Thu, Nov 01, 2001 page1

• Trade curbs of benefit tono one: US

  CROSS-STRAIT TIES A US official said that it would be in neither Taiwan's nor China's interests to use WTO exclusion provisions to limit trade with each other

  • By Charles Snyder / STAFF REPORTER IN WASHINGTON
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  A senior US trade official has cautioned Taiwan not to put broad curbs on trade with China after both are admitted to the WTO, although he conceded that such a move may be necessary on national security grounds.

  Assistant US Trade Representative Jeff Bader told the US-ROC Business Council in Washington that invoking broad bilateral curbs under Article 13 of the WTO's rules would offset some of the advantages that WTO membership will afford Taiwan, as well as China.

  His comments came just a day after Minister of Economic Affairs Lin Hsin-yi (林信義) said that the government has still not decided whether to invoke Article 13 after Taiwan's WTO accession. Article 13 allows a WTO member to deny another member the full benefits of the trade openings that are part of WTO membership and which each member pledges to apply to all other members.

  "There are no indications that either Taiwan or the PRC will seek non-application [of such benefits] with respect to the other, and I would be surprised if they did," Bader said. "Indeed, I believe it would not be in the interest of either side to do so."

  If Taiwan invoked Article 13, he noted, it would not have to extend permanent normal trade relations to Beijing, but at the same time, would not be able to use WTO dispute mechanisms against China.

  "Commercial relationships are a very important part of the relations between the two sides, both in terms of the immediate benefit ... and in encouraging other exchanges. If you decide to invoke non-application, that means that the benefit [WTO membership] provides to each other will be more limited," he said. "We feel the future for the two sides lies in closer dialogue and more exchanges, not less."

  Nevertheless, Bader, who was Washington's chief negotiator in the final phases of Taiwan's and China's successful accession process, noted that even if Taiwan does not invoke Article 13, it will face a complex decision: whether to continue to block imports of certain goods and services from China.

  "If necessary, Taiwan can justify some continued restrictions using the national security exception in the WTO," he said.

  Bader said he was confident China would not attempt to block Taiwan's accession at the last minute and said that Beijing could not do so even if it wanted to at this stage.

  "The effective linkage between Taiwan and the PRC has been hard-wired since 1992, when the General Agreement on Tariffs and Trade agreed that both would be admitted at the same time," he said. While the agreement is not a formal one, it is understood, he said.

  "I will tell you frankly that the linkage has helped, because the PRC understood that they weren't going to get through this process if they stalled Taiwan's accession," Bader said. That linkage was tested throughout the summer when some of the toughest last-minute bickering took place, and again at the WTO meeting in Geneva in September.

  "During those talks, both sides showed in my opinion admirable and constructive flexibility to ensure both were admitted at the same time, Bader said."

  That process is expected to be completed in Qatar on Nov. 9 to Nov. 13 when the WTO ministerial conference is expected to approve both membership applications.

  Membership should go beyond commercial benefits and should improve Taipei-Beijing communications overall, Bader said. He said the final accession process was "painful" because the two sides did not talk to each other directly. He hopes this will change when both are in the WTO.

  "All delegations within this organization talk to each other -- they have to," he said. "So, instead of having illusions about what the other side is up to, they'll be able to go to the other side directly and say, `What are you up to?' And in the long run that helps."
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