Sat, Aug 25, 2001 - Page 17 News List

Taiwan and US sign memo of understanding on WTO


Taiwan and the US yesterday signed a memorandum of understanding on government procurement policy in line with commitments required to join the WTO, according to the AIT.

The understanding clarifies Taiwan's commitment to ensure that barriers against US companies in the government procurement market will be lifted, said the AIT in a written statement.

Taiwan's commitment to the agreement will effectively open up US$15 billion in infrastructure projects, and procurement of a wide range of other goods and services, said the statement.

The understanding expands upon a bilateral agreement signed between Taiwan and the US in 1998, in which Taiwan agreed to open up markets to the US ahead of WTO entry in return for support for its bid to join the trade body.

Observers have scolded the government for agreeing to the opening of markets to the US -- which has been dubbed "the down payment" -- while Taiwan remains outside the WTO.

Some of the commitments covered in this understanding must be implemented immediately while others will await entry into the WTO, said the statement.

AIT described the agreement as affirming "Taiwan's commitment to full and effective participation in the international rules-based trading system ... [requiring] transparency, due process and non-discrimination in government bidding processes." Foreign firms have long decried the murky state of government procurement.

The American Chamber of Commerce in Taipei commented in its 2000-2001 White Paper that "Foreign contractors remain skeptical about the Government Procurement Law, its scope and consistency of enforcement."

Procurement policy

* Taiwan will include global business experience in its evaluation of suppliers' qualifications, and will not limit such evaluations to previous performance in Taiwan.

* A supplier's delay or failure to perform a GPA-covered contract due to an event of "force majeure," will not constitute the basis for termination of the contract for default, forfeiture of any performance security, or imposition of liquidated damages.

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