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Economics minister takes industry back to school on WTO

With entry into the WTO drawing ever closer, Minister of Economic Affairs Lin Hsin-yi (林信義) is stepping up efforts to educate industry leaders on what the entry will mean and how to cope.

"Minister Lin has arrived, class is now in session," said the doorman at the offices of the Taiwan Confectionery, Biscuit and Floury Food Industry Association (糖果餅乾麵食公會) to the 60-odd attendees of Lin's lecture on Taiwan's entry.

Lin, looking at times like an enthusiastic school teacher as he drew graphs on the white board, began by lightly scolding industry leaders for not spending more on research and development.

"Taiwan companies needed to spend far more money on research and development if they are to prosper in the more competitive environments WTO entry will bring," Lin said.

"Taiwan spends only NT$5.5 billion annually on R&D, while South Korea and Japan -- with comparable gross domestic product rates -- spend NT$7 billion and NT$170 billion respectively," Lin said.

"To boost our economy we must develop value-added products at the high end of the market," he said.

Educating Taiwan's industry about the impact of WTO entry and how to cope is a task receiving considerable attention both here and across the Strait.

In China, officials are in overdrive in their attempt to educate leaders at inefficient state-run enterprises on the new regulations and conditions under the WTO, according to reports in Hong Kong-based media.

In the 45-minute presentation, Lin also outlined the benefits of WTO entry to the food processing industry, which he said included the lowering of the customs tax and other protective measures on foreign raw ingredients such as sugar, and the increase in import quantities resulting in cheaper production costs.

WTO entry will also allow for Taiwan to make requests through the organization that other member countries remove obstacles to the import of local products boosting Taiwan's exports, Lin said.

On the negative side, Lin said that the lowering of import taxes will open the market to greater competitive pressure, which together with the removal of subsidies and other protective measures will strongly impact the processed-foods industry.
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