Chapter 1 Initial Provisions 
Chapter 2 General Definitions 
Part Two Trade in Goods 
Chapter 3 National Treatment and Market Access for Goods 
Chapter 4 Rules of Origin 
Chapter 5 Customs Procedures 
Chapter 6 Safeguard Measures 
Chapter 7 Unfair Trade Practices 
Part Three Technical Barriers to Trade 
Chapter 8 Sanitary and Phytosanitary Measures 
Chapter 9 Measures on Standards, Metrology and Authorization Procedures 
Part Four Investment, Services and related Matters 
Chapter 10 Investment 
Chapter 11 Cross-Border Trade in Services 
Chapter 12 Financial Services 
Chapter 13 Telecommunications 
Chapter 14 Temporary Entry for Business Persons 
Part Five Competition Policy 
Chapter 15 Competition Policy, Mo nopolies and State Enterprises 
Part Six Intellectual Property Rights 
Chapter 16 Intellectual Property 
Part Seven Administrative and Institutional Provisions 
Chapter 17 Transparency 
Chapter 18 Administration of the Agreement 
Chapter 19 Dispute Settlement 
Chapter 20 Exceptions 
Chapter 21 Final Provisions 
Source : Free Trade Agreement between Panama and Chinese Taipei.  
 
III. TRADE IN GOODS 
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
1. General provisions 
17. Each Party shall accord national treatment to goods from the other Party in accordance with 
Article III of the GATT 1994 (Article 3.3.1).  Howe ver, national treatment does not apply to certain 
measures related to import and export restric tions on those products identified by each Party 
(Annex 3.11(6)) (see section III.A.6).  Article 3.4.2 further clarifies that the purpose of the tariff reduction/elimination schedules is not to prevent the Parties from maintaining or increasing customs 
duties as may be allowed by the WTO Agreement or any other agreement which forms part of the WTO. 
18. Upon a request by either Party, the Parties sh all consult with each other to consider the 
possibility of accelerating the phase-out of custom s duties under the tariff reduction/elimination 
schedules (Article 3.4.4).  Any modification of the implementation period (i.e., from 2004 until 2013) 
with a view to accelerating the tariff reduction/e limination shall be conducted by the Committee on  WT/REG268/1 
 Page 13 
 
 
  Trade in Goods composed of the Panamanian Ministry of Trade and Industries, and the Chinese 
Taipei Ministry of Economic Affa irs (Article 3.16.3 and its Annex). 
19. The Parties shall temporarily grant duty-free access to each other on the following products: 
i) professional equipment to conduct business activit y, trade or profession of a business person that 
satisfies the conditions under Chapter 14 (temporary en try for business persons);  ii) equipment for the 
press or for radio or television br oadcasting and cinematographic equi pment;  iii) goods imported for 
sports purposes or goods intended for display or de monstration;  and iv) commercial samples and 
advertising films (Article 3.5.1). 
2. Liberalization of trade and tariff lines 
20. Trade in goods under the Agreement is classified under the 1996 nomenclature of the 
Harmonized System (HS) (Annex 3.4).  
21. The overall tariff elimination under the Agreement is depicted in Tables III.1.A and III.1.B.  
Table III.1.A shows duty elimination in terms of tariff lines and trade, as applied by Panama to 
imports from Chinese Taipei.  Before entry into for ce of the Agreement, 2,549 tariff lines (29.71% of 
Panama's tariff) were already duty-free on an MFN basis.5  Upon entry into force of the Agreement, 
an additional 1,634 tariff lines (19.04% of the tariff) became duty-free for import from Chinese 
Taipei;  as a result, 48.75% of Panama's tari ff lines became duty-free corresponding to 59.59% of 
imports by value from Chinese Taipei.  The remaini ng tariffs are to be progr essively eliminated in 
four additional stages starting in 2006 and ending in  2013.  By the end of implementation in 2013, 
95.09% of tariff lines and 98.07% of imports by  value from Chinese Taipei will be duty-free. 
Table III.1 
Tariff elimination commitments under the Agreement and corresponding average trade 
A.  Panama 
Duty phase-out 
period Number of lines % of total lines in 
Panama's tariff 
schedule Value of Panama's imports 
from Chinese Taipei  
(2006-2008) in million US$ % of Panama's total 
imports from 
Chinese Taipei 
2006-2008 
MFN duty free (2004) 2,549 29.71 7.59 21.52 
2004-2005 1,634 19.04 13.43 38.07 
2006-2007 1 0.01 0.00 0.00 
2008-2009 1,951 22.74 11.08 31.41 
2010-2012 13 0.15 0.07 0.20 
2013 2,011 23.44 2.42 6.87 
Remain dutiable 421 4.91 0.68 1.93 
Total 8,580 100.00 35.28 100.00 
 
Source :  WTO estimates based on data pr ovided by Panama and WTO-IDB. 
 
22. Table III.1.B shows Chinese Taipei's duty elimin ation in terms of tariff lines and trade, 
applied to Panama.  Before entry into force of the Agreement, 2,777 tariff lines (31% of 
Chinese Taipei's tariff) were alre ady duty-free on an MFN basis.6  Upon entry into force of the 
                                                      
5 Panama's MFN tariff schedule in the year of the entry into force of the Agreement (2004) comprised 
8,580 tariff lines at the HS 8-digit level;  99.97% of this tariff is ad valorem , and 0.03% relates to others. 
6 Chinese Taipei's MFN tariff schedule in the year of the entry into force of the Agreement (2004) 
comprised 8,961 tariff lines at the HS 8-digit level;  98.1% of this tariff is ad valorem , 1.1% relates to lines with 
specific duties, and 0.8% relates to mixed tariff lines.  For mixed lines, only the ad valorem  component is taken 
into account in the calculation of averages. WT/REG268/1 
Page 14  
 
  Agreement, an additional 3,847 ta riff lines (42.9% of the tariff) became duty-free for imports from 
Panama;  as a result, 73.9% of Chinese Taipei's ta riff lines became duty-free corresponding to 98.5% 
of imports by value from Panama.  The remaining tariffs are to be progressively eliminated in eight additional stages starting in 2005 and ending in 2013.  By the end of implementation in 2013, 97.4% of tariff lines and 99.6% of imports  by value from Panama will be duty-free. 
Table III.1 
Tariff elimination commitments under the Agreement and corresponding average trade 
B.  Chinese Taipei 
Duty phase-out 
period Number of lines % of total lines in 
Chinese Taipei's tariff 
schedule Value of Chinese Taipei's 
imports from Panama 
(2006-2008) in million US$ % of Chinese Taipei's 
total imports from 
Panama  
2006-2008 
MFN duty free (2004) 2,777 31.0 46.0 89.8 
2004 3,847 42.9 4.5 8.7 
2005 1 0.0 0.0 0.0 
2006 9 0.1 0.0 0.0 
2007 4 0.0 0.0 0.0 
2008 1,512 16.9 0.5 1.0 
2009 2 0.0 0.0 0.0 
2010 15 0.2 0.0 0.0 
2011-2012 21 0.2 0.0 0.0 
2013 536 6.0 0.0 0.1 
Remain dutiable 237 2.6 0.2 0.4 
Total 8,961 100.0 51.3 100.0 
 
Note: Excludes data beyond HS Chapter 97.  
 Tariff lines subject to in-quota rates are excluded in the com putation; for the calculation of averages, specific rates are 
excluded and the ad valorem  equivalents or ad valorem  part of alternate rates are included. 
 
Source :  WTO estimates based on data  provided by Chinese Taipei. 
 
3. Panama's liberalization schedule 
23. Table III.2 shows Panama's tariff elimination commitments vis-à-vis Chinese Taipei by 
HS section product categories.  Of the 1,634 tariff lines liberalized upon entry into force of the Agreement, most fall under HS sections XVI (machin ery), I (live animals and animal products), and 
VI (chemicals and chemical products) while the othe rs are distributed across the other HS sections.  
Of the 421 lines retaining a duty at the end of the implementation period, 75% fall under 
HS sections I-IV.  The overall average tariff in 20 13 on the lines remaining dutiable will be 27.6% 
with the highest for live animals and animal products (48.4%). 
Table III.2  
Panama: Tariff reduction under the Agreement, by HS section 
Number of duty-free lines HS section and 
description MFN 
average
% Total 
No. of 
lines MFN 
2004 2004-
2005 2006-
2007 2008-
2009 2010-
2012 2013 No. of lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable) 
% 
I Live animals and 
animal products 24.2 375 20 163  31  45 116 48.4 
II Vegetable products 11.3 423 120 98  64  102 39 34.2 
III Animal or 
vegetable fats and oils 11.8 68 16 5  3  6 38 15.8 
IV Prepared food etc. 14.8 542 59 88  88  184 123 21.0 
V Minerals 7.6 186 71 63  38  12 2 10.0 
VI Chemicals and 
chemical products 3.4 1,229 809 132  163  125   
VII Plastics and 
rubber 4.8 426 233 40 1 68 10 74   
VIII Hides and skins 12.6 126 1 38  26  61   
IX Wood and articles 7.6 167 60 7  68  32   
X Pulp, paper etc. 7.2 425 187 16  89  133   
Table III.2 (Cont'd)   WT/REG268/1 
 Page 15 
 
 
  Number of duty-free lines HS section and 
description MFN 
average
% Total 
No. of 
lines MFN 
2004 2004-
2005 2006-
2007 2008-
2009 2010-
2012 2013 No. of lines 
remaining 
dutiable Avg. Final 
Tariff 
(Dutiable) 
% 
XI Textiles and textiles articles 8.0 1,254 448 45  142 3 603 13 13.1 
XII Footwear, 
headgear 11.8 164 6 45  68  45   
XIII Articles of stone 9.7 293 38 23  149  77 6 10.8 
XIV Precious stones, 
etc. 7.3 65 23   42     
XV Base metals and 
base metals products 7.6 925 329 101  350  145   
XVI Machinery 6.1 1,019 87 530  199  203   
XVII Transport 
equipment 11.9 276 20 75  69  28 84 14.9 
XVIII Precision 
equipment 9.7 300 17 86  170  27   
XIX Arms and 
ammunition 14.6 24  5  19     
XX Miscellaneous 
manufactured articles 11.8 284 1 74  104  105   
XXI Works of art, 
etc. 7.8 9 4   1  4   
Total 8.7 8,580 2,549 1,634 1 1,951 13 2,011 421 27.6 
 
Source : WTO estimates based on data pr ovided by Panama and WTO-IDB. 
 
24. The 421 tariff lines that will remain dutiable at  the end of implementation period (2013) are 
entirely composed of products excluded from liber alization.  Around 70% of these tariff lines are 
agricultural products according to the WTO definitio n.  Chart III.1 below shows a breakdown of these 
lines. 
Chart III.1 
Panama's Composition of Lines Remaining Dutiable, by HS chapter
HS Chapter - Description
87 - Vehicles other than railway or tramway rolling- stock,and parts and accessories thereof
04 - Dairy produce; birds' eggs; natural honey; edible products of animal origin,not elsewhere specified or included
02 - Meat and edible meat offal15 - Animal of vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes19 - Preparations of cereals, flour, starch or milk; pastry cook's products
20 - Preparations of vegetables, fruit, nuts or other parts of plants
16 - Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates24 - Tobacco and manufactured tobacco substitutes
61 - Articles of apparel and clothing accessories, knitted or crocheted
17 - Sugars and sugar confectionery
Source :  WTO estimates based on data provided by Panama.Chapter 87 
(20.0%)Chapter 4 
(14.3%)Chapter 2 
(11.2%)Chapter 15 
(9.0%)Chapter 19 
(7.8%)Chapter 20 
(7.6%)Chapter 
16 
(3.1%) Chapter 24 (3.1%)
Chapter 61 (3.1%)
Chapter 17 
(2.9%)HS Chapter 21 (2.6%)
HS Chapter 8 (2.1%)HS Chapter 9 (2.1%)
HS Chapter 3 (1.9%)
HS Chapter 11 (1.9%)
HS Chapter 18 (1.9%)
HS Chapter 7 (1.4%)
HS Chapter 68 (1.4%)
HS Chapter 10 (1.2%)Other products, i.e., HS Chapters 5, 12, 22 
and 25 (1.4%)Other (18.1%)
 WT/REG268/1 
Page 16  
 
  25. Charts III.2-3 show a comparison of average dutia ble rates in those HS sections and chapters, 
respectively, where preferential duties remain at  the end of the implementation period.  The 
comparison is made between the average preferentia l and MFN rates for lines subject to preferential 
duties only.  For those HS sections where tariff p eaks remain after implementation of the Agreement 
is completed, the preferential duties will be identical  to the MFN rates for all the HS sections I-V, XI, 
XIII, and XVII. 
0 5 10 15 20 25 30 35 40 45 50XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.2
Panama:  Average of dutiable rates, by HS Section
HS Section  
Source :  WTO Secretariat estimates based on data provided by Panama and WTO-IDB.Average rate of duty (%)
MFN Preferential
 
 
26. Chart III.3 shows a comparison of average du tiable rates in those HS chapters where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines s ubject to preferential duties only.  For those 
HS chapters where tariff peaks remain after impl ementation of the Agreement is completed, the 
preferential duties will be identical to the MFN rates for all the HS chapters 2-5, 7-12, 15-22, 24-25, 
61, 68, and 87.  The highest average (1 00.8%) is found in Chapter 10 (cereals).  WT/REG268/1 
 Page 17 
 
 
  020406080100120
02
03
04
05
07
08
09
10
11
12
15
16
17
18
19
20
21
22
24020406080100120
25
61
68
87Chart III.3
Panama: Average of dutiable rates, by HS Chapter
HS  01-24 HS 25-97Average rate of duty (%)  
Average rate of duty (%)  
HS Chapter HS Chapter
MFN Preferential
Source :  WTO Secretariat estimates based on data provided by Panama and WTO-IDB. 
4. Chinese Taipei's liberalization schedule 
27. Table III.3 shows Chinese Taipei's tariff elimination commitment vis-à-vis  Panama by 
HS section product categories.  Of the 3,847 tariff lines liberalized upon entry into force of the Agreement, most fall under HS sections XI (textiles and textiles articles), VI (chemicals and chemical 
products), and XVI (machinery) while the others are distributed across the other HS sections.  Of the 
237 lines retaining a duty at the end of the impl ementation period, almost 90% fall under HS sections 
I-IV.  The overall average tariff in 2013 on the lin es remaining dutiable will  be 89.2% with the 
highest for animal or vegetable fats and oils (338%). 
Table III.3 
Chinese Taipei: Tariff elimination und er the Agreement, by HS section 
Number of duty-free lines  
HS section and 
description  
MFN 
average%  
Total No. of 
lines  
MFN 
2004  
2004 
2005 
2006 
2007 
2008 
2009 
2010 
2011-
2012 
2013 
No. of lines 
remaining 
dutiable  
Avg. Final 
Tariff 
(Dutiable) 
% 
I Live animals and 
animal products 29.4 551 66 232    97  7 3 69 77 52.6 a 
II Vegetable products 32.7 520 144 96   2 122  3 4 100 49 239.0 a 
III Animal or 
vegetable fats and oils 12.8 77 23 40   2 7    3 2 338.0  
IV Prepared food etc. 25.9 460 53 42 1   98 2 5 14 164 81 51.2 a 
V Minerals 1.4 231 146 69    16       
VI Chemicals and 
chemical products 2.7 1,460 497 827    130    4 2 8.6 
Table III.3 (Cont'd)  WT/REG268/1 
Page 18  
 
  Number of duty-free lines  
HS section and 
description  
MFN 
average%  
Total No. of 
lines  
MFN 
2004  
2004 
2005 
2006 
2007 
2008 
2009 
2010 
2011-
2012 
2013 
No. of lines 
remaining 
dutiable  
Avg. Final 
Tariff 
(Dutiable) 
% 
VII Plastics and 
rubber 4.9 366 11 297    58       
VIII Hides and skins 3.2 96 34 34    28       
IX Wood and articles 2.4 160 112 29    19       
X Pulp, paper etc. 0.0 223 223            
XI Textiles and 
textiles articles 8.9 1,195 55 1,045    95       
XII Footwear, 
headgear 6.4 77 6 40    31       
XIII Articles of stone 7.1 234 7 106    120    1   
XIV Precious stones, 
etc. 0.1 76 75 1           
XV Base metals and 
base metals products 2.8 899 521 178  6  194       
XVI Machinery 3.5 1,440 460 612  1  212    155   
XVII Transport 
equipment 14.3 252 56 72  2  57    39 26 17.5 
XVIII Precision 
equipment 2.7 393 183 57    152    1   
XIX Arms and 
ammunition 1.6 22 15 2    5       
XX Miscellaneous 
manufactured articles 3.3 219 80 68    71       
XXI Works of art, 
etc. 0.0 10 10            
Total 8.7 8,961 2,777 3,847 1 9 4 1,512 2 15 21 536 237 89.2 
 
a Combination of ad valorem  and specific duties. 
Note: Excludes data beyond HS Chapter 97;  
 Tariff lines subject to in-quota rates are excluded in the com putation; for the calculation of averages, specific rates are 
excluded and the ad valorem  equivalents or  ad valorem  part of alternate rates are included. 
 
Source : WTO estimates based on data provided by Chinese Taipei. 
 
28. The 237 tariff lines that will remain dutiable at  the end of implementation period (2013) are 
composed of products: i) excluded from liberalization (186 tariff lines, all of which except 26 lines in 
HS 87 are agricultural products according to the WTO definition);  and ii) subject to TRQs 
(51 agricultural tariff lines).7  Chart III.4 below shows a breakdown of these lines. 
                                                      
7 The total number of tariff lines subject to TRQs under the Agreement is 52 as indicated in 
section III.5.(b) of the Factual Presentation.  Out of these 52 lines, the tariff on one line (02102000) subject to 
TRQ will be liberalized at the end of implementation.  As shown in Table AII.1 in Annex II, the out-of-quota 
rate of this line becomes duty-free in 2010.  WT/REG268/1 
 Page 19 
 
 
  Chart III.4 
Chinese Taipei's Composition of Lines Remaining Dutiable
Source :  WTO estimates based on data provided by Chinese Taipei.Excluded 
(79.7 %)TRQ
(Category Q)  
(20.3 %)HS Chapter 19 (13.8%)
HS Chapter 87 (13.8%)
HS Chapter 2 (12.7%)
HS Chapter 4 (7.9%)HS Chapter 24 (6.9%)HS Chapter 11 (5.8%)HS Chapter 7 (5.3%)
HS Chapter 20 (5.3%)
HS Chapter 8 (4.2%)HS Chapter 9 (4.2%)HS Chapter 18( 4.2%)
Other agricultural products (15.9%), as 
defined in the WTO, such as rice
HS Chapter - Description
19 - Preparations of cereals, flour, starch or milk; pastry cook's products
87 - Vehicles other than railway or tramway rolling- stock,and parts and accessories thereof
02 - Meat and edible meat offal04 - Dairy produce; birds' eggs; natural honey; edible products of animal origin,not elsewhere specified or included24 - Tobacco and manufactured tobacco substitutes11 - Products of the milling industry; malt; starches; inulin; wheat gluten
07 - Edible vegetables and certain roots and tubers
20 -Preparations of vegetables, fruit, nuts or other parts of plants08 - Edible fruit and nuts; peel of citrus fruit or melons09 - Coffee, tea, mate and spices
18 - Cocoa and cocoa preparations
 
 
29. Chart III.5 shows a comparison of average du tiable rates in those HS sections where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines s ubject to preferential duties only.  For those 
HS sections where tariff peaks remain after impl ementation of the Agreement is completed, the 
preferential and MFN duties will be identical for HS  section III, whereas the preferential duties will 
be lower than the MFN duties for HS sections I, II,  IV, VI, and XVII.  The largest difference between 
the average applied MFN rate in 2004 and preferenti al duty is found in HS sections I (MFN 111.4%, 
compared to a preferential rate of 52.6%) and XV II (MFN 60%, compared to a preferential rate of 
17.5%).  Due to a significant reduction in Chinese Taipei's MFN duties since the Agreement entered 
into force, however, the resulting preferential marg ins for imports from Panama have also changed.  
The WTO Secretariat estimates, for instance, that as a result of the change to the MFN applied rates, 
the average preferential tariff for lines remaining subj ect to duty after implementation in HS Section I 
was 20.5% compared to the corresponding average MF N average of 40.3%, while in HS Section XVII 
there was no longer a difference in these two averages in 2009 (30%).  WT/REG268/1 
Page 20  
 
  0 50 100 150 200 250 300 350XXIXXXIXXVIIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.5
Chinese Taipei:  Average of dut iable rates, by HS SectionHS Section  
Source :  WTO Secretariat estimates based on data provided by Chinese Taipei.Average rate of duty (%)
MFN Preferential
 
 
30. Chart III.6 shows a comparison of average du tiable rates in those HS chapters where 
preferential duties remain at the end of the implem entation period.  The comparison is made between 
the average preferential and MFN rates for lines s ubject to preferential duties only.  For those 
HS chapters where tariff peaks remain after impl ementation of the Agreement is completed, the 
preferential duties will be identical to the MFN rat es for HS chapters 7, 10-12, 15, and 20-21, whereas 
the preferential duties will be lower than the MFN duti es for HS chapters 2-5, 8-9, 16-19, 24, 35, and 
87.  The largest differences between average applie d MFN rates in 2004 and the preferential duty is 
found for HS chapters 2 (MFN 180.9%, compared to a preferential rate of 27.1%), 5 (MFN 325%, compared to a preferential rate of 138.8%), 16 (M FN 171.3%, compared to a preferential rate of 
71.8%), and 87 (MFN 60%, compared to a preferential rate of 17.5%).  As for the averages by 
HS section, the comparison between average preferen tial MFN rates for tariff lines remaining dutiable 
after implementation has changed since the Agreement entered into force due to liberalization of the 
MFN tariff.  Thus for instance, based on WTO Secretariat calculations, it would appear that the difference between the two is significantly smaller fo r Chapter 2 (average preferential rate of 19.7% 
compared to an MFN average of 21.6% in 2009), whereas for Chapter 16 the preferential average is 
6.3% compared to the MFN average of 25.4%.  In  Chapters 5 and 87, there appears to be no 
difference between the average MFN rate for 2009 a nd the expected preferential rate for that year 
(138.8% and 30% respectively).  WT/REG268/1 
 Page 21 
 
 
  0100200300400500600
02
03
0405
07
0809
10
1112
15
16
17
1819
20
21240100200300400500600
35
87Chart III.6
Chinese Taipei: Average of dut iable rates, by HS Chapter
HS  01-24 HS 25-97Average rate of duty (%)  
Average rate of duty (%)  
HS Chapter HS Chapter
MFN Preferential
Source :  WTO Secretariat estimates based on data provided by Chinese Taipei. 
 
5. Tariff-rate quotas 
(a) Panama 
31. Panama does not have a TRQ mechanism under the Agreement. 
(b) Chinese Taipei 
32. In addition to tariff-rate quotas (TRQs) on an MFN basis, before 2010 Chinese Taipei 
maintained TRQs for 528 tariff lines relating to agricultural products: pork belly (four lines);  fowl 
meat (two lines);  poultry offal (one line);  banan as (one line);  pineapples (one line);  liquid milk 
(nine lines);  sugar (six lines);  mackerel (eight lines);  carangid (four lines);  sardine and herring 
(15 lines);  and meat of bovine animals, salted, in br ine, dried or smoked (one line).  The last of these 
products was subject to TRQs only under the Agreement (not on an MFN basis), for two years (2008-2009), and phased out in 2010.  The other products are: either i) also subject to TRQs on an 
MFN basis (bananas, pineapples, and liquid milk), or ii) had an MFN basis TRQ from 2002 until 
either 2005 or 2008, but were phased out (pork be lly, chicken/fowls meat, poultry offal, sugar, and 
fish).
9  Details of the quantities and rates applying to these lines are given in Table AII.1.  The 
in-quota rates for such products are all duty-free u nder the Agreement in 2004.  The out-of-quota rates 
                                                      
8 Since 2010 Chinese Taipei's TRQs have been redu ced to 50 tariff lines as TRQs on poultry offal 
(one line) and meat of bovine animals, salted, in brine, dried or smoked (one line) have been eliminated. 
9 MFN TRQs on pork belly, chicken/fowl meat, and poultry offal phased out as of 1 January 2005, on 
sugar phased out from 7 February 2005, and on mackerel, carangid and sardine and herring phased out on 
1 January 2008. WT/REG268/1 
Page 22  
 
  enter at the prevailing MFN rates, except for meat of  bovine animals, salted, in brine, dried or smoked 
for which the out-of-quota rates are lower than MFN rates. 
6. Import restrictions 
33. The Agreement commits the Parties to elim inate non-tariff barriers, except those in 
accordance with their rights under Articles XX and XXI of GATT 1994, Chapter 8 (sanitary and 
phytosanitary measures), and Chapter 9 (standard , metrology-related measures and authorization 
procedures) (Article 3.11.1).  However, the Ag reement prescribes that before a Party adopts a 
measure consistent with an intergovernmental agreement on goods pursuant to paragraph (h) in 
Article XX of GATT 1994, consultati ons with the other Party must take place to avoid nullification or 
impairment of concessions granted under the tariff reduction/elimination progr amme (Article 3.15).  
Articles 3.11.1 and 3.15 equally apply to export du ties and charges, and quantitative restrictions 
described in section III.C below. 
34. The Parties may not adopt or maintain any prohibition or restriction on imports except if: 
i) the Agreement provides otherwise, or ii) they take measures authorized under Article XI of the 
GATT 1994 including its interpretative notes (which  are incorporated into the Agreement) 
(Article 3.11.2).  In addition, import price re quirements are forbidden, except as permitted in 
enforcement of countervailing and antidumping orders  and undertakings (Article 3.11.3).  When a 
Party adopts or maintains prohibitions or restric tions on imports from a non-Party, the Party is 
allowed to limit or prohibit such products of the non-Party that are from the other Party (Article 3.11.4.(a)).  In this regard, the Parties, on the request of either Party, shall consult, aiming at 
avoiding undue interference with or distortion of pr icing, marketing and distribution arrangements in 
the other Party (Article 3.11.5). 
35. Annex 3.11(6) lists pr oducts for which each Party ma y adopt import prohibitions or 
restrictions.  For Panama, the list is composed of  some products under HS chapters 13, 29, 36, 40, 
49, 62, 64, 87, 89, 93, and 95.  Chinese Taipei has identified a number of products under "HS chapters" 2-3, 6, 12, 14, 16, 27-29, 33-34, 36, 38, 81, and 84-85.  According to Chinese Taipei, it  
has modified the list as shown in the table below.  Panama has not changed its list of import 
prohibitions or restrictions. 
Table III.4.  Changes in Chinese Taipei's import prohibit ions (excludes products for which there are no changes)  
 CCC Code Description 
03019929ex Whale shark (Rhincodon typus), live 
03026500ex Whale shark (Rhinc odon typus), fresh or chilled 
03026999ex Puffer fish, fresh or chilled 
03037500ex Whale shark (Rhincodon typus), frozen 
03041990ex Whale shark (Rhincodon typus) fillets and its meat (whether or not minced), fresh or chilled 
Puffer fish fillets and its meat (wheth er or not minced), fresh or chilled 
03042990ex Puffer fish fillets and its meat (w hether or not minced), fresh or chilled 
Whale shark (Rhincodon typus), fillets or steaks, frozen 
03049919ex Puffer fish, minced (surimi), frozen 
03055990ex Puffer fish, dried 
27109190 Other oil containing polychlor inated biphenyls (PCBs), polychlorinated terphenyls (PCTs) or 
polybrominated biphenyls (PBBs) 
28520000 Compounds, inorganic or organic,  of mercury, excluding gamalgams 
29036210 Hexachlorobenzene (ISO) 
29081100 Pentachlorophenol (ISO) Additional products 
29252900ex Hydroxylimine HCL 
360410 Fireworks, toy;Fireworks other than toy 
36049090ex Other pyrotechnic articles  
products 
removed 81129121ex Mixed metal scrap 
 
Source:  Chinese Taipei and Annex 3.11(6) of the Agreement.  WT/REG268/1 
 Page 23 
 
 
  B. RULES OF ORIGIN  
36. Disciplines regarding rules of origin and custom s procedures are set out in Chapters 4 and 5, 
respectively.  Annex 4.3 of the Agreement details specific rules of origin by HS chapters.  The 
principles and rules of the WTO Agreement on Custom s Valuation are applied to determine the value 
of a good or material (Article 4.2.1).  Neverthele ss, when determining the origin of a good, the 
provisions in Chapter 4 of the Agreement prevail over the WTO Agreement on Customs Valuation to 
the extent of any inconsistency (Article 4.2.2). 
37. The general requirement for a good of  a Party to be considered orig inating (Article 4.3) is that 
it is:  
i) wholly obtained or produced entirely in the Party;   
ii) produced entirely in one or both Parties exclusively from originating materials;   
iii) produced in one or both Parties from non-originating materials that comply with the 
change in tariff classification, regional value content or other requirements, as specified in Annex 4.3, and that the good satisfies all other applicable provisions of 
Chapter 4;  or  
iv) produced in one or both Parties, but one or  more of the non-originating materials that 
are used in the production of the good does not undergo a change in tariff classification, provided that the regional value content of the good is met and the 
good satisfies the other provisions applicable in the Chapter.  For this category of 
products, the Parties have defined a regiona l value content of a minimum of 35% of 
originating materials applicable unless Annex 4.3 specifies differently.  Article 4.7 
provides for a method to calculate the regional value content. 
38. Section B of Annex 4.3 sets out specific crite ria to determine origin for the purpose of 
applying the preferential rates foreseen in the Agre ement.  In most cases, origin is granted if 
non-originating materials have undergone a change  in tariff classification (CTC) on the basis of 
HS chapters, HS headings, or subheadings (i.e. at the four or six-digit level).  For a number of 
headings or subheadings, the rule that if CTC is not  met, there must be a regional value content of a 
minimum of either 35%, 40%, 45% or 50% of origin ating materials is prescribed as an alterative to 
CTC.
10  In some other cases, the additional regional value content, varying from 35% to 70%, is 
mandatory, in addition to the CTC.11 
                                                      
10 Some mineral fuels, oils and products of their distillation (HS 27);  some tanning or dyeing extracts;  
tannins and their derivatives;  dyes, pigments and other colouring matter;  paints and varnishes;  putty and other 
mastics;  inks (HS 32);  some soap, organic surface-activ e agents, washing preparations , lubricating preparations, 
artificial waxes, prepared waxes, po lishing or scouring preparations, candles and similar articles, modelling 
pastes, dental waxes and dental preparations with a basis of plaster (HS 34);  some plastics and articles thereof 
(HS 39);  some rubber and articles thereof (HS 40);  some wood and articles of wood, wood charcoal (HS 44);  
some articles of iron or steel (HS 73);  some alum inium and articles thereof (H S 76);  some miscellaneous 
articles of base metal (HS 83);  some nuclear reacto rs, boilers, machinery and me chanical appliances, part 
thereof (HS 84);  some electrical m achinery and equipment and parts thereo f, sound recorders and reproducers, 
television image and sound recorders and reproducers, and parts and accessories of such articles (HS 85);  some vehicles other than railway or tram way rolling-stock, and parts and accessori es thereof (HS 87);   some optical, 
photographic, cinematographic, measurin g, checking, precision, medical or surgical instruments and apparatus, 
parts and accessories thereof (HS 90);  and some  miscellaneous manufactured articles (HS 94-95). 
11 Some preparations of meat (HS 16);  some tobacco and manufactured tobacco substitutes 
(HS 24);some articles of iron or steel (HS 73);  some tools, implements, cutlery, spoons and forks, of base metal, WT/REG268/1 
Page 24  
 
  39. Some agricultural products are subject to several  variations of specific rules of origin.  For 
example, for some dairy products
12, if CTC is not met, there must be a regional value content of milk 
solids not less than either 50%, 60% or 80%.  Fo r tomatoes under HS 20.02 an d 2103.20, CTC is not 
required, provided that a minimum of 65% of the tomato content should originate from either Party.  For some tobacco products under HS 24.02 (in Annex 4.3), either the CTC is required, or a regional 
value content of a minimum of 70% of originating ma terials as an alternative to the CTC.  Vegetable 
products under HS chapters 6-14 are deemed to be originating in a Party even if they are grown from seed, bulbs, rootstock, cutti ngs, slips or other live parts of plants  imported from a non-Party.  Apparel 
and clothing accessories (HS 61-62), and other made  up textiles (HS 63) are only governed by CTC, 
and specific rules on these products do not require local processing. 
40. Bilateral cumulation between the Parties is possi ble (Article 4.6).  Article 4.8 establishes a de 
minimis  principle whereby a product is considered to be  originating if the value of all non-originating 
materials used in its production that do not satisfy  the requirement of CTC is not more than 10% of 
the transaction value of the good.  This rule does no t apply to a non-originating material used in the 
production of goods provided for in  HS chapters 1-27 unless the non-originating material is provided 
for in a different subheading than the good fo r which origin is being determined under the de minimis  
principle. 
41. Article 4.4 contains a list of minimal operati ons or processes which do not confer origin.  
Articles 4.5 and 4.9-4.13 define how certain mate rials (fungible goods;  sets or assortments of goods;  
accessories, spare parts and tools;  and containers and packaging materials for retail sale or shipment) 
are to be treated/valued when determining their origin. 
C. E
XPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
42. Neither Party may adopt or maintain any prohi bition or restriction on exports or sale for 
export to the other Party, except if: i) the Agreem ent provides otherwise, or ii) the Parties take 
measures authorized under Article XI of the GATT 1994 including its interpretative notes (which are 
incorporated into the Agreement) (Article 3.11.2) .  In addition, export price requirements are not 
allowed (Article 3.11.3).  When a Party adopts or maintains prohibitions  or restrictions  on exports to a 
non-Party, the Party cannot require of the other Party that the Party's exports of the same goods to the 
other Party not be re-exported to the non-Party, dire ctly or indirectly, without  being consumed in the 
other Party (Article 3.11.4.(b)). 
43. Panama has designated one product, woods of what ever species of natural forests, for which it 
can adopt or maintain export measures in accordance with its domestic regulation, Executive Decree 
No.57 (5 June 2002).  Whereas, Chinese Taipei has listed 33 tariff lines (relating to fishery, 
agricultural, chemical, and military products) under "H S chapters" 2-3, 6, 12, 14, 16, 29, 87, 89, 93, 
and 97 which are prohibited from export (Annex 3.11( 6)).  According to Chinese Taipei, it  has 
modified the list as in the table below.  For Panama, there is no change in its export prohibitions or 
restrictions. 
 
 
                                                                                                                                                                     
parts thereof of base metal (HS 82);  some nuclear react ors, boilers, machinery and m echanical appliances, part 
thereof (HS 84);  some electrical m achinery and equipment and parts thereo f, sound recorders and reproducers, 
television image and sound recorders and reproducers, and parts and accessories of such articles (HS 85);  some vehicles other than railway or tram way rolling-stock, and parts and accessori es thereof (HS 87);   some optical, 
photographic, cinematographic, measurin g, checking, precision, medical or surgical instruments and apparatus, 
parts and accessories thereof (HS 90);  some furniture (HS 94);  and some  miscellaneous manufactured articles 
(HS 96).   
12 HS 0403.10;  HS 04.05;  HS 0406.10-0406.20;  HS 0406.30;  and HS 0406.90.  WT/REG268/1 
 Page 25 
 
 
  Table III.5.  Changes in Chinese Taipei's export prohibit ions (excludes products for which there are no changes) 
 CCC Code Description 
03019929ex Whale shark (Rhincodon typus), live 
03026500ex Whale shark (Rhinc odon typus), fresh or chilled 
03037500ex Whale shark (Rhincodon typus), frozen  
03041990ex Whale shark (Rhincodon typus) fillets and its meat (whether or not minced), fresh or chilled 
03042990ex Whale shark (Rhincodon typus ), fillets or steaks, frozen 
12119060 Putchuck, new (Radix Saussureae) 
12119091ex Guang Fang Jee (Radix Aristolochiae Fangchi) ; 
Guan Mu Tong (Caulis Aristolochiae Manshuriensis) ;  
Mar Doe Ling (Fructus Aristolochiae);  Ten Shen Tirng (Caulis Aristolochiae) 
25059000 Other natural sands of all kinds, whether or not coloured, ot her than metal-bearing sands of 
Chapter 26 
25171090 Pebbles, gravels, broken or crushed stone, of a kind commonly used for concrete aggregates, 
for road metalling or for railway or other ballast, shingle and flint, whether or not heat-treated Additional products 
29252900ex Hydroxylimine HCL 
03019100 Live trout (Salmo trutta, Oncorhynchus mykiss, Oncorhynchus clarki, Oncorhy aguabonita, 
Oncorhynchus gilae, Onco rhynchus apache and Onco rhynchus chrysogaster) 
03021100 Trout (Salmo trutta, Oncorhynchus mykiss,  Oncorhynchus clarki, Oncorhynchus aguabonita, 
Oncorhynchus gilae, On corhynchus apache and Oncorhynchus  chrysogaster), fresh or chilled 
03021210 Pacific salmon (Oncorhynchus nerka, On corhynchus gorbuscha, Oncorhynchus keta, 
Oncorhynchus tschawytscha, On corhynchus kisutch, Oncorhynchus masou and Oncorhynchus 
rhodurus), fresh or chilled 
03021220 Atlantic salmon (Salmo salar) and Da nube salmon (Hucho hucho ), fresh or chilled 
03021900ex Other salmonidae, fresh or chilled 
03031000 Pacific salmon (Oncorhynchus nerka, On corhynchus gorbuscha, Oncorhynchus keta, 
Oncorhynchus tschawytscha, On corhynchus kisutch, Oncorhynchus masou and Oncorhynchus 
rhodurus), frozen, excluding livers and roes 
03032100 Trout (Salmo trutta, Oncorhynchus mykiss,  Oncorhynchus clarki, Oncorhynchus aguabonita, 
Oncorhynchus gilae, Oncorhynchus apache a nd Oncorhynchus chrysogaster), frozen 
03032200 Atlantic salmon (Salmo salar) a nd Danube salmon (Hucho hucho), frozen 
03032900ex Other salmonidae, frozen 
03041050ex Trout fillets and its meat (whe ther or not minced), fresh or chilled 
03041090ex Salmon fillets and its meat (whe ther or not minced), fresh or chilled 
03042020ex Salmon fillets, frozen 
03042030ex Trouts, fillets, frozen 
03053090ex Salmon and trouts f illets, dried, salted or in brine, but not smoked 
03054100 Pacific salmon (Oncorhynchus nerka, On corhynchus gorbuscha, Oncorhynchus keta, 
Oncorhynchus tschawytscha, On corhynchus kisutch, Oncorhynchus masou and Oncorhynchus 
rhodurus), Atlantic salmon (Salmo sala r) and Danube salmon (Hucho hucho), smoked 
03054930ex Trout, smoked 
03056910ex Fish, salmon, salted or in brine 
06021090ex Sugar-cane, unroot ed cuttings and slips 
06029091ex Other bamboo planting stock 
12129200ex Sugar cane, for sugar extraction products removed 
16041100ex Salmon, whole or in  piece, but not minced, prepared or pr eserved, frozen; Salmon, whole or in 
pieces, but not minced, prepared or preserved, canned; Other sa lmon, whole or in pieces, but 
not minced, prepared or preserved 
 Source: Chinese Taipei and Annex 3.11(6) of the Agreement.  
 
44. The Agreement prohibits the Parties from adopti ng or maintaining any duty, tax, or other 
charge on exports to the other Party.  However, th e Agreement allows the Par ties to levy such duties, 
taxes, or charges when such exports are d estined for local consumption (Article 3.14). 
D. REGULATORY PROVISION S ON TRADE IN GOODS  
1. Standards 
45. Part three of the Agreement underlines provision s relating to technical barriers to trade.  
Chapter 8 governs sanitary and phytosanitary meas ures, and measures on standards, metrology and 
authorization procedures are administered under Ch apter 9.  Both Chapters contain technical WT/REG268/1 
Page 26  
 
  cooperation provisions with a view to strengtheni ng the activities, processes, systems and measures 
related to SPS or standards a nd metrology between the Parties (Articles 8.12 and 9.13). 
(a) Sanitary and phytosanitary measures 
46. Chapter 8 of the Agreement covers Sanitary and Phytosanitary Measures (SPS) and is based 
on the WTO SPS Agreement (Article 8.2.2).  The Parties' rights are, inter alia , that they may 
establish, adopt, maintain or implement any SPS me asures in their territories, only to the extent 
necessary to protect human life and health (food safety)  and animal life and heath or to preserve plant 
health, even if their own measures are stricter  than international standards, guidelines or 
recommendations, provided that there is a scientif ic basis to justify them (Article 8.3.(a)). 
47. Article 8.4 requires the SPS measures to: be based on scientific principles, international 
standards, guidelines
13 and recommendations;  be maintained  subject to risk assessment based 
reasons;  and not constitute a disguised restrictio n to trade nor create an unnecessary obstacle to 
bilateral trade. 
48. Article 8.5.(d) provides for the Parties to estab lish harmonized systems of control, inspection 
and approval procedures for SPS measures for animals,  plants, their products and by-products as well 
as for food safety.  If a Party objectively demonstrates to the other Party that its measures, based on 
scientific information and risk assessment, achieves th e other Party's appropriate level of sanitary and 
phytosanitary protection, equivalence shall be recognized (Article 8.6). 
49. Assessment of risk and determination of the appropriate level of SPS protection, is to be 
based on guidelines established by rele vant international organizations.14  The factors to be used when 
assessing the risks include the available scientific and technical information, the existence of pests and 
diseases and their epidemiology, an d relevant ecological and environmental conditions (Article 
8.7.(c)).  The Parties may adopt provisional san itary or phytosanitary measures on the basis of 
available information, if the relevant evidence is in sufficient for risk assessment .  In such cases, they 
will make an effort to obtain the information n eeded for a more objective risk assessment, following a 
defined procedure and deadlines (Article 8.7.(e)).  If the risk assessment results in an import not being 
permitted, the scientific basis of the decision should be  notified.  If one of the Parties believes that its 
exports are being restricted through SPS measures that are not based on the relevant international 
standards, guidelines or recommendations, or they do not exist, it may request an explanation which 
must be provided within 60 days (Article 8.7.(g)). 
50. The Parties shall recognize pest- or disease-free areas and areas of low pest or disease 
prevalence.  The Party requested to provide rec ognition may carry out inspections, testing and other 
verification procedures.  If the requested Party does not accept the request, the Parties may consult 
each other to reach agreement on specific requirements for recognition (Article 8.8). 
51. With regard to control, inspection and approva l procedures, the Agreement directs the Parties 
to observe Annex C of the WTO SPS Agreement and sets out maximum inspection periods (100 days upon completion of reviewing necessary documents, in formation and risk assessment) (Article 8.9). 
                                                     
 
13 The Parties shall follow the guidelines of th e WTO SPS Agreement, the International Plant 
Protection Convention for plant health, the Office International des Epizooties for animal health, and the Codex 
on food safety and tolerance limits (Article 8.5.(c)). 
14 According to the Parties, the relevant international organizations include: the World Organization for 
Animal Health, and the International Plant Protection Convention.   WT/REG268/1 
 Page 27 
 
 
  52. For transparency, the adoption and modification of SPS measures of general application must 
be notified as well as changes occurring in sanitary  or phytosanitary conditions and disease outbreaks 
(Article 8.10.1).  These obligations must be fulfilled within the time periods detailed in Article 8.10. 
53. The Agreement establishes a Committee on SPS measures, the composition of which is 
contained in Annex 8.11.15  The Committee shall hear matters related to the functioning of the 
Chapter and will have responsibility for ensuring tr aining and specialization of technical staff, 
promoting active participation by the Parties in  international bodies and creating and updating a 
database of specialists in food safety, pl ant, and animal health (Article 8.11). 
(b) Technical barriers to trade 
54. Chapter 9 covers measures on standards, metr ology and authorization procedures.  The 
provisions in Chapter 9 apply in addition to the WTO Agreement on Technical Barriers to Trade 
(TBT) (Article 9.2).  The Chapter applies to sta ndardization measures, authorization procedures, and 
metrology, as well as related measures that may directly  or indirectly affect trade in goods between 
the Parties (Article 9.3), and that allow each  Party to achieve its legitimate objectives 
(Article 9.4.1.(b)).  Chapter 9 does not  apply to SPS measures (Article 9.3). 
55. Risk assessment by the Parties shall take into account factors indicated in Article 9.5: risk 
assessment by international standardization and me trology bodies;  available scientific technical 
information;  related processing technology or intended end use of goods.  The Parties shall accept the 
equivalence of each others' technical regulations  when such regulations adequately fulfil the 
legitimate objectives of the importing Party (Article 9.6). 
56. The Parties shall develop, adopt and apply c onformity assessment/authorization procedures to 
accord non-discriminatory access to like goods from the other Party  (Articles 9.7 and 9.8).  
Disciplines to be fulfilled by the Parties in c onformity assessment procedures are contained in 
Article 9.7 and cover matters such as expeditious completion, publication, prompt examination of 
applications, avoidance of unnecessary requests for in formation, confidentiality, and equitable fees. 
57. With regard to metrology, the documented traceability of a Party's standards and the 
calibration of its measuring instruments, shall be  ensured in accordance with the recommendations of 
the Bureau international des poids et measures  (BIPM) and the International Organization of Legal 
Metrology  (OIML) (Article 9.9). 
58. In case relevant international standards are not  available or the technical content of a 
proposed technical regulation or of conformity asse ssment procedures does not conform with that of 
the relevant international standards, and if the t echnical regulations may have a significant impact on 
trade, the proposed measures must be notified in wr iting to the other Party at least 60 days before its 
application (Article 9.10).  Each Party has designa ted information centres to respond to all reasonable 
questions and requests from the other Party and interested persons (Article 9.11).16 
                                                      
15 For Panama: the Ministry of Trade and Industries, and the Ministry of Agriculture and the Ministry 
of Health, or their successors.  For Chinese Taipei: the Council of Agricu lture represented by the Bureau of 
Animal and Plant Health Inspection and Quarantine, the Bureau of Food Sanitation from the Department of 
Health, and the Bureau of Standards, Metrology and Inspection from the Ministry of Economic Affairs, or their 
successors. 
16 For Panama: the General Directorate of Standards and Industrial Technology, or it successor.  For 
Chinese Taipei: the Bureau of Stan dards, Metrology and In spection, or its successor (Annex 9.11.(2)). WT/REG268/1 
Page 28  
 
  59. The Agreement establishes a Committee on st andards, metrology and authorization 
procedures, the composition of whic h is contained in Annex 9.12.
17  The Committee shall hear matters 
relating to the functioning of the Chapter and will have responsibility, inter alia , for analysing and 
proposing ways to resolve measures on standards, au thorization procedures and metrology that a Party 
considers a technical barriers to trade;  and fac ilitating the process by which the Parties shall establish 
mutual recognition agreements (Article 9.12). 
2. Safeguard mechanisms 
(a) Global safeguards 
60. The Parties reserve their rights and obligati ons in accordance with Article XIX of GATT 
1994 and the WTO Agreement on Safeguards.  Regard ing the matter of exclusion of the other Party 
from a safeguard measure, compensation, and retalia tion, the relevant provisions in the Agreement 
prevail over WTO provisions (Article 6.3.1). 
61. When taking global safeguard measures, goods imported from the other Party shall be 
excluded unless the imports: i) account for a substantial18 share of total imports;  and ii) contribute 
importantly to the serious injury, or threat thereof, caused by total imports.19  The Parties shall 
(compared to "may" in Article 8.1 of the WTO Agreement on Safeguards) mutually agree on 
compensation when a Party invokes a safeguard.  The compensation shall take the form of 
concessions having substantia lly equivalent trade effects or equiva lent to the value of the additional 
customs tariffs expected to result from the safeguard measure (Article 6.3.7).  If there is no agreement 
on the compensation, the exporting Party may impo se retaliation measures that  have trade effects 
substantially equivalent to the effects of th e safeguard applied to itself (Article 6.3.8). 
62. The following conditions and limitations apply to global safeguards procedures: i) prior 
written notification to the Commission, and approp riate opportunity for consultation with the other 
Party, as much far in advance of taking the action as practical (Article 6.3.5);  and ii) the measure 
shall consist, only and exclusively, of tariff measures (Article 6.3.6). 
(b) Bilateral safeguards 
63. The application of bilateral safeguards is gove rned by the provisions in Chapter 6 as 
supplemented by provisions in Article XIX of GATT 1994, the WTO Agreement on Safeguards, and 
each Party's respective legislation (Article 6.2. 1).  The provisions on bilateral safeguards are 
applicable during the transition period which is two years greater than for the tariff reductions (until 
31 December 2015.  The Parties, may, however, a pply a safeguard after the termination of the 
transition period only if both consent (Article 6.2.5). 
64. As a result of the reduction or elimination of customs duties under the Agreement, if a good 
originating in one Party is importe d by the other Party in such increased quantities, in relation to 
domestic production, and under such conditions that the imports constitu te substantial cause of serious 
injury, or a threat thereof to the domestic industry of  a like or directly competitive product, the other 
                                                      
17 For Panama: the vice ministry of Foreign Trade of the Ministry of Trade and Industries, or its 
successors.  For Chinese Taipei: the vice ministry of the Ministry of Economic Affairs, or it successors. 
18 The imports from a Party normally shall be consider ed to be substantial if the other Party is among 
the top five suppliers of the product subject to the proceeding, measured in terms of import share during the most recent three year peri od (Article 6.3.3.(a)). 
19 The imports from a Party normally shall not be considered to contribute importantly to serious injury 
or the threat thereof, if its growth ra te of imports from the Party during the period in which the injurious surge in 
imports occurred is appreciably lower than the growth ra te of total imports from all sources during the same 
period (Article 6.3.3.(b)).  WT/REG268/1 
 Page 29 
 
 
  Party may apply a bilateral safeguard measure, to  the minimum extent necessary, to remedy or 
prevent the serious inju ry, or threat thereof.20  Such measures can take the form of a suspension of a 
future reduction in any customs duty on the product provided for under the Agreement, or an increase 
in the customs duty on the product to a level not to exceed the lesser of the MFN applied customs duty in effect at the time the measure is taken, an d that in effect on the day immediately preceding the 
date of entry into force of the Agreement (Article 6.2.2). 
65. Any safeguard measure shall be imposed no later than one year from the date of the initiation 
of the procedure.  The measure may not be maintained for more than two years including the period of a provisional safeguard, although the total duratio n can be extended for one additional consecutive 
year.  During the transition period, the safeguard meas ures, with or without an extension, may only be 
applied twice on the same product.  When applied for a second time, at least a period equivalent to 
half of the duration of the first meas ure should have passed (Article 6.2.3). 
66. Although provisional measures may be taken in critical circumstances where any delay would 
cause damage difficult to repair, their duration cannot  exceed 120 days within the overall period of the 
safeguard (Articles 6.2.4 and 6.2.3.(f)).  The Agreem ent does not indicate whether a refund is possible 
when the subsequent investigation does not determin e that increased imports substantially caused or 
threatened to cause serious injury to a domestic indus try.  The Parties clarify that although the issue of 
a refund is not stipulated under the Agreement, it w ill be dealt with according to Article 6 of the WTO 
Agreement on Safeguard. 
67. Compensation for applying a measure shall be provided to the exporting Party (instead of 
"endeavour" to provide in the WTO Agreement on Safeguard) in the form of concessions having 
substantially equivalent trade eff ects or being equivalent to the value of the additional customs duties 
expected to result from the measure.  If compensa tion cannot be agreed, the exporting Party may take 
tariff measures with trade effects substantially equi valent to the effects of the safeguard measure 
applied, only for the minimum necessary period to achieve the substantially equivalent effects 
(Article 6.2.6). 
68. Article 6.4 details investiga tion procedures for safeguards, inter alia , the contents of a 
petition, consultations, notice requirements, confidenti al information, deliberation and determination, 
and extension of measures.  Once a Party imposes a safeguard measure, a request to establish an 
"arbitral group", pursuant to the Agreement's provisi ons (Article 19.9) on dispute settlement, can be 
made by the other Party (Article 6.5).  
(c) Balance of payments safeguards 
69. The Parties can take measures for balan ce-of-payments purposes in accordance with 
Article XII of GATT 1994, the Understanding on the Balance-of-Payments Provisions of the GATT 1994, and the Agreement of the International Monetary Fund (IMF) in the event that both 
Parties become party to the IMF Agreement.  Th e measures shall be applied on a national or MFN 
treatment basis, whichever is more favourable (Article 20.4). 
3. Anti-dumping 
70. The Parties confirm their rights and obligations according to Article VI of GATT 1994 and 
the Agreement on Implementation of Article VI of GATT 1994 whose provisions are to be applied 
when the Parties initiate an investigation and apply antidumping duties (Article 7.1).  An investigation 
by the importing Party shall be terminated when its competent authority determines that: the dumping 
                                                     
 
20 The Agreement states that the m eaning of "serious injury" and "threat of serious injury" follows the 
relevant definitions in the WTO Agreement on Safeguards (Article 6.1). WT/REG268/1 
Page 30  
 
  margin is de minimis  (less than 6% of the export price);  or that sufficient evidence of dumping, 
injury, or causal link does not exist;  or where its competent authority determines that the volume of 
the dumped imports is insignificant (less than 6% of  the total imports of the like products of the 
importing Party) (Article 7.2). 
4. Subsidies and state-aid 
(a) Domestic support 
71. In Article 3.9, the Parties recognize that dom estic support measures could be of crucial 
importance for agriculture but also distort trade and affect production.  They will therefore apply domestic support in accordance with the provisions of the WTO Agreement on Agriculture.  Where a 
Party decides to provide domestic support, it shall endeavour that the support will have a minimal or 
non-distorting affect on trade and production, a nd conform with WTO obligations.  To ensure 
transparency, the Parties agree to continuously anal yse their support policies for agriculture and the 
information acquired will be used as the main refere nce in their respective annual notifications to the 
WTO Committee on Agriculture.  
(b) Export subsidies 
72. In Article 3.10, the Parties reaffirm their co mmitments to abide by the WTO Agreement on 
Agriculture and Agreement on Subsidies and Counte rvailing measures to pursue the elimination of 
export subsidies for agricultural and non-agricultura l products.  They also commit not to reintroduce 
any export subsidies notwithstanding the results of future multilateral negotiations on the WTO 
Agreements on Subsidies and Countervailing Measures, and Agriculture, respectively. 
(c) Subsidies and countervailing measures 
73. The Parties confirm their rights and obligations according to Article XVI of GATT 1994 and 
the WTO Agreement on Subsidies and Countervailing Measures for which the provisions therein are 
to be applied when the Parties initiate an investig ation and apply countervaili ng duties (Article 7.1).  
An investigation by the importing Party shall be te rminated when its competent authority determines 
that: the amount of the subsidy is de minimis  (less than 6% ad valorem );  or that sufficient evidence of 
subsidy, injury, or causal link does not exist;  or the volume of the subsidized imports is insignificant 
(less than 6% of total imports of the like pr oducts of the importing Party) (Article 7.2). 
5. Customs-related procedures 
74. Chapter 5 contains provisions inter alia , on certification of origin, and procedures to verify 
origin (Articles 5.2, 5.6, respectively), obligations  regarding imports and e xports (Articles 5.3-5.4), 
and review and appeal of determin ations of origin (Article 5.11). 
IV. CROSS-BORDER TRADE IN SERVICES AND INVESTMENT 
A. S
COPE AND DEFINITIONS  
75. Part Four of the Agreement covers investme nt, services and related matters.  Chapter 10 
contains disciplines on investment; Chapter 11 re lates to cross-border trade in services (CBTS); 
Chapter 12 comprises specific rules on financial se rvices;  Chapter 13 deals with disciplines specific 
to telecommunication;  and Chapter 14 c overs temporary entry for business persons.   WT/REG268/1 
 Page 31 
 
 
  76. Chapter 11 on CBTS covers GATS modes of supply 1 (cross-border), 2 (consumption 
abroad), and 4 (natural persons) (Article 11.1) .  Commercial presence is not identified under the 
Chapter.  The Parties clarify that mode 3 (c ommercial presence) is covered in Chapter 10. 
77. The scope of Chapter 11 covers measures adopted  or maintained by the Parties relating to 
cross-border trade in services by service providers of the other Party.  These include measures 
concerning: (i) the production, distribution, marketing, sale, and delivery of a service;  (ii) the 
purchase or use of, or payment for, a cross-border ser vice;  (iii) access to and use of distribution and 
transportation systems in connection with the provision of a cross-border service;  (iv) access to networks and public services of telecommunication and its use;  (v) the presence in its territory of a cross-border service provider of the other Party;  and (vi) the provision of a bond or other form of 
financial security as a condition of the provision of a cross-border service (Article 11.2). 
78. Chapter 11 does not apply to: i) subsidies or grants provided by a Party or a state enterprise, 
including government-supported loans, guarantees and in surance;  ii) air services including domestic 
and international air transportation services, whethe r scheduled or non-scheduled, and related services 
in support of air services other than aircraft repair  and maintenance services, sales and marketing of 
air transport services, and computer reservation system;  iii) cross-border financial services;  iv) 
government services or functions such as law enforcem ent, correctional services, income security or 
unemployment insurance or social security services, social welfare, public education, public training, 
health, and child care;  v) government procurement by  the Parties or their st ate enterprises (Article 
11.2.3);  and vi) measures affecting nationals of a Party seeking access to the other Party's employment market, or permanent based employmen t, or conferring any right on that national 
regarding such access or employment (Article 11.2.4).  The Chapter has no disciplines on domestic 
regulation. 
79. The scope of coverage for financial services and telecommunications is described under 
Section E below (sector specific provisions on trade in services).  In the event of any inconsistency 
between the Chapters on financial services or tele communications and any other Chapters of the 
Agreement, the former shall prev ail, except where there is an e xplicit reference to the contrary 
(Article 12.2.3) or to the extent of an y such inconsistency (Article 13.8).   
80. Chapter 10 on investment covers measures adopted or maintained by the Parties relating to: i) 
investors of the other Party
21 with respect to all aspects of th eir investments;  ii) investments22 of 
investors of the other Party in the territory of the Parties;  and, iii) with respect to disciplines on 
performance requirements, all investments of the invest ors of the Parties in the territory of the other 
Party (Article 10.1.1).   
81. However, the Chapter on investment does not appl y to:  i) measures adopted or maintained by 
the Parties in relation to financial services;  ii)  measures adopted by the Parties to limit the 
participation in investment by investors of the ot her party in their territories for reasons of public 
order or national security;  iii) economic activities rese rved by each Party pursuant to its law in force, 
as listed in Annex III23;  iv) government services or functions such as law enforcement, correctional 
services, income security or unemplo yment insurance, social security  services, social welfare, public 
                                                      
21 According to Article 10.39 of the Agreement, "inves tor of a Party" means a Party or a state enterprise 
of a Party or a national or an enterprise of a Party that makes or has made an investment in the territory of the 
other Party. 
22 According to Article 10.39 of the Agreement, "inv estment" includes an en terprise, a stake in an 
enterprise, real estate or other prop erties, or share or benefits arising from the allocation of capital or other 
resources to the developing of an economic activity. 
23 Panama has listed: post office and telegraphs;  games of luck and chance;  and electrical energy. 
Chinese Taipei has listed: postal and courier services;  ba nana exportation;  water supply;  airport operation and 
management;  and games of luck and chance.   WT/REG268/1 
Page 32  
 
  education, public training, health, and child care
24;  v) disputes or claims arising before the entry into 
force of the Agreement or relating to facts that o ccurred before the entry into  force, even if their 
effects persist thereafter;  and vi) gove rnment procurement (Article 10.1.2). 
82. In the event of any inconsistency between the Chapter on investment and any other Chapters 
of the Agreement, the latter prevails to the extent of the inconsistency (Article 10.13). 
B. DENIAL OF BENEFITS  
83.  A Party may deny the benefits of Chapter 11 to a service provider of the other Party where 
the denying Party decides, according to its effectiv e law, that the service is being provided by an 
enterprise that is owned or controlled by pers ons of a non-party having no 'substantial business 
activities' in the territory of the other Party (Article 11.10). 
84. The denial of benefits for financial services is sim ilar, but not identical to that of Chapter 11.  
A Party may 'partially' or 'wholly' deny the benefits  of Chapter 12 to a financial services provider of 
the other Party or to a provider of cross-border fina ncial services of the other Party, if the denying 
Party determines that the service is being provided by  an enterprise that does not conduct 'substantial 
trade activities' in the territory of the other Party and is owned by persons of a non-Party or is under 
its control (Article 12.16). 
85. Under Chapter 10 on investment, a Party may deny the benefits of the Chapter to an investor 
of the other Party that is an enterprise of the ot her Party and to the investment of the investor, if 
investors of a non-Party are owners of or control the enterprise and the enterprise has no substantial 
business activities in the territory of the first Part y under whose law it is constituted or organized 
(Article 10.14).  Denial of benefits for Chapte rs 10-12 shall only occur if prior notification and 
consultation have taken place. 
C. GENERAL PROVISIONS ON CROSS -BORDER TRADE IN SERVICES AND INVESTMENT  
1. Market access 
86. None of the Chapters under Part Four of th e Agreement covering investment, services and 
related matters has a market access provision per se , along the lines of GATS Article XVI.  
Meanwhile, Article 11.9 directs each Party to set out any quantitative restriction that it maintains in its 
Annex V list under the Agreement.  In this rega rd, Panama has listed three sectors relating to 
agricultural colonies25, telecommunication services, and hotels and restaurant services.  Chinese 
Taipei has not identified any sectors which are subj ect to quantitative restrictions.  Chinese Taipei 
confirms that the current situation is still the sa me as when this provision was adopted.  Therefore, 
Chinese Taipei cannot apply quantitative restrictions  on Panamanian services providers and investors;  
this commitment only applies to Panama, not on an MFN basis. 
                                                      
24 However, if a duly authorized investor from a Party provides such services or carries out such 
functions, the investment of this investor shall be protected by the provisions of the Chapter on investment 
(Article 10.1.4). 
25 According to Panama, 'agricultural colonies' are portions of land granted to nationals and/or 
foreigners by the Agrarian Reform Commission to increase production, create population centres, avoid the 
movement of peasants to other regions, promote the integration of different regional and national groups, raise the standard of living of farmers and take advantage of the collective energies of the community.  Each 
agricultural colony shall be composed of a group of not less than 20 families.  WT/REG268/1 
 Page 33 
 
 
  2. National and MFN treatment 
87. A Party shall accord to cross-border services and service providers of the other Party 
treatment no less favourable than it accords, in like circumstances, to its own services and service 
providers (national treatment) and to services and service providers of any non-Party (MFN treatment) (Articles 11.3 and 11.4, respectively).  National treatment provisions on services add that specific 
commitments assumed under the provision shall not be construed to require the Parties to compensate 
for any inherent competitive disadvantages which r esult from the foreign character of the relevant 
services or service suppliers. 
88. A Party shall accord to investors of the other Party and to their investments treatment no less 
favourable than it accords, in like circumstances, to its own investors and their investments (national 
treatment) and to investors of any non-Party and thei r investments (MFN treatment), with respect to 
the establishment, acquisition, expansion, mana gement, conduct, operation, and sale or other 
disposition of investments (Articles 10.2 and 10.3, respectively).  Both Parties take exceptions to 
Article 10.3, for treatment accorded under their bila teral or multilateral agreements in force or signed 
prior to the date of entry into force of the Agre ement.  Additionally, for aviation, fisheries, and 
maritime affairs including salvaging, they exempt Article 10.3 from the treatment granted under those 
agreements in force or signed after the date of  entry into force of the Agreement (Annex IV). 
89. National and MFN treatment in financial services are described in Section E below (sector 
specific provisions on trade in services).   
3. Commercial presence 
90. According to Article 11.6 of the Agreement, no Party may require a service provider of the 
other Party to establish or maintain a representative office or any other form of enterprise, or be 
resident, in its territory as a condition for the cross-border provision of a service.  The non-conforming measures listed in the Parties' Sc hedules in Annexes I (reservations for existing 
measures and liberalization commitments) and II (reser vations for future measures) of the Agreement 
may provide for a commercial presence requirement (see Section D below).  
4. Movement of natural persons 
91. Chapter 14 of the Agreement governs th e temporary entry of business persons.
26  Pursuant to 
the definition of 'business persons', the Chapter not on ly applies to services and investment, but also to 
goods.  The definition of 'national' applying to the Chapter is different from that in Article 2.1 and 
Annex 2.127 as the Chapter excludes permanent or definitiv e residents who are therefore not subject to 
Chapter 14. 
92. The Parties intend to facilitate temporary en try on a reciprocal basis and to establish 
transparent criteria and procedures for temporary entry and protect the domestic labour force and 
permanent employment in their respective territori es (Article 14.2).  They commit to expeditiously 
grant temporary entry to business persons covered in Annex 14.4 and endeavou r to develop and adopt 
common criteria, definitions and interpretations fo r the implementation of Chapter 14 (Article 14.3). 
                                                      
26 “Business person” means a national of a Party who is engaged in trade of goods, provision of 
services or conduct of investment activities. 
27 The definition of "national" is not same between the Parties.  Panama recognizes national by birth, 
naturalization, or adoption.  However, Chinese Taipei do es not recognize national by adoption, only recognize it 
by birth or naturalization. WT/REG268/1 
Page 34  
 
  93. Annex 14.4 contains the Parties' commitments for facilitating the temporary entry of business 
persons.  The three categories of business persons covered are: (i) business visitors
28;  (ii) traders and 
investors;  and (iii) intra-corporate transferees.  Special provisions regarding temporary entry of business persons are also contained in Annex 14.4(1 ).  Chinese Taipei business persons shall carry out 
useful or beneficial activities for Panama;  and they must hold temporary residency, renewable for 
consecutive periods.  The business persons would not be eligible for permanent residence.  For 
Chinese Taipei, Panamanian business persons must obt ain a visitor or resident visa prior to entry 
which is valid for one year, and multiple entry a nd 90 day durations of stay may be issued.   
94. The Parties may not require labour certification tests or other procedures of similar effect as a 
condition for temporary entry for the three covered categories of business persons.  In addition, the 
Parties may not impose or maintain any numerical re striction relating to the three covered categories 
of business persons. 
95. Recourse to dispute settlement following refusal to grant temporary entry under Chapter 14 is 
not permitted except in certain cases where the matter involves a pattern of practice, or the available 
administrative review regarding the matter  has been exhausted (Article 14.6).  
5. Performance requirements 
96. Paragraph 1 of Article 10.7 contains an exha ustive list of banned requirements that a Party 
cannot impose.  This list concerns the establishmen t, acquisition, expansion,  management, conduct or 
operation of an investment of an investor of the other Party in the first Party's territory.  The prohibited performance requirements are: i) export a gi ven level or percentage of goods or services;  
ii) a certain level or percentage of domestic cont ent requirement;  iii) purchase, use or accord of a 
preference to goods produced or services provided in the Parties' territory, or purchase of the goods or 
services from persons in the Parties' territory;  or iv) foreign exchange inflow requirements. 
97. In connection with an investment in its territory of an investor of the other Party, neither Party 
may condition the receipt or continued receipt of  an advantage on compliance with the performance 
requirements specified in paragraph 2 of Article 10.7.   
98. The prohibition on most performance require ments does not apply to: i) qualification 
requirements for goods or services with respect to export promotion and foreign aid programmes;  ii) 
procurement;  and iii) requirements imposed by an  importing Party relating to the content of goods 
necessary to qualify for preferential tariffs or preferential quotas (Article 10.7.3).  
99. In addition, exceptions are provided for the Parties to adopt or maintain measures, including 
environmental measures, necessary to secure compliance with laws and regulations that are consistent 
with the Agreement or to protect human, animal, or plant life or health, or for measures related to the 
conservation of living or non-living exhaus tible natural resources (Article 10.7.5). 
6. Senior management and board of directors 
100. Neither Party may require that an enterprise of that  Party, that is an investment of an investor 
of the other Party, appoint to senior management positions individuals of any particular nationality 
(Article 10.8).  However, with respect to the board of  directors, a Party may require that a majority of 
the board, of an enterprise of that Party that is an i nvestment of an investor of the other Party, be of a 
                                                     
 
28 Temporary entry and expeditious document verification is particularly designed for business visitors 
in: research and design; cultivation, manufacture and pr oduction purchasing; marketing; sales; after-sales 
service; and general services (Appendix 14.4(A)(1)).  WT/REG268/1 
 Page 35 
 
 
  particular nationality, or resident in the territory of the Party, provided that such a requirement does 
not materially impair the ability of the investor to exercise control over its investment. 
7. Health, safety or environmental measures 
101. Recognizing the inappropriateness of encouraging investment by relaxing health, safety or 
environmental measures, the Parties agree not to waiv e or otherwise derogate from, or offer to waive 
or otherwise derogate from, such measures as an  encouragement for the establishment, acquisition, 
expansion or retention in their territories of an investment of an investor.  If a Party considers that the other Party has offered such encouragement, the Pa rty may request consultations with the other Party 
(Article 10.15.2). 
D. N
ON-CONFORMING MEASURES ON TRADE IN SERVICES AND INVESTMENT29 
102. Both Chapters 10 (investment) and 11 (cross- boarder trade in services) follow a "negative 
list" approach with all sectors and sub-sectors assu med to be open to competition from nationals of 
the other Party, unless otherwise specified in Anne xes I-III of the Agreement.  Any existing or future 
non-conforming measures for both cross-border services and investment are set out in Annexes I and 
II, respectively. 
103. As a consequence, the obligations of national and MFN treatment, and liberalization of local 
presence requirements in cross-border trade in servi ces, apply fully to measures covering all sectors 
and sub-sectors, unless reservations are listed in Annexes I (existing non-conforming measures), II 
(future non-conforming measures) or III (activities reser ved to the Parties) of the Agreement (Articles 
10.9 and 11.8).   
104. The same would apply for investment-related matters, on the absence of nationality 
requirements for senior management appointments a nd nominations to boards of directors, and 
performance requirements as well as national and MF N treatment (Article 10.9).  Non-conforming 
measures in the context of financial services are described in Section E below (sector specific 
provisions on trade in services). 
105. Article 11.11 directs the Parties to deepen th eir liberalization commitments through future 
negotiations by eliminating the non- conforming measures under Article 11.8.30   
1. Panama 
106. In Annex I, Panama has listed 24 existing reser vations including four entries applying to 
all  sectors.31  For the 24 entries, the national treatment obligation is reserved in 22 sectors.32 
                                                      
29 When considering the level of commitments under the Agreement in light of those contracted by the 
Parties under the GATS, it shall be kept in mind that Chap ters of the Agreement that relate to services do not 
contain a market access obligation like GATS Article XVI.   Therefore, full commitmen ts on services under the 
Agreement mean full commitments on national treatment. 
30 According to the Parties as of August 2010, there is no update in this regard. 
31 The 20 specific sectors listed in Annex I are: ar tistic activities (musicians and artists);  travel 
agencies;  services of transmission of radio and television programs;  telecommunication services;  education;  
electrical energy;  crude petroleum and natural gas;  operation of mines;  exploration and exploitation of non 
metallic minerals used as construction, ceramic, refractory and metallurgical materials;  fishing;  activities 
relating to fishing;  private security  agencies;  advertising services;  passenger and freight road transport 
services;  maritime transport (pilotage );  maritime transport (water tran sport services, and placement and supply 
services of personnel);  air transport;  air transport au xiliary services (air traffi c control services, and other 
supporting services for air transport);  journalist;  and services provided to en terprise (business-related services). WT/REG268/1 
Page 36  
 
  Reservations in performance requirements relate to seven sectors
33, followed by six for senior 
management and boards of directors34, four for local presence 35, and two for MFN treatment.36  In 
Annex II, Panama has indicated seven future reserva tions including four entr ies fully reserving the 
five obligations above in issues related to: i) nativ e populations;  ii) social or economical minority;  
iii) the Panama Canal;  iv) state enterprises or gov ernmental organizations.  The other three future 
reservations are with respect to multi-modal courie r services, construction work, and fishing related 
activities.   
107. Some of Panama's horizontal limitations in  modes 3 and 4 under the GATS have not been 
listed under the Agreement.  For example, its GATS schedule provides that not less than 90% of the 
ordinary workforce of any employer must be Panama nian or foreigners with a Panamanian spouse or 
with ten years of residence in Panama.  In additi on, its GATS schedule also limits foreign specialized 
or technical personnel to a maximum of 15% of th e total workforce.  Such limitations are not 
indicated in the Agreement.  With respect to th e presence of natural persons (mode 4), Panama's 
GATS commitments are unbound, except for measures re lating to the temporary entry of sellers of 
services;  and managers, administrators and specialists, whereas the Agreement grants temporary 
entry to a different category of business persons under  Chapter 14 (see Section IV.C.4 of the Factual 
Presentation).  Panama confirms that the scope of categories for beneficiaries of mode 4 is broader 
under the Agreement, compared to its GATS horizontal commitments.  
108. Under its GATS schedule, Panama has commitment s in all the 11 general sectors defined in 
the Services Sectoral Classification List.  In th e Agreement, with respect to sector-specific 
commitments, Panama has made improved commitme nts in a number of sectors.  In other words, 
several services for which Panama has no GATS commitments are assumed to be free of national 
treatment limitations for Chinese Taipei under the Agreement as they are not listed in Annexes I-III.37  
Concerning maritime transport for which no comm itments have made in the GATS, Panama has 
indicated mode 4 types of reservations on ships' crews.   
2. Chinese Taipei 
109. In Annex I, Chinese Taipei has listed 19 existin g reservations including one entry applying to 
all sectors.38  Out of the 19 entries, the national tr eatment obligation is reserved in 16 sectors.39  There 
                                                                                                                                                                     
32 The two sectors with no existing reservation on the national treatment are: activities related to 
fishing, and advertising services. 
33 Artistic activities;  crude petroleum and natural gas;  operation of mines;  fishing;  activities relating 
to fishing;  advertising services ;  and maritime transport.   
34 All sectors;  all sectors (Panama Canal Authority);  services of transmission of radio and television 
programs;  electrical energy;  guar d services;  and journalist.   
35 Crude petroleum and natural gas;  fishing;  activ ities related to fishing;  and maritime transport 
(water transport services and placement and supply services of personnel). 
36 Services relating to transmission of radio and tele vision programs;  and bu siness-related services. 
37 Such services include retailing services, adult education services, some environmental services 
(sewage services, refuse disposal services, sanitation and similar services), other human health services, social 
services, travel agencies, tourist guides services, news agency services, libraries, archives, museums and other 
cultural services, sporting and other recreational services, and some transport services (space, rail, pipeline, and 
services auxiliary to all modes of transport). 
38 The 18 specific sectors listed in Annex I are: placement and supply services of personnel;  some 
professional services (CPA certifi cation services, taxation services, ar chitectural services, professional 
engineering services, veterinary services, and real estate services);  fisheries;  ag riculture, animal husbandry, 
hunting, and forestry;  public utilities;  water rights;  te lecommunication services;  radio and television services;  
education services;  hospital services;  maritime auxiliary  services;  internal waterway transport, cabotage and 
pilotage;  international maritime transport services;  road  transport services;  air transport services;  airfield 
management and operation;  air transport auxiliary services;  and mining.    WT/REG268/1 
 Page 37 
 
 
  are reservations for senior management and boards of directors in eight sectors40, local presence in 
four sectors41, and performance requirements in one sector42.  Chinese Taipei has no MFN 
reservations in Annex I.  In Annex II, Chinese Taipei  has indicated three future reservations that fully 
reserve the five obligations above in issues related to: i) native populations;  ii) social or economical 
minority;  and iii) audiovisual services.  In add ition, national treatment, senior management and 
boards of directors, and local presence reservations ar e maintained under Annex II for legal services.   
110. In its GATS schedule, Chinese Taipei mainta ins horizontal limitations on market access 
relating to commercial presence, in particular for portfolio investment in companies whose shares are 
listed in its securities market.  Mode 4 is u nbound except for measures concerning the conditional 
entry and temporary stay of four categories of na tural persons (business visitors;  intra-corporate 
transferees;  natural persons employed by busin ess entities in Chinese Taipei;  and persons who are 
employees of an enterprise outside Chinese Taipei not having commercial presence in, but having business relations with, Chinese Taipei – provided certain requirements are fulfilled).  Horizontal 
limitations on national treatment by Chinese Taipei  in its GATS schedule refer to limitations to 
foreigners regarding the acquisiti on of land (mode 3).  This restri ction mirrors those contained in 
Annex I with respect to all sectors under the Agreement.    
111. In the GATS Chinese Taipei has commitments in  all the 11 general sectors defined in the 
Services Sectoral Classification List.  Chinese Taipei has extensive GATS commitments for 
professional services but no commitments in medical and dental services, services provided by midwives, nurses, physiotherapists and para-medical  personnel.  These latter services are not listed in 
Annexes I-III of the Agreement.  Chinese Taipei clarifies that these medical services should be 
provided by persons with medical licenses it issues.   Under its GATS schedule, Chinese Taipei does 
not have commitments in some business service s (e.g., rental/leasing services without operators 
relating to ships;  services incidental to fishing;  investigation and security;  and printing services).  
Under the Agreement Chinese Taipei has improved its commitments in these services by either not 
listing them in Annexes I-III, or by listing them under the Annexes but with partially liberalized 
limitations (e.g., services incidental to fishing are committed under the Agreement subject to an 
approval requirement by the competent authority to operate in cooperation with Chinese Taipei 
fishermen).  Chinese Taipei has no GATS commitments  for postal services, hospital services, social 
services, entertainment services (including theatre, live bands and circus services), libraries, archives, 
museums and other cultural service.  These services  are not under Annexes I-III of the Agreement, 
except postal services (reserved in Annex III) and hosp ital services (listed in Annex I with partially 
liberalized limitation that at least 2/3 of the boa rd of trustees to be Chinese Taipei nationals). 
112. Compared to other sectors, Chinese Taipei has fewer commitments in transport services in the 
GATS.  For example, maritime transport services, in ternal waterways transpor t, space transport, and 
pipeline transport are not listed in its GATS schedule.   In contrast, the Agreement provides that a non-
Chinese Taipei vessel may navigate between Chinese Taipei ports to transport passengers and cargo if 
a franchise is granted.  In addition, any non-Chinese Taipei flagship can stay  in international ports 
designated by Chinese Taipei.  Space transport and pi peline transport have not  been listed under its 
Annexes I-III under the Agreement.      
                                                                                                                                                                    
 
39 The three sectors with no existing reservation on  the national treatment are: placement and supply 
services of personnel;  some professional services (CPA  certification services, taxa tion services, architectural 
services, professional engineering services, veterinary serv ices, and real estate services);  and hospital services. 
40 The eight sectors are: telecommunication services;  radio and television;  education services;  
hospital services;  maritime auxiliary services;  inte rnal waterway transport, cabotage, and pilotage;  
international maritime transport serv ices;  and air transport services. 
41 The four sectors are: placement an d supply services of personnel;  some professional services (CPA 
certification services, taxation services, architectural se rvices, professional engineering services, veterinary 
services, and real estate services);  teleco mmunication services;  and radio and television. 
42 The one sector is radio and television. WT/REG268/1 
Page 38  
 
  E. S
ECTOR SPECIFIC PROVISIONS ON TRADE IN SERVICES  
1. Financial services 
113. Chapter 12 on financial services applies to measu res adopted or maintained by the Parties 
relating to: i) financial institutions of the other Part y;  ii) investors of the other Party, and investments 
of such investors in financial institutions of the Parties;  and iii) cross-border trade in financial 
services.  Regarding the right to establish financial institutions, the Parties recognize the principle that 
investors of a Party shall be permitted to establish a financial institution in the territory of the other 
Party through any forms of establishment and oper ation that the law of the other Party permits 
(Article 12.4.1). 
114. However, the Chapter does not apply to measur es relating to: i) activities by the monetary 
authorities or any other public ins titution for monetary or exchange policies;  ii) activities or services 
forming part of a public retirement plan or statut ory system of social security;  iii) activities or 
services for the account or with the guarantee or using the financial resources of the Party, or its public entities (Article 12.2.2);  iv) protection of fu nd administrators, investors, depositors, financial 
market participants, policy holders, policy claimants, or persons to whom a fiduciary duty is owed by 
a financial institution or cross-border financial ser vices provider;  v) maintenance of the safety, 
soundness, integrity or financial responsibility of financial institutions or cross-border financial 
services providers;  and vi) ensuring the integrity and stability of the financial system of the Parties 
(Article 12.9.1). 
115. National treatment is granted by a Party to inv estors of the other Party with respect to the 
establishment, acquisition, expansion, management , conduct, operation, and sale or other disposition 
of 'similar' financial institutions a nd investments in 'similar' financia l institutions in its territory.  A 
Party shall accord to financial institutions of the other Party and to investments of investors of the 
other Party in financial institutions treatment no less favourable than it accords to its own similar 
financial institutions and to investments to its own investors in 'similar' fi nancial institutions, with 
respect to the establishment, acquisition, expans ion, management, conduct, operation, and sale or 
other disposition of financial in stitutions and investments.  Where a Party permits the cross-border 
provision of a financial service it shall accord to the cross-border financial service providers of the 
other Party treatment no less favourable than that it accords to its own 'similar' financial service providers, with respect to the provision of such service (Article 12.6).   
116. MFN treatment is granted to investors of the ot her Party, financial institutions of the other 
Party as well as to investments of investors of th e other Party in financial institutions, and cross-
border financial service suppliers of the other Party (Article 12.7). 
117. Cross-border trade  of financial services is governed by Article 12.5.  No Party may adopt any 
measure restricting any type of cross-border trad e in financial services by cross-border financial 
service providers of the other Party that the Party permits on the date of entry into force of the 
Agreement, except those identified in section B of A nnex VI for each Party.  In this regard, Panama 
reserves the right to adopt or maintain any measure dealing with pension fund services.  In addition, 
the Parties shall permit persons located in their te rritories, and their nationals wherever located, to 
purchase financial services from cross-border financia l service providers of the other Party located in 
the territory of the other Party.  Registration of cross-border financial service providers of the other 
Party and of financial instruments may be required. 
118. Senior management and boards of directors obligations provide that the Parties may not 
require that a financial institution of the other Part y engages individuals of any particular nationality 
as senior managerial or other essential personnel.  In  addition, neither Party may require that the board 
of directors or administrative council of a financia l institution of the other Party be composed of  WT/REG268/1 
 Page 39 
 
 
  nationals of the Party, persons residing in the te rritory of the Party, or a combination thereof 
(Article 12.14).   
119. Regarding disputes arising under the chapter on financial services, chapter 19 (dispute 
settlement) applies.  If disputes occurred specifically  on investment in financial services between an 
investor of a Party and the other Party, section B of Chapter 10 on investment shall be applied 
(Article 12.19).  A consultation procedur e is also defined (Article 12.12).  
120. Chapter 12 also contains disciplines on self-regulatory organisations (Article. 12.3), 
recognition and harmonization (Article 12.8), transp arency (Article 12.10), committee on financial 
services (Article 12.11), new financial services and data processing (Article 12.13), and transfers 
(Article 12.17).  Article 10.11 on e xpropriation and compensation in Chapter 10 on investment applies 
to Chapter 12 on financial services (Article 12.2.4). 
121. Subject to the non-conforming measures in Annex VI of the Agreement, the obligations of 
right of establishment (Article 12.4), cross-border trade (Article 12.5), national and MFN treatment 
(Articles 12.6 and 12.7), new financial services and data processing (Article 12.13), and senior 
management and board of directors (Article 12.14) , apply fully (Article 12.15).  In addition, 
non-conforming measures in Annexes I and II may, b ased on the description in the two Annexes, also 
cover financial services-related matters.  Notwithstan ding the "negative-list" approach under Annexes 
I-II, and VI, specific preferential commitments for certain Panamanian banki ng and other financial 
services (excluding insurance, securities and futures)  are made by Chinese Taipei (section C of Annex 
VI of Chinese Taipei).  
122. Under the Agreement, Panama has taken nationa l treatment, senior management and board of 
directors, right of established or cross border trade reservations for banking, insurance companies, 
administrators of insurance enterp rises/reinsurance, insurance brokers  or adjustors, reinsurance or 
underwriters entities, reinsurance br okers, and pension fund services.  Panama confirms that these 
reservations are not particularly for Chinese Taipei , but applied on an MFN basis.  In particular, 
Panama fully reserves its rights to adopt or mainta in any measure dealing with pension fund services.  
The settlement and clearing services for financia l assets which is not listed in Panama's GATS 
commitment is also not indicated under Annex VI of the Agreement. 
123. Under the Agreement, Chinese Taipei has taken national treatment, right of establishment or 
cross border trade reservations for direct insuran ce, insurance intermediation, and banking and other 
financial services (excluding insurance, securities and futures).  However, Chinese Taipei has relaxed 
in section C of Annex VI some requirements for Panamanian banking and other financial services 
(excluding insurance, securities and futures) that are required of other foreign banks.  For example, 
Panamanian banks wishing to establish branch offi ces in Chinese Taipei do not need to be ranked 
among the top 500 banks in the world;  or, Pana manian banks wishing to establish a representative 
office in Chinese Taipei are not required to ha ve conducted total transa ctions with banks or 
enterprises of Chinese Taipei of more than US$300 milli on during the three years prior to application.  
In addition, if Chinese Taipei pr ovides better market access to a non- Party in insurance, banking and 
other financial services, such treatment shall also be  granted to Panama no later than 60 days from the 
entry into force of such treat ment for the third Party.   
2. Telecommunications 
124. Chapter 13 on telecommunications ensures that persons of the other Party have access to and 
can use any public telecommunications transport network or services, including private leased 
circuits, offered in a Party's territory or across its  borders for the conduct of their business.  Such 
access and use must be based on reasonable and non-discriminatory terms and conditions (Article 13.3.2). WT/REG268/1 
Page 40  
 
  125. The Chapter applies to: 1) measures adopted or maintained by the Parties relating to: i) access 
to and use of public telecommunications transport ne tworks or services by persons of the other Party, 
including price fixing and access and use by su ch persons operating private networks for 
intra-corporate communications, subject to Annex 13. 1.(A) on conformity assessment procedures;  ii) 
the provision of enhanced or value-added services by persons of the other Party in the territory, or 
across the borders, of a Party;  and 2) standard s-related measures for connecting an attachment of 
terminal or other equipment to public telecomm unications transport netw orks (Article 13.2.1). 
126. The Chapter excludes measures a dopted or maintained by the Parties relating to cable or 
broadcast distribution of radio or television prog ramming, except to ensure that persons operating 
broadcast stations and cable systems have conti nued access to, and use of, public telecommunications 
transport networks and services (Article 13.2.2).  
127. The Parties may: i) authorize a person of the othe r Party to establish, construct, acquire, lease, 
operate or provide telecommunicati ons transport networks or telecommunications transport services;  
ii) oblige any person to establish, construct, acqui re, lease, operate or supply telecommunications 
transport networks or telecommunications transpor t services not offered to the public generally;  
iii) oblige a person engaged in the cable or broad cast distribution of radio or television programming 
to make available its cable or broadcast facilities as a public telecommunications transport network;  
or iv) prohibit persons operating private telecommu nication networks from using their networks to 
provide public telecommunications transport networks or services to third persons (Article 13.2.3).  In 
addition, the Parties may adopt or enforce any measures necessary to: i) ensure the security and 
confidentiality of message;  or ii) protect the pr ivacy of subscribers to public telecommunications 
transport networks or services (Article 13.3.6).  
128. Chapter 13 also contains conditions relating to  the provision of enhanced or value-added 
services (Article 13.4), standards-related measures (Article 13.5), and monopolies or anti-competitive 
practices (Article 13.6). 
129. Panama's GATS schedule does not list basic telecommunication services.  However, it has 
commitments on value-added telecommunication servi ces that permit foreign enterprises to provide 
such services directly five years after its accession to the WTO.
43  Panama's Annex V under the 
Agreement states, inter alia,  that cellular mobile telephone services shall be provided exclusively on 
bands A and B by BSC de Panama S.A. and Cable & Wireless (Panama), S.A., for 20 years starting from the date when the relative contracts of concession enter into force.  After the eleventh year, from 
the date on which the cellular mobile telephony licence for band B was granted, up to two licences 
may be tendered for personal co mmunication services providers.
44    
130. In its GATS schedule, Chinese Taipei has unde rtaken specific commitments both for basic 
and value-added telecommunication services.  It has no commitments in radio and television transmission services.  Similarly, under Annex II of the Agreement, it has reserved its right to adopt 
or maintain any measure relating to investment in, or the provision of, televi sion and radio broadcast 
transmission services.  However, in Annex I of the Agreement Panamanian satellite broadcasting 
businesses are permitted, provided that a branch offi ce or agent is established in Chinese Taipei.   
131. The Parties shall consult each other with  a view to liberalizing trade in all 
telecommunications services, including public tele communications transport networks and services 
(Article 13.10.2). 
                                                     
 
43 Panama has been a Member of the WTO since 6 September 1997. 
44 According to Panama, the personal communication services providers are not exclusively from 
Chinese Taipei.  WT/REG268/1 
 Page 41 
 
 
  V. GENERAL PROVISIONS OF THE AGREEMENT 
A. TRANSPARENCY  
132. An information centre shall be designated by each Party to facilitate communications between 
them on any issues covered in the Agreement.  The Parties must promptly publish or otherwise make 
available laws, regulations, procedures and administra tive rulings of general application that are in 
reference to any matters under the Agreement.  Provisions are also made for the provision of 
information (Article 17.4);  guarantees on hear ing, legality and due pr ocess (Article 17.5);  
administrative proceedings for adopting measures of ge neral applications (Artic le 17.6);  review and 
appeal (Article 17.7);  and communications and notifi cations (Article 17.8).  In  addition to the general 
transparency provisions in Chapter 17, the Agreem ent also contains chapte r-specific transparency 
provisions with respect to sanitary and phytosan itary measures (Article 8.10), financial services 
(Article 12.10), telecommunications (Article 13. 7), and intellectual property (Article 16.12). 
B. EXCEPTIONS  
133. Article XX of GATT 199445 and subparagraphs (a), (b) a nd (c) of Article XIV of GATS46 are 
incorporated into the Agreement for the purpose of  general exceptions.  Security exceptions under the 
Agreement reflect Article XXI of GATT 1994, Article XIV bis of GATS, and Article 73 of the TRIPS 
Agreement.  In addition, the Agreement allows th e Parties to take actions to implement national 
policies or international agreements on the non-pr oliferation of nuclear weapons or other nuclear 
explosive device (Article 20.3.(b).(iii)). 
C. ACCESSION AND TERMINATION  
134. There are no accession provisions in the Agre ement.  Either Party may terminate the 
Agreement but must first notify the other Party.  Termination becomes effective after 180 days have 
elapsed from the notification date (Article 21.5). 
D. INSTITUTIONAL FRAMEWORK  
135. Chapter 18 establishes the structure of en tities administering the Agreement.  An 
Administrative Commission composed of representati ves from the Parties or of persons designated by 
them was established, inter alia , to supervise the implementation of the Agreement;  evaluate the 
results of the implementation of the Agreement;  and resolve any dispute on the interpretation or 
application of the Agreement.  The Commission may seek advice from non-governmental persons or 
groups (Article 18.1) and may cr eate committees other than those47 listed in Annex 18.4 (Article 
18.5). 
136. The committees established under Annex 18.4, inter alia , propose to the Commission any 
modification, amendment, or addendum to the provisi ons of the Agreements in their competence, and 
may create standing sub-committees.  An Admi nistrative Sub-Commission was established to, 
                                                      
45 For the chapters on trade in goods and technical barr iers to trade, except to the extent that some of 
their provisions apply to services or investment;  and th e chapter on competition policy, to the extent that some 
of its provisions apply to goods. 
46 For the chapters on trade in goods and technical barriers to trade, to the extent that some of their 
provisions apply to services;  the chapter on competition policy, to the extent that some of its provisions apply to services;  and the chapters on investme nt, cross-border trade in  services, financial services, telecommunication, 
and temporary entry for business persons. 
47 Committees on: trade in goods;  sanitary and phytosanitary measures;  standards, metrology and 
authorization procedures;  investment and cross-border trade in services;  financial services;  and intellectual 
property.   WT/REG268/1 
Page 42  
 
  inter alia , follow up on the decisions adopted by the Administrative Commission (Article 18.2).  The 
Administrative Commission and the Sub-Commission shall be assisted by the Secretariat established under Article 18.3.  The Secretariat supports also the work of the committees, sub-committees, expert 
groups, and arbitral groups under the chapter on dispute settlement. 
137. In addition to the general institutional framewo rk provisions of Chapter 18, the Agreement 
also contains chapter-specific provisions establishing the relevant bodies.  These are committees on 
trade in goods (Article 3.16), sanitary and phytosanit ary measures (Article 8.11), standards, metrology 
and authorization procedures (Article 9.12), in vestment and cross-border trade in services 
(Article 11.14), financial services (Article 12. 11), and intellectual pr operty (Article 16.13). 
E. D
ISPUTE SETTLEMENT  
138. Chapter 19 sets out procedures on dispute settlement relating to the interpretation and 
application of the Agreement.  The Agreement's dis pute settlement mechanism is  applicable in case of 
alleged violations of obligations by the Parties and in case of alleged nullification or impairment 
caused by measures taken by a Party.48  For disputes arising in connection with the provisions of the 
Agreement and the WTO Agreement or agreem ents negotiated in accordance with the WTO 
Agreement, the complaining Party chooses under whic h forum the disputes shall be settled.  Once the 
forum has been chosen, it shall be exclusiv ely used for that dispute (Article 19.4). 
139. Noting that the Parties shall endeavour to agr ee on the interpretation and application at all 
times and to arrive at a mutually satisfactor y resolution of any matter under the Agreement 
(Article 19.2), a Party may request consultations in writing with the other Party on matters that it 
considers to affect the operation of the Agreement (A rticle 19.6).  If the consu ltations fail to settle the 
dispute within 30 days from the date of receipt of th e request for consultations (15 days in the case of 
urgency – if the dispute applies to perishable agricu ltural goods, and fish and fish products), any Party 
may refer the matter to the Commission.  The Commission may call on technical advisers or create expert groups as necessary, have recourse to good  offices, conciliation, mediation or other dispute 
resolution procedures, or make recommendations (Article 19.7). 
140. The Party requesting the intervention of the Co mmission may also request the establishment 
of an arbitral group.  The arbitral group which co mprises three members is selected from a list of up 
to 20 potential arbitrators set up by the Parties (Artic le 19.10).  The chair of the arbitral group should 
be chosen within 15 days, following which each Party may select an arbitrator within an additional 15 
days (Article 19.12).  The Model Rules of Procedure for the group include a right of a hearing by the group and an opportunity to pr esent allegations and rebuttals in  writing, which subject to be 
confidential (Article 19.13). 
141. The arbitral group presents its preliminary report to the Parties, within 90 days after its 
nomination of the last arbitrator containing findi ngs of fact, its decision, recommendations, and the 
timeframe for the implementation of the report (Article 19.15).  The final report is to be presented to 
the Parties within 30 days of the preliminary report (Article 19.16) and requires the Parties to adhere 
to the requirements and implementation periods in  it.  The timeframe for implementing the final 
report must not exceed six months (Article 19.17). 
142. Within five days from the expiry of the impl ementation period, the Party complained against 
shall inform the arbitral group and the other Party of  actions adopted to comply with the final report. 
Within 30 days from the expiry of the implementa tion period, the arbitral group shall determine 
whether the Party complained against has complied w ith the final report (Article 19.17.4).  If this is 
                                                     
 
48 Annex 19.3 clarifies the coverage as well as the determination of possible elements of nullification 
and impairment.  WT/REG268/1 
 Page 43 
 
 
  not the case, the complaining Party may suspend be nefits in accordance with the provisions of 
Article 19.18. 
143. The steps to be taken in the dispute settleme nt process are described below.  During the 
process, the Parties may request good offices, concilia tion or mediation at any time (Article 19.8.3). WT/REG268/1 
Page 44  
 
  Table V.1 
Synopsis of Dispute Settlement Provisions under the Agreement 
 
 
 
 
 
  
 
 
  
  
 
 Request for 
Consultations 
(Art. 19.6) 
Consultations 
(Art. 19.6) 
30 days 
(15 days in urgent cases) 
Commission 
(Art. 19.7) 
30 days 
Request for establishment of 
Arbitral Group 
(Art. 19.9) 
90 days from the nomination 
of the last arbitrator 
Preliminary Report 
(Art. 19.15) 
30 days 
Final Report 
(Art. 19.16) 
Final + binding on Parties Mutually satisfactory 
resolution 
Implementation 
(Art. 19.17) 
Implementation period (6 months 
maximum unless Parties agree on a 
different timeframe) + 5 days 
Party complained against informs 
Arbitral Group and other Party of 
actions adopted to comply 
Suspension of benefits (Art. 19.18) 
Establishment of Arbitral Group to 
determine the compliance 
60 (or 30) days 
Report issued Arbitral Group determines if 
implementation is complete 
Source : WTO Secretariat based on Chapter 19 of the Agreement . 
 
  WT/REG268/1 
 Page 45 
 
 
  F. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  
144. The Agreement's relationship with other agreemen ts concluded by the Parties is defined in 
Article 1.3, where the Parties affirm their existin g rights and obligations with respect to each other 
under the WTO Agreement and other agreements to which the Parties are party.  When there are 
inconsistencies between the Agreement, and the WT O Agreement and other ag reements to which the 
Parties are party, the Agreement prevails.  Howe ver, if there are inconsistencies between the 
Agreement, and i) the Convention on Internationa l Trade in Endangered Species of Wild Fauna and 
Flora (CITES);  ii) the Montreal Protocol on Substances that Deplete the Ozone Layer;  or iii) the Basel Convention on the Control of Trans-bounda ry Movements of Hazardous Wastes and Their 
Disposal, these three agreements prevail, provided th at the Parties comply with their obligations in a 
manner consistent with the Agreement to the extent possible. 
Table V.2:  Panama and Chinese Taipei:  Pa rticipation in other RTAs (notified and non-notified in force), as of 1 September 201 0 
GATT/WTO Notification 
Partner / Agreement Date of 
entry  
into force Type of 
agreement Year WTO Provision 
PANAMA  
Honduras (Central America) 09.01.09 Goods & Se rvices 2009 GATT Art. XXIV & GATS Art. V
Chile 07.03.08 Goods & Services 2008 GATT Art. XXIV & GATS Art. V
Singapore 24.07.06 Goods & Services 2007 GATT Art. XXIV & GATS Art. V
Costa Rica 11.04.03 Goods & Services 2009 GATT Art. XXIV & GATS Art. V
El Salvador (Central America) 11.04.03 Goods & Services 2005 GATT Art. XXIV & GATS Art. V
Nicaragua (Central America) 21.11.09 Goods Not notified  
Guatemala (Central America)  20.06.09 Goods Not notified  
Colombia 18.01.95 Goods Not notified  
Dominican Republic 08.06.87 Goods Not notified  
Mexico 24.04.86 Goods Not notified  
CHINESE TAIPEI  
Honduras – El Salvador 01.03.08  
(El Salvador) 15.07.08  (Honduras) Goods & Services 2010 GATT Art. XXIV & GATS Art. V
Nicaragua 01.01.08 Goods & Services 2009 GATT Art. XXIV & GATS Art. V
Guatemala 01.07.06 Goods  & Services Not notified  
 
Source: WTO Secretariat.  
 
G. GOVERNMENT PROCUREMENT  
145. There are no government procurement provisions in the Agreement. 
H. INTELLECTUAL PROPERTY RIGHTS  
146. Chapter 16 governing intellectual property right s applies to copyrights and related rights, 
geographical indications, traditional knowledge, folk lore, access to genetic resources, and breeders' 
rights.  The WTO TRIPS Agreement, as well as other international conventions or treaties49, apply to 
                                                      
49 These conventions and treaties: (a) the Paris Convention for the Protection of Industrial Property 
(1967), (b) the Berne Convention for the Protection of Literary and Artistic Works (1971), (c) the International WT/REG268/1 
Page 46  
 
  all intellectual property issues arising from the Agr eement (Article 16.1).  As general obligations, 
appropriate protection and enforcement of intellectual property rights shall be accorded to nationals of 
the other Party, and such measures shall not create obstacles to legitimate trade.  In addition, the 
Parties may accord "broader"
50 protection to intellectual property rights in their legislations than the 
level of protection under the Chapter, provided that th ey are not inconsistent with the provisions in the 
Chapter (Article 16.2). 
147. The holder of copyright and related rights sha ll not hinder free trade of legitimate products in 
a Party, once the relevant products are legally introduced into that Party, by the right or license holder or by any other authorized third person. 
148. Article 16.4 requires the Parties to recognize and protect geographical indications of the other 
Party.  They shall permit the import, manufactur e or sale of goods with a geographical indication 
protected by the other Party, only if it is processed  and certified in the originating Party according to 
its applicable legislation.  The Article recognizes homonymous geographical indications that lawfully 
belong to a non-Party.  Chinese Taipei recognizes  "Seco" for exclusive use as a spirit made from 
sugarcane "originating"
51 in Panama.  Chinese Taipei will recognize only "Seco" processed in 
Panama, according to Panamanian laws, rules, techni cal regulations and standards.  The appellation of 
origin for "Seco" is subject to Section C (enforce ment) of the Chapter and Article 23.1 of the WTO 
TRIPS Agreement.  No geographical indications  from Chinese Taipei are listed in the Article.52 
149. Collective intellectual property rights and the traditional knowledge of indigenous people in 
their creations, subject to commercial use, shall be protected through a special system of registering, 
promoting, and marketing of these rights.  The defini tion of cultural heritage recognized by the Parties 
is: the customs, traditions, beliefs, spirituality, relig iosity, cosmos vision, folklore expressions, artistic 
manifestations, traditional skills and any other form  of traditional expression of the indigenous people 
and local communities.  Cultural heritage shall not  be subject to any form of exclusivity by 
unauthorized third parties applying the intell ectual property system, unless requested by the 
indigenous peoples and local communities or by third parties with their authorization (Article 16.5). 
150. The Parties shall protect access to their genetic  resources and traditional knowledge of their 
indigenous peoples and local communities on the u ses of the biological resources containing such 
genetic resources, against the indiscriminate use of  biological diversity, as well as ensuring that the 
Parties will participate in benefits derived from the use of its genetic resources (Article 16.7). 
151. With regard to the protection of rights origin ating from the use of plant varieties, "breeders 
rights" are recognized by the Parties through a special  system of registration in accordance with their 
relevant laws and regulations.  In this regard, the Parties plan to develop a mutual recognition 
mechanism.53  The right accorded to the breeder of a plan t variety is an exclusive right over the plant 
variety and is authorized to exploit the protected va riety, or license its exploitation to third persons.  
The right shall be granted for 20 years in both Pa rties from the date of concession of the title of the 
protection.  In the case of trees or perennial vine plants, including in each case their rootstocks, the 
                                                                                                                                                                     
Convention for the Protection of Performers, Producers or Phonograms and Broadcasting Organizations, (d) the 
Geneva Convention for the Protection of Producers of Phonograms Against Unauthorized Reproduction, (e) the 
Convention of the International Union for the Protection of New Varieties of Plants (UPOV), Act of 1978 for 
Panama, or Act of 1991 for the Chinese Taipei, (f) the WIPO Copyright Treaty (1996), and (g) the WIPO 
Performances and Phonograms Treaty (1996). 
50 According to the Parties, the meaning of "broader" is equivalent to the term "more extensive" in 
Article I of the WTO TRIPS Agreement. 
51 The Parties clarify that the word "originatin g" refers to "Seco", i.e., the sprit itself. 
52 According to Chinese Taipei as of August 2010, it is considering its candidates' list of the 
geographical indications.  However, it has no plan to notify any of them in the near future. 
53 According to the Parties as of August 2010, there is no development in this regard.  WT/REG268/1 
 Page 47 
 
 
  protection granted is 25 years for both Parties.  Once the term expires, the varieties shall be 
considered as being in the public domain (Article 16.8). 
152. The Committee on Intellectual Property was establis hed to discuss and review all intellectual 
property issues under the Agreement.  Under the Comm ittee, an expert group with three experts from 
each Party's Intellectual Property Office was esta blished (Article 16.13).  Article 16.14 foresees 
technical cooperation between the Parties on issues relating to intellectual property, particularly on 
newly developed intellectual property related issues. 
I. OTHERS  
1. Competition 
153. Chapter 15 deals with competition policy, monopolies and state enterprises.  Its purpose is to 
ensure that the benefits of trade liberalization are not reduced by anticompetitive activities and to 
promote cooperation and coordination be tween the Parties (Article 15.1).  
154. The Parties may designate or maintain a monopoly or a state enterprise54 if and whenever 
their laws permit it.  When a Party intends to designate a monopoly or a state enterprise, the designation shall be communicated to the other Party through a prior written notification.  The Parties 
shall ensure that the designated/maintained entiti es act in accordance with their obligations under the 
Agreement.  An exception applies to procuremen t of goods and services by government agencies for 
official purposes and not for commercial resale, or for production of goods a nd provisions of services 
for commercial sale (Article 15.3). 
2. Environment 
155. There is no chapter on environment in the Agreement per se .  However, under Chapter 10 on 
investment, the Parties can adopt, maintain or enfo rce any measure that they consider appropriate to 
ensure that investment in their territories is unde rtaken under their ecological or environmental laws 
(Article 10.15.1). 
                                                     
 
54 According to Article 2.1 of the Agreement, 'state enterprise' is an enterprise that is owned or 
controlled by a Party through ownership interests. WT/REG268/1 
Page 48  
 
  ANNEX I 
 
Indicators of tariff and trade liberalization under the Agreement
 
  
1. A comparison between the scheduled elimination of tariffs applied to the Parties' mutual 
imports and the MFN rates applied by Panama and Chinese Taipei is shown in Table AI.1 (Panama) 
and AI.2 (Chinese Taipei) below, by total pro ducts, agricultural products and non-agricultural 
products. 
Table AI.1  
Panama: Indicators of MFN tariff rates and pref erential rates for imports from Chinese Taipei 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff 
Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share 
of 
duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Share 
of duty-
free 
tariff 
lines 
(%) Overall 
(%) On 
dutiable 
(%) Share 
of duty-
free 
tariff 
lines 
(%) 
MFN 2004 8.71 12.39 29.71 15.76 19.50 19.15 7.40 10.82 31.58 
Chinese Taipei 2004 6.47 12.62 48.75 12.48 20.91 40.31 5.35 10.75 50.24 
 2005 5.64 11.01 48.75 11.73 19.65 40.31 4.51 9.07 50.24 
 2006 4.79 9.35 48.76 10.97 18.38 40.31 3.64 7.32 50.26 
 2007 3.93 7.66 48.76 10.21 17.10 40.31 2.76 5.54 50.26 
 2008 3.04 10.66 71.50 9.44 20.22 53.30 1.85 7.34 74.84 
 2009 2.70 9.47 71.50 9.04 19.36 53.30 1.52 6.04 74.84 
 2010 2.36 8.33 71.66 8.64 18.50 53.30 1.19 4.77 75.02 
 2011 2.03 7.15 71.66 8.24 17.64 53.30 0.87 3.48 75.02 
 2012 1.69 5.97 71.66 7.83 16.76 53.30 0.55 2.20 75.02 
 2013 1.36 27.64 95.09 7.42 32.77 77.36 0.23 14.15 98.39 
 
a WTO Definition.  
Source : WTO Secretariat estimates based on data provided by Panama and WTO-IDB. 
 
2. Panama's average applied MFN rate in 2004 was 8.71%.  Tariffs on agricultural products are 
around twice as high as those for non-agricultura l products.  Duty-free tariff lines accounted for 
29.71% of all tariff lines.  As a result of the Agreem ent, Chinese Taipei exporters enjoyed an absolute 
margin of preference of 3.28% for agricultural goods, vis-à-vis  the prevailing average MFN tariff in 
2004, and 2.05% for non-agricultural goods.  Overall, Chinese Taipei exporters enjoyed an absolute 
margin of preference of 2.24% vis-à-vis  the prevailing average applied MFN tariff;  the share of duty-
free lines applicable to imports from Chinese Taip ei also rose from 29.71% on an MFN basis to 
48.75% in 2004.  By the end of implementation in 2013, the share of duty-free lines for imports from Chinese Taipei is expected to rise to 95.09% overa ll, with 98.39% of non-agricultural products and 
77.36% of agricultural products becoming duty-free. 
Table AI.2 
Chinese Taipei: Indicators of MFN tariff rates and preferential rates for imports from Panama 
ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) 
MFN 2004 8.7 12.7 31.0 26.6 34.8 23.3 5.3 7.8 32.5 
Panama 2004 5.4 20.6 73.9 24.2 41.8 41.8 1.7 8.7 80.2 
 2005 4.4 16.9 73.9 19.5 33.6 41.9 1.5 7.4 80.2 
 2006 4.0 15.3 74.0 18.2 31.4 41.9 1.2 6.2 80.3 
 2007 3.5 13.4 74.1 16.9 29.3 42.0 0.8 4.3 80.3 
 2008 3.0 33.4 90.9 15.5 42.2 63.1 0.6 16.0 96.4 
Table AI.2 (Cont'd)  WT/REG268/1 
 Page 49 
 
 
  ALL PRODUCTS Agricultural products a Non-agricultural products 
Average applied 
tariff Average applied 
tariff Average applied 
tariff Origin of 
goods Year 
Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff lines 
(%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) 
 2009 2.9 31.9 91.0 14.9 40.6 63.3 0.5 14.8 96.4 
 2010 2.7 31.0 91.1 14.3 40.1 64.3 0.5 13.6 96.4 
 2011 2.6 29.9 91.4 13.7 40.2 65.7 0.4 11.2 96.4 
 2012 2.5 28.5 91.4 13.2 38.7 65.7 0.4 9.9 96.4 
 2013 2.3 89.2 97.4 12.7 102.1 87.4 0.3 44.8 99.3 
 a WTO Definition. 
 
Note: Excludes data beyond HS Chapter 97; 
 Tariff lines subject to in-quota rates are excluded in the com putation; for the calculation of averages, specific rates are 
excluded and the ad valorem  equivalents or ad valorem  part of alternate rates are included. 
 
Source : WTO Secretariat estimates based on data provided by Chinese Taipei to the WTO-TPRD. 
 
3. Chinese Taipei's average applied MFN rate in  2004 was 8.7%.  Tari ffs on agricultural 
products are higher than for non-agricultural pro ducts with the average applied MFN tariff on 
agricultural products about five times higher than that  applied to non-agricultu ral products.  Duty-free 
tariff lines account for 31% of all tariff lines.  As  a result of the Agreement, Panamanian exporters 
enjoyed an absolute margin of prefer ence of 2.4% for agricultural goods, vis-à-vis  the prevailing 
average MFN tariff in 2004, and 3.6% for non-agricu ltural goods.  Overall, Panamanian exporters 
enjoyed an absolute margin of preference of 3.3% vis-à-vis the prevailing average applied MFN tariff;  
the share of duty-free lines applicable to imports  from Panama also rose from 31% on an MFN basis 
to 73.9% in 2004.  By the end of implementation in 2013, the share of duty-free lines for imports from 
Panama is expected to rise to 97.4% overall, with 99.3% of non-agricultural products and 87.4% of 
agricultural products becoming duty-free. 
Table AI.3 – Panama: Market access oppo rtunities under the Agreement for Chinese Taipei's top 25 exports to the world 
Access Conditions to Panama's import markets  Chinese Taipei's top export products in 2006-2008  MFN (2004)  Duty-free in  
No. of 
tariff 
lines  
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) 
Duty-free 
Dutiable 2004 2008 2013 No. of lines 
remaining 
dutiable 
 
854240 Hybrid integrated circuits 5.8 10.0  1   1  
271000 Petroleum oils and oils obtained from 
bituminous minerals, other than crude; preparations not elsewhere specified or 
included, containing by weight 70 % or 
more of petroleum oils or of oils obtained from bitumi 5.7 5.7 13 8 3 3 2  
901390 Parts and accessories 3.6 15.0  1   1  
847330 Parts and accessories of the machines of 
heading no. 84.71 3.2 3.0  1 1    
901380 Other devices, appliances and instruments 3.0 15.0  2   2  
853120 Indicator panels incorporating liquid 
crystal devices (lcd) or light emitting 
diodes (led) 2.9 15.0  1 1    
854230 Other monolithic integrated circuits 2.8 10.0  1   1  
854213 Metal oxide semiconductors (mos 
technology) 2.3 10.0  1   1  
854214 Circuits obtained by bipolar  technology 2.3 10.0  1   1  
854219 Other, including circuits obtained by a 
combination of bipolar and mos 
technologies (bimos technology) 2.3 10.0  1 1    
Table AI.3 (Cont'd)  WT/REG268/1 
Page 50  
 
  Access Conditions to Panama's import markets  Chinese Taipei's top export products in 2006-2008  MFN (2004)  Duty-free in  
No. of 
tariff 
lines  
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) 
Duty-free 
Dutiable 2004 2008 2013 No. of lines 
remaining 
dutiable 
 
853400 Printed circuits 2.2 3.0  1 1    
852390 Other 1.8 5.0  1 1    
852520 Transmission apparatus incorporating 
reception apparatus 1.6 6.3 1 3 2  1  
854140 Photosensitive semiconductor devices, 
including photovoltaic cells whether or not 
assembled in modules or made up into 
panels; light emitting diodes 1.2 10.0  1  1   
854250 Electronic microassemblies 1.1 10.0  1   1  
390330 Acrylonitrile-butadiene-styrene (abs) 
copolymers 0.8 0.0 2      
291736 Terephthalic acid and its salts 0.7 0.0 1      
870899 Parts and accessories of the motor vehicles 
of HS headings 87.01 to 87.05, n.e.s. 0.7 3.3 1 2 1   1 
392690 Other 0.6 2.9 9 9 4 4 1  
731815 Other screws and bolts, whether or not 
with their nuts or washers 0.6 10.0  1 1    
852691 Radio navigational aid a pparatus 0.6 15.0  1   1  
852812 Colour 0.6 5.0  1  1   
852990 Other 0.6 8.3  3  3   
847350 Parts and accessories equally suitable for 
use with machines of two or more of the 
headings nos. 84.69 to 84.72 0.5 15.0  1   1  
871200 Bicycles and other cycles (including 
delivery tricycles), not motorised 0.5 10.0  4 1 2 1  
Total of above 48.2  27 47 17 14 15 1 
 
Source : WTO estimates based on data pr ovided by Chinese Taipei, WTO-ID B and UNSD, Comtrade database. 
 
4. Table AI.3 shows the market access conditions in  Panama for Chinese Taipei's top 25 exports, 
which in 2006-2008 accounted for 48.2% of its gl obal exports.  Twenty seven tariff lines (at the 
HS  8-digit level) were already duty-free on an MF N basis, accounting for 10. 1% of Chinese Taipei's 
global exports.  Out of 47 tariff lines which were dutiable, 17 lines became duty-free upon the entry 
into force of the Agreement;  a further 14 lines b ecame duty-free in 2008;  and 15 lines are to become 
duty-free in 2013.  One tariff line which remains dutiable among Chinese Taipei's top 25 exports and 
accounts for 0.7% of its global exports is relate d to parts and accessories of motor vehicles.  WT/REG268/1 
 Page 51 
 
 
  Table AI.4 – Chinese Taipei: Market a ccess opportunities under the Agreement for Panama's top 25 exports to the world 
Access Conditions to Chinese Taipei's import markets  Panama's top export products in 2006-2008  MFN (2004)  Duty-free in  
No. of 
tariff 
lines  
HS number and description of the product  Share in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) 
Duty-free 
Dutiable 
2004 2008 2010 2013 No. of lines 
remaining 
dutiable 
 
080719 Melons (excluding watermelons ), fresh 10.0 25.0  2  2    
080300 Bananas, including plantains, fresh or 
dried. 9.8 114.0  1     1 
030410 Fresh or chilled 7. 8 19.0  6 6     
080711 Watermelons 7.7 30.0  1  1    
030342 Yellowfin tunas (Thunnus al bacares) 7.4 10.0  1 1     
030219 Other 5.3 18.0  1 1     
030613 Shrimps and prawns 4.5 20.0  1 1     
080430 Pineapples 3.5 173.0  1     1 
030749 Cuttle fish (Sepia officinalis, Rossia 
macrosoma, Sepiola spp.) and squid 
(Ommastrephes spp., Loligo spp., 
Nototodarus spp., Sepioteuthis spp.), other than live or fresh or chilled 2.6 213.8  4 4     
030420 Frozen fillets 2.2 42.7  10 6    4 
070990 Vegetables, n.e.s., fresh or  chilled 2.1 20.0  4  1  3  
720410 Waste and scrap of cast iron 1.8 0.0 1       
170111 Cane sugar 1.6 143.0  1     1 
010210 Pure-bred breeding animals 1.4 2.5  1 1     
030269 Fish, not elsewhere specified. in HS 
heading 0302, fresh or  chilled (excluding 
fillets or other fish meat of HS heading 0304/livers and roes). 1.4 31.6  15 13    2 
090111 Not decaffeinated 1.4 0.0 1       
020130 Boneless 1.2 5.2  3 3     
300490 Medicaments (excluding goods of heading 
30.02/30.05/30.06/3004.10-3004.50) 
consisting of mixed/unmixed products for 
therapeutic/prophylactic uses, put up in measured doses (including those in the 
form of transdermal administration 
systems) or in forms or packings for retail sale 1.2 1.5 12 1 1     
071490 Arrowroot, salep, Jerusalem artichokes & 
similar roots and tubers  with high starch or 
insulin content, n.e.s., fresh or chilled or 
frozen or dried, whether or not sliced or in 
the form of pellets; sago pith 1.1 17.2 1 8 1 4 2 1  
481910 Cartons, boxes and cases, of corrugated 
paper or paperboard 1.1 0.0 1       
760200 Aluminum waste and scrap. 1.1 0.0 1       
030379 Fish (excluding HS sub-headings 030371 
to 030378), n.e.s., frozen (excluding  
fillets or other fish meat of HS heading 0304/livers and roes) 1.0 34.8  16 14    2 
711291 Of gold, including metal clad with gold 
but excluding sweepings containing other precious metals 1.0 0.0 1       
030232 Yellowfin tunas (Thunnus al bacares) 0.8 10.0  1 1     
230120 Flours, meals and pellets, of fish or of 
crustaceans, molluscs or other aquatic invertebrates 0.8 0.0 2       
Total of above 79.8  20 78 53 8 2 4 11 
 
Source : WTO estimates based on data provided by Ch inese Taipei and UNSD, Comtrade database. 
 
 WT/REG268/1 
Page 52  
 
  5. Table AI.4 shows the market access conditions in Chinese Taipei for Panama's top 25 exports, 
which in 2006-2008 accounted for 79.8% of its global  exports.  Twenty tariff lines (at the HS 8-digit 
level) were already duty-free on an MFN basis, acc ounting for 9.5% of Panama's global exports.  Out 
of 78 tariff lines which were dutiable, 53 lines became duty-free upon the entry into force of the 
Agreement;  a further eight and two lines became du ty-free in 2008 and 2010, respectively;  and four 
lines are to become duty-free in 2013.  Eleven ta riff lines which remain dutiable among Panama's top 
25 exports are related to banana wh ich is Panama's second largest e xport;  pineapples;  fish, and cane 
sugar.  WT/REG268/1 
 Page 53 
 
 
  ANNEX II 
 
Tariff-Rate Quotas under the Agreement  
  
1. Chinese Taipei maintains tariff-rate quotas (TRQs)  in some agricultural and fish products 
(52 tariff lines until 2009, 50 tariff lines from 2010 at 8-digit) while Panama has no TRQs, the details 
of which are shown below. 
Table AII.1. Chinese Taipei, tariff rate quo tas (TRQs) for some agricultural and fish  products originating in Panama under the 
Agreement (2004) and implementation in 2010 
2004 2010 
HS Code (description) Tariff quota 
quantity 
(metric 
tonnes)  In-quota 
rates Out-of-quota 
rates 
(MFN) Tariff quota 
quantity 
(metric tonnes)  In-
quota 
rates Out-of-quota 
rates 
(MFN) 
 
Pork belly (4 lines)       
02031911, 02031991, 02032911, 
02032991 1,000 0% 50% 1,150 0% 12.5% 
Chicken/fowl meat (2 lines)       
16023210, 16023220  800 0% NT$34 or 
54/kg 1,200 0% 20% 
Poultry offal  (1 line)     
16023290 500 0% 340% No longer subject to TRQs from 2010  
(MFN 25%) 
Bananas  (1 line) 
08030000 1,000 0% 114% 1,500 12.5%a 100% 
Liquid milk  (9 lines)       
04011010, 04011020, 04012010, 
04012020, 04013010, 04013020, 
04029910, 04029920; 04029992 1,065 0% NT$15.6/kg 3,000 15%a Same as in 
2004 
Pineapples  (1 line) 
08043000  
1,200  
0%  
173%  
2,000  
0% Same as in 
2004 
Sugar (6 lines)       
17019910, 17019920, 17019990, 
17019120 21,000 17.5% 
17011100, 17019110 5,000 0% 143% 
39,000 0% 
6.3% 
Fish        
Mackerel (8 lines)        
03026993,  03037993, 03042944, 
03053010, 03056940, 16041510 30% 
03026400 
 NT$ 9.3 /kg or 
30 % 
whichever is 
higher 
03037400 377 0% 86% 377 0% 
NT$ 7.3 /kg or 
25 % 
whichever is 
higher 
Carangid  (4 lines)        
03026992 42.5%  
03037992 50% 
03042943; 16041920 164 0% 90%  164 0% 
40% 
Table AII.1(Cont'd) WT/REG268/1 
Page 54  
 
  2004 2010 
HS Code (description) Tariff quota 
quantity 
(metric 
tonnes)  In-quota 
rates Out-of-quota 
rates 
(MFN) Tariff quota 
quantity 
(metric tonnes)  In-
quota 
rates Out-of-quota 
rates 
(MFN) 
 
Sardine and herring  (15 lines)       
03024000 
 60% in 2004-
2007; 
30% in 2008 
onwards 30% 
03026100, 03037100, 03042941, 
03054950, 03055950, 03056300, 
16041310, 16041320, 16041600 30% 
03035100, 03042942, 03056100, 
16041210 
 25% 
03055941 
 191 0%  
 
60% 191 0% 
NT$ 57.2 /KG 
or 30 % 
whichever is 
higher 
Meat of bovine animals, salted, in 
brine, dried or smoked  (1 line)        
02102000 1,000  
(in 2008-
2009) 0% 
(in 2008-
2009) 10% (in 2008) 
5% (in 2009) 
(MFN 15% for 
2008-2009) No longer subject to TRQs from 2010  
(MFN 15%) 
 
a: According to Chinese Taipei, as for in-quota rates on banana s and liquid milk, the allocation of the quotas are administered  by 
Panama in accordance with Annex 3.4.6.  On these products, Chin ese Taipei shall apply the in-quota tariff rates that it has 
committed under the WTO (MFN basis TRQs) for the same products.   
 
Note: The tariff item numbers are based on HS 2007 nomenclature. 
 
Source: Chinese Taipei and Annex 3.4 of the Agreement. 
 
 
 
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