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RESTRICTED WT/TPR/S/377 18 July 2018

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RESTRICTED WT/TPR/S/377 18 July 2018 RESTRICTED WT/TPR/S/377 18 July 2018 (18-4484) Page: 1/172 Trade Policy Review Body TRADE POLICY REVIEW REPORT BY THE SECRETARIAT SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU This report, prepared for the fourth Trade Policy Review of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on its trade policies and practices. Any technical questions arising from this report may be addressed to Mr Sergios Stamnas (tel: 022/739 5382) and Ms Katie Waters (tel: 022/739 5067). Document WT/TPR/G/377 contains the policy statement submitted by the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. Note: This report is subject to restricted circulation and press embargo until the end of the first session of the meeting of the Trade Policy Review Body on the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. This report was drafted in English. WT/TPR/S/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu - 2 - CONTENTS SUMMARY ........................................................................................................................ 9 1 ECONOMIC ENVIRONMENT ......................................................................................... 14 1.1 Main Features of the Economy ......................................................................................14 1.2 Recent Economic Developments ....................................................................................16 1.2.1 Growth, income, and employment ..............................................................................16 1.2.2 Prices ......................................................................................................................18 1.2.3 Main macroeconomic policy developments ...................................................................19 1.2.3.1 Monetary and exchange rate policy ..........................................................................19 1.2.3.2 Fiscal policy ...........................................................................................................20 1.2.4 Structural policies .....................................................................................................20 1.2.4.1 Tax reform ............................................................................................................20 1.2.4.2 Privatization ..........................................................................................................20 1.2.4.3 Competition policy .................................................................................................21 1.2.4.4 Labour market policies............................................................................................21 1.2.5 Balance of payments .................................................................................................22 1.3 Developments in Trade and Investment .........................................................................23 1.3.1 Trends and patterns in merchandise trade and services trade .........................................23 1.3.2 Trends and patterns in inbound direct investment .........................................................26 2 TRADE AND INVESTMENT REGIME ............................................................................. 29 2.1 General Framework .....................................................................................................29 2.2 Trade Policy Formulation and Objectives .........................................................................30 2.3 Trade Agreements and Arrangements ............................................................................33 2.3.1 WTO .......................................................................................................................33 2.3.2 Regional and preferential agreements .........................................................................34 2.3.2.1 Regional trade agreements (RTAs) ...........................................................................34 2.3.2.2 Preferential trade agreements .................................................................................36 2.3.3 Other agreements and arrangements ..........................................................................36 2.3.3.1 APEC ....................................................................................................................36 2.4 Investment Regime .....................................................................................................36 2.4.1 General investment regime ........................................................................................36 2.4.2 Business environment ...............................................................................................38 3 TRADE POLICIES AND PRACTICES BY MEASURE ......................................................... 41 3.1 Measures Directly Affecting Imports ...............................................................................41 3.1.1 Customs procedures, valuation, and requirements ........................................................41 3.1.1.1 Customs procedures ...............................................................................................41 3.1.1.2 Customs valuation .................................................................................................45 3.1.2 Rules of origin ..........................................................................................................45 3.1.3 Tariffs .....................................................................................................................46 3.1.3.1 General features ....................................................................................................46 WT/TPR/S/377 • Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu - 3 - 3.1.3.2 Applied MFN tariffs .................................................................................................47 3.1.3.3 MFN tariff dispersion and escalation .........................................................................49 3.1.3.4 MFN tariff bindings .................................................................................................49 3.1.3.5 Tariff-rate quotas ...................................................................................................50 3.1.3.6 Tariff preferences ...................................................................................................51 3.1.3.7 Duty concessions/exemptions ..................................................................................51 3.1.4 Other charges affecting imports ..................................................................................52 3.1.5 Import prohibitions, restrictions, and licensing .............................................................52 3.1.5.1 Import prohibitions ................................................................................................53 3.1.5.2 Import licensing .....................................................................................................53 3.1.6 Anti-dumping, countervailing, and safeguard measures .................................................54 3.1.6.1 Anti-dumping and countervailing .............................................................................54 3.1.6.2 Safeguards............................................................................................................55 3.2 Measures Directly Affecting Exports ...............................................................................56 3.2.1 Customs procedures and requirements ........................................................................56 3.2.2 Taxes, charges, and levies .........................................................................................56 3.2.3 Export prohibitions, restrictions, and licensing ..............................................................56 3.2.3.1 Export prohibitions .................................................................................................56 3.2.3.2 Export licensing .....................................................................................................56 3.2.4 Export support and promotion ....................................................................................57 3.2.4.1 Duty and tax concessions ........................................................................................57 3.2.4.2 Free-trade export zones ..........................................................................................58 3.2.4.3 Other means of promotion ......................................................................................58 3.2.5 Export finance, insurance, and guarantees ...................................................................59 3.3 Measures Affecting Production and Trade........................................................................60 3.3.1 Incentives ................................................................................................................60 3.3.1.1 Taxation ...............................................................................................................60 3.3.1.1.1 Features ............................................................................................................60
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