A WTO working committee approved Taiwan's application for entry into the trade body on Tuesday, bringing to a close an odyssey that began with a GATT membership application 11 years ago. Taiwan is expected to formally become a WTO member early next year, after its entry proposal is passed by the WTO ministerial conference, scheduled for Novem-ber in Qatar.
WTO entry will allow Taiwan to integrate more closely with the global economy and help it overcome obstacles to its own economic growth. The Legislative Yuan now has 14 WTO-related bills awaiting review. The legislators should understand the urgent need to enact laws that will better help the government and public prepare for the impact of WTO membership and the chamber should speedily review and pass those bills in its current session, which opens today.
WTO entry will bring enormous benefits for Taiwan's external trade, but it will also have a substantial negative impact, especially in the agriculture, automotive, textile, service and appliance sectors. The government has plans to minimize the impact, but it should quickly implement related mechanisms, such as agricultural insurance funds. It should also help businesses improve their competitiveness.
Economic relations between Taiwan and China will also be brought into the WTO's framework now that both countries are becoming members. Both are entering as independent customs territories and are therefore mutually non-subordinate. This arrangement can help the two sides avoid the thorny "one China" principle, put the sovereignty dispute aside and engage in substantive negotiations within the WTO framework. Perhaps even cross-strait trade exchanges will be possible under international norms and arbitration. This additional guarantee can only help improve mutual confidence.
Taiwan has already announced that it will not invoke the WTO's exclusionary provisions against Beijing, but instead will treat China on a par with other countries. Taiwan will also have to view its trade relations with China -- capital, tariffs, commerce and labor affairs -- from an international perspective. It will therefore be necessary to readjust the "no haste, be patient" policy as well as the ban on direct links. The Economic Development Advisory Conference proposed the principle of "active opening, effective management" for handling cross-strait trade exchanges.
Given the hostile state of cross-strait political relations, however, Taiwan will still need to effectively manage cross-strait trade exchanges to ensure its national security. The extent of this management will depend on China's efforts to show goodwill. President Chen Shui-bian (
During his speech at the closing ceremony of the advisory conference, Chen asked for quick planning for transportation links with China. But transportation links are not part of the WTO's requirements and entry does not necessarily entail such links. The issue can be handled in a flexible manner after accession, depending on the actual needs of cross-strait trade, as well as official and non-official cross-strait interactions. A "cargo first, passengers later; sea links first, air links later" approach can be considered -- cargo shipping links to be followed by the expansion of offshore transshipment centers, and then by air links and tourist entry.
WTO accession is an important landmark in Taiwan's industrial transformation, as well as in cross-strait trade. Both the government and the people of Taiwan should speed up their preparations in order to maximize the benefits of WTO accession and minimize its negative impact.
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