> Home Page > Latest News > Politics and Economy > Industry > WTO Impact

Talks requested with PRC on towel imports

This article was published by the Taiwan Headlines on April 26, 2006. It reports that Taiwan has formally requested talks with the Chinese authorities, on towel imports from China under the framework of the World Trade Organization. The aim of such talks will be to decide whether a mechanism should be launched to restrict the imports of Chinese towels. China's response to Taiwan's request may determine future interactions between the two sides of the Taiwan Strait on trade disputes.

In the request, government authorities have notified China of the possible actions Taiwan may take to stop China from dumping its towels on the Taiwanese market. These actions will be conducted under the World Trade Organization's agreements. Specifically, the government has proposed that if no agreement is reached between Taiwan and China within 60 days, then a tariff of NT$42 should be imposed on each kilogram of towel imports from China in the first year, NT$32 in the second year, and NT$20 in the third year. In terms of average tariff rate, it will be about 66 percent.

So far, no decision has been made on the timing for imposing such tariffs. But China has said before that it will not enter talks with Taiwan under the World Trade Organization's framework.

According to the World Trade Organization, Taiwan will be the seventh member nation of the World Trade Organization to apply for the launch of a mechanism in order to protect its industry from unfair competition. The previous six countries are the United States, Peru, India, Canada, Colombia and Turkey.

In March 2006, at the request of local towel manufacturers, the Ministry of Finance launched an anti-dumping investigation on towel imports from China. Statistics show that since Taiwan's accession to the World Trade Organization in 2002, Taiwan's towel makers have lost 50 percent of their market share to cheap imports from China. Specifically, Taiwan's annual towel output dropped from 1.1 million in 2001, to 77,000 kilograms in 2005. The nation's largest towel manufacturer closed businesses in the end of 2005, while many others are struggling for survival.