Fri, Jun 28, 2002 page10

• Efforts in WTO hurt by Beijing

  TRADE Although foreign countries are clamoring to sign agreements with Taiwan, officials from Beijing are issuing threats that are stalling the process

  • By Richard Dobson / STAFF REPORTER
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  China's meddling is preventing Taiwan from signing an agreement under the WTO which would significantly improve the prospects for foreign companies bidding for government procurement contracts, according to Minister of Economic Affairs Lin Yi-fu (林義夫).

  "We have committed ourselves to signing that agreement," Lin, who was speaking at a luncheon to members of the European Chamber of Commerce Taipei, said yesterday.

  "But there's still a final problem with signing because our `big friend' has some different views on that," Lin said.

  The Government Procurement Agreement, which is a separate agreement under the WTO, has 28 signatory countries. It is aimed at making laws, regulations, procedures and practices regarding government procurement more transparent and thereby more fair.

  Taiwan had been set to sign the agreement in February but the decision was called off due to objections from other signatories including China, Singapore and Israel, according to Europe-based trade officials who requested anonymity.

  While supporting Taiwan's bid to sign on to the agreement, China raised concerns about its status as a signatory to the agreement despite the fact that it is categorized as a separate customs territory entitled Chinese Taipei, said the official.

  "[China] attaches such importance on the way things are named," the official said.

  China's objections appear intended to frustrate any actions Taiwan make under the WTO even though Chinese Taipei enjoys the same rights as all other members.

  More importantly, however, Singapore and Israel -- two strong allies of China and current signatories to the agreement -- claimed that they needed more time to revise their negotiation documents.

  Taiwanese officials have long feared that allies of China in the WTO would use their status as members to aid Beijing in hampering their efforts to fully participate in the trade body.

  Despite Taiwanese hopes that membership in the WTO would bring the two sides closer together, China's resistance to internationalizing cross-strait matter even under the banner of the trade body, persists.

  China has recently turned up its efforts to isolate Taiwan economically, with Foreign Trade Minister Shi Guangsheng (石廣生) saying last week that China would consider free-trade agreements with Taiwan a breach of the "one-China" policy.

  "If such countries sign free-trade agreements with the Taiwan authorities, they are bound to bring political trouble to themselves," Shi was quoted by China's official Xinhua news agency as saying.

  The remaining signatories of the agreement, including the US, the EU, Japan, Switzerland and Norway have all completed bilateral talks with Taiwan and support its signing the agreement, the official said.

  Lin said that he was eager for Taiwan to become a signatory to the agreement and resolve problems voiced by foreign companies vying for government contracts.

  Half of the NT$2.6 trillion needed to fund the government's "Challenge 2008" infrastructure upgrading project, Lin said, which includes the construction of an islandwide mass transport system, would come from the private sector including from foreign companies.

  While eager to participate in the the bidding process for government procurement contracts, foreign companies competing for the projects have long complained about unfair practices that they say are biased against them.

  The American Chamber of Commerce in Taipei in its 2002 White Paper urges the government to adopt and enforce open and clear bidding procedures, use performance-based specifications, allow reasonable pre-qualification and bidding time and use English for international tendering.

  Other practices that don't square with international norms and keep foreign firms away from government projects in Taiwan are terms that allocate all the financial risk for the project onto the contractors and suppliers instead of distributing it equally across both sides.
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