Taiwan AIT-CCNAA Agreement Concerning Trade Matters (With Annexes)

AMERICAN INSTITUTE IN TAIWAN

October 24, 1979

Konsin C. Shah, Representative

Coordination Council for North

American Affairs

5161 River Road

Washington, DC 200106

Dear Mr. Shah:

I have the honor to refer to recent discussions concerning our bilateral trade. During those discussions, it was noted that as a result of the Tokyo Round trade negotiations, reductions in United States tariffs are expected that will benefit exports from Taiwan, and it was agreed that in consideration of these concessions, measures will be implemented in Taiwan that will benefit exports from the United States. This letter describes these reciprocal action more fully.

It is understood that among the Tokyo Round concessions to be made by the United States and to be implemented domestically on a non-discriminatory basis will be included certain tariff concessions which have been discussed among us and which are included in the United States' Schedule XX deposited with the GATT, a copy of which has been furnished to your delegation. Those tariff concessions enumerated in Annex I to this letter will also be implemented in the United States on a non-discriminatory basis. We understand that those items contained in the U.S. Schedule XX for which exports from Taiwan constituted ten percent or more of total U.S. imports in 1976, as well as all articles described in Annex I to this letter, have been considered in establishing the initial bilateral balance. It is further understood that the implementation in the United States of tariff concessions referred to in this letter will begin on January 1, 1980, in accordance with the staging schedules enumerated in Annex I to the United States Schedule XX and as described in Annex I to this letter.

In consideration of the implementation of the above action, we understand that all tariff and non-tariff measure concessions previously offered affecting trade with the United States will continue in effect in Taiwan, and any concessions not yet implemented, with the exception of those items subject to deferred staging as enumerated in Annex II, will be implemented as of January 1, 1980 in Taiwan. We note with satisfaction that the concessions concerning apples and automobiles have already been implemented.

With regard to tariff measures referred to in this letter, both sides shall have the same rights a GATT Contracting Partv would have with respect to articles bound in the GATT for which it becomes or ceases to be a principal or substantial supplier.

We further understand that obligations substantially the same as those applicable to developing countries set forth in certain non-tariff agreements concluded in the Tokyo Round will observed in Taiwan i.e., the agreements on subsidies and countervailing measures, customs valuation, licensing, government procurement, and technical barriers to trade as well as the provisions likely to be set forth in an agreement on commercial counterfeiting to be concluded. We expect that the benefits of several non-tariff agreements concluded in the Tokyo Round, i.e., the agreements on subsidies and countervailing measures, customs valuation, licensing, government procurement and technical barriers to trade as well as benefits likely to be set forth in an agreement on commericial counterfeiting to be concluded, will be extended in the United States to exports from Taiwan.

It is understood none of these concessions will be nullified or impaired by actions which would be inconsistent with the provisions of the General Agreement on Tariffs and Trade or the agreements referred to above. We believe that these assurances reflect commitments appropriate to Taiwan's stage of development.

We understand that discussions between the two sides will continue at a mutually convenient date aimed at defining bilateral obligations and an appropriate dispute settlement mechanism for matters falling within the purview of those non-tariff agreements enumerated above.

We are confident that amicable adjustments will be made if necessary to ensure that the bilateral undertakings described in this exchange of letters remain appropriately balanced.

Every effort will be made to consult through appropriate channels on any trade matters, including those covered by this letter.

It is further understood that both sides will consider favorably incorporating matters covered by this letter into other arrangements at an appropriate time.

Sincerely,

David Dean

Chairman of the Board

and Managing Director

October 24, 1979

Mr. David Dean

Chairman of the Board and

Managing Director

American Instiitute in Taiwan

1700 North Moore Street

Arlington, Virginia 22209

Dear Mr. Dean:

I have honor to acknowledge receipt of your letter of today's date, which reads as follows:

"Dear Mr. Shah:

I have the honor to refer to recent discussions concerning our bilateral trade. During those discussions, it was noted that as a result of the Tokyo Round trade negotiations, reductions in United States tariffs are expected that will benefit exports from Taiwan, and it was agreed that in consideration of these concessions, measures will be implemented in Taiwan that will benefit exports from the United States. This letter describes these reciprocal action more fully.

It is understood that among the Tokyo Round concessions to be made by the United States and to be implemented domestically on a non-discriminatory basis will be included certain tariff concessions which have been discussed among us and which are included in the United States' Schedule XX deposited with the GATT, a copy of which has been furnished to your delegation. Those tariff concessions enumerated in Annex I to this letter will also be implemented in the United States on a non-discriminatory basis. We understand that those items contained in the U.S. Schedule XX for which exports from Taiwan constituted ten percent or more of total U.S. imports in 1976, as well as all articles described in Annex I to this letter, have been considered in establishing the initial bilateral balance. It is further understood that the implementation in the United States of tariff concessions referred to in this letter will begin on January 1, 1980, in accordance with the staging schedules enumerated in Annex I to the United States Schedule XX and as described in Annex I to this letter.

In consideration of the implementation of the above action, we understand that all tariff and non-tariff measure concessions previously offered affecting trade with the United States will continue in effect in Taiwan, and any concessions not yet implemented, with the exception of those items subject to deferred staging as enumerated in Annex II, will be implemented as of January 1, 1980 in Taiwan. We note with satisfaction that the concessions concerning apples and automobiles have already been implemented.

With regard to tariff measures referred to in this letter, both sides shall have the same rights a GATT Contracting Partv would have with respect to articles bound in the GATT for which it becomes or ceases to be a principal or substantial supplier.

We further understand that obligations substantially the same as those applicable to developing countries set forth in certain non-tariff agreements concluded in the Tokyo Round will observed in Taiwan i.e., the agreements on subsidies and countervailing measures, customs valuation, licensing, government procurement, and technical barriers to trade as well as the provisions likely to be set forth in an agreement on commercial counterfeiting to be concluded. We expect that the benefits of several non-tariff agreements concluded in the Tokyo Round, i.e., the agreements on subsidies and countervailing measures, customs valuation, licensing, government procurement and technical barriers to trade as well as benefits likely to be set forth in an agreement on commericial counterfeiting to be concluded, will be extended in the United States to export from Taiwan.

It is understood none of these concessions will be nullified or impaired by actions which would be inconsistent with the provisions of the General Agreement on Tariffs and Trade or the agreements referred to above. We believe that these assurances reflect commitments appropriate to Taiwan's stage of development.

We understand that discussions between the two sides will continue at a mutually convenient date aimed at defining bilateral obligations and an appropriate dispute settlement mechanism for matters falling within the purview of those non-tariff agreements enumerated above.

We are confident that amicable adjustment will be made if necessary to ensure that the bilateral undertakings described in this exchange of letters remain appropriately balanced.

Every effort will be made to consult through appropriate channels on any trade matters, including those covered by this letter.

It is further understood that both sides will consider favorably incorporating matter covered by this letter into other arrangements at an appropriate time.

Sincerely,

(signed)

David Dean

I have the honor to inform you that the concessions and measures described in your letter with its Annexes will be implemented in Taiwan.

Accordingly, your letter correctly reflects the understandings reached during the course of recent discussings concerning our bilateral trade.

Sincerely,

Kohsin C. Shah

Representative