With Taiwan's WTO entry slated for early next year, government officials and academics are wasting no time trying to assess the pros and cons of joining the global trade club.
"The government has previously estimated that once Taiwan entered the WTO, unemployment will increase by 130,000 -- that is based on the assumption that annual growth in the gross domestic product will be 6 percent. But with the current recession, unemployment could rise to 180,000 and make the current economic situation even worse," said Norman Yin (
According to the Council for Economic Planning and Development, Taiwan may lose 20,000 jobs, mainly in agriculture, in the first year after joining the WTO, increasing the jobless rate by 0.2 percentage points.
Another academic painted a rosy picture of Taiwan's economy five years on. "WTO entry will be positive for Taiwan's economy in the long term. Most of all, it could make the economy more competitive in the international arena," said Lee Tong-how (
"In the short term, the adjustment period is likely to dampen the already sluggish economy," Lee said.
While entry into the WTO will hit the agriculture sector hard, it won't have a serious negative impact on the rest of Taiwan's economy, said Wu Rong-I (
"The agricultural sector is very small, accounting for less than 2 percent of GDP ... and the government has already budgeted NT$100 billion to protect the agriculture sector," Wu said.
Wu explained that under the WTO rules the government can subsidize the farmers, but are forbidden to subsidize the prices of agricultural products.
Taiwan's unemployment rate shouldn't be too affected by trouble within the agriculture sector, as many farmers -- who make up less than 4 percent of the population -- only maintain that title so as to hold onto their land, Wu said.
"Many farmers are only `part-time farmers,' as they actually have other jobs in the commercial and public sectors," Wu said.
Some government officials have said that up to 100,000 farmers could be put out of work after WTO entry. Tariffs on imports will fall from 20 percent to 12 percent early next year, making foreign products much more competitive in Taiwan.
While bad news for farmers, increased competition in the service sector will force companies to improve their performance, Wu said. "Foreign capital will improve management and competitiveness in the financial sector."
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