TRADE POLICY REVIEW: CHINESE TAIPEI
20 and 22 June 2006

Concluding remarks by the Chairperson


See also:
> Press release: A record of strong growth which continued reform can help to maintain


1. This first Trade Policy Review of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei) has been highly informative and thought-provoking, thus contributing to a much better understanding of Chinese Taipei's trade and related policies and the challenges it faces. I very much appreciate the valuable contribution of Deputy Minister Ruey-Long Chen and his delegation; also, our discussion has greatly benefited from insightful comments by our discussant, Ambassador Bruce Gosper of Australia, and many thoughtful interventions by Members.

2. Members commended the recent steady growth in Chinese Taipei's economy. In 2005, real GDP grew by 4.1% and per capita GDP was well over US$15,000. Members expressed their appreciation of Chinese Taipei's continued reform, particularly trade liberalization; this is at the heart of its economic success. Members also recognized that the multilateral trading system, by keeping markets open, contributes to the steady growth of Chinese Taipei's economy. With a view to promoting sustained growth, Members called on Chinese Taipei to continue to improve the environment for inbound direct investment.

3. Members welcomed Chinese Taipei's active participation in the multilateral trading system, including its strong support for the Doha Development Agenda. Members also noted the engagement of Chinese Taipei in regional and bilateral trade arrangements, which are seen by Chinese Taipei as complementary to the multilateral trading system.

4. Almost all of Chinese Taipei's trade is on an MFN basis, with a simple average applied MFN tariff of 7.8% in 2005. All tariff lines are bound and most applied rates coincide with bound rates, thereby making the tariff predictable. About 31% of all tariff lines are duty-free. However, Chinese Taipei's tariff has some tariff peaks (often concealed by non-ad valorem rates), tariff escalation and tariff quotas. Members expressed particular concern over relatively high tariffs in agriculture. Members also noted that a number of tariff lines were subject to import and export licensing requirements. Members welcomed the fact that Chinese Taipei seldom resorted to contingency measures.

5. Members were concerned that inbound cross-strait trade was prohibited on some 2,200 tariff lines and that little inbound cross-strait direct investment had been allowed.

6. Members noted Chinese Taipei's commitment to achieving a more transparent and open government procurement regime: they urged Chinese Taipei to permit greater external participation in its government procurement activities. Members called for further harmonization of Chinese Taipei's standard and SPS arrangements with international ones. While Members commended Chinese Taipei's significant improvement in the enforcement of intellectual property rights, some Members called for greater efforts in this regard.

7. Members encouraged Chinese Taipei to consider further reforms in agriculture. Chinese Taipei stated that efforts were being made to modernize and transform the agriculture sector to make it more capital and technology-intensive. Some Members questioned the effectiveness of tax incentives, subsidies and tariff quotas applicable to certain manufacturing industries.

8. Members noted the importance of the services sector to the Chinese Taipei economy, and encouraged it to further liberalize this sector, especially financial services and telecommunications. Members were interested in regulatory developments in services, such as Chinese Taipei's plan for privatization of state-owned financial institutions, including postal savings, the new independent telecommunications regulator, and developments concerning the regulation of cross-strait transport and movement of natural persons.

9. Members expressed their appreciation of the oral and written responses to their questions provided by the Chinese Taipei delegation. They looked forward to receiving any outstanding answers to questions within a month.

10. This successfully concludes the first Trade Policy Review of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. The review has been very useful in giving us a far better understanding of Chinese Taipei's trade policies and practices. As some Members noted, Chinese Taipei provides an excellent model as a newly-acceded WTO Member. I hope that Chinese Taipei will continue to play an active role in the WTO and in the ongoing negotiations, and take to heart the concerns expressed by Members, particularly with regard to its policies on agriculture, sanitary and phytosanitary measures, government procurement, and cross-strait trade and investment. I would once again like to thank the delegation of Chinese Taipei for its active engagement in this review, the Discussant for his insightful comments, and Members for contributing to what has been a very enlightening two days of discussions.