Over 1,000 demonstrators from local traditional manufacturing industries protested in front of major government departments yesterday, demanding the government safeguard their businesses against masses of cheap Chinese imports.
The protesters, mainly from the Yunlin Towel Industrial Technology and Development Association, urged the government to impose import-relief taxes on Chinese towels, which they claimed were clobbering the local industry, slashing the output value from NT$2.5 billion (US$77.4 million) to less than NT$500 million in three years.
They requested the government increase duties on made-in-China towels from the current 10.5 percent to 50 percent.
PHOTO: WANG YI-SUNG, TAIPEI TIMES
The towel manufacturers may take to the streets again should the government fail to respond within a week, they said.
The towel dispute has also brought about the first trade negotiations across the Taiwan Strait under the WTO framework since Taiwan and China joined the trade organization in early 2002 and late 2001, respectively.
A delegation of Chinese trade officials and industry representatives attended a hearing in Taipei held yesterday by the Ministry of Economic Affairs' International Trade Commission.
During the hearing, the towel manufacturing association and the Chinese delegation stated their cases and presented related evidence for further investigations.
Chu Chin-yuan (周清源), chairman of the association, said that the filing of a request for import-relief measures on Aug. 24 last year was in accordance with WTO rules, as a flood of Chinese towels have undercut local products and affected local businesses.
Since Taiwan lifted the ban on Chinese towel imports on Feb. 15, 2002, imports have increased rapidly, from 3.7 million kg in the same year to 5.6 million kg in 2003 and to 6.8 million kg in 2004, according to the petition, which cited government statistics.
Translated into market share, Chinese towels took up 45.54 percent of the market in 2002, surged to 62.48 percent in 2003 and climbed further to 70 percent in 2004, the petition said. In contrast, local products' market share dropped from 16.61 percent in 2001, to 8.42 percent in 2004.
Chinese products were about half the price of local towels in 2002, falling to 42 percent the price of local products in 2004.
"The statistics show that our filing complies with all required conditions," Chu said.
Facing protesters outside the Ministry of Economic Affairs building, Vice Minister Shih Yen-hsiang (施顏祥) said the government would consider the protesters' requests on quotas and duties and will work to protect the nation's traditional manufacturers under the WTO framework.
According to the "transitional product-specific safeguard mechanism for imports originating in the People's Republic of China," which is included in the protocol for China's accession to the WTO, safeguard measures may be imposed when products imported from China cause or threaten to cause market disruption to an industry.
Market disruption is said to exist whenever imports of a product are increasing rapidly and become a significant cause of material injury -- or threaten to cause injury -- to an industry, according to the protocol.
But the delegation, led by Cao Xinyu (
Liu Jianwei (劉建偉), a lawyer representing the delegation, said there was no solid proof of Chinese products causing market disruption, as the Taiwanese towel manufacturing industry showed signs of decline before Chinese products arrived.
Citing figures from the petition, Liu said production of locally made towels in 2000 had slumped by 32.65 percent from 1999, and the volume in 2002 slid by 45.96 percent from 2001.
The decline may be related to industry migration to Vietnam and China, Liu said. The growth rate of Chinese towel imports has also declined over the years, and would cause no threat to local rivals, he added.
The commission will conclude the investigation by March 25 and decide whether or not to enact safeguard measures.
On Wednesday, the Ministry of Finance also announced it would launch an anti-dumping investigation into the case, which could take more than 260 days.
A slew of countries have taken safeguard measures to protect their industries from cheaper Chinese goods, including the US and the EU.
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