Restrictions on imports to continue

Taiwan's plan to retain restrictions on the import of certain Chinese products does not violate WTO rules, trade sources said yesterday.

According to a Geneva-based trade official who requested anonymity, Taiwan is essentially free to impose any of its own restrictions -- outside of WTO mechanisms -- on the import of goods from China with impunity.

"Unless a member complains about the action to the WTO, it is not dealt with here," the official told the Taipei Times from Geneva.

An official from the Mainland Affair Council agreed that the mechanism didn't violate any WTO regulation.

"There is no violation of the WTO spirit or regulations at all," said Fu Don-cheng (傅棟成), director of the MAC's economic affairs department.

Fu emphasized that what Taiwan is looking for is negotiating with China, before any trade disputes happened between both sides.

"Taiwan has to consider the enormous impact of a surge of Chinese imports. Before the two sides have a normal trade relationship, we have no choice but to establish a defense mechanism to protect Taiwan's industries," Fu said.

Tang Shubei (唐樹備), a former executive vice-president of Beijing's Association for Relations Across the Taiwan Strait (海協會), on Tuesday accused Taiwan of violating WTO rules and guidelines by continuing to restrict direct free trade with China.

"Taiwan still exerts unreasonable limits over investment and products from the mainland, which does not conform to WTO rules," Tang was quoted as saying in the state-owned China Daily.

Tang was obviously unmoved last week when Taiwan's Cabinet unveiled a plan whereby trade ties with China would be eased gradually and a safeguard mechanism to prevent an influx of Chinese goods from damaging local industry would be established.

"Taiwan authorities have hinted at only a partial and slow opening of the Taiwan market to the mainland instead of making an all-round and wide-ranging adjustment to its present mainland-trade management mechanism in line with WTO rules," Tang was quoted as saying.

However, as Tang added that "China strongly opposes any attempt to use an international organization to discuss a country's internal affairs," it appears unlikely that it will take its complaint to Geneva.

According to observers and local media reports, this could be the strategy that Taipei is employing in an attempt to force China to restart dialogue under the WTO on an equal footing.

"If Taiwan refuses to accept Chinese imports, [Beijing] might resort to the WTO's arbitration mechanism ... Taiwan may feel this is the only way to force China to talk," said Joseph Wu (吳釗燮), deputy director of the Institute of International Relations at National Chengchi University.

Despite setting up its own safeguard mechanisms, Taiwan's membership in the WTO offers it use of legal safeguard mechanisms under the organization.

According to the WTO Agreement on Safeguards, countries that can provide evidence -- to both the WTO and the target country -- that a quantitative rise in imports from a certain country will or has the potential to damage domestic industry, are permitted to impose restrictions.

Since no Chinese imports are currently permitted into Taiwan, the government would be allowed to make informed predictions on the potential damage that could be wreaked by a flood of Chinese products, the Geneva-based official said.