The Enabling Clause, which was adopted in 1979, provides another legal basis for developing countries to enter into preferential trade agreements that may cover a very limited range of products and lower — not abolish — tariffs between member states. Moreover, developed countries are allowed to give preferential treatment to poorer countries. As of the end of March, a total of 29 regional trade agreements have been signed in accordance with the Enabling Clause.
The question is whether Taiwan is considered a developing country under the WTO framework, which would allow it to sign an industrial preferential trade agreement with China by citing the Enabling Clause. The WTO charter does not discriminate between developed and developing countries among member states and each member defines its own status. For example, South Korea and Singapore signed three trade agreements, including the Asia-Pacific Trade Agreement in 2002 and the ASEAN-China Free Trade Area, in accordance with the Enabling Clause.
When Taiwan joined the WTO in 2002, the government defined Taiwan as a developing country. The following year, then-minister of economic affairs Lin Yi-fu (林義夫) declared that Taiwan was a developing country at the WTO Ministerial Conference in Cancun, Mexico. Therefore, Taiwan, which attended the Doha Round of WTO negotiations as a developing country, can sign a cross-strait industrial preferential trade agreement with China, citing the Enabling Clause aimed at reducing and exempting tariffs for some industries.
Tung Chen-yuan is an associate professor in the Graduate Institute of Development Studies at National Chengchi University.
TRANSLATED BY TED YANG
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