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.