Tariffs

• The current average rate for tariff lines that include civil aircraft products is 10.5 percent.  This will be reduced to a final average rate of 7.2 percent.  Most reductions will be completed by January 1, 2002.  The final tariff rates of major civil aircraft categories (8411, 8802, and 8803) will average 2.7 percent when all reductions are completed.

• China has agreed to eliminate immediately all non-tariff measures, including quotas and licenses, for all items in the ATCA. 

• 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 civil aircraft industry, 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 civil aircraft.  (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 the 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)