Tue, Jan 01, 2002 page17

• Food from China may be banned

  INTERNATIONAL TRADE With the nation entering the WTO today, Taiwan may be considering some defensive measures to guard its agricultural sector

  • By Richard Dobson and Joyce Huang / STAFF REPORTERS
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  The government is considering a range of options to either soften the impact of a surge of Chinese imports or temporarily ban them outright after Taiwan is officially admitted into the WTO today.

  The Mainland Affairs Council (MAC) said yesterday that opening to imports from China would take time.

  "In accordance with WTO regulations, [Taiwan] will gradually open up its market to China within a certain transitional period of time," the highest cross-strait policy-maker yesterday said in a written statement.

  The statement added that Taiwan has made issues relating to cross-strait trade and Chinese capital investment in the service industry a top priority.

  But the statement failed to clarify whether Chinese agricultural products would be allowed to enter Taiwanese market from today.

  The comments come after local media reported yesterday that Taiwan would withhold market access from China after joining the WTO, choosing instead to "temporarily" leave its markets closed to China in the agriculture and services sectors after joining the world trade body.

  But Fu Don-cheng (傅棟成), director of the MAC's economic affairs department, called the reports "Untrue," saying that "The government will actively promote exchanges across the strait following WTO accession."

  According to an official at the Ministry of Economic Affairs, the government has long considered whether or not it would place a blanket restriction on imports from China on the basis of national security under the WTO.

  "In the context of our China relations, there are many special safeguards -- both within the WTO and in our own policy inventory -- designed to prevent a surge in imports from China," said the official, who requested anonymity.

  Fearing the massive impact cheap Chinese imports would have on sectors such as agriculture and manufacturing, the government is still considering whether a blanket ban on all goods or simply sector specific restrictions should be used, the official said.

  "Our situation is much different from other countries which are also facing a risk from Chinese goods due simply to our proximity," the official added.

  The government is concerned about the lack of a price mechanism in China and the technical difficulties in identifying what could constitute dumping by Chinese producers here on this side of the Strait.

  "If there is a surge of imports at a very low cost how do you determine if that constitutes some kind of dumping?" the official asked.

  "You have to identify what is a fair price and if no price mechanism exists how can you clearly define at what point you should trigger this kind of mechanism," he said.

  The basic tenet of the WTO is to promote free trade while also serving as a guarantor of fair trade.

  Article 2.2 of the WTO Agreement on Technical Barriers to Trade, it stipulates that "... technical regulations shall not be more trade-restrictive than necessary to fulfill a legitimate objective ..." which would include national security concerns.

  While not ruling out any eventuality, the official said the government was working on the assumption that Taiwan's markets would be open to Chinese products and that the main consideration was simply how to appropriately control the volume and price of imports.

  With regard to the possibility that Beijing may take offense to any blocking actions by Taiwan and appeal to the WTO's dispute settlement board, the official was dismissive.

  "Although we don't really know what they might do, what we have heard via the press is that they don't want to bring any dispute settlement cases to the WTO," he said.

  China does not want to internationalize what it considers a domestic relationship.

  Sunny Chang (張耿銘), a Taiwan-ese lawyer who works on Beijing's arbitration commission (北京仲裁委員會), raised concerns over the legal footing of the move.

  "The closed-door strategy may become an excuse for China to attack or embarrass Taiwan on the international economic stage," Chang said.

  China would be on more solid legal ground than Taiwan if the issue was brought up under the WTO's dispute-resolution framework, he said.
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