Fri, Mar 14, 2008 page8

• WTO regulations need prioritizing

  • By Chang Sheng-hsin 張升星
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  The WTO promotes the value of trade liberalization and advocates cutting tariffs and reducing obstacles to trade. The most influential aspect of this promotion is the expansion of the scope of trade liberalization from traditional commodities trade to include service industries. In fact, "globalization" consists precisely of the expansion of cross-border flows from tangible commodities to also include intangible services.

  Although its goal is trade liberalization, the WTO is an international organization, and so cannot ignore global political factors. Article 21 in the General Agreement on Tariffs and Trade -- "Security Exceptions" -- and Article 35 of the same agreement -- "Non-application of Agreement between Particular Contracting Parties" -- stipulates that WTO member countries can be exempted from applying any WTO agreement in relation to another member state based on political considerations. The purpose of this provision is to avoid a situation where a country may not be willing to join the organization because internal political and economic conflict could lead to major domestic controversy.

  Taiwan joined the WTO in 2002. Although admitted to the organization a few days later than China because of political factors, becoming a WTO member was an important milestone for both sides of the Taiwan Strait. It should be stressed that neither Taiwan nor China applied the non-application provision.

  This provision can only be applied on accession to the organization, but neither of the two countries referred to it in the accession protocol.

  From the perspective of international economic and trade law, the cross-strait relationship should thus be the same as Taiwan's trade relations with other countries. Otherwise, Taiwan might be in violation of the WTO's nondiscrimination principle.

  However, since Taiwan joined the WTO, there have been considerable discrepancies between what cross-strait economic and trade relations are supposed to be and reality, mostly because Taiwan has imposed cross-strait trade restrictions based on concerns about its small economy and national security.

  Such unilateral discrimination could be handled through the WTO's dispute settlement system, but maybe because Taiwan's market represents limited benefits, maybe because the Chinese government wants to act generously in order to court the Taiwanese public, or maybe because China is unwilling to create an impression of "two Chinas" or "one China and one Taiwan" in the international community, Beijing has never internationalized the issue even though it is losing some economic and trade benefits.

  Despite this, the impact of Chinese products on Taiwan's industry continues to spark conflict between economic and trade policy and social justice. One example is how the dumping of Chinese-made towels caused Yunlin County's towel industry to ask the government to implement trade relief measures.

  In a similar case, the alleged dumping of Chinese wood-free paper was in the end not considered dumping as a result of different interests in the paper manufacturing industry and the publishing industry. In yet another case, China's Ministry of Commerce recently authorized the opening up of sandstone exports after requests from Taiwan's construction industry to address shortages caused by a ban on sandstone mining in the country.

  Although WTO regulations still have not been fully implemented in cross-strait trade, Taiwan is working hard to adapt to the situation, and it is clear that the integration of cross-strait trade and industrial division of labor are complex issues making it difficult to find simple and objective standards as a basis for policy.

  Under these circumstances, it might be very difficult to alleviate public doubt over discussion of a more liberalized common cross-strait market unless careful planning takes place.

  If the Democratic Progressive Party is really worried that "men won't find work and women won't find husbands," it could have taken the same approach as it did when opposing the construction of the Fourth Nuclear Power Plant and chose not to implement WTO regulations in cross-strait trade after taking power.

  This would not only have defended the core value of Taiwanese consciousness, but would also have prevented undermining local industry and excessive economic dependence on China. Anyone can see that if it had wanted to show good will to China, enjoy the benefits of China's development, or satisfy foreign business in Taiwan, eliminating the use of WTO regulations was not feasible.

  It's convenient to use the argument that China is an authoritarian regime as a reason for controlling cross-strait trade, but maybe precisely because China is an authoritarian regime, it is willing to sacrifice economic and trade benefits to win the approval of the Taiwanese public.

  If China becomes a democracy, pressures within the country will force the government to make economic and trade policy reflect the interests of industry. Maybe that is what Taiwan really should worry about.

  No matter who is in office, currently implemented WTO regulations are already enough of a headache for the government. Let's deal with these before we start talking about a cross-strait common market.

  Chang Sheng-hsin is a judge with the Taichung District Court.

  Translated by Ted Yang and Anna Stiggelbout
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