Autos

• The tariff rate on autos will decrease (percentage varies by engine size, see Annex 8 to the Protocol for details) as follows:

   Auto Parts

• Auto parts tariffs will be phased down from an average of 17.4 percent to an average of 9.5 percent.  Reductions on all auto parts will be completed by July 1, 2006.

• Quotas on autos will be phased out by January 1, 2005 with an initial quota amount that exceeds the actual level of trade prior to implementation of the 1994 Auto Industrial Policy.  Quotas will grow 15 percent annually until eliminated.

• China has agreed to detailed rules on quota administration, including criteria for allocating quotas, which can be found in the Working Party Report on China’s WTO accession.

• Pursuant to China’s accession agreement, non-bank financial institutions will be permitted to provide auto financing without any market access or national treatment limitations.

• Prior to its accession, through various means, China restricted the number of companies that had the right to import and export goods as well as the types of goods that these companies could import.  China has agreed, upon its accession, to eliminate any export performance, trade or foreign exchange balancing, and prior experience requirements as criteria for obtaining or maintaining the right to import and export.  Chinese enterprises will also have full trading rights upon accession, subject to certain minimum registered capital requirements. Joint ventures with minority foreign ownership will be granted full trading rights within one year after accession, and joint ventures with majority foreign ownership will be granted full trading rights within two years after accession.  All enterprises, including those in the auto and auto parts sector, will be granted full trading rights within three years after accession (except with regard to a limited number of products reserved for state trading enterprises, as identified in Annex 2A to the Protocol).

• For enterprises and individuals that are not invested in China, the right to import and export will be granted in a non-discriminatory and non-discretionary way.  Any requirements will be for customs and fiscal purposes only. 

• Prior to its accession, China did not generally permit foreign companies to distribute products through wholesale and retail systems in China or to provide related distribution services, such as repair and maintenance services.  These prohibitions will be phased out over three years for most products, including autos and auto parts.  (See sector report on Distribution Services)

• China has agreed to bring both its automatic and non-automatic import licensing systems into conformity with the WTO Agreement on Import Licensing, ensuring that these systems will not function as trade barriers and will comply with the principles of national treatment and nondiscrimination. 

• China will no longer condition importation or investment approvals on whether competing domestic suppliers exist or on performance requirements of any kind, such as export performance, local content, technology transfer, offsets, foreign exchange balancing, or research and development.

• In accordance with the WTO agreement on Trade-Related Intellectual Property Rights (TRIPs), China is obligated to comply with internationally accepted norms for protecting and enforcing the intellectual property rights of U.S. and other foreign companies and individuals in China.

• China is in the process of modifying its intellectual property laws and regulations, including those relating to patents, trademarks, trade secrets, test data, integrated circuits and copyrights.  In addition, China has committed to strengthen the enforcement of these laws and regulations by its courts and responsible administrative agencies.

• China has further agreed that it will only impose, apply or enforce laws, regulations or other measures relating to the transfer of technology that are consistent with the WTO agreement on Trade-Related Investment Measures (TRIMs) and the TRIPs agreement.

• China has agreed to ensure that its laws, regulations and other measures relating to internal taxes and charges levied on imports comply with WTO rules and are applied uniformly to both foreign and domestic enterprises.  This obligation applies not only to national taxes but to provincial and local taxes as well.

• China has agreed to eliminate all subsidies on industrial goods that are prohibited under WTO rules, i.e., export and import substitution subsidies.  (See separate report on Import Related Issues)

• China has agreed that the United States (and other WTO members) may continue to apply its non-market economy methodology for measuring dumping in antidumping investigations of imports from China for the first 15 years following accession. 

• China continues to have the opportunity to demonstrate that market conditions prevail in its economy as a whole or in a particular industry, but any such demonstration must be made to the satisfaction of the investigating.  (See separate report on Import Related Issues)

• China's accession agreement includes a unique, China-specific safeguard mechanism allowing a WTO Member to restrain increasing imports from China that disrupt its market.  This mechanism will be available for 12 years after accession.  (See separate report on Import Related Issues)