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Fri, Nov 09, 2001 - Page 18 News List

Sizing up the impact of WTO entry

Minister of Economic Affairs Lin Hsin-yi this week told the Taipei Times which business sectors will bemost seriously affected by WTO entry and whatthe government plans to do to help theparts of the economy that stand to suffer the most

Minister of Economic Affairs Lin Hsin-yi.

PHOTO: CHIANG YING-YING, TAIPEI TIMES.

Taipei Times: Which sector will be most severely affected by Taiwan's accession to the WTO? What assistance will the government give to affected sectors?

Lin Hsin-yi (林信義): The agricultural industry will be most affected by our accession to the WTO, since after joining, import regulations for agricultural products will be relaxed, import tariffs for agricultural products will be lowered and domestic agricultural subsidies will be cut. Agricultural imports are expected to increase, having an impact on less competitive domestic agricultural products.

Agricultural products that will be affected by our WTO entry include rice, where import quotas will be imposed to lower the impact on domestic rice growers. A long-term plan for reducing production of price-protected products such as sugar cane, corn, soy beans, and sorghum will be implemented. Domestic prices for locally produced peanuts, red beans, garlic, shiitake mushrooms and day lilies are high, and they are expected to be impacted after imports are opened up. Fruits such as mango, papaya, lichee and other local specialities will still be competitive. Only tropical fruits are expected to be affected by imports.

The lifting of import restrictions on pork flank and offal will affect pig farmers. Chicken farmers will also experience some impact.

Overall, Taiwan is an exporter of fishery products, and we are still competitive in international markets, but mackerel products will see some impact.

To deal with this impact, we have already obtained the rights to lift import restrictions on 22 sensitive products, such as pork flank, through a tariff quota system, while import quotas will be adopted for rice. Special protective measures can also be used for peanuts and other sensitive agricultural products.

We will also set up a relief fund for agricultural products affected by imports. The government's preliminary goal for funding is NT$100 billion.

TT: What industries will benefit most and will the service sector be a major beneficiary?

Lin: After Taiwan's entry into the WTO, the economic and trade systems will become more open and transparent. In addition, in accordance with the WTO principles of "most favored nation status" and "national treatment," Taiwan can take part in various economic and trade activities with other members on the basis of equality. Within the WTO framework, Taiwan can fairly and reasonably resolve its economic disputes with other nations and protect its domestic industries from unfair competition.

Regarding individual industries, the sectors with stronger international competitiveness -- for example, export-oriented industries such as petrochemicals, plastics, information technology and the communications sectors -- will be able to expand their international markets due to lower tariffs and open markets provided by WTO members.

TT: The ministerial meeting in Qatar will launch a new round of negotiations by next year. What stance will Taiwan take on the various issues?

Lin: Taiwan supports a new round of negotiations. Regarding the agricultural industry, export subsidies should be cut down gradually because they have the effect of distorting trade. In terms of cutting domestic subsidies, price support measures should be gradually reduced.

In the service sector Taiwan is willing to participate in trade negotiations, join hands with other members in opening up the market and share the results of the negotiations. In addition to the issue of liberalization, the negotiations should also focus on how to assist developing members to develop the service trade. The existing regulations related to regional trade agreements should also be clarified.

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