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Brussels, 23 July 1998

European Union and Taiwan conclude bilateral market access negotiations

The European Union (EU) and Taiwan today completed their bilateral market access negotiations in the context of Taiwan's bid to join the World Trade Organisation (WTO). Sir Leon Brittan, Vice-President of the European Commission, and Mr Wang, Taiwanese Minister for Economic Affairs, agreed that Taiwan will start eliminating discriminatory taxation on spirits and allowing additional access to EU fruit from 1st August. These moves will be followed by early tariff cuts on certain other products. Taiwan also agreed that upon joining the WTO it would guarantee a high level of access to its markets and reduce its tariffs in line with the liberalisation already implemented by other developed countries. It will also substantially open up a number of service sectors including financial services, telecoms and professional services - as well as grant market access on agriculture. These are important steps forward towards Taiwan's eventual WTO membership, although this is still some way from being agreed by the WTO as a whole.

Sir Leon Brittan, Vice-President of the Commission, reacted to the conclusion of the negotiation with the following comment:

«I am greatly encouraged by the conclusion of the market access negotiations with Taiwan. Taiwan's market access offer now compares well with concessions offered by the most industrialised countries. I am particularly pleased to see that Taiwan has improved its market access offer to take account of specific EU requests, notably by agreeing to reduce tariffs on cars from 30% to 17.5%, a move which will make for a more competitive car industry in Taiwan in the future. The substantial removal of market barriers to the sale of cognac, whisky and other spirits in Taiwan is also a welcome step forward. I would now encourage Taiwan to build on its commitments as substantial work still remains to be done before WTO accession can become a reality.»

The EU has obtained additional commitments going beyond those offered by Taiwan in its market access negotiations with other major WTO partners, notably the US and Japan. These include the 17.5% car tariff and the concessions on spirits; the reduction of tariffs on trucks and buses from 42% to 25%; an agreement to lift the ban on the sale of diesel cars two years after WTO accession; the granting of national treatment to foreign banks regarding lending activities and the opening of branches; and the authorisation of shipping companies to set up as wholly-owned subsidiaries and to run their sea container terminals.

The details of the agreement

Industrial tariffs: Taiwan will bind tariffs on 6814 products, reduce its tariff protection, and eliminate tariffs on products covered by the Uruguay Round zero-for-zero agreements as well as the Information Technology Agreement. Most cuts will take place upon WTO accession, but 2217 of the tariff lines will happen over specific time periods ('staging'), as follows: of this figure, most will be reduced by the year 2002, except for newsprint (year 2000), 29 chemicals products (year 2001), 405 products mainly in the chemicals, iron and steel, auto parts, and plywood sectors (year 2004), and 46 tariff lines in the motor vehicles sector (2008).

Spirits: Whisky and cognac currently suffer massive discrimination in Taiwan, severely affecting their sales to one of the most lucrative markets in the global drinks business. Taiwan has agreed to remove this discrimination by January 1 1999 if new legislation equalising spirits taxes has not come into force by then. This would mean dropping cognac tax from 1000 New Taiwanese dollars (NT$) or ECU 26.4 a litre and Scotch and Irish whisk(e)y from NT$ 440 (ECU 11.6) a litre down to NT$ 198 (ECU 5.2) a litre. Furthermore, Taiwan will drop as of 1 August tax rates to NT$ 490 (ECU 12.9) for cognac, to NT$ 350 (ECU 9.2) for Scotch and Irish whisk(e)y of a CIF value higher than 7 US$ and to 198 NT$ (ECU 5.2) for other Scotch and Irish Whisk(e)y . The EU has therefore secured a cast-iron guarantee that its whisk(e)y, cognac and other producers can compete on a level playing field in Taiwan by January next year.

In addition, Taiwan will eliminate tariffs on EU spirits completely by the year 2000, and will introduce tougher protection to prevent abuse of the labelling, origin and quality of European wines and spirits.

Motor vehicles: tariffs will be gradually lowered to 17.5% by the year 2008. Taiwan's tariff quota on EU car imports will be set at 159,220 units a year upon accession (this is well over twice the EU's current export level to Taiwan), increasing this by 20% a year until full liberalisation. Taiwan will also remove its ban on diesel passenger cars and motorcycles above 150 cc no more than two years after accession, and will remove discriminatory tax incentives which encourage manufacturers to use domestically produced engines and bodywork.

Services: Taiwan will remove foreign equity restrictions in all services sectors except in specific sectors such as telecoms, where the EU and other foreign companies will nonetheless be able to hold a controlling interest. In financial services, Taiwan will substantially improve market access and treatment guaranteed to EU operators. On maritime services, Taiwan will allow foreign shipping companies to set up wholly-owned subsidiaries which can arrange entering/leaving harbours for their own ships, solicit goods and/or passengers and operate their own sea-container terminals as of January next year. Wholly foreign-owned companies will also be able to provide maritime agency, freight forwarding, container station and depot services.

Civil aircraft: Taiwan will join the WTO Agreement on trade in civil aircraft upon WTO accession.

Agriculture: On accession Taiwan has agreed to market openings in sectors of interest to EU producers such as pork and poultry. In addition, Taiwan will immediately open tariff quotas for EU exports of apples (3000 tonnes a year) and citrus fruit (1500 tonnes a year).

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