Mon, Oct 30, 2006 page11

• Taiwan sees opportunities at WTO

  KEEN PLAYER More than four years after it joined the international body, some believe that Taiwan should deepen its involvement in the organization's activities

  • By Jessie Ho / STAFF REPORTER
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  On Jan. 1, 2002, Taiwan celebrated a hard-won victory as it finally was accepted as a member of the WTO, one of the rare international organizations this country has been able to participate in.

  Four years have passed since then, and contrary to many people's expectations, thus far Taiwan's economy doesn't seem to have suffered negatively from the free-trade system.

  On example is provided by the agricultural industry, a sector seemingly rife with vulnerabilities to free-trade. The nation's agricultural output value totaled NT$375.4 billion (US$11.28 million) last year, a 6.4 percent increase from 2001, the year before Taiwan's accession to the WTO, according to statistics provided by the Council of Agriculture.

  

  Lin Yi-fu, Taiwan's representative at the WTO, poses in front of his residence in Geneva, Switzerland, on Friday.

  PHOTO: JESSIE HO, TAIPEI TIMES

  Automobile manufacturing, another long-protected sector that, it was estimated, would bear the brunt of free trade, has also surprisingly gained on the country's membership status -- and done so despite fierce global competition.

  According to statistics compiled by the Taiwan Transportation Vehicle Manufacturers Association (台灣區車輛工業同業公會), the annual output value of the automobile industry continually climbed from NT$347.9 billion in 2001 to NT$543.5 billion last year.

  Taiwan cancelled a measure that requires a minimum 40 percent ratio of locally made car parts after its WTO entry and has promised to gradually lower import duties on small vehicles and auto parts.

  "The automobile manufacturing sector had the strongest resistance to Taiwan's accession to the WTO, but the industry has weathered the challenge and even revived," said William Liu (劉威廉), an official at Taiwan's Permanent Mission at the WTO.

  "The strength of our auto makers was fired up by market mechanism that came into effect after liberalization," Liu said.

  Smaller traditional industries, impaired by massive industry migrations and cheap imports, are now facing a cutthroat battle for survival.

  But for the moment, towel manufacturers can breathe a little more easily as the government has announced it would impose a 204.1 percent anti-dumping duty on Chinese towel imports for a period of five years.

  This first safeguard measure taken by the WTO has encouraged shoemakers and non-coated paper makers, which are also about to request similar protection mechanism.

  LOW PARTICIPATION

  Even though Taiwan is the world's 16th largest economy, the rather slow reaction by Taiwanese demonstrated the general public's low awareness of WTO-related issues.

  It was not until hundreds of workers from the towel manufacturing industry took to the streets in March that the public began showing an interest in the developments surrounding the nation's participation in the body.

  "Unlike Brazilians, Taiwanese pay little attention to WTO issues, but the decisions made in WTO will actually affect their daily life," said Jackson Pai (白振瑜), legal assistant at Taiwan's WTO mission.

  By opening the markets, consumers have access to cheaper goods and have more products and services to choose from.

  Taiwanese companies also have a low participation in WTO affairs, but the result of negotiations are nevertheless closely related to their interests, Pai said.

  South Korean companies, for example, are very active in WTO negotiations and even went to Hong Kong for the sixth WTO Ministerial Conference last year to ensure their interests would not be compromised, he said.

  Analyzing the lukewarm participation of Taiwanese companies, Jenni Yang (楊珍妮), counselor at the WTO mission, said local small-and medium-sized enterprises are used to operate alone without government assistance.

  Besides, Taiwanese companies are mostly manufacturers of original equipment and had their brand-name clients deal with disputes in the past.

  Despite the WTO's Doha round -- suspended in July over agricultural issues -- government officials, especially those at the mission, are still working hard in various areas to prepare for the resumption of negotiations, as a concession of even a decimal point represents billions of dollars for businesses every year.

  MORE ROLES TO PLAY

  Taiwan needs to increase its involvement in WTO activities, as the country has little capacity in signing bilateral or multilateral trade agreements, Taiwan's representative to the WTO, Lin Yi-fu (林義夫), told the Taipei Times in a recent interview in Geneva.

  Lin's viewpoint was also clearly supported by WTO Director-General Pascal Lamy in an interview earlier this month.

  Lin, the former minister of economic affairs, took over the position from Yen Ching-chang (顏慶章) in May, becoming Taiwan's second representative to the WTO.

  He is a veteran of international trade and was in charge of Taiwan's application to the WTO and various bilateral trade affairs.

  In 2003, he led a delegation to the WTO Ministerial Conference in Cancun, Mexico, for the first time after Taiwan joined the WTO.

  During the interview, Lin said that at the present stage, Taiwan focuses more on fulfilling its WTO commitments, but soon it will need to play a bigger role in increasing its international participation and maximizing the interests of its industries.

  During the timeout phase, the aid-for-trade program is one area Taiwan can exercise in, he added.

  Echoing the "Millennium Development Goal" adopted by the General Assembly of the UN in 2000 aiming to halve world poverty by 2015, the WTO is now advocating aid-for-trade programs, hoping to find more funds for less developed countries.

  Taiwan so far has donated a total of US$350,000 and 37,500 Swiss francs (US$30,000) to the Doha Development Agenda Global Trust Fund, but the amount is still much lower than the millions disbursed by other developed countries.

  Despite Taiwan's limited budget for the fund, Lin said the nation can provide know-how and technical support as a form of aid-for-trade to lesser-developed countries, especially now that some of the funds have been shifted from improving livelihood to trade facilitation.

  CONTRIBUTIONS

  For example, some Central and South American countries have rich fish reserves but no refrigeration and storage facilities, or highways or ports to ship the goods, Lin said.

  In some landlocked countries, transporting goods to another country's port for shipping involves going through a great deal of red tape, sometimes requiring as many as 100 official seals.

  Taiwan is known for having streamlined its customs procedures, an area in which Taiwan can make a contribution as a WTO member, Lin said.

  By doing so, Taiwan could further its relations with other countries as well as increase the nation's participation at the international level, Lin said.

  Despite the fact that the agricultural issues which have blocked the Doha round still seem insurmountable at the moment, many member countries have been using "quiet diplomacy" to push for the reopening of the talks, Lin said.

  One factor contributing to the remaining hopes is anticipation over the result of the US Congress elections next month.

  Many political observers believe that a Republican-controlled congress will carry on the US President George W. Bush administration's trade policies.

  The hiatus may give Taiwan's fragile agricultural industry a break, but the most important task at the moment is preparing for possible concessions in the sector and coming up with supporting measures.

  After all, ironing out the agricultural disputes and expediting negotiations on other sectors -- such as non-agriculture market access that have been taken hostage by agricultural issues -- will bring far more results for Taiwan' manufacturing sector.
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