WORLD TRADE  
ORGANIZATION  WT/REG267/1/Rev.1 
7 October 2010 
 (10-5126) 
Committee on Regional Trade Agreements  
 
 
   
 
 
FACTUAL PRESENTATION 
 
Free Trade Agreement 
between 
Nicaragua and the Separate Customs 
Territory of Taiwan, Penghu, Kinmen 
and Matsu  
(Goods and Services)  
 
 
Report by the Secretariat 
 
Revision  
 
 
 
 
This report, prepared for the considerat ion of the Free Trade Agreement between 
Nicaragua and the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and 
Matsu, has been drawn up by the WTO S ecretariat on its own responsibility and 
in full consultation with the Parties. The factual presentation reproduces as closely as possible the terminology used in the Ag reement and in the comments provided.  
The Secretariat notes that none of this  terminology has implications for 
sovereignty. The report has been drawn 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 
Jean-Daniel Rey (tel: +41 22 739 52 64).  WT/REG267/1/Rev.1 
 Page iii 
 
 
  TABLE OF CONTENT 
 
  Page 
 
I. TRADE ENVIRONMENT 1  
A. OVERVIEW  1 
B. MERCHANDISE TRADE  1  
C. TRADE IN SERVICES AND INVESTMENT  6  
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 11  
A. BACKGROUND INFORMATION  11  
B. STRUCTURE OF THE AGREEMENT  11  
III. TRADE IN GOODS 13  
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  13  
1. General Provisions 13  
2. Liberalization of tariff lines and trade 13  
(a) Nicaragua's liberalization schedule 15  
(b) Chinese Taipei's liberalization schedule 19  
3. Administrative Fees and Formalities 25  
4. Import Restrictions 25  
5. Tariff Rate Quotas 26  
B. RULES OF ORIGIN  26  
C. CUSTOMS VALUATION  28  
D. SPECIAL REGIMES  28  
E. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  28  
1. Administrative Fees and Formalities 28  
2. Export duties and restrictions 28  
F. REGULATORY PROVISIONS ON TRADE IN GOODS  29  
1. Sanitary and phytosanitary measures (SPS) 29  
2. Technical barriers to trade 30  
3. Trade Remedies 31  
(a) Safeguard mechanisms 31  
(b) Anti-dumping and countervailing measures 33  
4. Subsidies and State-aid 33  
(a) Domestic Support 33  
(b) Export Subsidies 34  
G. CUSTOMS -RELATED PROCEDURES / TRADE FACILITATION  34  
IV. PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 35  
A. SCOPE AND DEFINITIONS  35  
B. DENIAL OF BENEFITS  36  
C. GENERAL PROVISIONS ON TRADE IN SERVICES AND INVESTMENT  36  
1. Cross-Border Trade in  Services (CBTS) 36  
(a) National and MFN treatment 37  
(b) Market access 37  
(c) Local (Commercial) Presence 37  
2. Investment 37  WT/REG267/1/Rev.1 
Page iv  
 
  (a) National and MFN treatment 38  
(b) Performance requirements 38  
(c) Senior management and boards of directors 38  
3. Movement of natural persons 38  
D. LIBERALIZATION COMMITMENTS IN SERVICES AND INVESTMENT  39  
1. Non-conforming measures 40  
(a) Nicaragua 40  
(b) Chinese Taipei 44  
E. SECTOR SPECIFIC PROVISIONS ON TRADE IN SERVICES  49  
1. Telecommunication services 49  
2. Financial services 50  
3. Electronic Commerce 54  
F. REGULATORY PROVISIONS ON TRADE IN SERVICES  55  
1. Domestic regulation 55  
2. Recognition 55  
G. SAFEGUARD ACTIONS ON SERVICES AND INVESTMENT  55  
1. Safeguard measures in case of financial or balance of payments difficulties 55  
V. GENERAL PROVISIONS OF THE AGREEMENT 56  
A. TRANSPARENCY  56  
B. EXCEPTIONS  56  
C. ACCESSION AND WITHDRAWAL  56  
D. INSTITUTIONAL FRAMEWORK  56  
E. DISPUTE SETTLEMENT  58  
F. INTELLECTUAL PROPERTY RIGHTS  61  
G. OTHERS  62 
1. Competition Policy 62  
2. Labour 63  
3. Environment 63  
4. Anti-Corruption 63  
H. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  63  
ANNEX I 65 
ANNEX II 69 
 
 
 
 
 
    
 
  
  WT/REG267/1/Rev.1 
 Page 1 
 
 
  I. TRADE ENVIRONMENT 
A. OVERVIEW1 
1. The Free Trade Agreement (hereinafter referred to as "the Agreement") between Nicaragua 
and Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (hereinafter referred to as 
‘Chinese Taipei’) is Nicaragua's seventh2 RTA.  It is also Chinese Taipei's third3 RTA.  
2. In 2008, Nicaragua's GDP, with a population of 5.7 million, was estimated at US$6.6 billion 
while that of Chinese Taipei, with a populati on of 23 million was estimated at US$403 billions.  
3. In terms of their shares in world trade in go ods and services, the two parties show different 
profiles.  With total merchandise exports of US$1.5 billion, Nicaragua was the world's 110th largest 
exporter and, with total merchandise im ports of US$4.3 billion, the world's 97th largest importer 
compared to Chinese Taipei's ranking as the 12th largest exporter and importer (with exports of 
US$255.6 billion and imports of US$240.4 billion).  In commercial services, while Nicaragua ranked 
122nd in terms of exports and 119th in terms of imports (US $357 million and US$572 million 
respectively), Chinese Taipei ranked 15th in exports (US$34.5 billion) and 18th in imports 
(US$34.3 billion). Their trade to GDP ratios, are however comparable, 123.6 for Nicaragua during 
2006-2008 compared to 134.1 for Chinese Taipei.  
4. The structure of exports and imports of th e two economies is somewhat different. For 
Nicaragua, more than half of whose GDP is gene rated by services, agricultural products accounted for 
more than 80% of its exports and manufactured pr oducts accounted for the majority of its imports 
(58%).  Travel constituted Nicaragua's main services exports, while the transportation sector 
accounted for 54% of its imports.  Chinese Taipei's  main exports and imports were manufactured 
products (87% of global exports, and 60% of gl obal imports), while, in the services area, which 
contributes to roughly 70% of the GDP, transportation and travel represented 37%  of services exports 
and 59% of imports, with the financial and insu rance sector also playing an important role. 
B. MERCHANDISE TRADE4 
5. Merchandise trade between the two partners rema ins relatively small compared to their trade 
with the world. In 2008, Chinese Taipei was Nicaragua's 21st source of imports,5 accounting for 
0.49% of Nicaragua's total imports. Chinese Taipei was also Nicaragua's 11th largest export 
destination, accounting for 1.43% of Nicaragua's total exports.6  A t  t h e  s a m e  t i m e ,  N i c a r a g u a  
represented 0.01% of Chinese Taipei's total imports and 67th source of Chinese Taipei's total imports,7 
                                                      
1 Source for this section: WTO Trade Profiles, March 2010 (2008 and 2006-2008 data). Export figures 
are calculated f.o.b. and import figures are calculated c.i. f. Ranking in world trade excludes intra-EU trade. 
2 DR-CAFTA (G&S), GSTP (G), CACM (G&S), RTAs with Mexico (G&S), Panama (G&S), and 
Venezuela (G). 
3 RTAs with Panama (G&S), and Guatemala (G&S).  The RTAs concluded by Chinese Taipei with 
Honduras (G&S) and with El Salvador (G&S) have en tered into force after the entry into force of the 
Agreement being considered in  this Factual Presentation. 
4 Source:  for Nicaragua's trade with Chinese Taip ei (2008 global Trade In formation Service), for 
Chinese Taipei's trade with Nicaragua (UN Comtrade database). EU counted as one. 
5 Trade with EU Members counted as  trade with one partner. In 2008, the five top sources of imports 
from Nicaragua were: the USA (21.04%), Venezuela (1 1.57%), Mexico (9.51%), Costa Rica (7.99%), and 
China (7.81%). 
6 In 2008, the five top destinations of exports from Nicaragua were: the USA (29.36%), El Salvador 
(14.6%), Costa Rica (6.92%), Honduras (6.28%), and Mexico (5.51%). 
7 In 2008, the five top sources of imports from Chinese Taipei were: Japan (19.37%), China (13.07%), 
the USA (11.01%), Saudi Arabia (6.29%), and Korea (5.48%). WT/REG267/1/Rev.1 
Page 2  
 
  while it was Chinese Taipei's 82
nd destination for exports, accounting for 0.01% of Chinese Taipei's 
total exports.8 
6. Recent developments in global and intra-Party trade are presented in Charts I.1 and I.2. 
Figures extracted from the UNSD comtrade database  show considerable discrepancies between 
bilateral trade reported by the two parties.9  These data however indicate, in more recent years that 
although Nicaragua's global imports continued to grow rapidly, resulting a widening of its trade 
deficit, imports from Chinese Taipei have not progre ssed.  Exports to Chinese Taipei as with the rest 
of the world have grown steadily especially since 2006, resulting in a narrowing of the trade deficit 
with Chinese Taipei.  These observations have howev er to be placed in the context of the relative 
importance of bilateral trade between Nicaragua an d Chinese Taipei as illustrated in the previous 
paragraph.  
0.00.51.01.52.02.53.03.54.04.55.0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 200801020304050607080US$billion US$millionChart I.1 - Nicaragua: Merchandise imports from and exports to world and to Chinese 
Taipei, 1997-2008
Source : UNSD, Comtrade database and Global Trade Information Service (Nicaragua's trade data in 2008).Imports from the Chinese Taipei
Exports to the Chinese TaipeiTotal imports
Total exportsLeft hand scale: Right hand scale:
 
Table 1.1:  Nicaragua's impo rt and export figures (US$) 
Year Imports from the world  Export to the world  Imports from Chinese Taipei  Exports to Chinese Taipei  
1997 1,469,732,480 666,607,296 8,614,102 333,256 
1998 1,532,107,904 552,822,912 6,114,203 226,758 
1999 1,723,042,302 508,482,031 6,965,618 670,703 
2000 1,720,572,544 629,349,056 8,445,693 532,119 
2001 1,773,366,656 532,237,792 14,182,359 406,328 
2002 1,802,235,520 634,792,960 20,017,250 192,715 
2003 1,904,588,247 605,203,613 17,952,427 205,492 
2004 2,249,686,330 759,846,690 16,111,180 1,909,500 
2005 2,535,550,330 866,022,810 16,141,490 4,008,160 
2006 2,740,660,904 758,641,900 16,297,257 5,334,253 
2007 3,537,990,700 1,194,541,019 15,401,841 10,143,197 
2008 4,295,000,000 1,487,000,000 21,000,000 21,000,000 
Source: UNSD, Comtrade database and Gl obal Trade Information Service. 
                                                      
8 In 2008, the five top destinations of exports from Chinese Taipei were:  China (26.1%), Hong-Kong, 
China (12.78%), the USA (12.1%), Japan (6.89%), and Singapore (4.57%). 
9 On reason explaining the discrepancies might be the different statistical systems used by the Parties to 
record trade. For example, the statis tics provided by Nicaragua do not include the goods exported from Chinese 
Taipei to the Maquila Free Zone (considering this to be  offshore trade). This trade is however reported by 
Chinese Taipei as exports to Nicaragua (i nformation provided by Chinese Taipei).  WT/REG267/1/Rev.1 
 Page 3 
 
 
  050100150200250300
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 200801020304050607080US$billion US$millionChart I.2 -Chinese Taipei: Merchandise imports from and exports to world and Nicaragua, 
1997-2008
Source : UNSD, Comtrade database.Imports from Nicaragua
Exports to NicaraguaTotal imports
Total exportsLeft hand scale: Right hand scale:
 
 
Table 1.2:  Chinese Taipei's im port and export figures (US$) 
Year Imports from the world Export to the worl d Imports from Nicaragua Exports to Nicaragua 
1997 114,363,883,520 122,080,378,880 4,944,841 51,964,788 
1998 104,652,357,632 112,593,829,888 227,754 57,028,016 
1999 110,946,459,648 121,495,887,872 664,727 56,846,044 
2000 139,990,948,149 148,316,041,933 1,049,466 69,517,333 
2001 107,228,218,259 122,865,795,508 736,539 48,565,895 
2002 112,521,836,823 130,602,376,461 427,007 42,944,345 
2003 125,836,056,625 143,761,727,062 619,052 39,178,177 
2004 166,399,870,339 173,538,697,109 2,691,910 41,105,547 
2005 181,591,670,919 189,393,122,087 6,602,315 39,668,284 
2006 202,685,778,083 224,011,893,303 8,623,963 38,811,561 
2007 219,666,560,529 246,331,459,778 15,350,468 36,651,705 
2008 240,678,350,691 255,055,283,514 30,989,736 22,401,035 
Source: UNSD, Comtrade database. 
 
7. The commodity structure of trade among the Parti es, as well as of their imports and exports to 
the world in the period 2005-2007, is shown in Ch arts I.3a and I.3b on the basis of Harmonized 
System (HS) sections. Import statistics are used as reported by the importer, while export statistics are 
used as reported by the exporter. This should be re membered when attempting to interpret the charts 
reproduced in this factual presentation.  
8. Chart I.3a focuses on Nicaragua's imports from Chinese Taipei. It presents the product 
composition of merchandise trade during the period 2005-2007.  
9. A further breakdown of bilateral and global trad e by HS Chapter shows that Chinese Taipei's 
four largest global export products (74.9% of expor ts in this period) – Machinery and mechanical 
appliances, Base metals and articles thereof, Optic al and photographic equi pment, and Plastics and 
articles thereof and rubber – accounted for 69.4% of Nicaragua's imports from Chinese Taipei. WT/REG267/1/Rev.1 
Page 4  
 
  Machinery and mechanical applia nces, Chinese Taipei's largest global export, accounted for the 
largest share of imports of Nicaragua at 49.7%.
10  Vehicles, aircrafts, and vessels, Chinese Taipei's 
eighth largest world export (3.4%) represented th e second largest merchandise import by Nicaragua 
from Chinese Taipei (11.6%).  These two sectors accounted for 61.3% of Nicaragua's imports from 
Chinese Taipei. 
Chart I.3a (Nicaragua's imports from Chinese Taipei)
Product com position of merchandise trade , annual avera ge (2005-2007 )
 Source:  UNSD , Comtrade database.Per cent
Total:  US$2,938 millionNicaragua's global imports
Other 6.9
Machinery
15.0Plastics 4.8Minerals
22.7
Vegetables 4.0Wood pulp 3.5
Base metals 
7.0Chemicals 
15.2
Vehicles 7.4Textiles 2.2Vegetable fats 2.2
Total:  US$219,912 millionChinese Taipei's global exports
Other  3.9
Minerals 5.2
Optical
7.9Machinery 
48.6Vehicles  3.4
Plastics 
7.5Textiles 5.3
Chemicals 5.5
Base metals 10.9Miscellaneous 1.8
Miscellaneous 2.3
Prepared foods 
6.9Nicaragua's imports from Chinese Taipei
Total:  US$15.9 millionOther 3.3
Machinery  
49.7Chemicals 4.4Optical 3.9
Base metals 7.3Textiles 4.6
Vehicles 11.6Plastics 8.5Articles of stone, plaster 1.8
Miscellaneous  5.0
 
 
10. Chart I.3b, based on UNSD Comtrade, focuses on Chinese Taipei's imports from Nicaragua.  
Although over three quarters of Nicaragua's globa l exports are based on agriculture and processed 
agricultural products, base metals which represent onl y 2.3% of its global exports in this period, 
accounted for almost half (48.9%) of Chinese Taipei 's imports from Nicaragua.  Live animals and 
animal products (HS Section I, covering HS Chap ters 1 to 5), Nicaragua's largest global export 
(32.9%) represented the second largest merchandise import by Chinese Taipei from Nicaragua (42.2%).  These two sectors accounted for 91.1% of Chinese Taipei's imports from Nicaragua. 
11. A further breakdown of bilateral and global trade by HS Chapter shows that Nicaragua's four 
largest global exports product categories – live anim als, vegetable products, prepared foodstuffs and 
beverages, and natural and cultured pearls – ma de up 86.2% of its global exports in 2005-2007 and 
                                                     
 
10 This sector also represented roughly half of Chinese Taipei's exports to the world (48.6%) and only 
15% of Nicaragua's imports from the world.  WT/REG267/1/Rev.1 
 Page 5 
 
 
  accounted for 45.3% of Chinese Taipei's imports from Nicaragua. In terms of market penetration by 
Nicaraguan exports into Chinese Taipei, Base metals and articles thereof , Nicaragua's sixth largest 
global export sector, had the highest market sh are of total imports from Chinese Taipei.  Li ve animals  
accounted for 42.2% of Chinese Taipei's imports  from Nicaragua; the other sectors representing 
individually less than 3% of the total of Chinese Taipei's imports from Nicaragua.  
Chart I.3b (Chinese Taipei's imports from Nicaragua)
Product composition of merchandise trade, annual aver age (2005-2007)
 Source:  UNSD, Comtrade database.Per cent
Chinese Taipei's imports from Nicaragua
Total:  US$10.2 millionBase metals
48.9Other  3.7Vegetables 2.6
Raw hides 2.6
Live animals 
and animal 
products 42.2
Total: US$940 millionNicaragua's global exports
Other  8.7
Vegetables
 31.4Precious stones 6.1
Prepared foods 
15.8Live animals 
and animal 
products 
32.9Chemicals 2.8Base metals 2.3
Total: US$201,315 millionChinese Taipei's global imports
Machinery
35.3
Chemicals 
11.1Vehicles 2.9Other 11.1
Optical 6.1
Minerals 
19.0Plastics 3.3
Base metals 
11.4
 WT/REG267/1/Rev.1 
Page 6  
 
  C. T
RADE IN SERVICES AND INVESTMENT  
12. Chart I.4 shows the breakdown of commercial services trade for Nicaragua in 1997-2008. 
Nicaragua was a net importer of commercial services over the period surveyed. While transportation is the largest import, followed by travel services, e xports are dominated by travel services.  Growth in 
both exports and imports has been steady during th is period with a constant deficit in trade. 
050100150200250300350400450500550600650700
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Note: no data on exports of other business services (1997-2008); no trade data of construction, financial services, computer and  
          information services, royalties and license fees and personal, cultural and recreational services (1997-2008).Source: IMF, BOP CD-ROM.Chart I.4
Nicaragua, total commercial  services trade, 1997-2008
US$ million
Transportation services
Travel
Communication services
ConstructionFinancial services
Computer and information services
Royalties and license feesOther business services
Personal, cultural and 
recreational services
Government services, n.i.e.Insurance services
  WT/REG267/1/Rev.1 
 Page 7 
 
 
  13. Chart I.5 shows the breakdown of commercial services trade for Chinese Taipei in 
2000-2008. Chinese Taipei's imports and exports of commercial services were relatively stable during 
the last years of the period surveyed with a moderate increase of both imports and exports over the entire period. The services sector represents more th an 67% of Chinese Taipei's GDP.  Exports are 
dominated by other business services and transporta tion and travel services. While transportation and 
travel services represent leading sectors of Ch inese Taipei's imports, other business services and 
especially royalties and license fees have been growing.  
0510152025303540
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
Export
Import
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: national data.Chart I.5
Chinese Taipei , total commercial servic es trade, 2000-2008
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
 
 
 WT/REG267/1/Rev.1 
Page 8  
 
  14. Nicaragua's global investment position is depicted in Chart I.6. A net recipient of FDI, 
Nicaragua also has a small investment stock abroad.  The stock of inward FDI has grown consistently 
during the period surveyed (2000-2008), while outward FDI, at a significantly lower level, has also grown slowly.  
012345
2000 2001 2002 2003 2004 2005 2006 2007 2008012345
2000 2001 2002 2003 2004 2005 2006 2007 2008Chart I.6
Nicaragua, FDI stock with world, 2000-2008
Inward OutwardUS$ billion US$ billion
Source:  UNCTAD, Foreign Direct Investment database. 
  WT/REG267/1/Rev.1 
 Page 9 
 
 
  15. Chinese Taipei's global investment position is depict ed in Chart I.7.  While its overall stock of 
FDI is considerably larger than that of Nicara gua, it has been relatively stabile during the period 
surveyed (2000-2008) just below US$50 billion.  In  contrast, its outward FDI stock has shown rapid 
growth to reach a level of US$175,140 billion in 2008,  consolidating Chinese Taipei's status of net 
FDI exporter. 
050100150200
2000 2001 2002 2003 2004 2005 2006 2007 2008050100150200
2000 2001 2002 2003 2004 2005 2006 2007 2008Chart I.7
Chinese Taipei, FDI stoc k with world, 2000-2008
Inward Outward US$ million US$ million
Source: UNCTAD, Foreign Direct Investment database.
 
 
 WT/REG267/1/Rev.1 
Page 10  
 
  16. Chinese Taipei's approved outward and inward  investments during the period 2000-2008 are 
depicted in Chart I.8.  
05101520
2000 2001 2002 2003 2004 2005 2006 2007 200805101520
2000 2001 2002 2003 2004 2005 2006 2007 2008Chart I.8
Chinese Taipei, outward and in ward investment, 2000-2008
Inward OutwardUS$ billion US$ billion
Source:  Chinese Taipei authorities. 
17. While statistics on bilateral investment flows are difficult to retrieve, the Parties have 
provided some data, presented belo w, which help to shed some light on their FDI-related bilateral 
relations. 
18. FDI into Nicaragua in 2009 reached a total of US$ 433 million, with FDI from Venezuela, the 
US, Mexico, and Canada representing 71% of the total, and FDI from Chinese Taipei reported to 
amount to US$ 70,000.11 
19.  Table I.3 illustrates the evolution of approve d outward investment of Chinese Taipei to 
Nicaragua between 2000 and 2008, while Table I.4 presents the approved investment of Chinese 
Taipei to Nicaragua, by Sectors. 
Table I.3 
Chinese Taipei: Approved Outward Inve stment to Nicaragua (in US$ 1,000) 
Year Number of cases Amount 
2000 4 22,359 
2001 1 10,489 
2002 1 7,925 
2003 1 7,180 
2004 1 800 
2005 1 1,500 
2006 2 6,116 
2007 0 156 
2008 1 800 
Total 12 57,325 
Source :  WTO estimates based on data  provided by Chinese Taipei. 
                                                      
11 data provided by Nicaragua.  WT/REG267/1/Rev.1 
 Page 11 
 
 
  Table I.4 
Chinese Taipei: Approved Outward Invest ment to Nicaragua, by Sector, between from 1952 to 2009 (in US$ 1,000) 
Number of 
Cases Amount Industries 
2 5,189 Agriculture, Forestry, Fishing and Animal Husbandry 
1 392 Mining and Quarrying 
19 93,858 Manufacturing 
1 800 Construction 
3 22,832 Wholesale and Retail Trade 
1 5,000 Accommodation and Food Services 
2 3,750 Real Estate 
29 12  
 
Source :  WTO estimates based on data  provided by Chinese Taipei. 
 
II. CHARACTERISTIC ELEMENTS OF THE AGREEMENT 
A. BACKGROUND INFORMATION  
20. Nicaragua and Chinese Taipei's trade relations date back several decades, with a bilateral 
trade agreement signed in 1967 and an Economic complementation Agreement signed by Nicaragua12 
and Chinese Taipei in September 1997. The objective of the agreement was to expand cooperation in 
the areas of trade, investment, transfer of technolog y and in the financial sector, and to develop a Plan 
of Action that would allow the parties to determ ine the existence of conditions necessary to start 
negotiations for a Free Trade Agreemen t. A joint declaration issued at the Fourth meeting of Heads of 
State and government of the Central American Isthmus and the Dominican Republic, and Chinese 
Taipei, in August 2003, reiterated the willingness of these parties to initiate free trade talks at an 
opportune time. The negotiation process was complete d in two years, during which four rounds of 
negotiations and two extraordinary high level meetings took place.  
21. The Agreement was signed on 16 June 2006 and entered into force on 1 January 2008.  
The Parties jointly notified the goods and ser vices aspects of the Agreement to the WTO on 
9 July 2009, in document WT/REG267/N/1 – S/C/N/500.  The notification was made pursuant to 
Article XXIV:7(a) of the GATT 1994 for goods, and pur suant to Article V:7(a) of GATS for services. 
The text of the Agreement, together  with its Annexes, is available on the Parties' official websites: 
Nicaragua:  
http://www.mific.gob.ni/docushare/dsweb/View/Collection-704  
Chinese Taipei:  
http://eweb.trade.gov.tw/kmi.asp?xdurl=kmif.asp&cat=CAT4032  
B. STRUCTURE OF THE AGREEMENT  
22. The Agreement is composed of 8 Parts, contai ning 24 Chapters and has various annexes – 
either within the respective Chapte r attached to the Agreement or as appendices. Annexes also include 
the Parties Schedules related to the liberaliza tion commitments in goods and in services.  
23. In addition, a Protocol to amend Chapter 10 (Investment) of the Agreement which constitutes 
an integral part of the Agreement, was signed on 22 May 2008 by both Parties. The Protocol entered 
into force on 6 May 2009.13 
 
 
                                                      
12 Agreement signed along with the governments of Costa Rica, el Salvador, Guatemala and Honduras. 
13 Article 4 of the Protocol. WT/REG267/1/Rev.1 
Page 12  
 
  Box II.1:  Outline of the Agreement 
Chapters, Annexes 
and Side Letters Title/description 
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 
 Æ Annex 3.03 (Customs Tariff Elimination Schedule)  
Note: See also Parties' Schedules  
Chapter 4 Rules of Origin an d Related Customs Procedures 
Chapter 5 Trade Facilitation 
Chapter 6 Safeguard Measures 
Chapter 7 Unfair Trade Practices 
PART THREE Technical Barriers to Trade 
Chapter 8 Sanitary and Phytosanitary Measures 
Chapter 9 Technical Barriers to Trade 
PART FOUR Investment, Services and Related Matters 
Chapter 10 Investment 
 Note: See also the Protocol for the Ame ndment of Chapter 10 (Investment) of the 
FTA, Done on 22 May 2008. This Protocol amends Chapter 10 of the FTA. 
Chapter 11 Cross-Border  Trade in Services 
 Note: See also Parties' scheduled non-conforming measures (Annexes I and II). 
Chapter 12 Financial Services 
 Note: See also Parties' scheduled non-conforming measures (Annex III). 
Chapter 13 Telecommunication 
Chapter 14 Electronic Commerce 
Chapter 15 Temporary Entry for Business Persons 
PART FIVE Competition policy 
Chapter 16 Competition policy 
PART SIX Intellectual Property Rights 
Chapter 17 Intellectual Property Rights 
PART SEVEN Labour and Environment 
Chapter 18 Labour 
Chapter 19 Environment 
PART EIGHT Administrative and Institutional Provisions 
Chapter 20 Transparency 
Chapter 21 Administration of the Agreement 
Chapter 22 Dispute Settlement 
Chapter 23 Exceptions 
Chapter 24 Final Provisions 
 
Source: WTO Secretariat, based on the Agreement. 
 
  WT/REG267/1/Rev.1 
 Page 13 
 
 
  III. TRADE IN GOODS 
24. Parts Two and Three of the Agreement cover trade in goods-related aspects. 
A. IMPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
1. General Provisions 
25. Each Party gives national treatment to the goo ds of the other Party in accordance with 
Article III of the GATT 1994.  To avoid any misint erpretation of the concept of National Treatment, 
Article III of the GATT 1994 is made part of the Agreement mutatis mutandis  (Article 3.02).  
26. National Treatment does not however apply to cer tain measures related to import and export 
restrictions identified by each Party and contained in  Annex 3.03.7 of the Agreement. This aspect of 
the Agreement is discussed below. 
2. Liberalization of tariff lines and trade 
27. Section B of Chapter 3 of the Agreement describes the modalities for customs tariff 
elimination.  In addition, Annex 3.03 contains the rules applicable for the different staging categories 
negotiated by the Parties.  These provisions have to be read in connection with the Parties Schedules 
of tariff elimination attached to, and formi ng an integral part of the Agreement.  
28. Customs duty elimination started on 1 January 2008, from the base rates in the respective 
Schedules, which correspond to the applied MFN rate in effect on 1 January 2004.14  The tariff 
elimination programme has been implemented sinc e the Agreement's entry into force and will be 
completed at the end of a transition period of fifteen years (1 January 2022).  Besides the progressive elimination of customs duties, the Agreement in cludes commitments on tariff rates quotas (TRQs) for 
certain products by Chinese Taipei
15, as well as the exclusion of certain products from the tariff 
elimination programme by both Parties.16 
29. During the transition period, a Party may mainta in or increase a customs duty as authorized 
by the Dispute Settlement Body of the WTO (Article  3.03, paragraph 4b), presumably even if this 
level is higher than the level committed to in the context of the Agreement. However, no Party may 
apply or maintain an agricultural safeguard measure  on or after the date that a good is subject to 
duty-free treatment under the Party's Schedule to A nnex 3.03 or an agricultural safeguard measure 
that increases the in-quota duty on a good subj ect to a TRQ (Article 3.03, paragraph 5). 
30. The overall tariff elimination programme under th e Agreement is depicted in Tables III.1.A 
and III.1.B below. 
31. Table III.1.A shows the scheduled duty elimina tion in terms of tariff lines and trade, as 
applied by Nicaragua to imports from Chinese Taipei. Before the entry into force of the Agreement, 
3'095 tariff lines (46.8% of Nicaragua's tariff) were  already duty-free on an MFN basis (applied rates), 
representing 58.3% of its imports by value from Chinese Taipei. Upon entry into force of the Agreement, an additional 321 lines (4.9% of the tariff) became duty-free for imports form Chinese 
Taipei; as a result, 51.7% of Nicaragua's tariff became duty free for imports from Chinese Taipei, corresponding to 58.9% of imports by value from Chinese Taipei (during the period 2005-2007). The 
remaining tariffs are to be progressively reduced  and eliminated, according to modalities described 
below. In 2012, after five years of implementati on, a further 713 lines (10.8% of the tariff) are to 
                                                     
 
14 Paragraph 5 of Annex 3.03. 
15 Commitment by Chinese Taipei. 
16 Both for Nicaragua and for Chinese Taipei. WT/REG267/1/Rev.1 
Page 14  
 
  become duty-free, amounting to 8.9% of the value of imports from Chinese Taipei.  In 2017, after 
ten years of implementation, a further 1'791 lines ( 27.1% of the tariff) are to become duty-free, 
amounting to 18.9% of the value of  imports from Chinese Taipei.  By  the end of the implementation 
period (2022), a further 369 lines (5.6% of the tariff) are to become duty free, amounting to 4.8% of the value of imports from Chinese Taipei.  As a resu lt, 97.3% of the number of Nicaragua's tariff lines 
will be duty free for imports from Chinese Taipei, representing 95.3% of the value of imports from 
Chinese Taipei (during 2005-2007).  320 tariff lines are excluded from any tariff elimination, representing 4.7% of imports by value (during 2005-2007) from Chinese Taipei.   
Table III.1 
Tariff elimination commitments under the Agreement and corresponding average trade 
A. Nicaragua 
Duty phase-out 
period Number of lines % of total lines in 
Nicaragua's tariff 
schedule Value of Nicaragua's 
imports from Chinese 
Taipei (2005-2007) 
in million US$ % of Nicaragua's 
total imports from  
Chinese Taipei 
2005-2007 
MFN duty free (2008) 3,095 46.8 6.3 58.3 
2008 321 4.9 0.1 0.6 
2012 713 10.8 1.0 8.9 
2017 1,791 27.1 2.1 18.9 
2022 369 5.6 0.9 8.5 
Remain dutiable 320 4.8 0.5 4.7 
Total 6,609 100.0 10.9 100.0 
 
Note: excludes data beyond HS Chapter 97.  
 Based on the HS 2002 nomenclature. 
 
Source :  WTO estimates based on data provided by Nicaragua. 
 
32. Table III.1.B shows the scheduled duty eliminati on in terms of tariff lines and trade, as 
applied by Chinese Taipei to imports from Nicaragua . Before the entry into force of the Agreement, 
2,801 tariff lines (31.7% of Chinese Taipei's tari ff) were already duty-free on an MFN basis (applied 
rates), representing 56% of its imports by value from Nicaragua. Upon entry into force of the 
Agreement, an additional 3,006 lines (34% of  the tariff) became duty-free for imports form 
Nicaragua; as a result, 65.7% of Chinese Taipei's tariff became duty free for imports from Nicaragua, 
corresponding to 93.4% of imports by value fro m Nicaragua (during the period 2005-2007). The 
remaining tariffs are to be progressively reduced  and eliminated, according to modalities described 
below. In 2012, after five years of implementation,  a further 1,758 lines (19.9% of the tariff) are to 
become duty-free, amounting to 5.1% of the value of imports from Nicara gua.  In 2017, after ten 
years of implementation, a further 808 lines (9.1% of the tariff) are to become duty-free, amounting to 
0.5% of the value of imports from Nicaragua.  By the end of the implementation period (2022), a 
further 240 lines (2.7% of the tariff) are to beco me duty free, amounting to 0.2% of the value of 
imports from Nicaragua.  As a result, 97.3% of the number of Chinese Taipei's tariff lines will be duty 
free for imports from Nicaragua, representing 99.2% of the value of imports from Nicaragua (during 2005-2007).  235 tariff lines are excluded from any tariff elimination,
17 representing 0.8% of imports 
by value (during 2005-2007) from Nicaragua.  Four teen of these lines will be provided partial 
preferential access through tariff rate quotas (TRQ s);  imports within the TRQ quantity will be 
granted duty free access.  The staging for the introd uction of the TRQ is contained in Chinese Taipei's 
Schedule in Annex 3.03. 
                                                      
17 Not including the tariff lines for which Chinese Taipei will not eliminate the customs duties but 
made a commitment to create a TRQ for pr oducts originating from Nicaragua, with  an in-quota tariff rate at duty 
free.  WT/REG267/1/Rev.1 
 Page 15 
 
 
  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 
Nicaragua (2005-2007) 
in million US$ % of Chinese Taipei's 
total imports from  
Nicaragua 2005-2007 
MFN duty free (2008) 2,801 31.7 5.7 56.0 
2008 3,006 34.0 3.8 37.4 
2012 1,758 19.9 0.5 5.1 
2017 808 9.1 0.1 0.5 
2022 240 2.7 0.0 0.2 
Remain dutiable 235 2.7 0.1 0.8 
Total 8,848 100.0 10.2 100.0 
 
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 ex cluded 
 and the ad valorem  equivalents or ad valorem  part of alternate rates are included. 
 Based on the HS 2002 nomenclature. 
 
Source :  WTO estimates based on data  provided by Chinese Taipei. 
 
33. Annex I to this factual presentation contains so me additional indicators of trade liberalization 
under the Agreement. 
(a) Nicaragua's liberalization schedule 
34. Nicaragua's Schedule distinguishes between five  product categories for which the elimination 
of customs duties is implemented differently a nd one product category which is excluded from the 
Customs Tariff Elimination Schedule. These categor ies and the corresponding margin of preference 
for imports from Chinese Taipei  can be summarized as follows: 
CATEGORIES: A B B+ C D E 
 Margin of preference 
Entry into force (01/01/2008) 100% 20% 50.0% 10% 6.67% 
01/01/2009  40% 62.5% 20% 13.33% 
01/01/2010  60% 75.0% 30% 20.00% 
01/01/2011  80% 87.5% 40% 26.67% 
01/01/2012  100% 100.0% 50% 33.33% 
01/01/2013    60% 40.00% 
01/01/2014    70% 46.67% 
01/01/2015    80% 53.33% 
01/01/2016    90% 60.00% 
01/01/2017    100% 66.67% 
01/01/2018     73.33% 
01/01/2019     80.00% 
01/01/2020     86.67% 
01/01/2021     93.33% 
01/01/2022     100.00% 0% 
Source: WTO Secretariat based on the Agreement. 
 
35. Category A : covers products for which customs duties are eliminated upon entry into force of 
the Agreement (1 January 2008).   
36. Category B : covers products for which customs duti es are to be removed in 5 equal annual 
stages from the date of entry into force of the Ag reement and to become duty free on 1 January 2012. 
37. Category B+ : covers products for which customs duti es are to be reduced to 50% upon entry 
into force of the Agreement (1 January 2008).  Be ginning on 1 January of year two (2009), the duties 
are to be reduced by 50% in four equal annual stag es, to become duty-free, effective on 1 January of 
year five (2012).  WT/REG267/1/Rev.1 
Page 16  
 
  38. Category C : covers products for which customs duti es are to be removed in 10 equal annual 
stages from the date of entry into force of the Ag reement and to become duty free on 1 January 2017.  
39. Category D : covers products for which customs duti es are to be removed in 15 equal annual 
stages from the date of entry into force of the Ag reement and to become duty free on 1 January 2022.  
40. On 1 January 2022, 95.3% of Nicaragua's imports from Chinese Taipei are to be duty free 
(using the trade statistics for the period 2005-2007 as a reference period). 
41. Category E : covers products, which are deemed as sensitive products and excluded from the 
Customs Tariff Elimination Schedule. Trade in these products represented 4.8% of Nicaragua's 
imports from Chinese Taipei (reference period: 2005- 2007). The coverage of Category E "excluded" 
products can be found in a number of HS Chapters  and is summarized Annex II to this factual 
presentation. 
42. The base rate used by Nicaragua for its tariff elimination programme in its Schedule of tariff 
concessions is the MFN applied on 1 January 2004, wh ich is depicted in Tables III.2 and Chart III.1. 
43. Table III.2 shows Nicaragua's trade liberaliza tion commitments under the Agreement at the 
HS 8-digit level organized by HS section product categories.  Of the 6,609 tariff lines forming 
Nicaragua's tariff schedule
18, 3'095 or 46.8% of the tariff, were already duty-free on an MFN basis in 
2008.  321 additional lines, or 4.9% of the tariff, became duty free on the entry into force of the 
Agreement. In 2012, 713 additiona l lines, or 10.8% of the tariff, will become duty free for imports 
from Chinese Taipei. In 2017, 1'791 additional lines, or 27.1% of the tariff, will become duty free for 
imports from Chinese Taipei. This means that afte r 10 years of implementation 5'920 lines, or 89.6% 
of the tariff will become duty free for imports from Chinese Taipei. In 2022, 369 additional lines, or 
5.6% of the tariff, will become duty free for impor ts from Chinese Taipei. 320 tariff lines (4.7% of the 
tariff) will remain dutiable after liberalization is complete. 
Table III.2 
Nicaragua: Tariff elimination un der the Agreement, by HS section 
Number of duty-free lines for 
Chinese Taipei products  HS section and description  MFN 
avg.
% Total 
No of 
lines  MFN 
2008  2008 2012 2017 2022 Remain 
dutiable  Avg. Final 
Tariff 
(Dutiable)  
I Live animals and animal 
products 14.1 302 40 52 29 102 59 20 36.9 
II Vegetable products 10.1 395 104 56 32 120 69 14 28.2 
III Animal or vegetable fats and 
oils 9.6 75 7 8  49 11   
IV Prepared foods etc. 12.7 321 32 77 21 91 70 30 18.4 
V Minerals 2.8 186 116 28 33 8 1   
VI Chemicals and chemical 
products 2.2 972 768 23 98 82  1 15.0 
VII Plastics and rubber 4.7 354 142 37 91 62 15 7 14.3 
VIII Hides and skins 8.1 111 22 15 36 27 7 4 15.0 
IX Wood and articles 7.3 92 26  30 32 2 2 15.0 
X Pulp, paper etc. 5.0 308 160 2 104 34 3 5 14.0 
XI Textiles and textiles artic les 9.6 924 113  70 500 59 182 15.0 
XII Footwear, headgear 12.4 63 2   29 6 26 14.6 
XIII Articles of stone 6.3 161 72  23 61 2 3 15.0 
XIV Precious stones, etc. 6.9 54 15  23 13 2 1 15.0 
XV Base metals and base metals 
products 2.9 706 480 2 30 178 14 2 15.0 
XVI Machinery 2.6 919 716 3 76 109 12 3 15.0 
XVII Transport equipment 5.5 212 74 16 10 102 10   
XVIII Precision equipment 3.6 254 167 1 3 80 3   
XIX Arms and ammunition 12.6 21    21    
Table III.2 (Cont'd) 
                                                      
18 All tariff lines took the form of ad valorem  rates.  WT/REG267/1/Rev.1 
 Page 17 
 
 
  Number of duty-free lines for 
Chinese Taipei products  HS section and description  MFN 
avg.
% Total 
No of 
lines  MFN 
2008  2008 2012 2017 2022 Remain 
dutiable  Avg. Final 
Tariff 
(Dutiable)  
XX Misc. manufactured articles 9.8 170 39 1 4 82 24 20 15.0 
XXI Works of art, etc. 7.8 9    9    
Total 6.1 6,609 3,095 321 713 1,791 369 320 17.2 
 
Note: excludes data beyond HS Chapter 97.  
Based on the HS 2002 nomenclature.  
Source : WTO estimates based on da ta provided by Nicaragua. 
 
44. As can be seen from Chart III.1, most of the lines to be progressively freed of duties during 
the transition period are subject to rates of 10% or less. However, a relatively large number of lines 
subject to rates between 10% and 20% are al so due to be progressively liberalized. 
0 1,000 2,000 3,000 4,000 5,000 6,000 7,00020082009201220172022Chart III.1
Nicaragua's duty elimin ation under the AgreementYear of duty free treatment   
Source: WTO Secretariat estimates, based on data provided by Nicaragua.Number of duty-free lines (cumulative)
Duty-free <10% <20% MFN is: <30% <50% >50% <40%
 
 
 WT/REG267/1/Rev.1 
Page 18  
 
  45. Chart III.2 presents, for the relevant HS Chapters , Nicaragua's average of dutiable rates at the 
end of the transitional period. While most of the dutiable rates remain under 15%, dutiable rates in 
Chapters 2 (Meat and edible meat offal), 10 (Cer eals) and 17 (Sugar and s ugar confectionery) range 
between 35% and 50%. 
0 5 10 15 20 25 30 35 40 45 50 55020810111617192224343942444861626465697173748494Chart III.2
Nicaragua:  Average of dutia ble rates, by HS ChapterHS Chapter  
Source : WTO Secretariat estimates, based on data provided by Nicaragua.Average rate of duty (%)
MFN Preferential
  WT/REG267/1/Rev.1 
 Page 19 
 
 
  46. Chart III.3 complements the previous Chart a nd presents Nicaragua's average of dutiable 
rates, by HS Section.  
0 5 10 15 20 25 30 35 40XXIXXXIXXVIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.3
Nicaragua:  Average of dutia ble rates, by HS SectionHS Section  
Average rate of duty (%)
MFN Preferential
Source :  WTO Secretariat estimates based on data provided by Nicaragua. 
 
(b) Chinese Taipei's liberalization schedule 
47. Chinese Taipei's Schedule distinguishes between six product categories for which the 
elimination of customs duties is implemented diffe rently and one product category which is excluded 
from the Customs Tariff Elimination Schedule.  These categories and the corresponding margin of 
preference for imports from Nicaragua can be summarized as follows: 
CATEGORIES: A B B+ C D E Q 
 Margin of preference 
Entry into force (01/01/2008) 100% 20% 50.0% 10% 6.67% 
01/01/2009  40% 62.5% 20% 13.33% 
01/01/2010  60% 75.0% 30% 20.00% 
01/01/2011  80% 87.5% 40% 26.67% 
01/01/2012  100% 100.0% 50% 33.33% 
01/01/2013    60% 40.00% 
01/01/2014    70% 46.67% 
01/01/2015    80% 53.33% 
01/01/2016    90% 60.00% 
01/01/2017    100% 66.67% 
01/01/2018     73.33% 
01/01/2019     80.00% 
01/01/2020     86.67% 
01/01/2021     93.33% 
01/01/2022     100.00% 0% 0% but TRQs (duty-free in quota rate) 
 
Source: WTO Secretariat based on the Agreement. WT/REG267/1/Rev.1 
Page 20  
 
  48. Category A :  covers products for which customs duties were eliminated upon entry into force 
of the Agreement (1 January 2008).  This category represents 65.7% of total lines in Chinese Taipei's 
tariff Schedule, including the 31.7% of total lines which were already duty free on an MFN applied 
basis in 2008. 
49. Category B : covers products for which customs duti es are to be removed in 5 equal annual 
stages from the date of entry into force of the Ag reement and to become duty free on 1 January 2012.  
50. Category B+ : covers products for which customs duties are to be reduced by 50% upon entry 
into force of the Agreement (1 January 2008). Begi nning on 1 January of year two (2009), the duties 
are to be reduced by 50% in four equal annual stag es, to become duty-free on 1 January of year five 
(2012).  
51. Category C : covers products for which customs duti es are to be removed in 10 equal annual 
stages from the date of entry into force of the Ag reement and to become duty free on 1 January 2017.  
52. Category D : covers products for which customs duti es are to be removed in 15 equal annual 
stages from the date of entry into force of the Ag reement and to become duty free on 1 January 2022.  
53. On 1 January 2022, 97.3% of Chinese Taip ei's tariff lines, representing 99.2% of 
Chinese Taipei's imports from Nicaragua (using 2005 -2007 as a reference period), are to be duty free. 
54. Category E : covers products, which are deemed as sensitive products and excluded from the 
Customs Tariff Elimination Schedule. Trade in thes e products represented 0.8% of Chinese Taipei's 
imports from Nicaragua (using 2005-2007 as the re ference period). The coverage of Category E 
"excluded" products can be found in a number of HS Chapters and is summarized Annex II to this 
factual presentation. 
55. Category Q : covers products, which are excluded from the Customs Tariff Elimination 
Schedule but will be subject to tariff rate quotas by Chinese Taipei whose in-quota rate will be zero. It 
is assumed that, when imported out of the tariff rate  quota, Chinese Taipei's MFN applied rate will be 
applicable. The products covered by this category ar e peanuts, raw sugar, and refined sugar. It is 
assumed that the tariff rate quotas established under th e Agreement are in addition to the tariff rate 
quotas Chinese Taipei has established in the context of its accession to the WTO.
19  The following 
table summarizes the commitments made by Chinese Taip ei in relation with the establishment of tariff 
rate quotas. 
Table III.3:  Chinese Taipei's commitments in relat ion with the establishmen t of tariff rate quotas  
Goods Tariff Classification 
(HS) Annual quota 
quantity Note 
Peanut 1202.10.00 1202.20.00 
1508.10.00 1508.90.00 
2008.11.11 2008.11.12 2008.11.91 2008.11.92 250 tons (based on 
ground-nuts in shell) Shelled ground-nuts (peanut) and gr ound-nuts oil shall convert into 
the quota quantity of ground-nuts, in shell respectively. The 
conversion ratio of shelled ground-nu ts, ground-nuts oil is 1.5 and 3.8 
respectively. 
Raw 
Sugar 1701.11.00 1701.91.10 5'000 tons 1.  The quota will be granted in the be ginning of the second year after 
the entry into force of the Agreem ent. The quota for that year will 
be 5'000 metric tons. 
2. For the following year and onwards, the annual quota will be the 
total quota quantity of the previous year (year X) plus or minus the 
average growth of the total sugar imports in Chinese Taipei over the 
past four consecutive calendar years (i.e. X-1, X-2, X-3 and X-4). The minimum annual quota quantity will be 5'000 metric tons. 
Table III.3 (Cont'd) 
                                                      
19 See Chinese Taipei's Schedule (CLIII), Part I, Section I.  WT/REG267/1/Rev.1 
 Page 21 
 
 
  Goods Tariff Classification 
(HS) Annual quota 
quantity Note 
Refined 
Sugar 1701.91.20 1701.99.10 
1701.99.20 1701.99.90 25'000 tons 1.  The annual quota quantity for the first year after the entry into force 
of the Agreement is 25'000 metric tons. 
2. For the second year and onwards, the annual quota will be the total 
quota quantity of the previous year (year X) plus or minus the 
average growth of the total sugar imports in Chinese Taipei over the 
past four consecutive calendar years (i.e. X-1, X-2, X-3 and X-4). The minimum annual quota quantity will be 25'000 metric tons. 
 Administration of Quota:  
 
1. Upon the entry into force of the Agreemen t until December 31 of the same calendar year, the proportion of the quota quantity 
will be set according to the number of remaining implemen tation months of that year  divided by twelve (12); 
2. Chinese Taipei shall administer  the allocation of quota and the method of a llocation is conducted by auction for tariff quota 
right; and 
3. Chinese Taipei shall allocate the quota on peanut and sugar once a year. Import licenses issued for the in quota goods can be 
used at any time during the year, not allowed extending to the next year. 
 
 
Source: Annex 3.03 of the Agreement. 
 
56. In addition to disciplines on the administration of the quotas (Category Q), Annex 3.03 of the 
Agreement also contains additional requirement fo r Chinese Taipei's beef import under preferential 
treatment; essentially in relation with information to be provided, in the form of a certificate, when 
Nicaragua's beef products are exported to Chinese Taip ei. The Annex also contains a clarification on 
the classification of certain beans produced in Nicaragua. 
57. The base rate used by Chinese Taipei for its ta riff elimination programme in its Schedule of 
tariff concessions is the MFN applied rate on 1 Ja nuary 2004, shown in Tabl e III.4 and Chart III.4. 
58. Table III.4 shows Chinese Taipei's trade liber alization commitments under the Agreement at 
the HS 8-digit level organized by HS section product categories.  Of the 8,848 tariff lines forming 
Chinese Taipei's tariff schedule20, 2,801, or 31.7% of the tariff, were already duty-free on an MFN 
basis in 2008.  3,006 additional lines, or 34% of the tariff, became duty free on the entry into force of the Agreement.  In 2012, 1,758 additional lines, or 19.9% of the tariff, will become duty free for 
imports from Nicaragua. In 2017, 808 additional lines, or 9.1% of the tariff, will become duty free for 
imports from Nicaragua.  This means that after 10 years of implementation 8,373 lines, or 94.6% of 
the tariff will become duty free for imports from Nica ragua. In 2022, 240 additi onal lines, or 2.7% of 
the tariff, will become duty free for imports from Nicaragua. 235 tariff lines (2.7% of the tariff) will remain dutiable after liberalization is complete. 
Table III.4 
Chinese Taipei: Tariff elimination und er the Agreement, by HS section 
Number of duty-free lines for 
Nicaraguan products  HS section and description  MFN 
average%  Total 
No of 
lines  MFN 
2008  
2008 2012 2017 2022 Remain 
dutiable  Avg. Final 
Tariff 
(Dutiable)  
I Live animals and animal 
products 20.7 537 60 161 128 74 40 74 41.6 a 
II Vegetable products 32.0 510 154 107 61 91 52 45 254.4 
III Animal or vegetable fats 
and oils 12.5 76 28 31 10 5  2 338.0  
IV Prepared foods etc. 19.4 446 55 44 35 89 146 77 35.2 
V Minerals 1.3 229 149 65 15     
VI Chemicals and chemical 
products 2.6 1,451 521 829 84 15  2 8.6 
VII Plastics and rubber 4.8 357 12 254 91     
VIII Hides and skins 3.1 91 38 23 30     
IX Wood and articles 2.4 153 108 17 16 12    
Table III.4 (Cont'd) 
                                                      
20 160 tariff lines took the form of non Ad valorem  duties (89 specific and 71 mixed). WT/REG267/1/Rev.1 
Page 22  
 
  Number of duty-free lines for 
Nicaraguan products  HS section and description  MFN 
average%  Total 
No of 
lines  MFN 
2008  
2008 2012 2017 2022 Remain 
dutiable  Avg. Final 
Tariff 
(Dutiable)  
X Pulp, paper etc. 0.0 195 195       
XI Textiles and textiles 
articles 8.8 1,194 55 216 487 434 2   
XII Footwear, headgear 6.2 77 6 21 41   9 5.0 
XIII Articles of stone 6.6 234 10 59 162 3    
XIV Precious stones, etc. 0.1 76 75  1     
XV Base metals and base 
metals products 2.6 898 528 168 202     
XVI Machinery 3.4 1,433 463 673 269 28    
XVII Transport equipment 10.1 249 57 73 36 57  26 17.5 
XVIII Precision equipment 2.5 392 182 145 65     
XIX Arms and ammunition 1.6 22 15 7      
XX Misc. manufactured 
articles 3.2 218 80 113 25     
XXI Works of art, etc. 0.0 10 10       
Total 7.6 8,848 2,801 3,006 1,758 808 240 235 78.4 
 
a contains mixed 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. 
Based on the HS 2002 nomenclature.  
Source : WTO estimates based on data provided by Chinese Taipei. 
 
59. As can be seen from Chart III.4, most of the lines to be progressively freed of duties during 
the transition period are subject to rates of 10% or  less (7,328 lines).  The lines that are subject to 
duties above 10% are mainly to be liberalized during the last five years of implementation.  Most of the lines which will remain subject to duty will be  subject to rates between 10% and 20% (56 lines) 
and between 20% and 30% (75 lines) . In addition, out of 160 non ad  valorem  duties, 90 will be 
eliminated during the transitional period.   WT/REG267/1/Rev.1 
 Page 23 
 
 
  0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,00020082009201220172022Chart III.4
Chinese Taipei's duty elimination under the Agreement
Year of duty free treatment   
Source: WTO Secretariat estimates, based on data provided by Chinese Taipei.Number of duty-free lines (cumulative)
Duty-free <10% <20% MFN is: non ad valorem <30% <50% >50% <40%
 WT/REG267/1/Rev.1 
Page 24  
 
  60. Chart III.5 presents, for the relevant HS Chapte rs, Chinese Taipei's average of dutiable rates 
at the end of the transitional period. It illustra tes the variation between the preferential duty free 
treatment granted to Nicaragua's products and the MFN rate. 
0 100 200 300 400 500 600020304050708091011121516171819202124356487Chart III.5
Chinese Taipei:  Average of dut iable rates, by HS ChapterHS Chapter  
Note:    Tariff lines subject to in-quota rates are excluded in the computation; for the calculation of averages, specific rates  are 
              excluded and the ad valorem equivalents or  ad valorem part of alternate rates are included.              Preferential rates in HS chapters 7, 12, 20 & 21 only contain specific dutiesSource :  WTO Secretariat estimates, based on data provided by Chinese Taipei.Average rate of duty (%)
MFN Preferential
 
  WT/REG267/1/Rev.1 
 Page 25 
 
 
  61. Chart III.6 complements the previous Chart and presents Chinese Taipei's average of dutiable 
rates, by HS Section. 
0 50 100 150 200 250 300 350XXIXXXIXXVIIXVIIXVIXVXIVXIIIXIIXIXIXVIIIVIIVIVIVIIIIIIChart III.6
Chinese Taipei:  Average of dut iable rates, by HS SectionHS Section  
Average rate of duty (%)
MFN Preferential
Note: Tariff lines subject to in-quota rates are excluded in the computation; for the calculation of averages, specific rates ar e 
          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.
 
 
3. Administrative Fees and Formalities 
62. The Agreement provides for the Parties to a dhere to Article VIII:1 of GATT 1994 and its 
interpretative notes on the imposition of fees and charges imposed in connection with imports 
(Article 3.12).  This article also prohibits Par ties from requiring consular  transactions, including 
related fees and charges, in connection with the impo rt of any good of the other Party.  A current list 
of the fees and charges each Party imposes in c onnection with imports must be made available 
through the Internet. 
4. Import Restrictions 
63. The Agreement commits the Parties to eliminat e non-tariff barriers to trade, except those in 
accordance with their rights under Articles XX and XXI of GATT 1994 (Article 3.11, paragraph 1). 
The Agreement however foresees that before a Party adopts a measure consistent with an 
intergovernmental agreement on products in acco rdance with paragraph (h) in Article XX of 
GATT 1994, consultations with the other Party must take place with a view to avoid nullification or 
impairment of concessions granted in accordance with the tariff elimination programme (Article 3.14). 
64. As a principle, the Agreement prohibits th e Parties from adopting or maintaining any 
prohibition or restriction on the import of any good from the other Party, exceptions provided for by 
Article XI of GATT 1994 being reserved.  In th at regard, Article XI of GATT 1994 and its 
interpretative notes are incorporated into and form an integral part of the Agreement, WT/REG267/1/Rev.1 
Page 26  
 
  mutatis mutandis.
21  As an exception to the prohibition of impor t restrictions, the Parties have listed in 
Annex 3.03.7 certain measures, which may be maintain ed or be taken by them for products identified 
in the Annex and which may take the form of an import restriction.  In particular, Nicaragua may 
apply controls on imports of motor vehicles that are more than seven years old.22  It may also apply 
any action authorized by the WTO Dispute Settlement Body, which could in theory also take the form 
of an export restriction. Moreover, during the firs t ten years following the entry into force of the 
Agreement (up to 2017), Nicaragua may maintain its existing prohibitions or restriction to certain 
used products.23 
65. Similarly, Chinese Taipei may continue to appl y import prohibitions on a number of products 
listed in Annex 3.03.7, which cover, inter alia , a few specific agricultural products and a number of 
chemical products or merchandise c ontaining certain chemical products. 
5. Tariff Rate Quotas 
66. In addition to tariff elimination, Chinese Taipei  commits to grant tariff-rate-quotas (TRQs) for 
some originating goods imported from Nicaragua.  Th e products concerned are: peanuts, and raw and 
refined sugar. For these products, contained in categ ory Q of Chinese Taipei's schedule, the in-quota 
tariff rate is duty free.  The annual quota quantiti es are 250 tonnes for peanuts, 5,000 tonnes for raw 
sugar, and 25,000 tonnes for refined sugar. For raw and refined sugar, the quota was granted at the 
beginning of 2009.  The quantity is then adjusted in relation with the average growth of the total sugar 
imports in Chinese Taipei over a defined period. The disciplines on the administration of the TRQs 
(category Q) are contained in Annex 3.03 and are presented in paragraph 53 above as well as in the 
Table presenting Chinese Taipei's commitments in rela tion with the establishment of tariff rate quotas.  
B. RULES OF ORIGIN  
67. Disciplines regarding rules of origin and custom s procedures are set out in Chapter 4 of the 
Agreement. Specific rules of origin are detailed by HS Chapters in Annex 4.02 of the Agreement.  
68. Section A of Chapter 4 contains disciplines on th e determination of origin to ascertain which 
products will benefit from preferen tial treatment under the Agreement.   The Harmonized System (HS) 
is the basis for tariff classification, and Annex 4. 02 is based on HS 2002.  Moreover, the principles 
and norms of the WTO Agreement on Customs Valuati on are used to determine the value of a good or 
material.  Nevertheless, when determining the origin  of a good, the provisions contained in Chapter 4 
of the Agreement prevail over the WTO Agreemen t on Customs Valuation to the extent of any 
inconsistency. 
69. Article 4.02 to 4.13, as well as the specific rules contained in Annex 4.02 deal with the rules 
of origin themselves.  The general requirement fo r a good to be considered an originating good of a 
Party (Article 4.02) is that it is: 
(a) wholly obtained or produced entirely in that Party; 
(b) produced entirely in that Party exclusively from originating materials; 
                                                      
21 It is understood, but not explicitly included in the Agreement, that the provisi ons of Article 4 of the 
WTO Agreement on Agriculture, which supersedes some provisions contained in Article XI of GATT 1994, are 
also to be considered by the Parties. 
22 In accordance with Article 112 of Decree No. 453 of 6 May 2003. 
23 Retreated used tires; used tires; used clothes and foot ware; rags, cords, ropes, and textile cordage in 
scraps or unusable articles.  WT/REG267/1/Rev.1 
 Page 27 
 
 
  (c) produced entirely in the territory of one or both of the Parties from non-originating 
materials that undergo a change in tariff cl assification, satisfy a regional value content 
or other requirements, as specified in Anne x 4.02 of the Agreement, and that the good 
complies with all other applicable provi sions of Chapter 4 (see below);  or 
(d) produced entirely in the territory of one Party, although one or more of the non-
originating materials or parts provided fo r under the HS that are used in the 
production of the good does not undergo a change in tariff classification despite the fact that transformation takes place when parts are being imported and assembled in another country.  For this category of pr oducts, the Parties have defined a minimum 
regional value content requirement (not less than 35%), applicable unless the specific 
rules contained in Annex 4.02 specify a different requirement of regional value 
content. Article 4.06 provides for a method to calculate the regional value content. 
70. As mentioned above, Annex 4.02 contains specifi c rules to determine origin for the purpose 
of applying the preferential treatment foreseen in th e Agreement.  These rules are applicable in the 
case a good is produced entirely in Nicaragua and/or in Chinese Taipei from non-originating 
materials.
24  To be eligible, the merchandise must undergo a change in tariff classification in line with 
the specific rules contained in Annex 4.02.  
71. Part I of Annex 4.02 (General interpretative note)  provides technical clarifications for Part II 
of the Annex containing specific rules of origin, or ganized by HS Chapter.  The specific rules of 
origin are based on tariff heading changes (at the four-digit Chapter heading, or at the six-digit 
subheading level).  In a number of cases changes to  certain headings or subheadings do not confer 
origin.  This is particularly the case for a number of agricultural products and for some textile 
products.  For certain groups of pr oducts, "notes" clarify which manufacturing operations or processes 
are deemed to confer origin and/or allow custom s to treat the concerned merchandise as originating.25  
Complementary origin-conferring manufacturing ope rations and process-related rules are also 
applicable to selected products in HS Chapters  27-38. A limited number of product-specific rules are 
also applicable; for example in the case of extract s, essences, concentrates, or preparations based on 
coffee26, the coffee bean produced in the Central American countries27 used in the production are 
considered as originating.  Specific rules for a pparel and clothing accessories (HS 61-62), and other 
made up textiles (HS 63), make assembly either in Nicaragua or in Chinese Taipei mandatory.  For a 
number of Headings or Subheadings, alternative sp ecific rules, one being usually linked with an 
additional minimum regional value content, are av ailable to customs authorities to determine the 
origin of a product. This is for instance the case, for some tobacco and manufactured tobacco 
substitutes (HS 24), for some mineral products (HS 27), some plastics (HS 39), most machinery and 
mechanical appliances (HS 84) and electrical machinery and equipment, including consumer electronics, and optical and photographic instrument s (HS 90). An additional minimum regional value 
content is however mandatory for a limited number of products: certain cases and bags (HS 42.02); 
certain tools (HS 82.06); certain miscellaneous articles of base metal (HS 83.03-83.11); as well as 
most lines in Chapter 87 covering vehicles and part s and accessories thereof.  The required regional 
value content varies from 35% to 45%. 
72. Article 4.03 contains a list of minimal operation or processes that do not confer origin to a 
good. Articles 4.04-05, and 4.08-13 define how certai n material (indirect materials, incorporated 
material – accumulation -, fungible goods and mate rial, accessories, spare parts and tools, sets of 
                                                     
 
24 See the previous paragraph – letter c. 
25 For instance, agricultural goods grown in Nicaragua or in Chinese Taipei are treated as originating 
even if grown from seeds, bulbs, rootst ock, etc are imported from a non-Party. 
26 HS 2101.11 – 2101-12. 
27 The Central American Countries referred to are: Costa Rica, El Salvador, Guatemala, Honduras and 
Nicaragua. WT/REG267/1/Rev.1 
Page 28  
 
  assortments, packaging materials and containers for retail sale, packing materials for shipment, transit 
and transhipped materials) are to be treated / valued when determining the origin of a good. 
73. Article 4.07 defines a good to be nonetheless origin ating if the value of all non-originating 
materials used in the production of the good th at do not undergo the applicable change in 
classification do not exceed 10% of the value of the good ( de minimis  rule).
28  Annex 4.07 contains 
however a list of HS headings (at two digits) for wh ich the de minims rule does not apply in the case 
of specific transformations defined in Annex 4.07. 
74. Section B of Chapter 4 contains rules applicable  to customs procedures related to origin and 
defines specific disciplines in relation with obliga tions regarding importatio ns (Article 4.15) and 
exportations (Article 4.16), Records (Article 4.17), Confidentiality (Article 4.18), Origin Verifications 
(Article 4.19), Advance Rulings (Article 4.20), Penalties (Article 4.21), and Review and Appeal 
(Article 4.22). A single form of Certificate of  Origin has been developed (Annex 4.14) and 
requirements for its use are contained in Article 4.14. 
C. CUSTOMS VALUATION  
75. The principles of customs valuation applied to regulating trade between the Parties are those  
established by the WTO Agreement on the implemen tation of Article VI of GATT 1994 (the Customs 
Valuation Agreement). The Agreement also specifies that the determination of the customs value of 
the goods may not be based on the officially established minimum value (Article 3.08). 
D. SPECIAL REGIMES  
76. "Special regimes", which waive the application of customs duties, are applicable for: the 
temporary admission of goods for professional equipm ent, display or demonstration, commercial 
samples and advertising films and recordi ngs, and goods admitted for sporting purposes 
(Article 3.05); goods used as commercial samples of negligible value and printed advertising 
materials (Article 3.06); and go ods re-imported after repair or  alteration (Article 3.07).  
77. In addition, taking into account the fact that Nicaragua is a developing country Member not 
subject to the provisions of Article 3:1a of the WTO SCM Agreement as indicated in its Annex VII, 
the Agreement foresees the possibility to waive custom s duties, when the waiver is conditioned on the 
fulfilment of a performance requirement (Article 3.04). 
E. EXPORT DUTIES AND CHARGES , AND QUANTITATIVE RESTRICTIONS  
1. Administrative Fees and Formalities 
78. The Agreement requires the Parties to adhe re to Article VIII:1 of GATT 1994 and its 
interpretative notes on the imposition of fees and charges imposed in connection with exports 
(Article 3.12).  A current list of the fees and charges each Party imposes in connection with exports 
must be made available through the Internet. 
2. Export duties and restrictions 
79. The Parties commit to eliminate non-tariff barriers to trade (including exports), with the 
exception of their rights under Articles XX and XXI of GATT 1994 (Article 3.11,  paragraph 1).  The 
Agreement however foresees that before a Pa rty adopts a measure consistent with an 
intergovernmental agreement on products in acco rdance with paragraph (h) in Article XX of 
                                                      
28 The value of such non-originating material must, however, be included in the value of 
non-originating materials fo r any applicable regional value content requirement.  WT/REG267/1/Rev.1 
 Page 29 
 
 
  GATT 1994, consultations with the other Party must take place with a view to avoiding nullification 
or impairment of concessions granted under th e tariff elimination programme (Article 3.14). 
80. As a principle, the Agreement prohibits the Parties from adopting or maintaining any duty, 
tax, or other charge on the export of any good to the territory of the other Party.  The Agreement 
however leaves it open to levy such duties, taxes, or charges when the supp ly is insufficient for 
domestic consumption (Article 3.13). 
81. As a principle, the Agreement also prohibits  the Parties from adopting or maintaining any 
prohibition or restriction on the export or sale for export of any good from the other Party, exceptions provided for by Article XI of GATT 1994 being rese rved. In that regard, Article XI of GATT 1994 
and its interpretative notes are incorporated into and form an integral part of the Agreement, 
mutatis mutandis .  As an exception to the prohibition of e xport restrictions, the Pa rties have listed in 
Annex 3.03.7 certain measures, which may be main tained or be taken by them. In particular, 
Nicaragua may maintain or introduce controls on  exportation of any basic foodstuffs and leather
29, 
provided that these controls are used to temporarily a lleviate a critical shortage of that particular item. 
Moreover, Nicaragua may, during the first ten years following the entry into force of the Agreement, 
maintain its existing prohibitions or restrictions to the following used produc ts: retreated used tires 
(Sub-item 401210), used tires (sub-item 401220), used clothes and footwear (item 6309), and rags, 
cords, ropes, and textiles cord age in scraps or unusable articles (item 6310).  Similarly, 
Chinese Taipei may adopt or maintain e xport prohibition for a number of products30, essentially fish 
products and military material, listed in Annex 3-03-7.   
F. REGULATORY PROVISION S ON TRADE IN GOODS  
1. Sanitary and phytosanitary measures (SPS) 
82. Chapter 8 of the Agreement covers Sanitary and Phytosanitary Measures (SPS). The Parties 
reaffirm the provisions of the WTO SPS Agreem ent and establish a framework of rules and 
disciplines, based on the WTO SPS Agreement, to guide the development, adoption and compliance 
of SPS measures. 
83. Article 8.03 requires the Parties to use intern ational standards, guide lines or recommendations 
as reference for their SPS measures;  they may im plement SPS measures whose level of protection is 
different from or stricter than that of interna tional standards, guidelines or recommendations, provided 
that there is a scientific justification for the measu res;  and they shall follow the guidelines of the 
WTO SPS Agreement, the IPPC for plant health, th e OIE for animal health, and the Codex on food 
safety and tolerance limits.  
84. Article 8.03(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 sh all be recognized (Article 8.04(a)).  
                                                     
 
29 "basic foodstuffs and leather" includes the following: HS 020711, 020712, 020713, 020714 
(Poultry); 040210, 040221, 040229 (Powder Milk); 070820, 071022, 071331, 071332, 071333, 071339 (Beans); 
090111, 090112, 090121, 090122, 090190 (Coffee beans); 100610, 100620, 100630, 100640 (Rice); 110220 
(Cornmeal); 150710, 150790, 150810, 150890, 151110, 151190, 151550 (Vegetable oil); 170111, 1701112, 170191, 170199 (Sugar); 210690ex (Cor n tortillas); and 250100 (Refined salt). 
30 020890ex, 03019100, 03021100, 03021210, 03021220, 03021900, 03031100, 03031900, 03032100, 
03032200, 03032900, 03041050, 03041090ex, 03042020, 03042030, 03053090ex, 03054100, 03054930, 03056910, 06029010ex, 12119060, 12119091ex, 14049099ex, 16041100, 16041990ex, 29035100, 29214400ex, 
87100000, 89061000, 93011100, 93011900, 9301 2000, 93019000, 97050000ex, and 97060000ex. WT/REG267/1/Rev.1 
Page 30  
 
  85. Assessment of risk and determination of the appropriate level of SPS protection, is to be 
based on guidelines established by international orga nizations that are recognised by the WTO.  The 
factors to be used when assessing the risks are listed and include the available technical and scientific 
information, the existence of pests and diseases a nd their epidemiology, and relevant ecological and 
environmental conditions (Article 8.05).  The Par ties may adopt provisional sanitary or phytosanitary 
measures on the basis of available information, if  the relevant evidence is insufficient for risk 
assessment.  In such cases, the Parti es will make an effort to obtain th e information needed for a more 
objective risk assessment, following a defined procedur e and deadlines.  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 restri cted through SPS measures not based on the relevant 
international standards, it may request an expl anation which must be provided within 60 days. 
86. The Parties committed to recognize pest- or disease -free areas and areas of low pest or disease 
prevalence (Article 8.06). 
87. With regard to control, inspection and approva l procedures, the Agreement refers to Annex C 
of the WTO SPS Agreement and sets out maximum inspection periods (Article 8.07). 
88. With regard to transparency, the adopti on and amendment of SPS measures of general 
applications must be notified as well as changes occurring in sanitary or phytosanitary conditions and 
disease outbreaks.  These obligations must be fu lfilled within set time periods as detailed in 
Article 8.08.  The Agreement also requires the au thorities to establish and notify WTO / SPS Enquiry 
Points  (Article 8.08) and to act in accordance with  the principles of paragraph 3 of Annex B of the 
SPS Agreement. Moreover, Annex 3.03 of the Agre ement (on Customs Tariff Elimination Schedule) 
also contains, in its paragraph 3, additional requirement for Chinese Taipei's beef import under 
preferential treatment; essentially in relation with information to be provided, in the form of a 
certificate, when Nicaragua's beef products are exported to Chinese Taipei. 
89. Finally, the Agreement establishes a Committe e on SPS measures, the composition of which 
is contained in Annex 8.09.
31  The Committee which shall meet as mutually agreed, shall hear matters 
relating to the functioning of the Chapter and will have responsibility for ensuring training and 
specialization of staff, promoting active particip ation by the Parties in international bodies and 
creating and maintaining a database of specialists in  food safety, and plant and animal health.  The 
Committee can create ad hoc work groups. 
2. Technical barriers to trade 
90. Chapter 9 of the Agreement covers Technical Ba rriers to Trade (TBT).  The Parties affirm 
their rights and obligations under the WTO TBT Agre ement.  The disciplines in Chapter 9 apply in 
addition to the WTO's TBT rules.  The Chapter applies to standard ization measures and authorization 
and metrology procedures, as well as technical regula tions and conformity assessment procedures that 
allow each Party to achieve its legitimate objectiv es.  Chapter 9 does not apply to SPS measures. 
91. Risk assessment by the Parties shall take into account several factors including risk 
assessment by international standardization and me trology bodies;  available scientific technical 
information;  related processing technology or inte nded end use of goods (Article 9.04).  The Parties 
shall accept the equivalence of each others' Partie s technical regulations when such regulations 
adequately fulfil the legitimate objectives of the im porting Party.  Conformity assessment procedures 
                                                      
31 For Nicaragua: the Ministerio de Fomento, In dustria y Comercio (MIFIC), the Ministerio 
Agropecuario y Forestal (MAGFOR), an d the Ministerio de Salud (MINSA).  For Chinese Taipei: the Council 
of Agriculture represented by the Bureau of Animal a nd Plant Health Inspection and Quarantine, the Bureau of 
Food Safety from the Department of Health, and the Bureau of Standards, Metrology and Inspection from the 
Ministry of Economic Affairs.  WT/REG267/1/Rev.1 
 Page 31 
 
 
  are to be prepared, adopted and applied so as to grant access to similar goods, in a comparable 
situation, originating in the territory of th e other Party under national treatment-compatible 
conditions.  Disciplines to be abided by the Parties when implementing conformity assessment 
procedures are contained in Article 9.07 and co ver matters such as expeditious completion, 
publications, prompt examination of applications, avoidance of unnecessary requests for information, 
confidentiality, equitable fees, and examination of cl aims.  Authorization procedures must also ensure 
non discriminatory treatment and be administered in  an efficient and fair manner (Article 9.08). 
92. With regard to metrology, the documented traceability of a Party's standards and the 
calibration of its measuring instruments, shall be ensured, according to Artic le 9.09, in accordance 
with the recommendations of the Bureau international des poids et measures  (BIPM) and the 
International Organization of Legal Metrology  (OIML). 
93. In case relevant international standards are not  available or the technical content of a 
proposed technical regulation does not conform with that of an international standard, and if the 
technical regulation may have a significant impact on trade the measure or regulation must be notified 
in writing to the other Party at least 60 days befo re its application.  The use of Enquiry Points 
established in accordance with Article 10.1 of the WT O TBT Agreement is foreseen in the context of 
the implementation of the TBT Chapter of the Agreement (Article 9.11). 
94. The provision of technical cooperation between  the Parties' standardizing and metrology 
bodies is foreseen by Article 9.13. 
95. Finally, the Agreement establishes a Committee on Standardisation, Metrology and 
Authorization Procedures, the composition of which is contained in Annex 9.12.32  The Committee, 
which is to meet by mutual agreement between the Pa rties, is charged with hearing matters relating to 
the Chapter including its implementation and f acilitation and cooperation between the Parties to 
develop and improve their standardi zation and metrology measures.  Its decisions shall be adopted by 
mutual agreement. 
3. Trade Remedies 
96. Provisions on Trade Remedies can be found in Chapter 6 of the Agreement regarding 
Safeguard measures33 and in Chapter 7 regarding Anti-dump ing and Countervailing Duty Matters. No 
trade remedies (safeguards, antidum ping and countervailing measures) were  in place at the time of the 
entry into force of the Agreement and none has been activated between the Parties since then. 
(a) Safeguard mechanisms 
97. Chapter 6 of the Agreement governs the use of safeguard measures by the Parties. It 
distinguishes between bilateral and global safeguards.   However, no Party may apply, with respect to 
the same good, at the same time, a bilateral safe guard measure, and a measure under Article XIX of 
GATT 1994 and the WTO Agreement on Safeguards (a global safeguard).34  A request to establish an 
"arbitral group", pursuant to the Agre ement's provisions on dispute settlement35, may not be made 
before the other Party has imposed a safeguard measure. 
                                                      
32 For Nicaragua: the "Ministerio de Fomento, Indu stria y Comercio (MIFIC)" , through the "Dirección 
de tecnología, Normalización y Metrología". For Chines e Taipei: the "Ministry of Economic Affairs (MOEA)", 
through the "Bureau of Standards, Metrology and Inspection". 
33 In addition, Chapter 23 contains provi sions on Balance-of-Payment measures. 
34 Article 6.07, paragraph 3. 
35 See below the section on Dispute Settlement. WT/REG267/1/Rev.1 
Page 32  
 
  (i) Bilateral safeguards 
98. The application of bilateral safeguards are governed by 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.  
99. The provisions on bilateral safeguards are appli cable during the transition period (i.e. until 
2022).  A bilateral safeguard can be taken "if, as a result of the reduction or elimination of a customs 
duty pursuant to the Agreement, a good originating in  the territory of a Party is being imported into 
the territory of the other Party, in such increased quantities in absolute terms or relative to domestic 
production, and under such conditions, as to constitute a substantial cause
36 of serious injury37 or 
threat38 therefore, to a domestic industry produc ing the like or directly competitive goods" 
(Article 6.01, paragraph 2).  Such measures can take the form of a suspension of a future reduction of 
any customs duty on the product provided for under th e Agreement, or an increase in the customs 
duty on the product to a level not to exceed the lesser of (i) the MFN applied customs duty in effect at 
the time the action is taken, and (ii) the MFN a pplied customs duty in effect on 31 December 2007. 
100. In principle, bilateral safeguards may not be a pplied for longer than three years. If a measure 
continues to be necessary to prevent or remedy serious  injury and to facilitate adjustment and if there 
is evidence that the domestic industry is adjusti ng, an extension of a maximum of two years is 
possible, provided the total length remains within the three-year duration, unless the affected Party 
consents to prolong that period (A rticle 6.02).  If the duration of the measure is over two years, the 
party applying the measure is to progressively liber alize it at regular intervals during the extension 
period. The Parties may only appl y and extend the application of a safeguard measure on the same 
good on two occasions during the transition period. 
101. In critical circumstances39, a Party may take a provisional safeguard measure "pursuant to a 
preliminary determination that there is clear evidence  that imports originating in the other Party have 
increased as the result of the reduction or elimination of a customs duty under the Agreement, and on condition that this increase has been  the cause of serious injury, or threat thereof" (Article 6.03). 
102. The Administration of safeguard proceedings is  governed by Article 6.04 of the Agreement, 
which ensures equitable, timely, transparent and e ffective procedures by the competent investigation 
authorities as defined in Annex 6.04.
40  The Parties must notify each ot her of initiations of safeguard 
investigations, findings of serious injury and d ecisions to apply or extend a safeguard measure 
(Article 6.05).41 
103. In case a safeguard is adopted, consultations  on the provision of compensation having 
substantially equivalent trade effe cts or equivalent to the value of  the additional duties expected to 
result from the measure, are foreseen, no later than 30 days after the application of the safeguard 
(Article 6.06).  If the consultations do not result in  an agreement, the Party against whose originating 
                                                      
36 Defined as a cause which is important and not less than any other cause (Article 6.09). 
37 As defined in the (WTO) Agreement on Safeguards ( a significant overall impairment in the position 
of a domestic industry)" (Article 6.09). 
38 As defined in the (WTO) Agreement on Safeguards (serious injury that on the basis of facts and not 
merely on allegation, conjecture, or remote possi bilities, is clearly imminent) (Article 6.09). 
39 Defined as circumstances where the delay of th e application of safeguard measures could cause 
damage which would be difficult to repair (Article 6.09). 
40 For Nicaragua: the "Dirección de Aplicación de Trat ados del Ministerio de Fomento, Industria y 
Comercio". For Chinese Taipei: the "International Trade Commission of the Ministry of Economic Affairs". 
41 For Nicaragua: the "Dirección de Aplicación de Trat ados del Ministerio de Fomento, Industria y 
Comercio".  For Chinese Taipei: the "International Tr ade Commission of the Ministry of Economic Affairs".  WT/REG267/1/Rev.1 
 Page 33 
 
 
  good the measure is applied may suspend the appli cation of substantially equivalent concessions to 
the trade of the Party applying the safeguard measure. 
(ii) Global safeguards 
104. The Parties retain their rights and obligat ions under Article XIX of GATT 1994 and the WTO 
Agreement on Safeguards (Article 6. 07 paragraph 1).  Nevertheless, a Party taking an action pursuant 
to Article XIX of GATT 1994 and the WTO Agreem ent on Safeguards may exclude imports of an 
originating good of the other Party covered by the Agreement if that Party accounts for not more than 
7% of total imports of the good c oncerned (Article 6.07 paragraph 2). 
(iii) Balance of payments safeguards 
105. In addition to Chapter 6 provisions and with rega rd to Restrictions to Safeguard the Balance 
of Payments, Article 23.04 of the Agreement contains  disciplines on the use of measures that restrict 
trade in goods where the Party experiences financia l or balance of payments difficulties or threat 
thereof.  Article XII of GATT 1994, and the Unders tanding on the Balance of Payments Provisions of 
the GATT 1994 are incorporated into and made part of the Agreement.  
(b) Anti-dumping and countervailing measures 
106. With regard to the application of anti-dumpi ng and countervailing measures, the Parties retain 
their rights and obligations under Article VI  of GATT 1994 and the WTO Agreement on 
Anti-Dumping and the WTO Agreement on Subsid ies and Countervailing Measures, as appropriate. 
An antidumping or countervailing investigation shal l not be initiated between the Parties unless the 
application has been made by or on behalf of the domestic industry whose collective output 
constitutes more than 50% of the total production of  the like good produced by the domestic industry 
(Article 7.03).  The maximum period for completing on investigation is one year, with the possibility 
of an extension to no more than 15 months (Ar ticle 7.04).  The maximum duration of a definitive 
antidumping or countervailing duty is four years42 (Article 7.05).43 
107. Negotiations to modify Chapter 7 will be initia ted if one of the Parties deems necessary 
(Article 7.06). 
4. Subsidies and State-aid 
(a) Domestic Support 
108. The Parties recognize that domestic support measures could be of vital importance for 
agriculture but also distort trade and affect producti on.  They will therefore apply domestic support in 
accordance with the provisions of the WTO Agreemen t on Agriculture (Article 3.09). Where a Party 
decides to provide domestic support, it shall ende avour that the support will have a minimal or 
non-distorting affect on trade and production;  an d it conforms with WTO obligations.  To ensure 
transparency, the Parties agree to undertake studies of their policies of support to agriculture on an 
ongoing basis and the information acquired for such purposes will be used as the main reference in 
their respective annual notifications to the WTO Committee on Agriculture.  
 
                                                      
42 Notwithstanding the right to review in accordance with the relevant WTO Agreement. 
43 Notwithstanding the right to review in accordance with the relevant WTO Agreement. WT/REG267/1/Rev.1 
Page 34  
 
  (b) Export Subsidies
44 
109. The Agreement prevents the Parties from adop ting or maintaining export subsidies on goods 
in their reciprocal trade.  The possibility of recour se to a waiver of customs duties in connection with 
the special regime for Nicaragua, in Article 3.04 of  the Agreement, and mentioned in Section III.D of 
this report, is however reserved.  
G. CUSTOMS -RELATED PROCEDURES / TRADE FACILITATION  
110. Although customs-related procedures are cont ained in other parts of the Agreement45, 
Chapter 5 of the Agreement addresses specifically tr ade facilitation.  In the provisions containing 
specific obligations, the Parties confirm their right s and obligations under Articles V (Freedom of 
Transit), VIII (Fees and Formalities Connected w ith Imports and Exports),  and X (Publication and 
Implementation of Trade Regulations) of GATT 1994.  The Parties have also made commitments to 
endeavour to expedite procedures for the release of  merchandise, to facilitate  and simplify formalities 
and procedures to release low-risk  goods and improve clearance of high-risk goods, to coordinate 
procedures that require compliance with import and export requirements.  The Parties will adopt or 
maintain simplified clearance procedures for low-va lue goods, and will endeavour to achieve common 
processes and simplification of the required data fo r the release of goods, applying, when appropriate, 
the international standards in force.46 
111. The Parties have agreed to set up formal cons ultation mechanisms with  their own trade and 
business community to promote greater cooperation and the electronic exchange of data.  Expeditious 
review of any administrative action or official de cision is to be ensured by an administrative, 
arbitration or judicial body independent of the authority that took the original decision, in conformity 
with the Parties laws.  Administrative recourse to a ppeal or review is to be provided prior to seeking 
action through a more formal or judicial level.  Obligations on publication and on the confidential 
nature of certain business information are also contained in Article 5.02. 
112. Recognizing that technical cooperation is an essential element to facilitate compliance with 
the Agreement, both Parties have agreed to  develop a technical cooperation programme in 
customs-related areas47 and to undertake further steps to fac ilitate trade.  For further steps towards 
facilitating trade, they have established a work programme which aims to develop a cooperation 
programme to implement obligations  under Chapter 4 (Rules of origin) to facilitate compliance with 
the obligations set forth in the Agreement, and to  identify and submit to the Free-Trade Commission, 
where appropriate, new measures intended to promote trade facilitation among the Parties 
(Article 5.04).  This work progra mme may be reviewed periodically. 
                                                      
44 Export subsidies in this Chapter has the same meaning as in Article 1(e) of the WTO Agreement on 
Agriculture, including any amendments to that article. 
45 For instance in Chapter 4 addressing Rules of origin, or in Chapter 9 addressing Technical Barriers to 
Trade. 
46 to this end, Nicaragua and Chinese Taipei sha ll endeavour to establish the means for electronic 
exchange of information between its customs authorities and the trading community in order to set up expedited release procedures.  For the purpose of Article 5.02, the Parties shall use formats based on international 
standards for electronic exchange of data. 
47 Inter alia  training, risk management, prevention and detection of smuggling and illicit activities, 
implementation of the WTO Customs Valuation Agreement, audit and verification frameworks, electronic 
exchange of information, and advance rulings.  WT/REG267/1/Rev.1 
 Page 35 
 
 
  IV. PROVISIONS ON TRADE IN SERVICES AND INVESTMENT 
A. SCOPE AND DEFINITIONS  
113. Part Four of the Agreement covers Investme nt, Services and Related Matters. Chapter 10 
contains disciplines on Investment; Chapter 11 rela tes to Cross-Border Trade in Services (CBTS); 
Chapter 12 contains disciplines for Financial Serv ices; Chapter 13 contains disciplines specific to 
Telecommunication; Chapter 14 covers Electronic Commerce, and Chapter 15 covers Temporary 
Entry for Business Persons. 
114. The scope of Chapter 11 covers measures adopted  or maintained by the Parties affecting 
cross-border trade in services by service suppliers of the other Party.  These include measures 
affecting: (i) the production, distribution, marketing, sale, and delivery of a service; (ii) the purchase 
or use of, or payment for, a service; (iii) ac cess to and use of distribution, transport, or 
telecommunications networks and services in connec tion with the supply of a service; (iv) the 
presence in its territory of a service supplier of the other Party; and (v) the provision of a bond or 
other form of financial security as a condition of the supply of a service.  Disciplines on market access, transparency in developing and applying re gulations, and domestic regul ations in Chapter 11, 
also apply to investment measures in Chapter 10.  Chapter 11 must be read together with a negative 
list of non-conforming measures in Annexes I and II of the Agreement. 
115. Chapter 11 does not apply to financial servi ces, except for disciplines on market access, 
transparency in developing and applying regulations , and domestic regulations, when they apply to 
investment.  Chapter 11 also does not apply to air services other than aircraft repair and maintenance 
services and specialty air services, government procurement, or subsidies or grants provided by a 
Party.  As in the GATS, obligations are not im posed by the Agreement on services supplied in the 
exercise of governmental authority. The provisions of Chapter 11 prevail over the provisions of Chapter 10 in the event of any inc onsistency between these two Chapters. 
116. Chapter 12 on financial services covers measure s adopted or maintained by the Parties 
relating to financial institutions of the other Party;  investors of the other Party, and investments of 
such investors, in financial institutions in Nicara gua or in Chinese Taipei;  and cross-border trade in 
financial services.  Disciplines in Chapter 10 or 11 (CBTS) apply to measures covered by Chapter 12 only to the extent that such discip lines are incorporated into Chapter 12.
48  Chapter 12 does not apply, 
however, to measures relating to activities or servi ces forming part of a public retirement plan or 
statutory system of social security, or activities or services conducted for the account or with the guarantee or using the financial resources of the Pa rty, including its public entities – if not conducted 
in competition with a public entity or a financial in stitution.  The provisions of Chapter 12 prevail 
over the provisions of the other Chapters.  Chapte r 12 must be read together with the list of 
non-conforming measures contained in Annexes I, II and III of the Agreement, as well as with 
Annex 12.05.01 (cross-border trade) and A nnex 12.09.02 (Specific Commitments). 
117. Chapter 13 on Telecommunications covers measu res adopted or maintained by the Parties 
relating to access to and use of public telecommuni cations services;  and to the obligations of 
suppliers of such services.  It also applies to measures relating to public telecommunication networks 
or services, and to the supply of information servi ces.  Chapter 13 does not, however, apply to any 
measure adopted or maintained by a Party relating to broadcast or cable distribution of radio or 
                                                     
 
48 The following Chapters or Articles are incorporat ed into Chapter 12: Articles 10.07 (Expropriation 
and Compensation), 10.08 (Transfers), 10.11 (Investment and Environment), 10.12 (Denial of Benefits), 10.14 
(Special Formalities and Information Requirements), and 11.13 (Denial of Benefits).  Moreover, Section B of 
Chapter 10 (Investor-State Dispute Settlement), and Article 11.11 (Transfers and Payments) are partly 
incorporated into Chapter 12. WT/REG267/1/Rev.1 
Page 36  
 
  television programming.  The provisions of Chap ter 12 prevail over the provisions of the other 
Chapters.  
118. Chapter 10 on Investment covers measures adopted  or maintained by the Parties relating to 
investors of the other Party
49, covered investments50, and, with respect to disciplines on performance 
requirements and investment and the environment, a ll investments in the territory of Nicaragua or 
Chinese Taipei. The obligations in Chapter 10 also appl y to a state enterprise or other person when it 
exercises any regulatory, administrative or other gov ernmental authority delegated to it by a Party. 
The other Chapters containing disciplines on trade in services, in particular Chapter 11, prevail over 
Chapter 10.  Moreover, Chapter 10 does not apply to measures adopted or maintained that are covered 
by Chapter 12 (financial services).  Chapter 10 must be read together with the list of non-conforming 
measures contained in Annexes I and II of the Agreement.  
B. DENIAL OF BENEFITS  
119. Under Article 11.13, Nicaragua and/or Chinese Ta ipei may deny the benefits of Chapter 11 
(CBTS) to a service provider of the other Party wh ere the denying Party decides, according to its 
effective law that the service is being provided by an  enterprise that is owned or controlled by persons 
of a non-party having no substantial business ac tivities in the territory of the other Party 
(Article 11.13).  Similarly, in the context of the disciplines applicable to investment (Chapter 10), a 
Party may deny the benefits of Chapter 10 to an invest or of the other Party that is an enterprise of the 
other Party and to the investment of this investor, if investors of a non-Party are owners of or control 
the enterprise and the enterprise has no substantia l business activities in the territory of the Party 
under whose law it is constituted or  organized (Article 10.12). 
C. GENERAL PROVISIONS ON TRADE IN SERVICES AND INVESTMENT  
1. Cross-Border Trade in Services (CBTS) 
120. Chapter 11 of the Agreement covers cross-borde r trade in services, which is defined as the 
supply of a service: (a) from the territory of one Party into the territory of the other Party; (b) in the territory of one Party by a person of that Party to a person of the other Party; or (c) by a national of a 
Party in the territory of the other Party.  CBTS does not include the supply of a service in the territory 
of a Party by an investor of the other Party or a covered investment (this is covered by Chapter 10), 
except that Chapter 11 provisions on market ac cess, transparency in developing and applying 
regulations, and domestic regulation also apply to supply of services by an investor or covered 
investment.  
121. The key obligations of Chapter 11 are nationa l treatment (Article 11.02), MFN treatment 
(Article 11.03), market access (Article 11.05 ), and local presence (Article 11.06). 
 
                                                     
 
49 In the Agreement, "Investor of a Party" means a Part y or state enterprise thereof, or a national or an 
enterprise of a Party, that attempts to make, is making, or has made an investment in the territory of the other 
Party; provided, however, that a natural person who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality. 
50 In the Agreement, "Investment" m eans every asset that an investor owns or controls, directly or 
indirectly, that has the characteristics of an investme nt, including such character istics as the commitment of 
capital or other resources, the expectation of gain or profit, or the assumption of risk. This may take different 
forms, including: an enterprise, shares, stock, and other forms of equity participation in an enterprise, bonds, 
debentures, other debt instruments, and loans, ... intellectual property rights, licenses, authorizations, permits, and similar rights conferred pursuant to domestic law, and other tangible or intangible, movable or immovable 
property, and related property rights, such as leases, mortgages, liens, and pledges.  WT/REG267/1/Rev.1 
 Page 37 
 
 
  (a) National and MFN treatment 
122. Nicaragua and Chinese Taipei grant each other national and MFN treatment for cross-border 
trade in services through Articles 11.02 and 11.03 of the Agreement. The full implementation of these 
principles can, however, be waived for the measur es listed as non-conforming  in Annexes I and II.51 
(b) Market access 
123. The Parties grant each other access to their r espective markets for their services and service 
suppliers through Article 11.05.  The types of limi tations Parties may not adopt or maintain mirror 
those in Article XVI of the GATS, with the exception of the limitation on the participation of foreign 
capital, which is captured in the national treatment provision of Chapter 10 on Investment.  Market 
access limitations are listed by the Parties th rough existing non-conforming measures in their 
Schedules (Annex I of the Agreement).  Market access disciplines do not apply to measures that a 
Party adopts or maintains with respect to sectors, su b-sectors, or activities as set out in its Schedule to 
Annex II of the Agreement. 
(c) Local (Commercial) Presence 
124. According to Article 11.06 of the Agreement, no Party may require a service supplier of the 
other Party to establish or maintain a representative offi ce or any form of enterprise, or be resident, in 
its territory as a condition for the cross-border supply of a service.  Disciplines on commercial 
presence are found essentially in Chapter 10 on Investment.  In addition, the non-conforming measures listed in the Parties Schedules in Annexes I and II of the Agreement, may provide for a local 
presence requirement.  
125. Chapter 11 contains additional rules and disciplin es on standard of treatment (Article 11.04), 
transfers and payments (Article 11.11), im plementation (Article 11.12), and procedures 
(Article 11.14).   
2. Investment 
126. Chapter 10 of the Agreement covers Investment.  Section A contains disciplines applicable to 
measures adopted or maintained by Nicaragua or by  Chinese Taipei relating to investors and covered 
investments.  Section B contains procedural rules applicable to Investor-State Dispute Settlement.  
127. In addition, a Protocol amending Chapter 10 of the Agreement, which once in force 
constitutes an integral part of the Agreement,  was signed on 22 May 2008 by both Parties.  The 
Protocol for the amendment of Chapter 10 entered into force on May 6, 2009.  The Protocol, inter alia , ensures that for all investments made af ter the entry into force of the Agreement 
(1 January 2008), the Agreement replaces the Agreement of Investment Guarantees , signed in 1992 by 
the Parties.
52  Investments made prior to the entry into force of the Agreement may, by choice of the 
investor, be governed by the Agreement, or by the bilateral investment agreement for ten years after 
the termination of the bilateral investment agreem ent;  any disputes arising after this period will be 
governed by the Agreement. 
128. The key obligations of Chapter 10 are on nati onal treatment (Article 10.03), MFN treatment 
(Article 10.04), performance requirements (Article 10.09), and requirements for senior management 
and boards of directors (Article 10.10). 
 
                                                      
51 See below the section on Non-conforming measures listed by Nicaragua and by Chinese Taipei. 
52 and extended for a ten year period on 8 January 2003. WT/REG267/1/Rev.1 
Page 38  
 
  (a) National and MFN treatment 
129. National and MFN treatment is granted by a Party to investors of the other Party with respect 
to the establishment, acquisition, expansion, ma nagement, conduct, operation, and sale or other 
disposition of investments in its territory.  It is al so granted by a Party to covered investments with 
respect to the establishment, acquisition, expans ion, management, conduct, operation, and sale or 
other disposition of investments (Article 10.03 and 10.04). 
(b) Performance requirements 
130. In connection with the establishment, acqui sition, expansion, management, conduct, 
operation, or sale or other disposition of an investment  of an investor of a Party or of a non-Party in a 
Party's territory, the Agreement prohibits performance requirements  (Article 10.09) , inter alia , export 
performance;  domestic content requirements;  purch ase, or use of domestically produced goods;  
foreign exchange inflows requirements;  transfer of technology
53, and requirements to locate 
production, supply services train or employ worker s, construct or expand facilities, or carry out 
research and development in a Party's territory.  Excep tions are, however, foreseen for Parties to adopt 
or maintain measures, including environmental m easures, necessary to secure compliance with laws 
and regulations that are not incons istent with the Agreement or to protect human, animal, or plant life 
or health, or for measures related to the conser vation of living or non-liv ing exhaustible natural 
resources.  The prohibition on most performance  requirements does not apply to qualification 
requirement for goods or services with respect to export promotion and foreign aid programmes, to 
procurement, and to requirements imposed by an  importing Party relating to the content of goods 
necessary to qualify for preferential tariffs or preferential quotas.  
(c) Senior management and boards of directors 
131. Requirement related to senior management and boa rds of directors such as that an enterprise 
that is a covered investment appoints to senior mana gement positions natural pe rsons of any particular 
nationality are not permitted under the Agreement (Ar ticle 10.10).  However, the Parties may require 
that a majority of the board of directors, or any comm ittee thereof, of an enterprise of that Party that is 
a covered investment, be of a particular nationality, or resident in the territory of the Party, provided 
that the requirement does not materially impair the ability of the investor to exercise control over its 
investment. 
132. The above-mentioned three key obligations ar e however not applicable in the case of 
non-conforming measures, as defined in Article 10.13, wh ich must be read together with the measures 
scheduled by the Parties in Annexes I and II54 (see below).  
133. Chapter 10 contains additional rules and di sciplines on minimum sta ndard of treatment 
(Article 10.05), treatment in case of strife (Article 10.06), expropriation and compensation 
(Article 10.07), transfers (Article 10.08), investme nt and environment (Article 10.11), and special 
formalities and information requirements (Article 10.14). 
134. Section B of Chapter 10 establishes the rules and procedures for a specific Investor-State 
Dispute Settlement mechanism. 
3. Movement of natural persons 
135. Chapter 15 of the Agreement deal with the tem porary entry of business persons.  It states the 
Parties' desirability to facilitating temporary entr y on a reciprocal basis  and to establishing 
                                                      
53 With certain reservations. 
54 See below the section on Non-conforming measures listed by Nicaragua and by Chinese Taipei.  WT/REG267/1/Rev.1 
 Page 39 
 
 
  transparent criteria and procedures for temporary en try, and the necessity to ensure border security 
and to protect the domestic labour force and perm anent employment in their respective territories 
(Article 15.01). Nicaragua and Chinese Taipei co mmit to expeditiously grant temporary entry to 
business persons covered (Article  15.03.01) and to limit any fees for processing applications for 
temporary entry to the approximate cost of services rendered (Article 15.03.03).  
136. Annex 15.03 contains the Par ties' commitments for facilitating the temporary entry of 
business persons.  Three categories of business persons are covered: (i) business visitors55, (ii) traders 
and investors, and (iii) intra-corporate transferees.   Special provisions regarding temporary entry of 
business persons are also containe d in Annex 15.03(1).  For Nicar agua business persons must hold 
temporary residency, renewable for consecutive peri ods;  the business person would not be eligible 
for permanent residence.  For Chinese Taipei, busin ess persons must obtain a multiple entry visitor or 
resident visa prior to entry which is valid for a year , for periods of stay of up to 90 days. Parties may 
not require prior approval procedures, petitions, la bour certification tests or other procedures of 
similar effect, as a condition for temporary entry. In  addition, Parties may not impose or maintain any 
numerical restriction relating to temporary entry. 
137. Recourse to dispute settlement following refusal to grant temporary entry under the Chapter is 
not permitted except in certain cases (see Section F below).  
D. LIBERALIZATION COMMITMENTS IN SERVICES AND INVESTMENT  
138. For cross-border trade in services and investme nt, the Parties have adopted a negative-list 
approach to the scheduling of their liberalization commitments.  This implies that all sectors or 
sub-sectors are assumed to be open to competition from services providers or investors of the other 
Party unless otherwise specified in the relevant A nnexes of the Agreement.  As a consequence, the 
obligations of national and MFN treatment, mark et access, and liberalization of local presence 
requirements apply fully to measures covering a ll sectors and sub-sectors, unless reservations are 
listed, as existing non-conforming measures (in Annex I of the Agreement), or sectors, sub-sectors or 
activities for which existing non-conforming measures may be adopted, maintained, or made more 
restrictive (in Annex II of the Agreement).  The sa me would apply for investment-related matters, for 
senior management appointments and nominations to  boards of directors, and on the absence of 
performance requirements.     
139. For Financial services, covered by Chapter 12, th e obligations of national treatment as regards 
investors and investment in financial institu tions, MFN treatment, market access for financial 
institutions, cross-border trade, and senior management and boards of directors, apply fully, subject to 
the non-conforming measures in Annex III of the Ag reement, although non-conforming measures in 
Annexes I and II may, based on the description in the Annexes themselves, also cover financial 
services-related matters, e.g., those covering all sect ors. Notwithstanding the negative list approach, 
specific liberalization commitments are made by the Parties, for national treatment, with respect to 
cross-border trade for financial services sectors and sub-sectors specified in Annex 12.05.1.56 
Annex 12.09.2 also contains some additional specific commitments by the Parties.57 
 
                                                      
55 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 15.03(A)(1)). 
56 Annex 12-A of the Agreement contains commitments  by the Parties for certain activities in the areas 
of risk insurance, reinsurance and retrocession, brokerag es for specific insurance risk s and services auxiliary to 
insurance and banking and other financial services (excluding insurance). 
57 In relation with expedited availability of insuran ce, insurance branching, banking services, and cross-
border trade in financial services. WT/REG267/1/Rev.1 
Page 40  
 
  1. Non-conforming measures 
140. Annex I to the Agreement contains the Schedul e of the Parties setting out existing measures 
that are not subject to some or all of the oblig ations taken under the Agre ement relating to national 
and most-favoured-nation treatment , market access, local presen ce, performance requirements or 
requirements for senior management and boards of di rectors. It represents a standstill commitment, as 
a Party will be able to maintain, review, or ev en amend the existing measures listed that do not 
comply with these obligations, but will not be able to make these measures more restrictive. Further, 
any future liberalization of these measures will be bound at the less restrictive level. Each reservation 
in Annex I contains an identification of:  the sector and/or sub-sector to which the reservation relates;  
the obligation(s) against which the reservation is taken; a description of the measure(s), and an 
indication of whether the reservation relates to cr oss-border trade in services and/or to investment. 
141. In addition, Annex II contains the Schedule of the Parties setting out the specific sectors, 
sub-sectors, or activities for which they may maintain  existing, or adopt new or more restrictive, 
measures that do not conform with obligations unde r the Agreement for national and MFN treatment, 
market access, local presence, performance requireme nts or requirements for senior management and 
boards of directors.  
142. Annex III contains non-conforming measures for fi nancial services.  Reservations for existing 
non-conforming measures are listed in Section A of Annex III, while general reservations for "future 
measures" are listed in Section B.  
(a) Nicaragua 
143. Nicaragua's WTO Schedule of specific commitmen ts covers 5 out of the 11 general sectors 
defined in  the Services Sectoral Classification List.
58  Nicaragua scheduled horizontal limitations on 
market access relating to commercial presence, in particular in connection with the approval of 
foreign investment being subject to an economic necess ity test according to certain criteria.  Mode 4 is 
unbound except for measures concerning the conditi onal entry and temporary stay of senior and 
specialized personnel in connection with commercia l presence, a minimum percentage of local staff 
(75%), and authorization requirements for the exercise of particular professions (professional 
services).59 Horizontal limitations on national treat ment in its GATS Schedule of Specific 
Commitments includes for a ll modes of supply, payment of divide nds to foreign shareholders being 
subject to a tax (5%), and a tax withheld on royalties and payment of interest abroad of 30%.  In the 
context of the DDA negotiations, Nicaragua presented an initial offer60 in 2005, but has not submitted 
a revised offer.  
144. Nicaragua's commitments under the Agreement are based on a negative list.  This means that 
all sectors and sub-sectors are assumed to be libera lized for Chinese Taipei's services providers unless 
limitations are registered in Nicaragua's negativ e lists of non conforming measures. This apply in 
particular to the six general sectors for which Nicaragua did not make any specific commitments 
under the GATS. Table IV.1 summarizes Annex I, wher e Nicaragua has reserved the right to maintain 
measures existing before the entry into force of the Agreement. 
                                                      
58 See WTO document MTN.GNS/W/120. The Sectors in which Nicaragua has made WTO GATS 
specific commitments are: (1) Busi ness Services, (2) Communication Services, (7) Financial Services, (9) 
Tourism and Travel-related Servi ces, and (11) Transport Services. 
59 See WTO document GATS/SC/63 and Suppl.1. 
60 See WTO document TN/S/O/NIC.  WT/REG267/1/Rev.1 
 Page 41 
 
 
  Table IV.1 
Non-conforming measures listed by Nicaragua in Annex I 
Sectora Obligations Coverage Description 
Regime on Free Zones and 
Regime on Active Improvement PR I -  Note : An enterprise authorized to  operate in a free zone may 
introduce up to 40% of its production by volume into Nicaragua after payment of du ties and taxes, depending on 
whether it falls under Category A (or "primera categoría"), B 
("segunda categoría"), or C ("tercera categoría"). 
- Note : Nicaragua commits to apply this measure consistent with 
its obligations under the WTO Agreement on Subsidies and 
Countervailing Measures. 
Private Security Services NT, LP CBTS -  Establishment requirement for enterprises. 
- Nationality requirement for Armed Guards. 
Electricity Distribution LP CBTS -  Registration requirement for enterprises. 
Services incidental to Mining – 
Hydrocarbons LP CBTS -  Registration requirement for enterprises (hydrocarbon 
exploration and testing services). 
- Appointment of a legal repres entative permanently domiciled 
in Nicaragua (conduct of studies, drafting of topographic maps, 
seismic or geochemical studies). 
Services incidental to Mining – 
Metallic and Non-Metallic 
Minerals LP CBTS -  Registration requirement for en terprises (to obtain concession 
for exploration for metallic and non-metallic minerals). 
- Residence requirement or appointment of a legal representative 
domiciled in Nicaragua. 
Fisheries and Services incidental 
to Fishing NT, PR, LP CBTS/I -  Registration and Licensing requirement for enterprises 
(processing, packing, and other services related to fishing). 
- Registration requirement for enterprises (processing and 
packing for export of fishing products captured in Nicaraguan 
territorial waters). 
- Nationality Requirement (artisan-type fishing as a family 
enterprise for subsistence) 
Professional Services NT, MFN, 
LP CBTS -  Reciprocity conditionality for natural persons (application and 
grant of a license or certificate necessary to practice a profession in the other Party. 
- Note : Nicaragua recognizes foreign licenses in cases when (a) 
course of study allowing the practice of a profession is not offered by a Nicaraguan academic institution; (b) holder of a 
license is a recognized expert in the profession; or (c) the 
recognition of the foreign license  will further the development 
of the profession in Nicaragua. 
Public Accounting and Auditing NT, LP CBTS -  Authorization requirement by  Nicaraguan public accounting 
firm or association. 
Professional Services – Notary 
Publics NT, MFN CBTS -  Nationality (by birth) requireme nt, and authorization by the 
Supreme Court of Justice (Public notaries to practice). 
- Note : Central American nationals (by birth) authorized to act as 
attorneys may obtain the authorization after residing at least 5 
years (provided they are allowe d to act as public notaries in 
their own countries and under reciprocity condition).  
Customs Brokers NT, MFN, 
LP CBTS -  Nationality requirement, or reciprocity granted (Customs 
brokers). 
- Registration requirement for enterp rises, and valid license for at 
least one official of the customs enterprise. 
Scientific Research Services LP CBTS -  Legal representative in Nicara gua during the entire time the 
research is conducted (to engage in scientific research 
activities). 
Development of Maps MA CBTS -  Note : (Exclusive) Access limited to  the "Instituto Nicaragüense 
de Estudios Territoriales" (developing, drafting, editing, and 
publishing of official regional, pr operty, urban, and rural maps, 
as well as thematic maps a nd hydrographical, nautical, and 
aeronautical charts of Nicaragua). 
Energy Services MA CBTS -  Note : (Exclusive) Access limited to the "Centro nacional de 
Despacho de Carga" (Electricity transmission services). 
Radio Broadcast, Free Television Reception NT CBTS/I -  Nationality requirement to be eligible for a license for 
operating free over the air tele vision and radio broadcast 
services ("medios de comunicación social"). 
- Minimum percentage of Nicaraguan nationals owning capital 
of enterprises (51%). 
Communication – Professional 
Radio and Television Broadcast 
Services NT, MFN CBTS - For enterprises supplying radio and television broadcast 
services, requirement to use only professional services of 
Nicaraguan nationals for narra tion, commentary, and live 
broadcast in sports or similar commercial programmes  
Table IV.1 (Cont'd) WT/REG267/1/Rev.1 
Page 42  
 
  Sectora Obligations Coverage Description 
   -  Note : Requirement not applicable if reciprocity is granted by 
the Chinese Taipei's law.  
- Note : Requirement not applicable to broadcast of programs 
when transmission is aimed exclusively at other countries. 
Public Communications Services MA CBTS -  Note : (Exclusive) Access limited to the "Correos de Nicaragua" 
(Issuance, finance, and marketing of postal stamps, as well as 
usage of franking machines and other analogous systems). 
Services Related to Construction NT, LP CBTS -  Registration requirement for enterprises. 
- Residence requirement for foreign national or legal 
representation in Nicaragua. 
Distribution of Fireworks, Firearms, and Munitions NT, LP CBTS -  Registration requirement for enterprises. 
- Residence requirement for foreign national. 
Portable Water, Sanitary Sewer 
Systems, and Sewage Collection and Disposal MA CBTS -  Note : (Exclusive) Access limited to the "Empresa Nicaragüense 
de Acueductos y Alcantarillados Sanitarios (ENACAL)" (Establishment, construction, and development of public works 
for the supply and distribution of  drinking water, and collecting 
and disposing of wastewater). 
Tourism – Hotels, Restaurants, 
Tour Guides, Car Rental, and 
Other Tourism Related Activities NT, LP CBTS -  Registration requirement for enterprises. 
- Residence requirement for foreign national or legal 
representation in Nicaragua. 
- Nationality requirement for Tour Guides 
Musicians and Artists NT, MFN CBTS -  Conditional requirement for fore ign artists to perform in 
Nicaragua. 
- Conditional requirement for selected foreigners to design and 
construct public, pictorial, or sc ulptural monuments erected in 
Nicaragua. 
Administration of Lotteries MA CBTS -  Note : (Exclusive) Access limited to the "Lotería Nacional", 
State-owned enterprise (Administration of lotteries, drawings, 
raffles, promotions, and games of chance for money or prizes). 
- Prior Authorization,  by "Lotería Nacional", requirement 
(Commercial promotion of the above activities). 
Land Transportation NT, MFN, 
LP CBTS -  Establishment requirement for enterprises (Point-to-point land 
transportation of cargo or pa ssengers within Nicaragua). 
- Establishment requirement for enterprise (Multimodal land 
transportation of cargo within Nicaragua). 
- Note : Requirement not applicable for international land 
transportation of cargo or passenge rs if reciprocity is granted 
by a specific agreement.   
- Nationality requirement for supplying collective land 
transportation services in the interior of Nicaragua. 
Maritime Transportation NT CBTS -  Registration requirement for enterprises or Nationality 
requirement for natural persons (operation as a shipping 
enterprise or as ship-owner; or  as a shipping agent, general 
shipping agent, or shipping consignment agent; or to obtain a route concession to engage in  maritime transportation). 
- Establishment requirement fo r enterprises (Cabotage). 
- Nationality requirement (Official pilots for any port in 
Nicaragua). 
Ports MA CBTS -  Note : (Exclusive) Access limited to "Empresa Portuaria 
nacional (EPN)" (Administration and operation of the existing 
ports of national interest: Corinto, Sandino, San Juan del Sur, Cabezas, El Rama, and El Bluff). 
Air Transportation – Repair and Maintenance Services, Specialty Air Services NT, MFN, 
LP CBTS -  Authorization (by the Dirección General de Aeronáutica Civil) 
requirement (specialty air services and aircraft repair services). 
- Registration requirement for enterprises or Nationality 
requirement for natural persons (private, for profit air services). 
- Nationality Requirement (Flight personnel who participate in 
aviation activities for agricultura l purposes, and Aircrafts used 
for such purposes must be licensed in Nicaragua) 
- Nationality Requirement (Tec hnical personnel engaged in 
remunerated repair and maintena nce services or speciality air 
services; Note : in absence of such personnel, authorization may 
be granted for foreigners by  the Dirección General de 
Aeronáutica Civil, with pref erence given to other Central 
American Parties' nationals) 
Table IV.1 (Cont'd)   WT/REG267/1/Rev.1 
 Page 43 
 
 
  Sectora Obligations Coverage Description 
Air Transportation NT, SMBD I -  Registration requirement for enterp rises (to be granted a license 
to engage in public air transportation services) 
- Minimum percentage of Nicara guan nationals having effective 
control of enterprises and be in Senior Management positions 
(51%). 
- Registration requirement for enterprises or Nationality 
requirement for natural persons (Remunerated private air transportation services). 
Airports MA CBTS -  Note: (Exclusive) Responsibility to the "Empresa 
Administradora de Aeropuertos Internacionales (EAAI)" (Establishment, operation, administration, carrying of works, 
and provision of services to international airports). 
 a Title of the Sector as i ndicated in the Agreement. 
Note: CBTS: Cross-border trade in services;  I: Investment;  LP: Local presence require ments;  PR: Performance requirements;  
NT: National treatment restriction;  MA: Market access restriction;  MFN: Most-f avoured-nation restriction; SMBD: Senior 
management and boards of directors restriction. 
 
Source : Annex I, the Free Trade Agreement between Nicaragua and Chinese Taipei. 
 
145. Table IV.2 summarizes Annex II, in which Nicar agua has reserved the right to adopt or 
maintain existing or future measures in the specific sectors, sub-sectors or activities listed.  Nicaragua 
registered,  inter alia , reservations applicable for all the sector s as well as to any measure it would take 
in favour of socially or economically disadvantaged  minorities and indigenous peoples.  In addition, 
Nicaragua reserved its rights to take any measure in some business services, communication services, and social services.
61  Nicaragua also reserved its rights to take any measure with respect to coastal 
lands, islands, and river banks in its possession.62 
Table IV.2 
Non-conforming measures listed by Nicaragua in Annex II 
Sectora Obligations Coverage Description 
All Sectors NT, SMBD I -  Any measure to limit transfer or di sposal of any interest held in 
an existing state enterprise, such that only a Nicaraguan 
national may receive such intere st (applies only to the initial 
transfer or disposal of such interest). 
- Any measure to limit the control of any new enterprise created 
by the transfer or disposal of  any interest (see above) through 
means other than limitations on the ownership of the interest.  
- Any measure related to the nationality of Senior management 
and members of the Board of directors in such new enterprise. 
All Sectors MFN CBTS/I -  Any measure according differentia l treatment to countries under 
any bilateral or multilateral intern ational agreement in force or 
signed prior  to the date of entry into  force of the Agreement (1 
January 2008). 
- Any measure according differentia l treatment to countries under 
any bilateral or multilateral intern ational agreement in force or 
signed after  the date of entry into force of the Agreement (1 
January 2008) involving: (a) avia tion, (b) fisheries, or (c) 
maritime matters, including salvage. 
Minority Affairs and Indigenous 
Peoples NT, MFN, 
LP, PR, 
SMBD CBTS/I -  Any measure granting rights or preferences to socially or 
economically disadvantages minor ities and indigenous peoples. 
Business services – Legal services NT, SMBD, 
LP CBTS/I -  Any measure relating to investment. 
Table IV.2 (Cont'd) 
                                                      
61 As summarized in Table IV.2, Nicaragua has made broad reservations in relation to legal services 
and television /radio broadcasting. 
62 The classification of sectors / sub-sectors register ed by Nicaragua in Annex I of the Agreement is 
however left to the Members appreciate. WT/REG267/1/Rev.1 
Page 44  
 
  Sectora Obligations Coverage Description 
Communications MFN CBTS/I -  Any measure that accords differen tial treatment to persons of 
other countries due to the applica tion of reciprocity measures or 
through international agreements involving sharing of the radio 
spectrum, guaranteeing market access, or national treatment (one-way satellite transmission of direct-to-home –DTH- and 
direct broadcasting satellite –DBS-television services and 
digital audio services). 
Communication services – Audiovisual services – Television broadcast transmission services 
and Radio Broadcast transmission 
services NT, MFN, 
LP, PR, 
SMBD CBTS/I -  Any measure on investment (television and radio broadcast 
transmission services). 
Coastal Lands, Islands, and River 
Banks (under Nicaraguan 
possession) NT I -  Any measure. 
Social services NT, MFN, 
LP, PR, 
SMBD CBTS/I -  Any measure (provision of law enforcement and correctional 
services, and the following services to the extent they are social 
services established or maintain ed for a public purpose: income 
security or insurance, social security or insurance, social 
welfare, public education, public training, health, and child 
care). 
 a Title of the Sector as i ndicated in the Agreement. 
Note: CBTS: Cross-border trade in services;  I: Investment;  LP: Local presence require ments;  PR: Performance requirements;  
NT: National treatment restriction;  SMBD: Senior management and boards of directors restriction. 
Source : Annex II, the Free Trade Agreement between Nicaragua and Chinese Taipei. 
 
146. In Nicaragua's GATS list of Article II (MFN) exemptions63 reservations are only made as 
regards the free transfer of capital, pursuant to its obligations in the Treaty on Central American 
Integration (CACM).64 
147. In the Agreement, Nicaragua listed exis ting non-conforming measures, and sectors, 
sub-sectors, or activities for which it may maintain  existing, or adopt new or more restrictive 
non-conforming measures which may derogate, inter alia , from the MFN principle. In addition to its 
GATS MFN exemptions, Nicaragua has also taken an MFN reservation for all sectors covering 
preferential treatment granted by Nicaragua as a result of an RTA in force or signed prior to 1 January 
2008.  Such derogations would mean that Nicaragua  could maintain or take a measure, which may 
introduce a preferential treatment in favour of services or service providers from non Parties to this Agreement. Nicaragua may also take any measure  that accords more favourable treatment to non-
Chinese Taipei service suppliers or investors u nder any bilateral or multilateral international 
agreement in force or signed after the date of entr y into force of the Agreement involving aviation, 
fisheries, or maritime matters, including salvage.  Nicaragua also introduced a Reciprocity 
conditionality in the context of some  professional services, with regard to the application for and grant 
of a license or a certificate necessary to practice a profession. 
(b) Chinese Taipei  
148. Chinese Taipei's WTO Schedule of specific commitments covers all the 11 general sectors 
defined in  the Services Sectoral Classification List .  Chinese Taipei scheduled horizontal limitations 
on market access relating to comme rcial presence, in particular in connection with portfolio 
investment in companies whose shares are listed in its securities market. Mode 4 is unbound except 
for measures concerning the conditional entry and tem porary stay of four categories of natural persons 
(business visitors, intra-corporate transferees, natural persons employed by business entities in 
Chinese Taipei, and persons who are employees of an  enterprise outside Chinese Taipei not having 
commercial presence in but having business relati ons with Chinese Taipei – provided certain 
                                                     
 
63 See WTO document GATS/EL/63. 
64 CACM signatories are: Guatemala, El Salv ador, Honduras, Costa Rica, and Nicaragua.  WT/REG267/1/Rev.1 
 Page 45 
 
 
  requirements are fulfilled).65  Horizontal limitations on national treatment by Chinese Taipei in its 
GATS Schedule of Specific Commitments refer to the acquisition of land (mode 3).  
149. In the context of the DDA negotiations, Chinese Taipei presented a revised conditional offer66 
in 2005. 
150. Chinese Taipei's commitments under the Agreemen t are based on a negative list. Table IV.3 
summarizes Annex I, where Chinese Taipei has r eserved the right to maintain measures existing 
before the entry into force of the Agreement.67 
Table IV.3 
Non-conforming measures listed by Chinese Taipei in Annex I 
Sectora Obligations Coverage Description 
All Sectors NT I -  Nationality requirement (Lease and transfer, or use as collateral, 
of land used for forests reserves, aquaculture, hunting reserves, 
desalination fields, mineral de posits areas, water resources, 
military purposes, and land adjacent to the national frontiers). 
- Reciprocity conditionality (acqui sition of land, provided that 
acquisition and use of land is c onsistent with the purposes and 
uses specified in Article 19 of  Chinese Taipei's Land Law, 
included restrictions of Article 17 of the same law). 
Business services – Placement 
and supply services of personnel LP CBTS -  Recognition requirement (F oreign employment service 
agencies). 
- Note : commercial presence possible to provide full employment 
services within Chinese Taipei , subject to authorization and 
according to the situation of domestic economy and 
employment market. 
Business services – Professional services MA, LP CBTS -  Local presence requirement (CPA certification services and 
taxation services, CPB bookkeep ing and taxation services, 
architectural services, profe ssional engineering services, 
veterinary services, notary and r eal estate professional services) 
- Note : Corporation type of commercial presence is not allowed 
except for real estate broking services and professional engineering services, where prof essional engineering consulting 
firm is applicable. 
Fisheries and Aquaculture NT CBTS/I -  Nationality requirement (Fishery persons). 
- Note : Particular foreigners ma y obtain approval to operate 
fishery in cooperation with the fishermen of Chinese Taipei. 
Agriculture, animal husbandry, 
forestry and loggings NT I -  Foreign investment prohibition (Forestry and loggings 
industries). 
- Restricted investment in: (i) agriculture (production on paddy 
rice, dryland food crops, special crops, vegetables, fruits, mushrooms, sugar-cane, flowers and other agricultural and 
horticultural products; and (ii) animal husbandry (rising of 
cattle, hogs, chickens, ducks, and other animal husbandry). 
Public utilities NT I -  Approval requirement by "Executive Yuan" (privately-owned 
utilities companies wanting to have foreign stockholder or 
mortgage their property to foreigners for funds). 
Water NT I - Approval requirement by "Executive Yuan" (acquisition of 
 water rights by foreigners). 
   -  Note: following waters exempt from water rights registration: 
(i) domestic use and livestock water consumption; (ii) pond digging on private land; (iii) well drilled on private land, 
provided that its water output yield is less than 100 litters per 
minute; or (iv) water drawn by  means of human power, animal 
power, or other simple means. Note : restrictions possible in case 
of interference with public water business or benefits from 
water use of others. 
Table IV.3 (Cont'd) 
                                                      
65 See WTO document GATS/SC/136/Rev.1. 
66 See WTO document TN/S/O/TPKM/Rev.1. 
67 Besides a limitation applicable to all sectors, on l ease and transfer of land used for certain purposes, 
which essentially replicates Chinese Taipei's MFN exemptions in the GATS, Chinese Taipei has listed 
limitations in: some business services;  communications services;  distribution services;  education;  health; and transport services (The classification of sectors / sub-sectors registered by Chinese Taipei in Annex I of the 
Agreement is however left to the Members). WT/REG267/1/Rev.1 
Page 46  
 
  Sectora Obligations Coverage Description 
Communications – 
Telecommunication services NT, SMBD, 
MA, LP I -  Nationality requirement (Chairman of the Board of a Type I 
telecommunications enterprise). Note : Type I 
telecommunications enterprise re fers to an enterprise that 
installs telecommunication m achinery and line facilities to 
provide telecommunications services (network transmission 
facilities connecting the sendi ng and receiving terminals, 
switching facilities installed as pa rt of the network transmission 
facilities and the auxiliary facilities thereof). 
- Direct and Indirect shareholdi ng percentage limitation (60% 
maximum adding direct and indirect shareholding). Note : 20% 
maximum in the case of "Chunghwa Telecom Co., Ltd". 
  CBTS -  Mandatory Cooperation contract (for foreign Mobile Satellite 
Service – MSS – operators) with a domestic operator of Satellite Communication Services or with and International 
Network Business of Fixed Network Telecommunications 
Services. Note : promotion of the MSS in Chinese Taipei 
through a domestic agent, which reports to MOTC for approval. Service contract with users mandatory. 
Communication services – Radio and television NT, PR, 
SMBD, LP I -  Foreign capital restrictions. 
- Minimum thresholds for domestically-produced programs 
(wireless radio and television a nd cable radio and television). 
- Nationality requirement (Chairman and at least 2/3 of Board of 
directors and supervisors of a company operating a cable radio and/or television system). 
  CBTS -  Branch office establishment requi rement (Satellite broadcasting 
business engaging in service operations or programme supply operations in Chinese Taipei) 
Education services NT, SMBD I -  Investment prohibition (Prima ry schools and junior high 
schools). 
- Nationality requirement, in princi ple (Chairman and at least 2/3 
of Board of trustees, and Presid ent / Principal of institutions 
providing senior high school edu cation, higher education, and 
adult education). 
Health related and social services – Hospital services SMBD, MA CBTS/I -  Establishment only by a non-profit institution. 
- Nationality requirement, in principl e (2/3 of Board of trustees). 
Tourism and travel related 
services – Tourist guide services MA CBTS -  Employment by travel agencies and tour operators, or 
temporary employment by government agencies required 
(Tourist guides). 
Transport services – Internal waterway transport, cabotage and 
pilotage NT, SMBD I -  Foreign investment limitations – maximum thresholds (0% for 
unlimited companies; 1/3 for the equity for a limited company 
or a company limited by shares). 
- Nationality requirement (Represe ntative Director/Chairman and 
at least 2/3 of Board of directors). 
  CBTS -  Prohibition to navigate between Chinese Taipei's ports 
(transport of passengers and cargos), except is franchise is granted. 
- Nationality requirement (Pilot). 
- Prohibition to stay in any harbour or port other than those 
announced by Chinese Taipei as international ports (Ships), 
except is specially approved by Chinese Taipei's government or 
for seeking shelter. 
Transport services – International 
maritime transport services NT, SMBD I -  Foreign investment limitations – maximum thresholds (0% for 
unlimited companies; ½ of the equity for a limited company or 
a company limited by shares). 
- Nationality requirement (Representative Director of a limited 
company; or Chairman and at least ½ of the Board of directors 
of a company limited by shares). 
Transport services – Road 
transport services NT I -  Foreign investment prohibition, al so applicable to investment 
by unincorporated legal entities (Automobile transportation). 
- Approval, by the central highway authority, requirement (car 
rental transportation and freight transportation). 
Transport services – Air transport services NT, SMBD I - Foreign investment limitations – maximum thresholds (0% for 
unlimited companies; 1/3 of the equity for a limited company or a company limited by shares) (Civil Air Transport 
Enterprises or Specialty Air Service Companies) 
Table IV.3 (Cont'd)   WT/REG267/1/Rev.1 
 Page 47 
 
 
  Sectora Obligations Coverage Description 
   Nationality requirement (Chairman/Representative Director 
and at least 2/3 of Board of directors of a limited company; or 
Chairman/Representative Director and at least 2/3 of Board of 
directors of a company limited by shares) (Civil Air Transport Enterprises or Specialty Air Service Companies) 
    -  Foreign investment limitations – maximum thresholds (0% for 
unlimited companies; 1/2 of the equity for a limited company or a company limited by shares) (Airport ground handling or 
catering) 
- Nationality requirement (Chairma n/Representative Director and 
at least 1/2 of Board of directors of a limited company; or 
Chairman/Representative Director and at least 1/2 of Board of 
directors of a company limited by shares) (Airport ground handling or catering) 
  CBTS -  Only Chinese Taipei's aircraft s (general domestic aviation 
services). 
Transport services – Airfield 
management and operation NT I -  Foreign investment limitations – maximum thresholds (0% for 
unlimited companies; 1/2 of the equity for a limited company 
or a company limited by shares) (Establishment of airfield by legal persons) 
- Nationality requirement (Chairma n/Representative Director and 
at least 2/3 of Board of directors of a limited company; or 
Chairman/Representative Director and at least 2/3 of Board of directors of a company limited by shares) (Airfield 
management and operation) 
- Nationality requirement (Managers and operators of airfield). 
Transport services – Air transport 
auxiliary services NT CBTS -  Nationality requirement (Aircraft pilot, and other aeronautical 
technical personnel, such as flight mechanic, ground mechanic, 
air traffic controller, technicians employed by an aircraft maintenance facility and aircraft dispatcher), unless exclusively 
permitted by MOTC in accordance with relevant regulations. 
Airport operation and 
management MA CBTS -  Note : according to the Civil Aviation Law, only state, county 
and city governments allowed to establish and operate airports, 
including the air traffic control services. 
Mining NT I -  Nationality requirement, for natu ral or legal persons (Mining 
concessions). 
Postal and courier services MA CBTS -  (Exclusive) Access limited to "Chunghwa Post Company 
Limited" (Business of forwarding letters, postal cards, or other 
papers having the nature of correspondence). 
Water supply MA CBTS -  (Exclusive) Access limited to "T aiwan Water Corporation" and 
"Taipei Water Department" (Business of water supply). 
Public Welfare Lottery NT, MA CBTS -  Note : the Issuing Institute of the Public Welfare Lottery shall 
be appointed by the Competent Authority. 
 a Title of the Sector as i ndicated in the Agreement. 
Note: CBTS: Cross-border trade in services;  I: Investment;  LP: Local presence require ments;  PR: Performance requirements;  
NT: National treatment restriction;  MA: Market access restriction;  MFN: Most-f avoured-nation restriction; SMBD: Senior 
management and boards of directors restriction. 
 
Source : Annex I, the Free Trade Agreement between Nicaragua and Chinese Taipei. 
 
151. Table IV.4 summarizes Annex II, in which Chinese Taipei has reserved the right to adopt or 
maintain existing or future measure s in the specific sectors, sub-se ctors or activities listed.  Chinese 
Taipei registered, inter alia , reservations for all sectors as well as a reservation applicable to any 
measure it would take in favour of socially or economically disadvantaged minorities and/or native 
populations.  In addition, it reserved its rights to take any measure, inter alia , in some business 
services – in particular legal services, communi cation services – essentially in the audiovisual 
services, private security services, construction servi ces, games of luck and chance-related activities, 
and social services.68 
 
  
                                                     
 
68 The classification of sectors / su b-sectors registered by Chinese Ta ipei in Annex I of the Agreement 
is however left to the Members appreciate. WT/REG267/1/Rev.1 
Page 48  
 
  Table IV.4 
Non-conforming measures listed by Chinese Taipei in Annex II 
Sectora Obligations Coverage Description 
All Sectors MFN CBTS/I -  Any measure granting differential treatment to countries under 
any bilateral or multilateral intern ational agreements in force or 
signed prior  to the date of entry in to force of the Agreement 
(1.1.2008). 
- Any measure granting differential treatment to countries under 
any bilateral or multilateral intern ational agreements in force or 
signed after  to the date of entry in to force of the Agreement 
(1.1.2008), involving: (i) aviation;  (ii) fisheries; or (iii) 
maritime affairs, including salvage. 
- Note : Present or future programme of international cooperation 
to promote economic development are excluded from the coverage of national treatment and local presence requirement 
provisions (Articles 10.04 and 11.03 of the Agreement). 
Issues related to native 
populations NT, MFN, 
LP, PR, 
SMBD CBTS/I -  Any measure denying to foreign investors and their investment 
or to foreign service suppliers any rights or preferences granted 
to native populations. 
Issues related to minorities NT, MFN, 
LP, PR, 
SMBD CBTS/I -  Any measure with respect to th e rights or preferences granted 
to minorities with social or economical disadvantages. 
Business services – Legal services NT, SMBD, 
LP CBTS/I -  Any measure relating to investment in, or provision of legal 
services. 
- Note : the general prohibition above does not apply to 
investment in or services provide d by attorney of foreign legal 
affairs (AFLA) and foreign legal assistants or consultants, as defined in Annex II of Chinese Taipei (limitations / 
requirements on (i) scope of th e service; (ii) qualification 
requirement for AFLA recognition; (iii) establishment of partnership with or employment of licensed lawyer of Chinese 
Taipei; (iv) study and experience qualifications for assistants or 
consultants; and (v) registration with the Bar Association in the locality where the law office is located after the recognition as 
AFLA. 
Communication services – Audiovisual services – Television 
broadcast transmission services and Radio broadcast transmission 
services NT, MFN, 
LP, PR, 
SMBD CBTS/I -  Any measure relating to investment in, or the provision of 
television and radio broadcast transmission services 
Games of luck and chance MA CBTS -  (Exclusive) Access limited to th e state (Operation of games of 
luck and chance) 
Private security services NT, LP CBTS -  Incorporation requirement for enterprises (operation of a 
private security guard company). 
- Nationality and Residence requirements (Natural persons 
serving as armed guards). 
Social services NT, MFN, 
LP, PR, 
SMBD CBTS/I -  Any Measure (provision of law enforcement and correctional 
services, and – to the extent they  are social services established 
or maintained for a public purpose -: (i) income security or insurance, (ii) social security or  insurance, (iii) social welfare, 
(iv) public education, (v) public training, (vi) health, and (vii) 
child care. 
Construction services NT, LP CBTS -  Any measure (provision of rendering of cross-border services 
from Nicaragua into Chin ese Taipei's territory). 
 
a Title of the Sector as i ndicated in the Agreement. 
Note: CBTS: Cross-border trade in services;  I: Investment;  LP: Local presence require ments;  PR: Performance requirements;  
NT: National treatment restriction;  MA: Market access restriction;  MFN: Most-f avoured-nation restriction; SMBD: Senior 
management and boards of directors restriction. 
 
Source : Annex II, the Free Trade Agreement between Nicaragua and Chinese Taipei. 
 
152. In connection with the implementation of its MFN obligations, Chinese Taipei had registered, 
in its list of GATS Article II (MFN) exemptions69, MFN treatment exemptions concerning the 
acquisition of land and air transport services, which are to be regulated on the basis of reciprocal 
treatment and/or bilateral arrangements. 
                                                      
69 See WTO document GATS/EL/136.  WT/REG267/1/Rev.1 
 Page 49 
 
 
  153. In the Agreement, Chinese Taipei, as di d Nicaragua, listed existing non-conforming 
measures, and sectors, sub-sectors, or activities for which it may maintain existing, or adopt new or 
more restrictive non-conforming measures which may derogate, inter alia , from the MFN principle. 
In addition to its GATS MFN exemptions, Chinese Ta ipei has also taken an MFN reservation for all 
sectors covering preferential treatment granted by Chinese Taipei as a result of  an RTA in force or 
signed prior to 1 January 2008.  Su ch derogations would mean that Chinese Taipei could maintain or 
take measures in the identified area, which may intr oduce preferential treatment in favour of services 
or service providers from non Parties. Chinese Taipei may also take any meas ure that accords more 
favourable treatment to non-Nicaraguan service s uppliers or investors under any bilateral or 
multilateral international agreement in force or si gned after the date of entry into force of the 
Agreement involving aviation, fisheries, or mar itime matters, including salvage.  Moreover, Chinese 
Taipei introduced a Reciprocity conditionalit y in the context of acquisition of land.  
E. SECTOR SPECIFIC PROVISIONS ON TRADE IN SERVICES  
1. Telecommunication services 
154. Nicaragua was not a signatory to the Fourth Pr otocol on basic telecommunication. It however 
has included some specific commitments on Telecommunication services in its Schedule of Specific 
Commitments, essentially on modes 1 and 3. For Nicaragua, commitments undertaken under Chapter 13 of the Agreement go further than those made under GATS. Chinese Taipei had, on its side undertaken Specific Commitments both for Basic Telecommunication services and for Value-added 
Telecommunication services in the context of its accession to the WTO and the commitments 
undertaken under Chapter 13 of the Agreement essentially matches them.   
155. Chapter 13 of the Agreement contains specific provisions on the provision of 
telecommunication services.
70  The Chapter ensures that all service suppliers of the other Party have 
access to and can use public telecommunications ser vices offered in Party's territory or across its 
borders on reasonable and non-discriminatory terms a nd conditions.  The Agreement covers measures 
adopted or maintained by the Parties relating to  access to and use of public telecommunications 
services (Article 13.02), and obligations relating to  suppliers of public telecommunications services71 
(Article 13.03).  Chapter 13 also contains additiona l obligations relating to major suppliers of public 
telecommunication services72 (Article 13.04) and limitations on the conditions Parties may introduce 
for the supply of information services (Article 13.05 ).  The Agreement sets a number of disciplines 
applicable to independent regulatory bodies and government-owned telecommunication suppliers 
(Article 13.06), related with the administration of  any universal service obligations (Article 13.07), 
and/or when requiring a license, concession, permit,  registration or other types of authorization 
(Article 13.08). Also contained in Chapter 13 are; rules on the allocation and use of scarce resources 
(Article 13.09); enforcement of the Party's ob ligations under the Agre ement (Article 13.10); 
telecommunication-specific transparency obligations (Article 13.12);  flexibility in the choice of 
technologies (Article 13.13); forbearance from applying a regulation to public telecommunications 
service (Article 13.14); standard s-related measures (Article 13. 15); and technical cooperation 
consultations with a view to further liberalization of trade in telecommunications services 
                                                      
70 In the event of any inconsistency between this Chapter and another Chapter of the Agreement, the 
Chapter on telecommunication services preva ils to the extent of the inconsistency. 
71 The following matters are covered by the disciplines contained in the Agreement: (i) interconnection, 
(ii) resale, (iii) number portab ility, and (iv) dialling parity. 
72 The following matters are covered by the discip lines contained in the Agreement: (i) treatment by 
major suppliers, (ii) competitive sa feguards, (iii) resale, (iv) unbundling of network elements, (v) 
interconnection, (vi) provisioning and pr icing of leased circuits services, (vii) co-location, and (viii) access to 
rights-of-way. WT/REG267/1/Rev.1 
Page 50  
 
  (Article 13.16). Recourse to a mechanism of reso lution of domestic telecommunications disputes is 
defined in Article 13.11, further to the Agre ement's specific dispute settlement mechanism.
73  
2. Financial services 
156. Chapter 12 on financial services applies to measu res adopted or maintained by Nicaragua and 
Chinese Taipei relating to (i) financial institution of th e Parties, (ii) investors of the other Party, and 
investments of such investors, in financial institutio ns in Nicaragua or Chinese Taipei, and (iii) cross-
border trade in financial services.   
157. The disciplines on financial services, contained in Chapter 12, incorporate some provisions of 
the Agreement contained in Chapters 10 (Investment)74 and 11 (Cross-border trade in services).75 
158. Chapter 12 does not apply either to measures rela ting to activities or services forming part of 
a public retirement plan or statutory system of social security, or activities or services conducted for 
the account or with the guarantee or using the fina ncial resources of the Party, including its public 
entities.  However, if a Party allows any of these ac tivities or services to be provided by its financial 
institutions in competition with a public entity or a financial institution, Chapter 12 would then apply. 
159. The financial services-specific provisions cont ained in Chapter 12 prevail upon the provisions 
of the other Chapters of the Agreement, except when an express remission is made in Chapter 12. 
160. The key obligations of the Chapter are na tional treatment (Art. 12.02), MFN treatment 
(Art. 12.03), market access for financial institutions  (Art. 12.04) and cross-border trade (Art. 12.05), 
as well as obligations with respect to senior ma nagement and boards of directors (Art. 12.08).  
161. 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 financial institutions and investments in financia l institutions in its territory.  A Party shall accord 
to cross-border financial services suppliers of the other Party, treatment no less favourable than it 
accords to its own financial services suppliers, in like circumstances, with respect to the supply of the 
relevant service (which are identified in Annex 12 .05.1 of the Agreement).  Similarly, national 
treatment is granted by a Party to financial institutio ns of the other Party as well as to investments of 
investors of the other Party in financial instituti ons with respect to the establishment, acquisition, 
expansion, management, conduct, operation, and sale or other disposition of financial institutions and 
investments (Article 12.02). 
162. 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.   The Parties may recognize prudential measures, 
whether such prudential measures (of the other Party or of a non-Party in the application of measures 
covered by Chapter 12) are recognized unilatera lly, achieved through harmonization based upon an 
                                                      
73 In particular, Parties  shall ensure: (i) recourse to telecommunications regulatory bodies, (ii) 
reconsideration of a determination of decision of a teleco mmunications regulatory body, and (iii) judicial review 
of a determination or decision by an independent judicial authority. 
74 Disciplines on Expropriation and Compensation (Article 10.07), Transf ers (Article 10.08), 
Investment and Environment (Article 10.11), Denial of Benefits (Article 10.12), and Special Formalities and 
Information Requirements (Article 10.14) are incorporat ed into, and form part of Chapter 12. Moreover, the 
provisions on Investor-State Dispute Settlement (Section B of Chapter 10) are also incorporated into Chapter 12 
solely for claims related with the implementation of Articles 10.07, 10.08, 10.12 and/or 10.14. 
75 Disciplines on Denial of Benefits (Article 11.13) are incorporated into, and form part of Chapter 12. 
Moreover, the provisions on Transfers an d Payments (Article 11.11) are also incorporated into, and form part of 
Chapter 12, to the extent that cross-border trade in financial services is subject to obligations pursuant to 
Article 12.05 (Cross-border trade).  WT/REG267/1/Rev.1 
 Page 51 
 
 
  agreement/arrangement.  When recognition is gran ted to a non-Party, the recognizing Party must 
provide adequate opportunity to the other Part y to negotiate accession to the recognition scheme 
(Article 12.03). 
163. Market access is granted, without quantitative restrictions76, to a financial institution of the 
other Party.  "Financial institution" means any fina ncial intermediary or other enterprise that is 
authorized to do business and regulated or supervis ed as a financial institution under the law of the 
Party in whose territory it is located.77  The Agreement prohibits the Parties from restricting or 
requiring specific types of legal entity or joint ventures through which a financial institution may 
supply a service (Article 12.04). 
164. Cross-border trade  of financial services is governed by  Article 12.05. According to the 
Agreement, Nicaragua and Chinese Taipei shall pe rmit, consistent with national treatment, cross-
border financial service suppliers of the other pa rty to supply the financial services they have 
identified in Annex 12.05.1.  In addition, Nicara gua and Chinese Taipei shall permit persons located 
in their territories, and their nationals wherever  located, to purchase financial services from cross-
border financial service suppliers of the other Party also located in that Party.  Registration of cross-
border financial service suppliers may be required.  Annex 12.05.1 contains the cross-border financial 
services identified by Nicaragua (in Section A), and by Chinese Taipei (in Section B). While both Parties have identified the same coverage for insurance and insurance-related services
78, insurance is 
excluded by Nicaragua from cove red banking and other financial services and included by Chinese 
Taipei. For Nicaragua, Article 12.05.1 applies with r espect to (a) provision and transfer of financial 
information, and (b) financial data processing.  More over, the covered financial services are subject to 
prior authorization from the relevant regulator, as required.  For Chinese Taipei, Article 12.05.1 
applies with respect to the provision and transf er of financial informa tion and financial data 
processing and related software. 
165. Senior management and boards of directors ob ligations provide that a Party may not require 
that a financial institution of the other Party engag es individuals of any particular nationality as senior 
managerial or other essential personnel.  In additi on, neither Party may require that more than a 
minority of the board of directors of a financial ins titution of the other Party be composed of nationals 
of the Party, persons residing in the territory of th e Party, or a combination thereof (Article 12.08).   
The above-mentioned obligations however do not ap ply for non-conforming measures, as defined in 
Art. 12.09, which must be read with the me asures scheduled by the Parties in Annex III.79   
166. Annex 12.09.2 sets out certain specific commitme nts by Nicaragua and Chinese Taipei.  For 
expedited availability of insurance, Nicaragua  and Chinese Taipei made a best endeavour 
                                                      
76 Quantitative restrictions apply to the number of financial institutions, the total value of financial 
service transactions or assets, the total number of financial service operations or on the total quantity of financial 
services output, or on the total number of natural persons that may be employed in a particular financial service sector. 
77 For the purpose of Article 12.04, "financial in stitutions of the other Party" includes financial 
institutions that investors of the other Party seek  to establish in the territory of the Party. 
78 Article 12.05.1 applies to the supply of a financial service from the territory of one Party into the 
territory of the other Party with respect to: (a) risk insurance for maritime shipping, commercial aviation, and 
space launching and freight - with so me limitation on coverage - as we ll as risk insurance for goods in 
international transit; (b) reinsurance and retrocession; (c ) brokerage of insurance risks relating to the scope of 
the risk insurance; and (d) services auxiliary to insuran ce – such as consultancy, actuarial, risk assessment, and 
claim settlement services. 
79 Non-conforming measures taken at the local level of government do not need to be listed in Annex 
III to be excluded from the obligations in Art. 12.02-12.05 and 12.08. WT/REG267/1/Rev.1 
Page 52  
 
  commitment with regards to certain policies or procedures.
80  In addition, Chinese Taipei will require 
prior product approval for the introduction of a new insurance product.  For insurance branching and 
insurance market access81, Nicaragua committed to allow, after a four-year transitional period, 
insurance suppliers from Chinese Ta ipei to establish in Nicaragua through branches, reserving the 
possibility for Nicaragua to regulate such branches.  In relation with banking services, Chinese Taipei 
will not require Nicaraguan banks, applying for ap proval to establish branches, offshore banking 
branches and representative offices, to meet the ba nk rankings and prior business volume specified in 
the Regulations Governing Foreign Bank Branches and Representative Offices and the 
Implementation of the Offshore Banking Act.  Fina lly, for cross-border trade in financial services, 
Chinese Taipei will, if it gives bette r market access than in the Agreem ent in any cross-border trade in 
financial services to another country, gr ant the same access to Nicaragua.  
167. Annex 12.09.3 sets out supplementary informa tion regarding certain aspects of financial 
services measures. The Parties indicate that the descriptive and explanatory information regarding 
certain aspects of their financial services measures , contained in this Annex, were provided for 
purposes of transparency. 
168. In addition, non-conforming measures set out in a Party's Schedule to Annexes I or II, such as 
those applying to all sectors, shall also be deem ed to be reservations to the corresponding disciplines 
under Chapter 12.82 
169. Table IV.5 summarizes Annex III-types of reservations by Nicaragua. 
Table IV.5 
Non-conforming measures listed by Nicaragua in Annex III 
Sector Obligations Description 
Section A 
Financial services – Banking NT, MA Bank Branches : The capital that banks established in foreign countries assign to their 
branches in Nicaragua must be effectively paid and deposited in Nicaragua. Based on 
such capital, the branch will be able to grant loans. A branch of a bank established 
under the laws of a foreign country, is not allowed to grant loans based on the capital 
and reserves of its headquarters. 
Financial services – Non-banking financial institutions and other financial services 
(excluding insurance) NT, MA Non-banking branches
: The capital that non-banking financial institution established 
in foreign countries assign to their branches  in Nicaragua must be effectively paid 
and deposited in Nicaragua. A branch of such a non-banking institution that accept 
deposits from the public is not allowed to grant loans based on the capital and 
reserves of its headquarters. 
Financial services – Insurance MA, CBTS, 
SMBD - Insurance and reinsurance activities may onl y be practiced by juridical persons 
constituted and domiciled in Nicaragua in  the form of pub lic corporations 
(sociedades anónimas ), or by an autonomous State entity authorized by its 
constitutive law. 
- natural or juridical persons domicile d in Nicaragua are prohibited from 
contracting for insurance with institutions  not duly authorized to operate in the 
country. 
- Agencies or branches of insurances co mpanies established in foreign countries 
are prohibited to operate in Nicaragua. 
- Members of the Board of Directors of an insurance company must be resident of 
Nicaragua. 
- Insurance companies cannot retain net premiums issued for an amount three 
times superior than its capital. 
                                                      
80 Such as: not requiring product approval for insurance other than sold to individuals or compulsory 
insurance; allowing introduction of products unless those products are disapproved within a reasonable period of 
time; and not imposing limitations on the number or frequency of product introductions. 
81 Excluding financial conglomerates and social services. 
82 In other words, non-conforming measures related to financial services, such as those applying to all 
sectors, and listed in Annex I or II (i n relation with cross-border trade in services or with investment) are also 
non-conforming in the context of the implementation of the disciplines on financial services.  Consequently, financial services-specific disciplines on national treatment (Article 12.02), MFN treatment (12.03), and market 
access for financial institutions (Artic le 12.04) do not apply to them.  WT/REG267/1/Rev.1 
 Page 53 
 
 
  Sector Obligations Description 
Section B 
Financial services – All sub 
sectors other than banking and 
insurance MA -  Any measure requiring the incorporation in  Nicaragua of financial institutions 
organized under the laws of a foreign c ountry, excluding those seeking to operate 
as banks or insurance companies within Nicaragua. 
Financial services NT -  Any measure taking the form of a grant of benefits to financial institutions or 
public entities wholly or majority owned by the State that supply financial 
services and are established with a public interest purpose, including but not limited to agriculture production fina nce, housing credits for low income 
families, and credits for small and midsize enterprises. 
- Such benefits shall not disadvantage the core operations of commercial 
competitors and shall include, but are not limited to: extension of State 
guarantees, tax exemptions, exceptions to the usual juridical form requirements, 
and the legal requirements to begin operations. 
Financial services – Pension 
funds and collective 
investment schemes NT, MA, 
CBTS, 
SMBD - Any measure and legislation regulating the establishment, functioning, and 
characteristics of Pension Funds and Coll ective Investment Schemes, as well as 
the entities that manage such funds and schemes. 
Note: CBTS:  Cross-border trade in services ;  I: Investment;  LP: Local presence requi rements;  PR: Performance requirements;  
NT: National treatment restriction;  MA: Market access restric tion;  MFN: Most-favoured-nati on restriction;  SMBD: Senior 
management and boards of directors restriction. 
 
Source : Annex III, the Free Trade Agreement be tween Nicaragua and Chinese Taipei. 
 
170. Table IV.6 summarizes Annex III-types of r eservations registered by Chinese Taipei.  
Table IV.6 
Non-conforming measures listed by Chinese Taipei in Annex III 
Sector Obligations Description 
Section A 
Financial services- Banking NT, MA Bank Branches : The capital that foreign banks assi gn to their bran ches in Chinese 
Taipei must be effectively paid and deposite d in Chinese Taipei. A branch of a bank 
of a foreign country, established unde r the Banking Act and the Regulations 
Governing Foreign Bank Branches and Repr esentative Offices of Chinese Taipei, 
will be able to grant loans on the total net worth of the pare nt bank rather than that of 
the branch in Ch inese Taipei.  
Financial services – Insurance 
and insurance related services NT, MA foreign insurance enterprises applying for approval to establish branch offices in 
Chinese Taipei are required to meet the following requirement: - to set aside a minimum working capital; and  
- to post a bond at national treasury in Chinese Taipei. 
Financial services – Banking 
and other financial services 
(excluding insurance, 
securities and futures) NT, MA Foreign bank branches and offshore banking branches : The capital that banks 
established in foreign countries assign to their branches and offshore banking 
branches in Chinese Taipei must be effectively paid and deposited in Chinese Taipei. 
Financial services – Insurance, 
Banking and other financial 
services (excluding insurance) CBTS Financial services providers may not c onduct business in Chinese Taipei without a 
proper business licence, except: 
- provision and transfer of financial inform ation, and financial data processing and 
related software; 
- reinsurance and retrocession services  and insurance auxiliary services; 
- direct insurance and insurance broker se rvices on: (i) international maritime 
shipping and commercial aviation, and ( ii) goods in international transit; or 
- other activities as approved by the govern ing authority from time to time. 
Any entity or person located in Chinese Taipei is allowed to consume financial 
services abroad, except: 
- direct insurance services, excludi ng individual life insurance; or 
- insurance intermediation services. 
Section B 
Financial services NT -  Any measure granting benefits to financ ial institutions or public entities wholly 
or majority owned by the State that suppl y financial services and are established 
with a public interest purpose, including but not limited to ag riculture production 
finance, housing credits for low income  families, and cred its for small and 
midsize enterprise. 
- Such benefits shall not disadvantage the core operations of commercial 
competitors and include, but are not limite d to: extension of state guarantees, tax 
exemptions, exceptions to the usual juri dical form requirements, and the legal 
requirements to begin operations. 
Note: CBTS: Cross-border trade in services;  I: Investment;  LP: Local presence require ments;  PR: Performance requirements;  
NT: National treatment restriction;  MA: Market access restriction;  MFN: Most-f avoured-nation restriction; SMBD: Senior 
management and boards of directors restriction. 
Source : Annex III, the Free Trade Agreement be tween Nicaragua and Chinese Taipei. WT/REG267/1/Rev.1 
Page 54  
 
  171. Chapter 12 also contains disciplines on new fi nancial services (Art. 12.06), treatment of 
certain information (Art. 12.07), transparency ( 12.11), self-regulatory organisations (Art. 12.12), 
payment and clearing systems (Art. 12.13), domestic  regulation (12.14), expedited availability of 
insurance services (Article 12.15).  
172. Exceptions related to the provision of financ ial services are contained in Article 12.10. 
Nicaragua and Chinese Taipei may adopt or  maintain measures for prudential reasons
83, including for 
the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by 
a financial institution or cross-border financial service  supplier, or to ensure the integrity and stability 
of the financial system. Prudential measures shall not be used as a means of avoiding the Party's 
commitments or obligations. Parties may, cond itionally, apply non-discriminatory measures of 
general application in pursuit of monetary and re lated credit policies or exchange rate policies. 
Nothing in Chapter 12 shall be construed to preven t the adoption or enforcement by Nicaragua or by 
Chinese Taipei of measures necessary to secure compliance with laws or regulations that are not inconsistent with Chapter 12. Such measures may in clude those relating to the prevention of deceptive 
and fraudulent practices or to deal with the effects of a default on financial services contracts, 
provided that such measures are not applied in an ar bitrary or unjustifiably discriminatory manner, or 
would constitute a disguised restriction on investment in financial institutions or cross-border trade in 
financial services.  
173. Chapter 12 establishes modified rules and pro cedures for financial services-related Dispute 
Settlement (Art. 12.18)
84 by referring to the dispute settlement  mechanism covering the Agreement in 
Chapter 22 while introducing a few modifications speci fically applicable for disputes with respect to 
financial services. A specific procedure is set up for addressing investment disputes in financial 
services (Art. 12.19).  
174. The promotion of cooperation between supervis ing and regulatory authorities is addressed in 
Article 12.20.  
3. Electronic Commerce 
175. The Agreement addresses electronic commerce in Chapter 14.  The disciplines on electronic 
commerce cover essentially trade of digital products85 by electronic transmission (Article 14.03).  
176. The Parties commit not to impose customs duties,  fees, or other charges on or in connection 
with the import or export of digital products by el ectronic transmission.  For the determination of the 
applicable customs duties, each Party shall dete rmine the customs value of an imported carrier 
medium bearing a digital product based on the cost or value of the carrier medium alone, without 
regard to the cost or value of the digital product stored in the carrier medium.  Non-discrimination 
shall apply to like digital products transmitted electronically, irrespective of, inter alia , the nationality 
of the author, performer, producer, developer, or dist ributor of the product. This obligation is subject 
to non conforming measures set out in the Agreement, including those on cross-border services and investment which may be applicable to it. Chap ter 14 also contains transparency and cooperation 
provisions. 
 
                                                     
 
83 In the Agreement, it is understood that the term "prudential reasons" includes the maintenance of the 
safety, soundness, integrity, or financial responsibility of individual financial institutions or cross-border 
financial service suppliers. 
84 See also the provision on Consultations (Article 12.17). 
85 In the Agreement, "digital products" means computer programmes, text, video, images, sound 
recordings, and other products that are digitally encoded. "Digital products" do not include digitized 
representations of financial instruments.  WT/REG267/1/Rev.1 
 Page 55 
 
 
  F. REGULATORY PROVISIONS ON TRADE IN SERVICES  
1. Domestic regulation 
177. Article 11.09 on domestic regulation contains di sciplines applicable when an authorization is 
required for the supply of a service. Moreover, w ith respect to measures relating to qualification 
requirements and procedures, technical standards,  and licensing requirements, the Parties shall 
endeavour to ensure that these measures do not c onstitute unnecessary barriers to trade, including by 
ensuring that they are based on objective and tr ansparent criteria, not more burdensome than 
necessary to ensure the quality of the service, a nd, in the case of licensing procedures, not in 
themselves a restriction on the supply of a service. 
178. The Parties must also ensure that, when aut horization is required for the supply of services, 
applicants be informed of the decision within a reasonable time after the application has been 
submitted.  In addition to the general disciplines on transparency in Chapter 20 of the Agreement, 
Article 11.08 contains rules on the establishmen t of appropriate mechanisms for responding to 
inquiries from interested persons regarding the Partie s' regulations in trade in services and investment. 
179. The Parties will review any development relate d to Art. VI:4 of the GATS negotiations, and 
would, as appropriate, incorporate these results into the Agreement. 
2. Recognition 
180. A Party may recognise the education or experience obtained, requirements met, or licences or 
certifications granted in a particular country.  In  such a case, the Party is not bound to accord this 
treatment to the other Party, but shall provide the other Party adequate opportunity to demonstrate that 
the education or experience obtained, requirements met, or licences or certifications granted in the 
other Party should also be recognized.  A Party sha ll also afford adequate opportunity to the other 
Party to negotiate its accession to mutual rec ognition agreements or arrangements (Art. 11.10).  
181. As to recognition of qualifications or registrati on/licensing of professionals in the other Party, 
Annex 11.10 on professional services is designed to en courage the Parties' relevant bodies to develop 
mutually acceptable standards and criteria for licensing and certification of professional service 
supplier and to provide recommendations on mutual recognition to the Free Trade Commission 
established by the Agreement.  A list of matters with  regard to which such standards and criteria may 
be developed is in Annex 11.10.  Moreover, where th e Parties agree, they shall encourage the relevant 
bodies in their territories to develop procedures fo r the temporary licensing of professional service 
suppliers of the other Party.  The implementation of  Annex 11.10 is to be reviewed by the Free Trade 
Commission at least once every three years. 
G. SAFEGUARD ACTIONS ON SERV ICES AND INVESTMENT  
182. Besides the general provision on safeguard measu res in case of financial or balance of 
payment difficulties (see below), which applies to tr ade in goods and trade in services, the Agreement 
does not contain any specific disciplines on saf eguard actions on services and investment. 
1. Safeguard measures in case of financial or balance of payments difficulties  
183. With regard to Restrictions to Safeguard the Balance of Payments, Article 23.04 of the 
Agreement contains disciplines on the use of measures that restrict trade of services, transfers or both, 
where the Party experiences financial or balance of pa yments difficulties or threat thereof.  Article XII 
of GATS is incorporated into and made part of the Agreement.  
 WT/REG267/1/Rev.1 
Page 56  
 
  V. GENERAL PROVISIONS OF THE AGREEMENT 
A. T
RANSPARENCY  
184. Section A of Chapter 20 of the Agreement contai ns horizontal transparency provisions, while 
a number of Chapters have specific transparency  provisions.  Chapter 20 requires the Parties to 
designate contact points to facilitate communicati ons between them on any matter covered by the 
Agreement (Article 20.01).86  Publication and notification and pr ovision of information obligations 
are contained in Articles 20.02 and 20.03. Section A also contains provisions on Administrative Proceedings (Article 20.04) and on Reviews and Appeals (Article 20. 04) similar to the corresponding 
provisions in the relevant WTO Agreements. 
185. Article 23.05 stresses that nothing in the Agreem ent shall be construed to require the Parties 
to furnish or allow access to confidential informat ion, the disclosure of which would impede law 
enforcement, or otherwise be contrary to the pub lic interest, or which would prejudice the legitimate 
commercial interests of particular enterprises, public or private. 
B. E
XCEPTIONS  
186. A general exception is maintained by  incorporating into the Agreement mutatis mutandis  
Article XX of the GATT 1994 and Article XIV of the GATS (Art. 23.01)87 (although it does not cover 
disciplines on safeguards, unfair trade practices, i nvestment, financial services, and temporary entry 
of business persons).  This exception also exists  for environmental measures necessary to protect 
human, animal, or plant life or health by GA TT Article XX(b) and for measures relating to the 
conservation of living and nonliving exhaustible natu ral resources by GATT Article XX(g), as well as 
for environmental measures necessary to protect hum an, animal, or plant life or health by GATS 
Article XIV(b).   
187. Security exceptions for goods, services, and in tellectual property rights reflect provisions in 
Article XXI of the GATT 1994, Article XIV bis of the GATS, and Article 73 of the WTO TRIPS 
Agreement and contained in Art. 23.02 applicab le to all aspects covered by the Agreement. 
C. ACCESSION AND WITHDRAWAL  
188. The Agreement is open to accession, on terms to be agreed between the Parties (Art. 24.05) 
and the candidate to accession.   
189. Either Party may withdraw from the Agreement. The withdrawal would enter into force 
180 days after notification to the other Party withou t prejudice to a different period that the Parties 
may agree (Article 24.06). 
D. INSTITUTIONAL FRAMEWORK  
190. Chapter 21 of the Agreement covers instituti onal arrangements and establishes the Free Trade 
Commission to supervise implementation and oversee further elaboration of the Agreement, seek to resolve disputes that may arise rega rding its interpretation or application, supervise the work of all 
committees and working groups established under the Ag reement, and consider any other matter that 
                                                     
 
86 For Chinese Taipei, The Bureau of Foreign Trade under the Ministry of Economic Affairs is 
designated as the contact point. 
87 In relation with goods-related disciplines on natio nal treatment and market access for goods, rules of 
origin and related customs procedures , trade facilitation, sanitary and phy tosanitary measures, and technical 
barriers to trade, and in relation with services-re lated disciplines on cross-border trade in services, 
telecommunications and electronic commerce.  WT/REG267/1/Rev.1 
 Page 57 
 
 
  may affect the operation of the Agreement.  The Commission may, inter alia , modify the tariff 
elimination schedules (by accelerating tariff eliminat ion), as well as the preferential rules or origin. 
Free Trade Agreement Coordinators88 are to be appointed to work jointly to develop agendas and 
make other preparations for the Commission meetings .  They are also in charge of following up on 
Commission decisions as appropriate. 
191. In the context of the administration of dispute settlement proceedings, the Parties are to 
designate an office to provide ad ministrative assistance to the panels and arbitral groups established 
under Chapter 22 (Dispute Settlement).89 
192. In addition to the institutional arrangements in Chapter 21, a number of other chapters of the 
Agreement contain institutional pr ovisions. Article 3.15 establishes a Committee on Trade in Goods, 
to consider any matter on national treatment and ma rket access for goods (Chapter 3), rules of origin 
and related customs procedures (Chapter 4), and trade facilitation (Chapter 5);  Article 8.09 
establishes a Committee on Sanitary and Phytosan itary Measures; Article 9.12 establishes a 
Committee on Standardization, Metrology and Auth orization Procedures; Article 12.16 establishes a 
Committee on Financial Services; Article 16. 02 establishes a Free Competition Committee; 
Article 17.06 establishes an Intellectual Propert y Committee; Article 18.04 establishes a Labour 
Affairs Committee; Article 19.06 establishes an E nvironmental Affairs Committee; Article 20.01 
requires Parties to designate contact points to f acilitate communications between the Parties on any 
matter covered by the Agreement. 
                                                      
88 For Nicaragua: the "Director general de comercio exterior del Ministerio de Fomento, Industria y 
Comercio (MIFIC). For Chinese Taipei: the Director Ge neral of the Bureau of Foreign Trade, Ministry of 
Economic Affairs. 
89 The operation and costs of the designated offi ces as well as the remuneration and payment of 
expenses of panellists and experts – set out in Anne x 21.03 – are under the responsibility of each Party. WT/REG267/1/Rev.1 
Page 58  
 
  193. The following Chart summari zes the Working Bodies estab lished by the Agreement. 
Chart V.1 
Institutional Framework 
 
Source: WTO Secretariat based on Chapter 21 of the Agreement. 
 
E. DISPUTE SETTLEMENT  
194. Chapter 22 sets out procedures on the settlement of disputes between the Parties relating to 
the implementation and/or application of the Agreement. The Agreement's dispute settlement 
mechanism is applicable in case of alleged violatio ns of obligations by the Parties and in case of 
alleged nullification or impairment caused by measures taken by a Party.90  Section A of Chapter 22 
sets rules and procedures for disputes between Parties.  In addition, in the ev ent that an investment 
dispute cannot be settled by consulta tion and negotiation, a separate investor-State dispute settlement 
mechanism has been established unde r Section B of Chapter 10.   
195. The dispute settlement mechanism is not availabl e in the case of a refusal to grant temporary 
entry under Chapter 15 unless the matter involves a pattern of practice, and the business person has 
                                                      
90 Annex 22.02 clarifies the coverage as well as the determination of possible elements of nullification 
and impairment. Free Trade Commission 
(Art. 21.01) 
Committee on Trade in Goods 
(Art. 3.15) 
Committee on Sanitary and 
Phytosanitary Measures (Art. 8.09)  
Committee on Standardization, 
Metrology and Authorization 
Procedures (Art. 9.12) 
Enquiry Points (Art. 9.11) 
Committee on Financial Services 
(Art. 12.16) FTA Coordinators 
(Art. 20.01 ) 
Contact Points 
(Art. 20.01 ) 
Arbitral Group (s) 
(Art. 22.07-22.11 ) 
Intellectual Property Committee 
(Art. 17.06) 
Labour Affairs Committee 
(Art. 18.04) 
Environment Affairs Committee 
(Art. 19.06) 
Free competition Committee  
(Art. 16.02)  WT/REG267/1/Rev.1 
 Page 59 
 
 
  exhausted the available administrative re view regarding the particular matter.91  Section B of 
Chapter 22 covers domestic proceedings a nd private commercial dispute settlement.  
196. The Parties have the choice of dispute se ttlement for matters arising under both the 
Agreement and the WTO.  Once the complaining Party has chosen the forum to settle the dispute, by 
either requesting the establishment of an Arbitral  Group under Article 22.07 of the Agreement or by 
requesting the establishment of a WTO Panel under Article 6 of the WTO Understanding on Rules 
and Procedures Governing the Settlement of Disput es (Article 22.03) the complaining Party may not 
thereafter have recourse to dispute settle ment procedures under the other agreement.92 
197. The Parties first seek to resolve disput es through cooperation and consultations 
(Articles 22.01 and 22.05).  In the event that the c onsultations fail to settle the dispute within 60 days 
after the date of receipt of the request for consultations (15 days in the case of urgency – if the dispute 
applies to perishable agricultural goods, and fish and fish products), the complaining Party may refer 
the matter to the Free Trade Commission (Article 22.06).  The Free Trade Commission may make 
recommendations, have recourse to good offices, c onciliation, mediation or such other dispute 
resolution procedures, or call on technical advisers or  create such working groups or experts groups as 
it deems necessary (Article 22.06, paragraph 3).  
198. The complaining Party may also request the estab lishment of an Arbitral Group, regardless of 
whether the matter has been referred to the Fr ee Trade Commission or not (Article 22.07).  The 
Arbitral Group which comprises three members is selected from a roster of up to 20 potential panellists set up by the Parties (Article 22.08).  Th e Chair of the Arbitral Group should be chosen 
within 15 days, following which each Party may sel ect a panel within an additional 15 days.  The 
Model Rules of procedure for the Group include a ri ght to at least one hear ing by the Group, which 
subject to the protection of confidential information,  shall be open to the public;  an opportunity for 
each Party to make its initial and rebuttal statemen ts, which would also be made public; and that the 
Group would consider requests for writte n views from non-government groups.  
199. The Arbitral Group presents its preliminary report  to the Parties, within 120 days after its 
establishment containing findings of fact, its determ ination, and its recommendations – if the Parties 
have requested them – for resolution of the dispute (Article 22.13).  The Final Report is presented to 
the Parties within 30 days of the preliminary re port (Article 22.14) and makes mandatory for the 
Parties the requirements and (implementation) period s that it orders.  The timeframe for implementing 
the final report must not exceed six months.  
200. Within five days after 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 after the expiry of the implemen tation period, the Arbitral Group shall determine 
whether the Party complained against has complied with the final report (Article 22.15).  If this is not 
the case, the complaining Party may suspend be nefits in accordance w ith the provisions of 
Article 22.16.  A compliance review is foreseen if the Party complained against believes it has 
eliminated the inconsistency.  If the Arbitral Group finds that the Party complained against has 
eliminated the consistency, the complaining Party shall promptly reinstate the benefits it suspended 
(Article 22.17). 
                                                     
 
91 The administrative review is deemed to be exhausted if a final determination in the matter has not 
been issued by the competent authority within six months of the institution of an administrative proceeding, and 
the failure to issue a determination is not attri butable to delay caused by the business person. 
92 However, in the case of a dispute where a Party comp lains against claims that its action is subject to 
Article 1.04 (Relation to Other International Agreement in Environmental and Conservation) and request in 
writing that the matter be considered under the Agreem ent (Free-Trade Agreement), the complaining Party may, 
in respect of that matter, thereafter have recourse to dispute settlement procedures solely under this Agreement 
(Free-Trade Agreement).   WT/REG267/1/Rev.1 
Page 60  
 
  201. The following Chart provides a synopsis  of the dispute settlement process. 
Chart V.2 
Agreement specific Dispute Settlement Mechanism 
 
Source: WTO Secretariat based on Chapter 22 of the Agreement. 
 Request for  
Consultations  
(Art. 22.05) 
Consultations 
(Art. 22.05 ) Mutually satisfactory 
resolution
Commission  (Art. 22.06)  
30 days 
(15 days in urgent cases) 
Request for establishment of 
Arbitral Group 
(Art. 22.07) 
120 days 
(60 days in urgent cases) 
Preliminary Report 
(Art. 22.13 ) 
30 days 
Final Report 
(Art. 22.14) 
Final + binding on Parties Implementation by the Party complained 
against (Art. 22.15) 
Implementation period (6 months 
maximum unless Parties agree on a a 
different timeframe) + 5 days 
Party complained against informs Arbitral 
Group and other Party of actions adopted to 
comply 
Arbitral Group determines if 
implementation is complete 
30 days 
Suspension of benefits  (Art. 22.16) 
Disagreement about requirements of 
suspension of concessions or benefits 
Arbitral Panel 
Report issued - Final binding on the Parties 60 days 
(15 days in urgent cases) 
60 days  WT/REG267/1/Rev.1 
 Page 61 
 
 
  F. INTELLECTUAL PROPERTY RIGHTS  
202. Chapter 17 of the Agreement deals with Intellect ual Property Rights.  The Parties agree that 
the WTO TRIPS Agreement, as well as the substantiv e provisions contained in specific international 
Intellectual Property Rights Conventions93, apply to all issues arising from the Agreement.  They 
reaffirm the obligation to grant national treatment to IPR holders, while ensuring that the protection 
does not become an obstacle to legitimate trade.   Nothing in Chapter 17 prevents a Party from 
adopting measures necessary to prevent anticompetit ive practices that may result from the abuse of 
the IPRs set out in the Chapter. Chapter 17 does not  give rise to obligations on the Parties regarding 
acts that occurred before the date of entry into force of the Agreement. 
203. The Parties also assert their rights and obligati ons under the WTO TRIPS Agreement, as well 
as under the other multilateral agreements to which th ey are party and, when this is not the case, 
commit themselves to put forth their best efforts to seek to join those treaties in due time.  Chapter 17 
applies to patents (inventions, utility models and industrial designs), trade secrets or confidential 
information or undisclosed information, integrated  circuits, trademarks and other distinctive signs, 
geographical indications, new varieties of plants, a nd copyrights and related rights. The Chapter also 
includes the protection of traditional knowledge and folklore as well as access to genetic resources. 
Section C also contains a transparency provision en suring that all laws and regulations are published 
or made available on the Internet (Article 17.05). 
204. Section D establishes an Intellectual Property Committee94 to review issues related to 
intellectual property and to establish a technical coope ration system for matters related to intellectual 
property.  The Committee may establish a group of experts when it is necessary. 
205. The coverage of trademarks protection foreseen by the Agreement is similar to that in Part II 
Section 2 of the WTO TRIPS Agreement.  Additional marks that are covered in the Agreement are for 
scents;  well-known marks, by making Article 6 bis of the Paris Convention applicable, mutatis 
mutandis , to goods and services (Article 17.08);  and telle quelle  marks, by making Article 6 
quinquies  of the Paris Convention also applicable (A rticle 17.09).  Geographical indications are 
protected in Articles 17.10 and 17.11.  In relati on with domain names on the Internet, the Agreement 
also contains provisions for the Parties to require that the management of their country-code top-level 
domain (ccTLD) provides an appropriate procedur e for the settlement of disputes, based on the 
principles established in the Uniform Domain-Name Dispute-Resolution Policy (UDRP), to address 
the problem of trademark cyber-piracy (Article 17.12).  
206. On patents, the Agreement has similar disciplin es to those in Part II Section 5 of the WTO 
TRIPS Agreement (Article 17.13).  New varieties of plants are protected through under the UPOV 
Convention and the Parties will ensure the rights of plant breeders through a special registry as 
provided for in their national legislations (Article 17.14).  With respect to regulated products, Article 
17.15 stipulates that the Parties shall observe and re spect their national legislations and international 
treaties for the manufacturing, marketing and dist ribution of pharmaceutical and agrochemical goods. 
                                                      
93 These specific provisions are: (a) Articles 1-11  of the Paris Convention for the Protection of 
Industrial Property (1967), (b) Articles 2-19 and 21 of the Berne Convention for the Protection of Literary and 
Artistic Works (1971), (c) Articles 1-15 of the Intern ational Convention for the Protection of Performers, 
Producers or Phonograms and Broadcasting Organizations (1961), (d) Articles 1-7 of the Convention for the 
Protection of Producers of Phonograms Against Unauthori zed Duplication of Their Pr ograms, (e) Articles 2-14 
of the WIPO Copyright Treaty (1996), (f) Articles 2-22 and 22-23 of the WIPO Performances and Phonograms Treaty (1996), and (g) Articles 1-14 of the Internatio nal Convention for the Protection of New Varieties of 
Plants (UPOV, Act of 1978). 
94 The Intellectual Property Committee consists of; for Nicaragua: the Ministerio de Fomento, Industria 
y Comercio, through the Registro de Propriedad Intelectual; and, for Chinese Taipei: the Ministry of Economic 
Affairs, through the Intellectual Property Office. WT/REG267/1/Rev.1 
Page 62  
 
  207. On copyrights and related rights the Agreement reaffirms some of the disciplines of Part II 
Section 1 of the WTO TRIPS Agreement. 
208. The protection of collective rights and the tr aditional knowledge of indigenous peoples and 
local and ethnic communities in which any of their creations are used commercially shall be through a 
special system of registering, promoting, and mark eting of these rights.  The objective is to emphasize 
the autochthonous sociological and cultural valu es of these communities and to bring them social 
justice (Article 17.17). The protection of collec tive rights is foreseen in association with the 
conservation and sustainable use of biological diversity through a sui generis  intellectual property 
registration system.  Although the Parties recognize that cultural heritage is not subject to any type of 
exclusivity by third parties applying an intellect ual property system, indigenous peoples and local and 
ethnic communities may authorize third parties to make  use of this heritage, with the understanding 
that this shall not be an exclusive right.  Effectiv e protection of all expressions and manifestations of 
folklore is to be ensured (Article 17.18).  Fina lly, the Parties shall protect the conservation and 
sustainable use of biological diversity, access to th eir genetic resources, and the traditional knowledge 
of their indigenous peoples and local and ethnic communities for the use of biological resources that 
contain such genetic resources, while recognizing fa ir and equitable participation in the benefits 
derived from the access to their genetic resources and the traditional knowledge associated with these 
resources by indigenous peoples and loca l and ethnic communities (Article 17.19). 
209. Border measure provisions are similar to those in Part III Section 4 of the WTO TRIPS 
Agreement. The Parties will also act on requests for specific inaudita altera parte  precautionary 
measures and to implement such requests expeditio usly, in accordance with the regulation governing 
their legal procedures (Artic le 17.20, second paragraph). 
210. Finally, the Parties establish a technical coope ration system regarding intellectual property, 
listing a number of initial priority activities (Article 17.21). 
G. O
THERS  
1. Competition Policy 
211. Chapter 16 of the Agreement contains rules on competition policy.  Its purpose is to 
endeavour that the benef its of trade liberalization are not undermined by anticompetitive activities and 
to promote cooperation and coordination between the competent authorities of the Parties.  Neither 
Party may have recourse to the Agreement's di spute settlement mechanis m for matter arising under 
this Chapter. 
212. The Agreement establishes a Free Competition Co mmittee to ensure the most appropriate 
means to implement the objectives of the Chapter (Article 16.02). 
213. Nothing in the Agreement shall be construed to prevent a Party from designating a 
monopoly95 or from maintaining or establishing a state enterprise.96  Articles 16.03 (on monopolies) 
and 16.04 (on state enterprises) contain disciplines to ensure that regulatory control, administrative supervision or the application of other measures, wh ich are put in place and used by the Parties, as 
feasible are not inconsistent with the disciplines of the Agreement. 
 
                                                     
 
95 Monopoly is defined as an entity, including a consortium or government agency, that in any relevant 
market in the territory of a Party is de signated as the sole prov ider or purchaser of a good or service, but does 
not include an entity that has been granted an exclusive intellectual property right solely by reason of such grant. 
96 State enterprise is defined as an enterprise owned, or controlled through ownership interests, by a 
Party.  WT/REG267/1/Rev.1 
 Page 63 
 
 
  2. Labour 
214. In a Statement of Shared Commitment the Par ties recognize their rights to establish their own 
domestic labour standards, and to adopt or modify accordingly their labour laws.  They shall strive to 
ensure that their laws provide for labour standard s consistent with internationally recognized labour 
rights97, as listed in Annex 18.01, and to improve those standards in that light (Article 18.01).  
Chapter 18 contains provisions on the enforcemen t of labour laws (Article 18.02), procedural 
guarantees and public awareness (Article 18.03), principles of corporate stewardship (Article 18.06), and cooperative labour consultations  (Article 18.07).  The Agreemen t establishes a Labour Affairs 
Committee to oversee the implementation of Chapter 18 (Article 18.04) and to  coordinate the Labour 
Cooperation and Capacity Building Mechanism
98, whose organization and principal functions, 
priorities, and cooperative activities are in Annex 18.05. 
3. Environment 
215. In Chapter 19 of the Agreement, the Parties r ecognize each others' right to establish their own 
levels of domestic environmental protection and environmental deve lopment policies and priorities, 
and to adopt or modify accordingly their environmental laws and policies.  They shall ensure that their 
laws and policies provide for and encourage high le vels of environmental protection, and strive to 
continue to improve them (Article 19.01).  Chap ter 19 contains provisions on the enforcement of 
environmental laws (Article 19.02), procedural ma tters (Article 19.03), voluntary mechanisms to 
enhance environmental performan ce (Article 19.04), principles of corporate stewardship 
(Article 19.05), and opportunities for public participa tion in environmental matters (Article 19.07).  
The Agreement establishes an Environmental Af fairs Committee to oversee implementation of 
Chapter 19 (Article 19.06) and an Environment Cooperation Mechanism (ECM) to establish a 
framework for cooperation to protect, improve and conserve the environment (Article 19.08 and 
Annex 19.08).  Consul tations on any matters arising under Chapter 19 are also foreseen 
(Article 19.09).  Moreover, Nicaragua and Chinese Ta ipei will continue to seek means to enhance the 
mutual supportiveness of multilateral environmental ag reements and trade agreements to which they 
are party (Article 19.10). 
4. Anti-Corruption 
216. The Parties affirm their resolve to eliminate br ibery and corruption in international trade or 
investment (Article 20.07).  Corruption practices, which are to be considered by the Parties as 
criminal offence under their laws, are identified (Ar ticle 20.08) and cooperation in international fora 
addressing the matter is encouraged (Article 20.09). 
H. RELATIONSHIP WITH OTHER AGREEMENTS CONCLUDED BY THE PARTIES  
217. The Parties affirm their existing rights and obligations with respect to each other under the 
WTO Agreement and other agreements to which they are party.  In the event of any inconsistency 
between the provisions of the Agreement and the provisions of the WTO Agreement or other agreement to which both Parties are party, the provis ions of the Agreement shall prevail to the extent 
of the inconsistency (Article 1.03).
99  However, in the event of any inconsistency between the 
                                                      
97 Annex 18.01 mentions the following guiding principles: the freedom of association and protection of 
the right to organize, the right to bargain collectively, the right to strike, prohibition of forced labour, labour 
protections for children and young persons, minimum employment standards, elimination of employment 
discrimination, and equal pay for women and men. 
98 Established by Article 18.05 
99 Except as otherwise prov ided in the Agreement. WT/REG267/1/Rev.1 
Page 64  
 
  Agreement and specific obligations in thr ee international environmental agreements
100, the latter 
prevails to the extent of the inconsistenc y (subject to qualifications in Article 1.04). 
218. Table IV.7 lists all other regional trade agreem ents (RTAs) notified and not notified to the 
GATT/WTO and in force to which Nicaragua and Chinese Taipei are party. 
Table IV.7 
Nicaragua and Chinese Taipei:  Participation in other RT As (notified and non-notified in force), as of July 2010  
GATT/WTO Notification 
Partner / Agreement Date of 
entry  
into force Type of 
agreement Year WTO Provision 
NICARAGUA  
DR-CAFTA 01.04.06 Goods & Services 2006 GATT Art. XXIV & GATS Art. V 
Mexico 01.07.98 Goods & Services 2005 GATT Art. XXIV & GATS Art. V 
GSTP 19.04.89 Goods 1989 Enabling Clause 
CACM 12.10.61 Goods 1961 GATT Art. XXIV 
Panama 21.11.09 Goods & Services Not notified  
CACM 06.01.06 Services Not notified  
CHINESE TAIPEI  
Panama 01.01.04 Goods & Services 2009 GATT Art. XXIV & GATS Art. V 
Honduras 15.07.08 Goods  & Services 2010 GATT Art. XXIV & GATS Art. V 
El Salvador 01.03.08 Goods  & Services 2010 GATT Art. XXIV & GATS Art. V 
Guatemala 01.07.06 Goods  & Services Not notified  
 
DR-CAFTA: Dominican Republic - Central Amer ica - United States Free Trade Agreement 
GSTP:   Global System of Trade Preferences CACM:   Central American Common Market 
 
Source: WTO Secretariat.  
 
                                                      
100 The three agreements are: (1) th e Convention on International Trade in Endangered Species of Wild 
Fauna and Flora (CITES), (2) the Montreal Protocol on Substances that Deplete the Ozone Layer, and (3) the 
Basel Convention on the Control of Trans-boundary Movements of Hazardous Wastes and Their Disposal.  WT/REG267/1/Rev.1 
 Page 65 
 
 
  ANNEX I 
 
Indicators of Trade Liberalization under the Agreement  
  
Nicaragua's Market
 
1. Annex Table AI.1 provides for a comparison between preferential tariff rates as part of the 
scheduled programme of elimination of tariffs a pplied to Nicaragua's imports of merchandises from 
Chinese Taipei and the MFN rates applied by Nicaragua  at the entry into force of the Agreement.  
Table AI.1 
Nicaragua: 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 
Overal
l (%) On 
dutiabl
e (%) Share of 
duty-free 
tariff 
lines (%) Overall 
(%) On 
dutiable 
(%) Share of 
duty-
free 
tariff 
lines 
(%) Overal
l (%) On 
dutiable 
(%) Share of 
duty-free 
tariff 
lines (%) 
MFN 2009 6.1 11.4 46.8 11.4 14.5 21.3 5.1 10.5 51.6 
Chinese Taipei 2008 4.5 9.4 51.7 8.7 14.4 40.0 3.8 8.2 53.9 
 2009 4.1 8.5 51.7 7.9 13.2 40.0 3.4 7.3 53.9 
 2010 3.6 7.5 51.7 7.2 12.0 40.0 3.0 6.5 53.9 
 2011 3.2 6.6 51.7 6.4 10.7 40.0 2.6 5.6 53.9 
 2012 2.7 7.3 62.5 5.7 10.9 47.8 2.2 6.3 65.1 
 2013 2.4 6.4 62.5 5.1 9.8 47.8 1.9 5.5 65.1 
 2014 2.1 5.6 62.5 4.6 8.7 47.8 1.6 4.7 65.1 
 2015 1.8 4.7 62.5 4.0 7.6 47.8 1.4 3.9 65.1 
 2016 1.5 3.9 62.5 3.4 6.5 47.8 1.1 3.1 65.1 
 2017 1.1 10.9 89.6 2.8 11.3 74.8 0.8 10.7 92.3 
 2018 1.1 10.3 89.6 2.6 10.3 74.8 0.8 10.3 92.3 
 2019 1.0 9.7 89.6 2.4 9.3 74.8 0.8 10.0 92.3 
 2020 1.0 9.2 89.6 2.1 8.3 74.8 0.7 9.7 92.3 
 2021 0.9 8.6 89.6 1.9 7.4 74.8 0.7 9.3 92.3 
 2022 0.8 17.2 95.2 1.6 26.5 93.9 0.7 14.9 95.4 
 a WTO Definition. 
 
Note: excludes data beyond HS Chapter 97.  
 Based on the HS 2002 nomenclature. 
 
Source : WTO Secretariat estimates based on data provided by Nicaragua. 
 
2. Nicaragua's average applied MFN rate in 2008 was 6.1%.  Tariffs on agricultural products at 
11.4% are substantially higher than those for non-agri cultural products at 5.1%.  Duty-free tariff lines 
account for 46.8% of all tariff lines.  As a result of the Agreement, at the date of entry into force of the 
Agreement (1.1.2008), Chinese Taipei's exporters enjoye d an absolute margin of preference of 1.6% 
vis-à-vis  the prevailing MFN tariff, 2.7% for agricultural goods and 1.3% for non-agricultural 
products.  The share of duty free lines applicable to imports from Chinese Taipei also rose at the 
beginning of 2008 from 46.8% to 51.7%.  Following te n years of implementation, 89.6% of all tariffs 
are to become duty free for imports from Chinese Taipei, of which 92.3% for non-agricultural goods 
and 74.8% for agricultural products.  At the end of the implementation period in 2022, Chinese 
Taipei's enterprises will face zero duties on 95.2% of their exports to Nicaragua; while 95.4% of 
non-agricultural exports will be duty free, 93.9% of tariffs on agricultu ral products will be eliminated. 
3. One of the objectives of the Agreement is to increase access oppor tunities for Chinese 
Taipei's merchandise to the Nicaraguan market.  Ta ble AI.2 gives an indication of the additional 
market access resulting from the entry into force of  the Agreement for Chinese Taipei's top 25 global 
exports.   WT/REG267/1/Rev.1 
Page 66  
 
  Table AI.2 – Nicaragua: Market access opportunities under th e agreement for Chinese Taipei's  top 25 exports to the world 
Access Conditions to Nicaragua's import markets  Chinese Taipei's top export products in 2005-2007  MFN (2008)  
No. of tariff lines  Duty-free in  
HS number and description of the product  Share 
in 
global 
exports 
(%) Average 
MFN 
applied 
rate 
(%) Duty-
free Dutiable 2008 2012  2017 2022 
854221 Digital 7.3 0.0 3      
854260 Hybrid integrated circuits 4.9 0.0 1      
847330 Parts and accessories of the machines of 
heading 84.71 3.8 0.0 1      
271019 Other 3.8 4.0 8 7 1 6   
901380 Other devices, appliances and 
instruments 3.6 0.0 1      
854229 Other 3.1 0.0 1      
853120 Indicator panels incorporating liquid 
crystal devices (LCD) or light emitting 
diodes (LED) 2.7 0.0 1      
901390 Parts and accessories 2.7 0.0 1      
853400 Printed circuits. 2.3 0.0 1      
852390 Other 1.9 0.0 1      
852520 Transmission apparatus incorporating 
reception apparatus 1.6 0.0 1      
854270 Electronic microassemblies 1.1 0.0 1      
271011 Light oils and preparations 1.0 2.3 6 5  5   
854140 Photosensitive semiconductor devices, 
including photovoltaic cells whether or 
not assembled in modules or made up into panels; light emitting diodes 0.9 0.0 1      
390330 Acrylonitrile-butadiene-styrene (ABS) 
copolymers 0.9 0.0 1      
291736 Terephthalic acid and its salts 0.8 0.0 1      
870899 Other 0.8 5.0  1    1 
852812 Colour 0.8 15.0  2   2  
852990 Other 0.7 7.5 1 1   1  
392690 Other 0.6 5.9 7 9  3 6  
847350 Parts and accessories equally suitable 
for use with machines of two or more of the headings 84.69 to 84.72 0.6 0.0 1      
731815 Other screws and bolts, whether or not 
with their nuts or washers 0.6 5.0  1   1  
847130 Portable digital automatic data 
processing machines, weighing not 
more than 10 kg, consisting of at least a central processing unit, a keyboard and 
a display 0.6 0.0 1      
852691 Radio navigational aid a pparatus 0.6 0.0 1      
847160 Input or output units, whether or not 
containing storage units in the same 
housing 0.5 0.0 1      
Total of above 48.1  42 26 1 14 10 1 
 
Source : WTO estimates based on data provided by Nicaragua and UNSD, Comtrade database. 
 
4. Chinese Taipei's top 25 exports accounted for 48. 1% of its global exports in 2008;  these 
corresponded to 68 tariff lines at the tariff line level.  Before the entry into force of the Agreement, 
42 of these tariff lines1, had duty free access to Nicaragua's market. At the entry into force of the 
Agreement, an additional 1 of these 68 tariff lin es became duty free. 14 additional tariff lines will 
become duty free in 2012, 10 will become duty free in 2017, and 1 will become duty free at the end of 
the implementation period, leaving no tariff lines dutiable in 2022. 
Chinese Taipei's Market  
                                                      
 1 Which represented more than 40% of Nicaraguan global exports.  WT/REG267/1/Rev.1 
 Page 67 
 
 
  5. Table AI.3 provides for a comparison between preferential tariff rates as part of the scheduled 
programme of tariff elimination applied to impor ts by Chinese Taipei of merchandise from Nicaragua 
and the MFN rates applied by Chinese Taipei at the date of entry into force of the Agreement.  
Annex Table AI.3 
Chinese Taipei: Indicators of MFN tariff rates and preferential rates for imports from Nicaragua 
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 2008 7.6 11.2 31.7 21.9 28.9 24.5 4.9 7.3 33.1 
Nicaragua 2008 5.5 16.0 65.6 19.7 35.1 43.8 2.8 9.3 69.8 
 2009 5.0 14.5 65.6 18.9 33.6 43.8 2.3 7.7 69.8 
 2010 4.4 12.8 65.6 18.0 32.1 43.8 1.8 6.0 69.8 
 2011 3.8 11.1 65.6 17.1 30.5 43.8 1.3 4.2 69.8 
 2012 3.2 22.3 85.5 16.2 36.4 55.4 0.8 8.7 91.2 
 2013 3.1 21.1 85.5 15.7 35.1 55.4 0.6 7.4 91.2 
 2014 2.9 19.8 85.5 15.1 33.8 55.4 0.5 6.1 91.2 
 2015 2.7 18.5 85.5 14.5 32.5 55.4 0.4 4.8 91.2 
 2016 2.5 17.2 85.5 13.9 31.2 55.4 0.3 3.5 91.2 
 2017 2.3 43.0 94.6 13.4 47.0 71.6 0.2 20.6 99.0 
 2018 2.3 42.1 94.6 13.1 46.0 71.6 0.2 20.4 99.0 
 2019 2.2 41.3 94.6 12.8 45.1 71.6 0.2 20.2 99.0 
 2020 2.2 40.5 94.6 12.5 44.1 71.6 0.2 19.9 99.0 
 2021 2.1 39.6 94.6 12.3 43.2 71.6 0.2 19.7 99.0 
 2022 2.1 78.4 97.3 12.0 98.4 87.8 0.2 22.7 99.2 
 
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. 
Based on the HS 2002 nomenclature. 
 
Source : WTO Secretariat estimates based on data provided by Chinese Taipei. 
 
6. Chinese Taipei's average applied MFN rate in 2008 was 7.6%.  Tariffs on agricultural 
products at 21.9% are substantially higher than t hose for non-agricultural products at 4.9%.  Duty-free 
tariff lines account for 31.7% of all tariff lines.  As a r esult of the Agreement, at the date of entry into 
force of the Agreement (1.1.2008), Nicaraguan exporters  enjoyed an absolute margin of preference of 
2.1% vis-à-vis  the prevailing MFN tariff, 2.2% for agri cultural goods and 2.1% for non-agricultural 
products.  The share of duty free lines applicable to  imports from Nicaragua also rose at the beginning 
of 2008 from 31.7% to 65.6%.  Following ten years of implementation, 94.6% of all tariffs are to 
become duty free for imports from Nicaragua, of wh ich 99% for non-agricultural goods and 71.6% for 
agricultural products.  At the end of the implem entation period in 2022, Nicaraguan enterprises will 
face zero duties on 97.3% of their exports to  Chinese Taipei;  however, while 99.2% of non-
agricultural exports will be duty free, 87.8% of ta riffs on agricultural products will be eliminated. 
7. One of the objectives of the Agreement is to increase access opportunities for Nicaragua's 
merchandise to the Chinese Taipei market.  Annex Tabl e AI.4 gives an indication of additional market 
access resulting from the entry into fo rce of the Agreement for Nicaragua top 25 global exports.   WT/REG267/1/Rev.1 
Page 68  
 
  Annex Table AI.4 
Chinese Taipei: Market access opportunities under the ag reement for Nicaragua's top 25 exports to the world 
Access Conditions to Chinese Taipei's import markets  Nicaragua's top export products in 2005-2007  MFN (2008)  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 
2008 2012 2017 2022 Remain 
dutiable 
 
090111 Not decaffeinated 18.3 0.0 1       
020230 Boneless 6.3 8.9  3 3     
170111 Cane sugar 6.2 6.3  1     1 
710812 Other unwrought forms 5.9 0.0 2       
020130 Boneless 5.7 5.2  3 3     
030613 Shrimps and prawns 5.1 20.0  1 1     
120220 Shelled, whether or not broken 4.9 357.1  1     1 
010290 Other 3.4 5.0  1  1    
030611 Rock lobster and other sea crawfish 
(Palinurus spp., Panulirus spp., Jasus 
spp.) 3.0 17.5  2 2     
071332 Small red (Adzuki) beans (Phaseolus 
or Vigna angularis) 2.4 165.1  1     1 
040690 Other cheese 1.7 5.0  1 1     
040221 Not containing added sugar or other 
sweetening matter 1.5 10.0  1    1  
080300 Bananas, including plantains, fresh or 
dried. 1.4 100.0  1     1 
030269 Other 1.4 24.6  15 1 12   2 
240210 Cigars, cheroots and cigarillos, 
containing tobacco 1.3 20.0  1     1 
220210 Waters, including mineral waters and 
aerated waters, containing added sugar 
or other sweetening matter or 
flavoured 1.2 10.0  1   1   
220840 Rum and tafia 1.0 0.0 1       
210111 Extracts, essences and concentrates 1.0 2.0  1 1     
150810 Crude oil 0.9 338.0  1     1 
020110 Carcasses and half-carcasses 0.9 5.4  2 2     
691090 Other 0.9 7.5  1  1    
271011 Light oils and preparations 0.7 5.9 1 3 1 2    
040630 Processed cheese, not grated or 
powdered 0.7 5.0  1 1     
120740 Sesamum seeds 0.7 12.0  1 1     
071490 Other 0.6 15.9 1 8 5 1  2  
Total of above 77.1  6 51 22 17 1 3 8 
 
Source : WTO estimates based on data provided by Ch inese Taipei and UNSD, Comtrade database. 
 
8. Nicaragua's top 25 exports accounted for 77.1%  of its global exports in 2008;  these 
corresponded to 57 tariff lines at the tariff line level.  Before the entry into force of the Agreement, 
6 of these tariff lines2, had duty free access to Chinese Taipei's ma rket. At the entry into force of the 
Agreement, an additional 22 of these 57 tariff lines b ecame duty free.  17 addi tional tariff lines will 
become duty free in 2012, 1 will become duty free in 2017, and 3 will become duty free in 2022, at the end of the implementation period; leaving 8 ta riff lines which will remain dutiable.  The products 
which are to remain subject to duties are cane suga r, shelled groundnuts, red beans, bananas, some 
fish products, cigars and cigarettes and crude oil;  some of these products, notably shelled ground 
nuts, crude oil, red (adzuki) beans and bananas fa ce prohibitive tariffs ranging from 100% to 357%. 
                                                     
 
2 Which represented 77.1% of Nicaraguan global exports.  WT/REG267/1/Rev.1 
 Page 69 
 
 
  ANNEX II 
 
Summary of Category E (Excluded Products)  
  
Annex Table AII.1 
Nicaragua:  Category E (excluded products)  
Coverage 
Meat products, essentially swine and poultry 
HS 0203110000, 0203120000, 0203190010, 0203190090, 0203210000, 0203220000, 0203290010, 0203290090, 0207110000, 0207120000, 0207131000, 0207139100, 0207139910, 0207139920, 0207139990, 0207141000, 0207149100, 0207149910, 0207149920, 
and 0207149990 
Bananas: HS 0803001100, 0303001200, 0803002010, 0803002090, and 0803009000 
Cereal, essentially white maize (corn), and Rice 
HS 1005903000, 1006109000, 1006200000, 1006301000, 1006309000, and 1006400000 
Cereal groats, meal and pellets of  rice: HS 1101000000, 1102300000, and 1103192000 
Preparation of meat and prepared sardines 
HS 1602200000, 1602310000, 16023220000, 1602390000, 1602500000, and 1604130000 
Raw sugar 
HS 1701110000, 1701120000, 1701910000, 1701990010, 1701990090, and 1704900000 
Preparation such as pre-cooked rice: HS 1904901000 
Tobacco and manufactured tobacco substitutes HS 2401101000, 2401102000, 2401103000, 2401109000, 2401201000, 2401202000, 2401203000, 2401209000, 2401301000, 
2401302000, 2401303000, 2401309000, 2402100000, 2402200000, 2402900000, 2403101000, 2403109000, and 2403990000 
Liquefied petroleum gases: HS 2711190000 
Polish: HS 3406000000 
Plastic articles, including apparel and clothing accessories HS, 3917232000, 3917321000, 3917332000, 3917401000, 3922102000, 3922200000, and 3926200000 
Leather products: HS 4202110000, 4202120000, 4202220000, and 4202290000  
Wooden frames: HS 4414000000,  and 4419000000 
Paper products: HS 4818100000, 4818200000, 4818300000, 4821100000, and 4823120000 
Apparel and clothing accessori es, knitted or crocheteda  
HS 6102200000, 6102300000, 6102900000, 6103120000, 6103190000, 6103220000, 6103230000, 6103290000, 6103320000, 
6103330000, 6103390000. 6103420000, 6103430000, 6103490000, 6104120000, 6104130000, 6104190000, 6104220000, 6104230000, 
6104290000, 6104320000, 6104330000, 6104390000, 6104420000, 6104430000, 6104440000, 6104490000, 6104520000, 6104530000, 
6104590000, 6104620000, 6104630000, 6104690000, 6105100000, 6105200000, 6105900000, 6106100000, 6106200000, 6106900000, 6107110000, 6107120000, 6107190000, 6107210000, 6107220000, 6107290000, 6107910000, 6107920000, 6107990000, 6108110000, 6108190000, 6108210000, 6108220000, 6108290000, 6108310000, 61058320000, 6108390000, 6108910000, 6108920000, 
6108990000, 6109100000, 6109900000, 6110190000, 6110200000, 6110300000, 6110900000, 6111200000, 6111300000, 6111900000, 
6112410000, 6112490000, 6113000000, 6114200000, 6114300000, 6114900000, 6115110000, 6115120000, 6115190000, 6115920000, 6115939000, 6115990000, 6116100000, 6116920000, 6116930000, 6116990000, 6117100000, 6117809000, and 6117900000 
Articles of apparel and clothing acce ssories, not knitted or crochetedb 
HS 6201120000, 6201130000, 6201190000, 6201920000, 6201930000, 6201990000, 6202120000, 6202130000, 6202190000, 
6202920000, 6202930000, 6202990000, 6203120000, 6203190000, 6203220000, 6203230000, 6203290000, 6203320000, 6203330000, 
6203390000, 6203420000, 6203430000, 6203490000, 6204120000. 6204130000, 6204190000, 6204220000, 6204230000, 6204290000, 
6204320000, 6204330000, 6204390000, 6204420000, 6204430000, 6204440000, 6204490000, 6204520000, 6204530000, 6204590000, 6204620000, 6204630000, 6204690000, 6205200000, 6205300000, 6205900000, 6206100000, 6206300000, 6206400000, 6206900000, 
6207110000, 6207190000, 6207210000, 6207220000, 6207290000, 6207910000, 9207920000, 9207990000, 6208110000, 6208190000, 
6208210000, 6208220000, 6208290000, 6208910000, 6208920000, 6208990000, 6209200000, 62093000000, 6209900000, 6210101000, 6210400000, 6210500000, 6211110000, 6211120000, 6211320000, 6211330000, 6211390000, 6211420000, 6211430000, 
6211490000, 6212100000, 6212200000, 6212300000, 6212900000, 6213200000, 6213900000, 6214300000, 6214400000, 6214900000, 
6215200000, 6215900000, 6216000000, 6217100000, and 6217900000 
Footwear, gaiters and the like, as well as parts of these articles 
HS 6401100000, 6401920000, 6401990000, 6402190000, 6402200000, 6402300000, 6402910000, 6402990000, 6403120000, 
6403190000, 6403200000, 6403300000, 6403400000, 6403510000, 6403590000, 6403910000, 6403990000, 6404110000, 6404191000, 6404199000, 6404200000, 6405100000, 6405200000, 6405900000, and 6406109000 
Hats: HS 6505900000 
Ceramic products: HS 6910100000, 6910900000, and 6914900000 
Imitation jewellery: HS 7117900000 
Products incorporating copper: HS 7418200000 
Refrigerating equipments: HS 8418100000, 8418300000, and 8418400000 
Furniture products and parts thereof 
HS 9401500000, 9401610000, 9401690000, 9401710000, 9401790000, 9401800000, 9403100000, 9403200010, 9403200090, 
9403300000, 9403400000, 9403500000, 9403600010, 9403600090, 9403700000, 9403800000, 9403901000, 9404100000, 9404290000, 
and 9404900000 
 a Most of the remaining products in Chap ter 61 are due to be duty free at the e nd of a fifteen year transition period. 
b Most of the remaining products in Chapter 62 are due to be  duty free at the end of a fifteen year transition period. 
 
Source: WTO Secretariat based on the Agreement. WT/REG267/1/Rev.1 
Page 70  
 
  Annex Table AII.2 
Chinese Taipei:  Category E (excluded products)  
Coverage  
Meat products, including belly of swine, Feet of swine, meat and various pieces of fowl s, some parts of turkeys, salted, dried or smoked 
meat of bovines, etc. HS 02032911, 02032991, 02063020, 02064930, 02071100, 02071200, 02071311, 02071319, 02071320, 02071391, 02071392, 
02071399, 02071411, 02071419, 02071421, 02071422, 02071423, 02071429, 02072690, 02072729, 02073599, 02073699, 0208030, 
02102000, 02109912, 02109919, and  02109929, 
Some fish products, including herrings, sardines, mackerel, carangid, etc. HS 03024000, 03026100, 03026400, 03026992, 03026993, 03035000, 03037100, 03037400, 03037992, 03037993, 03042041, 03042042, 03042050, 03042060, 03053010, 03054950, 03055941, 03055950, 03056100, 03056300, and  03056940 
Milk products, eggs and egg products HS 04011010, 04011020, 04012010, 04012020, 04013010, 04013020, 04029910, 04029920, 04029992, 04039029, 04039040, 04039059, 04039090, 04070090, 04081100, 04081910, 04081990, 04089110, 04089190, 04089910, and  04089990 
Guts of swine and poultry, bladders of sw ine, deer velvet (used in Chinese drugs) 
HS 05040021, 05040022, 05040029, and 05079020 
Vegetables, including garlic, frozen red beans 
HS 07032010, 07032090, 07102910, 07123920, 07129040, 07129050, and  07133200 
Coconuts, and some other nuts, bananas, pineapples, mangoes, shaddock, persimmons, lungngans 
HS 08011900, 08029030, 08030000, 08043000, 08045020, 08059010, 08109030, and 08134010 
Tea HS 09021000, 09022000, 09023010, 09023020, 09023090, 09024010, 09024020, and 09024090 
Rice 
HS 10011000, 10019000, 10061000, 10062000, 10063000, and  10064000 
Flour, groats and meal of rice and ot her worked rice, re d bean, starches 
HS 11010010, 11010020, 11023010, 11023090, 11031930, 11032010, 11041910, 11042920, 11061010, 11081910, and  11081990 
Flours and meals of ground-nuts 
HS 12089019, and  12089021 
Prepared products of excluded products c ontained in Chapters 3 and 5 (see above) 
HS 16022020, 16023120, 16023210, 16023220, 16023290, 16023920, 16024930, 16025010, 16025020, 16029040, 16041210, 
16041310, 16041320, 16041510, 16041600, and  16041920 
Beet sugar and some sugar conf ectionery not containing cocoa 
HS 17011200, and  17049000 
Cocoa preparations and some prepared and flavoured milk, some cereals, and some food preparations of flour, containing rice 
HS 18062000, 18069053, 18069055, 18069061, 18069071, and  18069092 
Preparation of milk, rice, or cereals, as well as some prepared food from mixtures of these products 
HS 19019025, 19019027, 19019091, 19021110, 19021910, 19022010, 19023020, 19041020, 19042011, 19042021, 19042029, 
19049010, 19051000, 19052000, 19054000, 19059020, 19059030, 19059040, 19059050, 19059060, 19059070, and  19059090 
Prepared read beans, and some mixtures of nuts 
HS 20049010, 20055110, 20055910, 20060011, 20060025, and  20081942 
Miscellaneous preparations of red bean or rice 
HS 21069097, and  21069098 
Tobacco and manufactured tobacco substitutes HS 24011010, 24011090, 24012010, 24012090, 24013000, 24021000, 24022000, 24029010, 24029020, 24031000, 24039100, 24039910, and  24039990 
Rice starch HS 35051051, 35051061 
Footwear HS 64011090, 64019100, 64019200, 64019900, 64022000, 64032000, 64033000, 64052000, 64059000 
Passenger cars, Chassis, and Refrig erating vehicles and equipments 
HS 87032110, 87032190, 87032210, 87032290, 87032310, 87032390, 87032410, 87032490, 87033110, 87033190, 87033210, 87033290, 87033311, 87033312, 87033391, 87033392, 87039010, 87039090, 87042111, 87042119, 87043111, 87043119, 87060010, 
87060031, 87089911, and 87089921  
 
Note: Products listed by Chinese Taipei in Category Q are also to  be considered as "excluded products" when products of the lis t are 
 imported out of the Tariff rate quota. 
 
Source: WTO Secretariat based on the Agreement. 
 
__________