The WTO on Tuesday urged Taiwan to adopt freer trade ties with China in order to stimulate growth and investment.
In its first-ever review of Taiwan's trade policy since the nation joined the global body four years ago, the WTO noted that despite increasing economic links Taipei still bans the import of 2,200 Chinese products.
"The growing importance of cross-strait movement of goods" in Taiwan's economy "would seem to indicate the need for further liberalization'' of trade with China, the WTO wrote in its review.
Such a move "would contribute to improving the efficiency" of Taiwan's economy and encourage more foreign investment, it said.
The WTO noted that foreign investment in Taiwan remains "substantially lower" than capital flows from the nation to China and other countries.
The government has forecast economic growth of 4.25 percent this year, the WTO said. But it said growth may be adversely affected by several factors, including expected rises in world oil prices and US interest rates, persistent fiscal deficits, outsourcing by Taiwanese business and an aging population.
It recommended the government maintain fiscal reforms.
The WTO said Taiwan should pursue reforms in the farm sector, where productivity is substantially lower, and which is protected by average import tariffs of 22.3 percent compared with around 5 percent in other parts of the economy.
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