Taiwan formally joins WTO

Asian Political News, Jan 7, 2002

TAIPEI, Jan. 1 Kyodo

Taiwan formally joined the World Trade Organization (WTO) on Tuesday after a 12-year-long accession bid, becoming the 144th member of the global trade body.

Its accession, which was approved by the WTO ministerial meeting in Doha in November, follows on the heels of China's Dec. 11 entry into the Geneva-based world trade regulatory body.

Taiwanese President Chen Shui-bian has expressed confidence that as a WTO member Taiwan will be able to reap benefits from increasing globalization while also preventing a hollowing-out of its local economy thanks to improving competitiveness.

Taiwan's Central News Agency on Monday quoted Ho Mei-yueh, vice chairwoman of the Council for Economic Planning and Development, as telling a seminar Saturday that WTO entry will enable Taiwan to trade with more than 140 countries around the world on an equal footing.

Touching on the price Taiwan will have to pay for its WTO accession, Ho said that superficially, the island may lose a huge amount of tariff revenues as it must lower import duties on more than 5,000 agricultural and industrial items in the first year after entry, which will have an adverse impact on agriculture, traditional industries, the automobile industry and even the information technology industry.

''The impact, however, will be manageable,'' Ho said, noting that among the products to be subject to tariff reductions, the average tariff rate for over 2,000 industrial items will be lowered by only 0.25 percentage points, from the current 6.03% to 5.78%.

For the agricultural sector, one of the most protected sectors of the island economy, the imminent tariff cuts will have a greater impact as the average customs duty rate for 3,000-plus agricultural items will be slashed from the present 21% to 14%, Ho said.

As for traditional labor-intensive industries, Taiwan secured assurances during the WTO negotiations process to protect its manufacturers in certain fields, ready-to-wear clothing for example.

In addition, Taiwan will have a grace period of up to three years to implement a zero tariff policy on paper pulp and steel imports.

Ho reportedly said individual consumers will benefit the most from Taiwan's WTO entry.

Beijing, which regards Taiwan as a renegade province of China, tried in vain until the very end to make the island enter the WTO as a special customs territory of China rather than as a separate entity.

But Beijing has since said it welcomes the accession by ''Chinese Taipei'' into the WTO, saying it will further development of economic cooperation and trade across the Taiwan Strait.

Chen has predicted that the entry of both Taiwan and China into the WTO will contribute to normalizing cross-strait economic and trade ties since it will allow the two sides of the strait to interact and cooperate more closely within a global multilateral trade body.

Taipei hopes to negotiate with Beijing on direct air links and other cross-strait economic issues under the WTO since such an arrangement would guarantee the island parity status and force China to play by international rules.

Beijing has so far cold-shouldered Taiwan's overtures, saying cross-strait economic issues are China's internal affairs and should not be dealt with under WTO auspices.