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Mon, Nov 05, 2001 - Page 18 News List

No guarantee WTO will help China ties

Taiwan and China are poised to get the official nod to enter the WTO at the fourth ministerial conference starting this week in Doha, Qatar. No one can say with absolute certainty how membership will effect cross-strait economic and political ties, but pressure is building at home to liberalize links. To gain insight into Taiwan's position on the matter, staff reporter Richard Dobson spoke recently with John Deng, vice chairman of the Mainland Affairs Council

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John Deng, vice chairman of the Mainland Affairs Council, gestures during an interview with the Taipei Times. Deng says that China's attitude will determine whether the WTO facilitates the development of closer economic ties.

PHOTO: CHIANG YING-YING, TAIPEI TIMES

Taipei Times: Beijing has already suggested the WTO is not the place to discuss cross-strait issues. Will WTO facilitate the development of closer economic and political ties?

John Deng (鄧振中): We don't know. Whether or not it can improve our economic relations with China really depends upon China's attitude. Taiwan has repeatedly said it wants to follow WTO rules. Our position is to move towards normalization of our economic trade relations. Normalization is a free flow of goods and services. We certainly hope that both sides take advantage of the WTO mechanism and its many written rules. But many scholars and media reports have said Beijing will probably not use the WTO's dispute settlement mechanism with Taiwan. They need to overcome the fear that once they use that mechanism, Taiwan will become equal to them.

TT: Since under WTO rules members must allow the free flow of goods and services, will Taiwan need to make some significant adjustments to its restrictive cross-strait policies at some point?

Deng: Yes, and there are many areas where both sides have restrictions. Sometimes if you read the newspapers in Taiwan they say all the restrictions are from us and China doesn't have any. But that's not true. They have a large number of restrictions but you just don't know about them. It's not like here where we put our restrictions into law.

Take import licensing for example, which is covered by the WTO. If you remember several months ago a certain company made a statement that annoyed Beijing and it was thereby [denied] an import license.We regularly meet with people who invest in China who tell us about so many measures that violate national treatment, [a basic WTO rule of giving others the same treatment as one's own nationals].

TT: The consensus reached at the Economic Development Advisory Conference (EDAC) was to ease restrictions on links with China. How are measures to implement this consensus progressing?

Deng:

Those conclusions we think can be done now have already been sent to the legislature. For instance the "no haste, be patient," policy. One part of that [means] we have to redesign our system in regard to how to screen applications, including which sectors we want to further liberalize and to what extent we are going to liberalize the capital cap. But that does not involve amendment of laws and the administration can through internal consultation and consultations with industries to develop a new system which first needs to be approved by the Cabinet.

But in the meantime some other areas need to have laws amended, such as double taxation. Investors are taxed in China and then they might also be taxed here. The law is not very clear. That law needs amending so we have already sent the draft to the legislature and we will push to have those clauses approved as soon as possible.

TT: What about companies that went around government rules on China investments and have already established considerable operations in China?

Deng: There are many cases where companies invested in China without going through the proper application process. That left a big gap in our statistics. So we think it is a good time to take advantage of the change in the system to give them an opportunity -- an amnesty -- to report what happened and forgive what they did or forgot to do in the past. That will also require the law to be changed.

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