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WTO talks’ possible failure bad for Taiwan: researchers

Taipei Times

WTO talks’ possible failure bad for Taiwan: researchers


9 December 2005

The anticipated collapse of the sixth WTO ministerial meeting will divert member countries away from striking bilateral or regional free-trade pacts, which would gradually drive Taiwan’s trade and business into a corner, lawmakers and researchers said yesterday.

"The role of the WTO will weaken over time if there is still no progress made in the meeting this year," Lai Shyi-bao, a Chinese Nationalist Party (KMT) lawmaker, said at a seminar held by the Chung-hua Institution for Economic Research’s (CIER) WTO Center yesterday.

"In that way, Taiwan is in danger of being marginalized," he said.

On the eve of the meeting in Hong Kong next week, the WTO’s 148 members are still squabbling over cutting agricultural tariffs and subsidies, and WTO Director General Pascal Lamy said he did not expect that consensus will be reached during the meeting.


Lee Chiang-chuan (李健全), vice minister of the Council of Agriculture, said that Taiwan is in an alliance with nine other countries — including Japan, South Korea, Israel and Switzerland — called the Group of 10 (G10).

The G10 members hope to apply rules agreed on during the Doha Round of trade talks between 1986 and 1993 in future WTO agricultural talks, Lee said.

Despite the trade impasse that seemingly gives Taiwanese farmers more time to brace for a large-scale opening up of the market, Taiwan will be left out of bilateral or regional integration because of a boycott by China, Ko Chen-en, president of CIER, said.

Among the existing 186 free-trade agreements (FTAs) in the world, Taiwan secured only two — with allies Panama and Guatemala — which are of almost no significance to the nation because of the small volume of trade involved, Ko said.

Another meeting to be staged this month is the ASEAN summit with the participation of China, Japan, South Korea, India, Australia, New Zealand and Russia. Taiwan does not form part of the summit, which aims to eventually form a free-trade bloc in the region.

FTA benefits

Under these circumstances, Democ-ratic Progressive Party Legislator Hong Chi-chang suggested that the government help companies to set up operations or invest in other countries to enjoy the benefits of FTAs.

Meanwhile, Taiwan should change its passive attitude to participating in WTO affairs and help with industry transition, Ko said.

Because of a lack of experience in international multilateral negotiations, Taiwan has mostly been adopting a mere response mechanism, instead of expanding trade and influence in global organizations like China is doing, Ko said.

The expected accession of Vietnam to the WTO next year, for example, will be a good opportunity for Taiwan to conduct bilateral negotiations with that nation to remove trade barriers under the WTO structure, Ko said.

Don’t know rules

Kristy Hsu, a researcher at the WTO Center, said that most farmers and industries are still not familiar with WTO rules and their impact on their businesses, and the government should spend more time to spread this information.

"We found that most farmers knew that their profits would decline after Taiwan joined the WTO, but they just sit back in the belief that the government will compensate them with subsidies, which is only partially true," Hsu said.

Use resources

Instead of giving them fish, the government should teach them how to fish using their own resources, such as developing their farms into tourist guest farms, she said.

Increased trade with WTO member countries in the three years after the nation’s accession to the organization has contributed about 2.2 percent to Taiwan’s GDP growth. This illustrates that membership in the world trade body helps the nation, instead of jeopardizing industries like many people thought would happen, Hsu said.