Taiwan makes big concessions in bid for entry into GATT

Taiwan makes big concessions in bid for entry into GATT

TAIPEI (Reuter): Taiwan has made major concessions in its bid
for entry to GATT, and plans more, to ensure the world's 13th
largest trading country becomes a member by the end of the year,
the island's top trade official said.

"As the world's 13th largest trading country, we should be a
member of the General Agreement on Tariffs and Trade (GATT). What
are we afraid of?" Y.C. Huang, director general of the Board of
Foreign Trade, told Reuters.

Officials leave this week for talks in Geneva throughout
September with 25 GATT member countries to clear up outstanding
disagreements blocking Taiwan's membership, such as removal of
non-tariff trade barriers and tax deductions on agricultural and
industrial products.

To attain entry to GATT and its successor body, the World
Trade Organization to be set up next year, Taiwan is reducing the
average trade-weighted tariff rate on industrial products to four
percent, a nearly 100 percent cut since 1986, Huang said.

"There should be no reason for (GATT) members not to accept,"
he said.

Cuts on agricultural tariffs are less sweeping, with the
island aiming for a 12.5 percent average, which Huang described
as almost the same as Japan and below South Korea. "We think this
is rather low."

Taiwan has traditionally used high import tariffs or non-
tariff barriers to protect certain industries, including an
average of 21.6 percent tariffs on agriculture and 30 percent on
passenger cars.

The past few weeks have seen a rush of moves by Taiwan to
conform with tariff request lists from GATT members.

Monopoly

A decades-old monopoly protecting tobacco and wines will go at
year's end, sweeping revisions to laws to guarantee protection of
patents and copyrights have been unveiled and lucrative
government procurement contracts are to be opened to foreign
bidders within two years.

"We will do our utmost to make our best offer and
concessions," Huang said. "But if their requests are so high that
we can't make the right offer -- we have a limit."

Huang, however, was confident of winning membership, saying
the island had to learn to compete on a level playing field.

"We will sign everything except the civil aircraft code
because this deals with subsidies," Huang said, adding that
agreement was optional and should not hamper the application.

"We have to be prepared for short-term pain."
Pain will be sharpest for the automotive industry and agriculture
and agricultural processing.

Officials say combined annual production value of those
sectors will drop 12 percent after GATT entry with estimates of
losses to the car industry ranging from 30 to 60 percent.

Huang says Taiwan has drafted a blueprint to tackle the thorny
issue of protection of the car industry.

Trade officials have come up with a complicated tripartite
quota system that Huang says caters to the interests of local
manufacturers, current exporters to Taiwan and countries still
banned from selling to the island.

"We have been told this is very innovative. It takes into
consideration the interests of all parties," Huang said, adding
that the formula is complicated, requiring agreement from all
parties to succeed.