WORLD TRADE  
ORGANIZATION  G/STR/N/12/TPKM 
5 June 2008 
 (08-2641) 
Working Party on 
State Trading Enterprises Original:   English 
 
 
 
STATE TRADING 
 
New and Full Notification Pursuant to Article XVII:4(a) of the  
GATT 1994 and Paragraph 1 of the Understanding on  
the Interpretation of Article XVII  
 
SEPARATE CUSTOMS TERRITORY OF TAIWAN,  
PENGHU, KINMEN AND MATSU 
 
 
 The following communication, dated 3 June 2008, is being circulated at the request of the 
Delegation of the Separate Customs Territo ry of Taiwan, Penghu, Kinmen and Matsu. 
 
_______________ 
  
TABLE OF CONTENTS 
 
Page
 
 
I. RICE ........................................................................................................................... ...............2  
II. BANKNOTE PAPER ...............................................................................................................4  
III. TRADE .......................................................................................................................... ............5  
 G/STR/N/12/TPKM 
Page 2  
 
  I. RICE 
A. 
ENUMERATION OF STATE TRADING ENTERPRISES  
1. Identification of state trading enterprises 
Agriculture and Food Agency, Council of Agricultu re (hereinafter referred to as the "AFA"). 
 2. Description of products affected (includi ng tariff item number(s) encompassed in 
product description) 
Rice
 
 
Products HS Number 
Rice in the husk 1006.10.00.00 
Husked (brown) rice 1006.20.00.00 
Glutinous rice 1006.30.00.10 
Other semi-milled or wholly-milled rice, whether or not 
polished or glazed 1006.30.00.90 
Broken rice 1006.40.00.00 
 
 
B. REASON AND PURPOSE  
1. Reason or purpose for establishing and/ or maintaining state trading enterprise 
Rice is the staple food and the most important  crop in the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu.  The go vernment regulates the production, purchasing, 
warehousing, export and import of rice to ensure food  security, market stability and the security of the 
income of farmers. 
 
2. Summary of legal basis for granting the relevan t exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers 
 Food Administration Act. 
 
C. DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISES  
1. Summary statement providing overview of op erations of the state trading enterprise 
The rice production in the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu 
is to maintain self-sufficiency.  To ensure a stab le food supply and maintain the income of farmers, 
the AFA purchases a proportion of the rice paddies owned by farmers to serve as food security stock.  
Most of the rice produced enters the market freely.  
The AFA imports rice to ensure the smooth ope ration of the supply and demand, and price 
stabilization system.  The quota on imported rice is  set according to the minimum access opportunities 
in line with the TRQ notification to the WTO of the Separate Customs Terr itory of Taiwan, Penghu, 
Kinmen and Matsu. 
 G/STR/N/12/TPKM 
Page 3 
 
 
   Rice importation is subject to a global qu ota and is conducted through open bidding. 
 
2. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise 
The AFA is in charge of the agricultural polic y and administration, food security and staple 
food price stabilization.  According to the commitme nts made by the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu for its TRQ notif ication to the WTO, in addition to importation 
by private sector traders, the AFA retains the ex clusive right to import certain amounts of rice. 
 
3. Type of entities other than the state tradin g enterprise that are allowed to engage in 
importation/exportation and conditions for participation 
Food dealers who are registered importers can participate in the allocation of rice quotas for 
private imports. 
 
4. How import/export levels are established by the state trading enterprise 
The AFA will import 65 per cent of the rice ta riff quota.  Rice importation by the AFA is 
conducted according to commitments made during the course of accession to the WTO. 
 
5. How export prices are determined 
None. 
 6. How the resale prices of imported products are determined 
The resale prices are determined on the basis of their import prices, management costs, 
domestic consumer prices of competi ng products and other economic factors. 
 
7. Whether long-term contracts are negotiated by  the state trading enterprise.  Whether 
the state trading enterprise is used to fulfil contractual obligations entered into by the 
government 
The AFA makes no long-term contracts for rice importation.  The opportunities are provided 
to all qualified importers.  
8. Brief description of market structure  
Farmers and traders are free to sell their produc ts in the market.  Th e price of rice is 
determined by market forces. 
 
D. STATISTICAL INFORMATION  
 (See attached Tables I-III on Rice) 
 E. 
REASON WHY NO FOREIGN TR ADE HAS TAKEN PLACE  
 Not applicable. 
 
F. ADDITIONAL INFORMATION  
None. G/STR/N/12/TPKM 
Page 4  
 
   
II. BANKNOTE PAPER 
A. ENUMERATION OF STATE TRADING ENTERPRISES  
1.  Identification of state trading enterprises 
 Central Engraving and Printing Plant (CEPP). 
 2. Description of products affected (includi ng tariff item number(s) encompassed in 
product description) 
 Banknote paper (4802100020-6, 4802699010-9, 4802691010-6). 
 B. 
REASON AND PURPOSE  
1. Reason or purpose for establishing and/ or maintaining state trading enterprise 
The purpose for maintaining this state trading en terprise is to stabilize financial markets and 
to prevent counterfeiting through the use of banknote paper.  
2. Summary of legal basis for granting the relevan t exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers 
The sole right of printing currency is stipulat ed in Article 13 of the Central Bank of China 
Act.  The sole importer of banknote paper is  stipulated in Code 343 of Tariff Code. 
 C. 
DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISES  
1. Summary statement providing overview of op erations of the state trading enterprise 
The CEPP was established by the Central Bank of  China, and is solely responsible for 
printing currency.    
2. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise 
The CEPP has exclusive rights to print currency and to import banknote paper.   
 
3. Type of entities other than the state tradin g enterprise that are allowed to engage in 
importation/exportation and conditions for participation 
 No other entities are allowed to import banknote paper. 
 4. How import/export levels are established by the state trading enterprise 
 The quantities imported are determined by the actual domestic need. 
 
5. How export prices are determined 
The CEPP does not produce banknote paper for export.   
 G/STR/N/12/TPKM 
Page 5 
 
 
  6. How the resale prices of imported products are determined 
 The CEPP does not resell imported banknote paper. 
 D. 
STATISTICAL INFORMATION  
 (See attached Tables IV on Banknote) 
 
E. REASON WHY NO FOREIGN TR ADE HAS TAKEN PLACE  
 Not applicable.   
 F. 
ADDITIONAL INFORMATION  
 None.   
  
III. TRADE 
A. 
ENUMERATION OF STATE TRADING ENTERPRISES  
1. Identification of state trading enterprises 
 Central Trust of China/Trading Department (her einafter referred to as the CTC/TD).  Bank of 
Taiwan/Department of Trade (hereinafter referred to as the BOT/DT).   (Central Trust of China/Trading Department has been renamed Bank of  Taiwan, Department 
of Trade (hereinafter referred to as theBOT/DT) since Central Trust of China emerged with Bank of 
Taiwan, effective from 1 July 2007.  The operations  of allocation of tariff rate quota (TRQ) remain 
the same.)  
2. Description of products affected (includi ng tariff item number(s) encompassed in 
product description) 
 Twenty  items of agricultural and fishery products which are subject to TRQ (hereinafter 
referred to as TRQ products):  deer velvet, fresh p ears (excluding European pears), banana, red beans, 
liquid milk, peanuts, garlic bulbs, dried shiitake, dried day lily, young coconut, betel nuts, pineapples, 
mangoes, pomelos, persimmons, dr ied longans and longan pulp, m ackerel, carangid and sardines 
(herrings), and rice (including rice products).  For the tariff item numbers of specific products, see the 
attachment. 
 
B. 
REASON AND PURPOSE  
1. Reason or purpose for establishing and/ or maintaining state trading enterprise 
The main purpose for establishing the CTC/TD (B OT/DT) is to conduct international trade 
and/or other related operations for the government. 
 
2. Summary of legal basis for granting the relevan t exclusive or special rights or privileges, 
including legal provisions and summary of statutory or constitutional powers 
 Rules Governing the Implementation of Tariff Quotas. 
 G/STR/N/12/TPKM 
Page 6  
 
  C. 
DESCRIPTION OF THE FUNCTIONING OF THE STATE TRADING ENTERPRISES  
1. Summary statement providing overview of op erations of the state trading enterprise 
The CTC/TD (BOT/DT), the only specialized trade institution owned by the government, 
carries out foreign trade operations entrusted by the government and provides trade services on a 
project-by-project basis. 
 
The CTC/TD (BOT/DT) is entrusted by the Mi nistry of Finance (MOF) to administer the 
allocation of tariff rate quota (TRQ) for 20 items of agricultural and fishery products as enumerated in 
Section I-B of the Schedule of C oncessions and Commitments on Goods. 
 
Rice and rice products have been subject to TRQ since 2003, when the CTC/TD was also 
entrusted by the Ministry of Finance (MOF) to ad minister the allocation of rice quota to the private 
sector. (BOT/DT is entrusted by the MOF to administer the above operations from 1 July 2007.)  
2. Specification of exclusive or special rights or privileges enjoyed by the state trading 
enterprise 
The CTC/TD (BOT/DT) is entrusted by the MOF to administer the allocation of TRQs for 20 
agricultural and fishery products.  This includes the allocation of tariff quotas and the issuance of 
tariff quota certificates.  The certificates serve as import licences.  All commercial terms of trade, including product specifications, origin, pricing and p ackaging, are at the sole discretion of the parties 
engaged in the transaction.  Moreover, all products  imported under the tariff rate quota should be 
distributed freely within the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 
without further trade-based restrictions.  
3. Type of entities other than the state tradin g enterprise that are allowed to engage in 
importation/exportation and conditions for participation 
- Nineteen items of TRQ products, excluding rice and rice products:  Any enterprise 
registered as an importer/exporter in th e Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu is eligible to apply for a certificate under each quota 
allocation system. 
- Rice and rice products:  Any enterprise re gistered as an importer/exporter and food 
dealer in the Separate Customs Territory  of Taiwan, Penghu, Kinmen and Matsu is 
eligible to apply for a certificate under the quota allocation system. 
4. How import/export levels are established by the state trading enterprise 
The quantity imported is determined by  the demand of the domestic market. 
 
5. How export prices are determined 
This item is not applicable to the CTC/TD (BOT/DT). 
 
6. How the resale prices of imported products are determined 
 The resale prices are determined by importers subject to market forces. 
 G/STR/N/12/TPKM 
Page 7 
 
 
  7. Whether long-term contracts are negotiated by  the state trading enterprise.  Whether 
the state trading enterprise is used to fulfil contractual obligations entered into by the 
government 
 There are no long-term contracts for TRQ products (including rice quotas).   
 8. Brief description of market structure 
Farmers and traders are free to sell their products  in the market.  The price is determined by 
market forces. 
 D. 
STATISTICAL INFORMATION  
Not available. 
 E. 
REASON WHY NO FOREIGN TR ADE HAS TAKEN PLACE  
 Not applicable. 
 
F. ADDITIONAL INFORMATION  
 None.  
  
  G/STR/N/12/TPKM 
Page 8 TABLE I 
 
STATE TRADING:  Agriculture and Food Agency, Council of Agriculture, Executive Yuan 
STATISTICAL INFORMATION, IMPORTS 
 
Description of 
product(s) (includin g HS 
number(s)) Total quantity 
imported 
(1000 Mt) Quantity imported by 
state trading enterprise
(1000 Mt) Average import price Avera ge representative 
domestic sales price Mark-up National production 
(brown rice) 
(1000 Mt) 
1 2 3 4 5 6 7 
2004 201.9 94    1,164.6 
2005 84.0 76    1,187.6 Rice 
2006 133.5 112    1,261.8 
Note :  The imported rice is only for processing  into rice products and re-export totally. 
 
TABLE II 
 
STATE TRADING:  Agriculture and Food Agency, Council of Agriculture, Executive Yuan 
STATISTICAL INFORMATION, EXPORTS  
 
Description of 
product(s) (includin g HS 
number(s)) Total quantity 
exported 
(1000 Mt) Quantity exported by 
state trading enterprise
(1000 Mt) Average procurement 
price Avera ge representative 
domestic sales price Averages export priceNational production 
(brown rice) 
(1000 Mt) 
1 2 3 4 5 6 7 
2004 75.7 0    1,164.6 
2005 40.1 0    1,187.6 Rice 
2006 47.3 0    1,261.8 
 
TABLE III 
 
STATE TRADING:  Agriculture and Food Agency, Council of Agriculture, Executive Yuan 
STATISTICAL INFORMATION, DOMESTIC ACTIVITIES 
 
Description of product(s) 
(including HS number(s)) Domestic purchases by state 
trading enterprise 
(paddies) 
(1000 Mt) National production 
(brown rice) 
(1000 Mt) Domestic sales by state trading 
enterprise 
(brown rice) 
(1000 Mt) National supply 
(brown rice) 
(1000 Mt) 
1 2 3 4 5 
2004 262 1,164.6 295 1,332.3 
2005 211 1,187.6 310 1,329.8 Rice 
2006 246 1,261.8 308 1,315.9 
  
   G/STR/N/12/TPKM
 Page 9TABLE IV 
 
STATE TRADING:  Central Engraving and Printing Plant 
STATISTICAL INFORMATION, IMPORTS 
 
unit:  ream 
Description of 
product(s) (includin g HS 
number(s)) Total quantity 
imported Quantity imported by 
state trading enterpriseAverage import price Avera ge representative 
domestic sales price Mark-up National production 
1 2 3 4 5 6 7 
2005 142,080 142,080    0 
2006 74,422 74,422    0 Banknote Paper 
(4802) 2007 65,816 65,816    0 
 
 G/STR/N/12/TPKM 
Page 10  
 
   
TRQ Products Tariff Item Number 
Deer velvet 05079020 
Fresh pears (excluding 
European pears) 08082019 
Bananas 08030000 
Red bean 07102910, 07133200, 11061010, 20049010, 20060011, 20055110, 
20060025, 20055910, 20060025, 21069097 
Liquid milk 04011010, 04012010, 04013010, 04011020, 04012020, 04013020, 
04029910, 04029920, 04029992, 04039059, 04039029, 04039090, 04039040, 18069053, 19019025, 18069055, 19019027 
Peanuts 12021000, 20081111, 20081191, 12022000, 20081112, 20081192, 
20081942, 12089011, 12089021, 15081000, 15089000 
Garlic bulbs 07032010, 07032090, 07129040 
Dried shiitake 07123030 
Dried day lily 07129050 
Young coconut 08011900 
Betel nuts 08029030 
Pineapples 08043000 
Mangoes 08045020 
Pomelos 08054020 
Persimmons 08109030 
Dried longans and longan Pulp 08134010 
Mackerel 03026400, 03026993, 03037400, 03037993, 03056940, 16041510, 
03042060, 03053010 
Carangid 03026992, 03037992, 16041920, 03042050 
Sardine (Herrings) 03024000, 03035000, 03042042, 03055941, 03056100, 16041210, 
03026100, 03037100, 03042041, 03055950, 03054950, 16041310, 03056300, 16041600, 16041320 
Rice and Rice Products 10061000, 10062000, 10063000, 10064000, 11023010, 11023090, 
11031400, 11032910, 11041910, 11042920, 11081910, 18069071, 19023020, 19041020, 19042011, 19042021, 19021110, 19021910, 19022010, 18069061, 19049010, 18069092, 19019091, 21069098 
 
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