After 12 years of negotiations, Taiwan officially joined the World Trade Organization (WTO) on Jan. 1, 2002. However, the benefits brought by multilateral trade may be discounted following the suspension of the WTO's Doha round of trade negotiations in July over agricultural issues.
Speaking to a group of reporters from Taiwan, Lamy talked about the role that Taiwan plays in the global trade body. Lamy started the interview by giving his view on Taiwan.
Pascal Lamy: Chinese Taipei [Taiwan's official title in the WTO is the Separate customs territory of Taiwan, Penghu, Kinmen and Matsu] is a rather a big fish in the pond in terms of trade volume.
Taiwan is the ninth-largest trader in the WTO [the EU itself as a whole], a very serious and big position. Chinese Taipei can be a big winner in negotiations on the manufacturing and service sectors. But at some stage, Chinese Taipei will have to pay in the agricultural sector like other members of G10 [Group of 10, consisting of 10 countries that include Taiwan, Switzerland, Japan, South Korea, Liechtenstein, Israel, Bulgaria, Norway, Iceland and Mauritius, identified by the WTO as "vulnerable" to imports due to ongoing reform in the agricultural sector].
For the moment, I don't think there are hot issues for Chinese Taipei. But if the negotiation resumes, the problem of specific sensitivity on agriculture will come back to the table.
There will also be potential rewards on a number of issues to Chinese Taipei, including systematic issues such as anti-dumping, where Chinese Taipei has a rather offensive position in strengthening the rules. But if the negotiation remains suspended, there will be no reward on manufacturing and service sectors for Chinese Taipei.
Taipei Times: As you mentioned in your statement, Taiwan is a major player in terms of world trade. But Taiwan is also a relatively young member of the WTO, and therefore we still have a lot to learn. At this very difficult and critical juncture, is there any role Taiwan can play to restart the negotiation?
Lamy: Yes. The first is sending political signals. Making sure that Chinese Taipei joins the club of movers that try and do the necessary political lobbying in promoting the resumption of negotiations. Making use of this phase of time-out for re-engaging politics around.
Failure is not an option, because it would be too costly collectively. It [the suspension] will weaken free trade policies that all WTO members subscribed here against the protectionism. Keeping steam into the machine, so that the temperature and tension on the negotiation will not be reduced.
Second, Chinese Taipei should prepare, in case, for the negotiation results and re-engage into necessary compromises.
TT: There is a rising trend of signing free trade agreements (FTAs) among WTO members after the Doha round of talks collapsed. Do you think the rise of FTAs will hurt the WTO system? Do you worry that bilateral trade agreements will replace multilateral ones?
Lamy: There has always been some sort of cooperation between countries, such as [members of] the European Union. The US has restarted bilateral trade agreements after NAFTA [North American Free Trade Agreement] in 1999 to 2000. But most of them are driven by politics, not economics. So the trend is not new.
The big change that took place is Japan. Japan had no new bilateral trade agreements until 1999 to 2000, when it signed FTAs with Mexico and some Latin American and Asian countries.