Taipei Times: What's your view on Taiwan's WTO accession, which is set for January?
Edward Chen (
In manufacturing, given the liberalization of the past decade, nothing much can be done of any benefit to Taiwan. Agriculture is an issue that will carry on forever. You can't expect the WTO to resolve it on a multilateral basis.
The only thing that Taiwan may be able to gain would be information about all the new issues emerging within the WTO, [such as] those involving e-commerce and information and communications technology.
We need regulations to monitor international business in e-commerce and to deal with various international tax issues. They are all are just beginning. Taiwan, being a member, hopefully, would be able to take a pro-active role in discussion of these matters. And hopefully Taiwan could exert some influence and get some benefit out of this.
TT: Compared to some developing countries, Taiwan is -- in a way -- on the middle of the development ladder. What kind of advice can you give Taiwan in order to identify its niche and map comprehensive tactics for the WTO?
Chen: As I said, you should not place too many expectations on the WTO. But what Taiwan needs now is to find some pillar for its economy, some driving force for its future economic development. That is the key issue.
It's not much related to the WTO. Taiwan is having problems not because of trade restrictions by and large. It's a structural issue. Taiwan is facing an economic transformation. Taiwan transformed from a labor-intensive production base to a technology, much higher value-added product base. But now Taiwan is losing its advantage.
But what kind of niche is Taiwan going to find? I think it's difficult as Taiwan is losing its advantage. Unlike Hong Kong, you have no historic advantage as an intermediary. You can't act as an operations center. You talk about it, but you could never make it. You cannot become a regional headquarters center, unlike Hong Kong.
In software, India is now making headway in hardware. A lot of production is shifting to China to reduce costs. So what is left for Taiwan is a very serious question, because you don't have the choice of going into services. You don't have the sophisticated professional services of Hong Kong and Singapore. You don't have a legal system set up for international business. You don't have such a sophisticated financial sector. Your agriculture can't support your exports and therefore there has to be some kind of industrial production.
For the time being, it seems your integration with China is inevitable. You have to see it as an opportunity. Dividing industrial labor between China and Taiwan could possibly be a way out. You have been doing it for years. But how to do it in a way that can really be a driving force for your economic development is the question.
Taiwan has the technical capability and technical expertise, and that is something you are much better at than Hong Kong. In China, they have cheap labor, they can act as a production base; but they don't have the sort of marketing skills and research and development capability that Taiwan has.
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