./.  WORLD TRADE  
ORGANIZATION  G/LIC/Q/CHN/13 
20 September 2004  
 
(04-3951) 
Committee on Import Licensing Original:   English 
   
CHINA TRANSITIONAL REVIEW MECHANISM
1 
 
Questions from the EUROPEAN COMMUNITIES to CHINA2 
 
  The following communication, dated 16 September 2004, is being circulated at the request of 
the Permanent Delegation of the European Communities. 
  
_______________ 
 
 
 The European Communities is transmitting co mments and questions well in advance of the 
meeting of the Import Licensing Committee of 30 September 2004, in order for the Chinese 
authorities to reply and to complete any information that may be incomplete.   Once the information to be provided by China in accordance with paragraph 8, and 
paragraph IV.2(d) of Annex 1A of its accession protoc ol has been received, the EC might come back 
with additional questions. 
  The EC's comments and questions relate to the following priority item:  trading rights under 
the new Foreign Trade Law.  
 
Revised Foreign Trade Law
 
 
 The EC noted the adoption on 6 April 2004 of the Revised Foreign Trade Law (hereafter 
"Revised FTL") and its entry into force on 1 July 2004.  It also noted the fact that the final version of 
the Revised FTL takes into account some of the comments provided by the EC on the draft text.  However, the Revised FTL still raises a number of concerns and requires some clarification. 
 
• As a general rule, the EC would like China to confirm that all FTL provisions will be 
implemented in a way which is compliant with  all WTO commitments undertaken by China. 
  More specifically, the EC would like to str ess two issues, namely the granting of trading 
rights and the possible restrictions on imports and exports: 
 
(i)  Trading rights
 (article 9 of the Revised FTL) 
  The EC understands that the precise procedure fo r the granting of trading rights will be set out 
in an implementing regulation.  The EC would like to stress that, in line with the commitments taken 
by China in the context of its accession to the WTO,  this procedure should be simple, subject to clear 
criteria and conducted without delay.  
                                                     
 
1 Pursuant to Paragraph 18 of the Protocol on the Accession of the People's Republic of China 
(WT/L/432). 
2 See Understanding on Procedures for th e Review of Notifications (G/LIC/4). G/LIC/Q/CHN/13 
Page 2  
 
 Moreover, article 9 of the Revised FTL stipulat es that registration will not be required "where 
laws, administrative regulations and provisions by th e department in charge of foreign trade under the 
State Council provide otherwise".  The EC is con cerned that such a provision might be implemented 
in a way which could lead to discrimination between operators.  
 In this context, the EC would be grateful if China could: 
 
• explain when and in which form the detailed provi sions for the granting of trading rights will be 
made public; 
• provide an indication of the content of these provisions; 
• explain precisely the cases where registration will not  be required and confirm that this will not 
lead to any form of discrimination. 
 
(ii)  Restrictions on imports and exports
 
  The Revised FTL contains a number of provisi ons dealing with restrictions on imports and 
exports (notably in articles 16 to 20).  Since these restrictions are clearly disciplined under several 
WTO rules, and since the language used in the Re vised FTL differs from such disciplines, the EC is 
concerned about the consistency with WTO rules of  possible restrictions introduced by China under 
the Revised FTL.  
 
• In this context, the EC would be grateful if Ch ina could confirm that all possible restrictions it 
might take under the Revised FTL will be in strict conformity with WTO rules. 
 
 The Revised Foreign Trade Law also raises a numb er of very serious concerns with regards to 
the services sectors.  These will be raised by the EC in its submission to the Council for Trade in 
Services in the context of the TRM exercise.  
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