WORLD TRADE  
ORGANIZATION  G/MA/W/97 
22 September 2009 
 (09-4442) 
Committee on Market Access Original:   English 
  
 
CHINA'S TRANSITIONAL REVIEW MECHANISM  
 
Communication from the European Communities
 
  
 The following communication, dated 18 September 2009, is being circulated at the request of 
the Delegation of the European Communities.  
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 The EC is transmitting comments and questions in advance of the meeting of the Market 
Access Committee of 2 October 2009, in order for th e Chinese authorities to reply to and complete 
any outstanding information.   Once the information to be provided by China in accordance with paragraph 8 and 
paragraph IV.3 (a) of Annex 1A of  its Protocol of accession has been received, the EC might come 
back with additional questions.  
1. Chinese exports restrictions  
1.1 The EC would like to reiterate its growing concern regarding China's policy in the field of 
raw materials.  In particular, the EC notes an increased use of measures restricting access of EU 
industry to materials that serve as inputs for different sectors of EU interest.  1.2 The EC refers to the WTO consultations it requested on 23 June 2009 regarding China's 
export restraints on a number of key raw materials and hopes to arrive at a mutually satisfactory 
solution with China. 
 
1.3 The EC also needs to underline that many other products are subject to by China's export 
restraints which need to be urgently lifted as they place EU industry at a significant unfair 
disadvantage vis-à-vis China's domestic industry.  
1.4 The EC notes that China currently applies export quotas which are generally prohibited under 
Article XI of the GATT on General Elimination of  Quantitative Restrictions.  In addition, on 
1 January 2009, China applies export tariffs to 373 ta riff lines in what the EC sees as a violation of its 
Protocol of Accession to the WTO.  
1.5 Justification requested on several occasions for the existing export restraints and taxes by the 
EC since the TRM exercise of 2002 has not been provided by the Chinese authorities nor was it 
transmitted to the WTO.  1.6 In particular, the EC refers to its 2007  and 2008 communications in  which it had recalled 
China's commitments: 
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  - to eliminate all taxes and charges applied to exports unless specifica lly provided for in 
Annex 6 of its accession Protocol, 
- to eliminate, upon accession, export restraints unless they could be justified under WTO rules 
(§ 165 of the Working Party Report) and 
- to notify any possible export restraints to the WTO. 
 
1.7 The EC thus remains very concerned and is not satisfied with the level of WTO compliance 
on a number of the export restraints and taxes mainta ined by China.  China is therefore urged to 
comply with its accession related commitments and to  bring its export regime of raw materials into 
conformity with WTO rules.  
 
1.8 As far as the introduction of new export restrain ts is concerned the EC urges China to comply 
with the obligation of consulting countries having a substa ntial interest in trade of products concerned.  
 
2. China Compulsory Certification (CCC) Regulation  
2.1 On 24 June 2008, China notified to the TBT Committee a Draft Amendment to Regulations 
on Compulsory Product Certification (G/TBT/N/CHN/399).  The EC welcomes this notification as a 
first step of a process involving a more substantive review of the CCC system.  2.2 However, the EC would like to stress to th e Chinese authorities its concern about the growing 
difficulties encountered by European exporters ow ing to the CCC regulation. An increasing number 
of sectors are affected by provisions that appear to  be trade restrictive, impose a heavy cost on 
importers and are not proportionate to the objectives stated by the Chinese legislation.   2.3 The EC urges China to develop and implement a certification system in a way to avoid unnecessary barriers to trade.  China could, in a reasonable timeframe, amend the CCC in a way that 
would improved market access for EU products, in  particular by setting conformity assessment 
requirements on the basis of the actual risks associ ated with the products and consider simplified 
procedure, including Supplier Declaration of Confor mity (SDoC), for lower risk products whenever 
possible.  2.4 The EC understands that the substantive revi ew of the CCC will take some time and remains 
engaged to support this process by deepening exch anges of experiences with the Chinese authorities 
on product risk assessment and management of conformity assessment systems based on lighter requirements and effective market surveillance.  2.5 Pending such review, the EC invites China to  give positive consideration to some proposals 
for the short-term simplification of the CCC, as follows: 
 - Wider exemptions for spare parts and compone nts intended for incorporation into a final 
product subjected itself to CCC certification; 
- Limitation of factory inspection in third countries to those aspects not covered by ISO 9001 
certificates, for factories that are ISO 9001 certified; 
- Wider scope of recognition of foreign test results; 
- Initial factory inspection allowed to be done by foreign bodies; 
- Allow foreign-owned laboratories and certifi cation bodies legally established in China and 
authorized by the CNCA to test and certify under the CCC scheme; 
- Reduction of administrative bur dens (lower certification fees, shorter procedures, fewer test 
samples, etc.); 
- Eliminate redundancies with other approval procedures for radio and telecom equipment 
(similarly to what has been achieved for medical devices). 
  G/MA/W/97 
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  3. Pharmaceuticals – National Drug  Reimbursement List (NDRL) 
3.1 The EC recalls the concerns raised in the last  transitional review with respect to the National 
Drug Reimbursement List (NDRL) introduced in 2000 which has not been up-dated since 2004.  3.2 Current Chinese regulations require that the NDRL be reviewed bi-annually.  This should be 
enforced because any delay means that new medicines still have not had the opportunity to obtain 
reimbursement.  3.3 Despite the EC repeated requests to address th e problem, the EC notes that there are currently 
106 new molecules approved by the SFDA for sale in China currently queued up for NDRL review.  
 
3.4 Since only products on the list can be reimbur sed, failure to update it puts more recent and 
innovative drugs at a competitive disadvantage.  The EC is concerned about possible de facto 
discrimination as the practice of not updating often enough the reimbursement list has a disproportionate impact on imported products. 
 
3.5 The EC urges China to ensure that new innovative medicinal products already approved by 
China SFDA for sale in China are included in th e NDRL and that a regular and comprehensive 
updating of the NDRL is achieved.   
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