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

 

WTO Impact

As introduced by the Yearbook of the Republic of China:

 

Taiwan's accession to the World Trade Organization (WTO) in January 2002 creates new opportunities for growth by providing wider access to global markets under the most-favored-nation trading status.

The simple average nominal duty rate for Taiwan's industrial sectors was 6.03 percent before its accession to the WTO. The rate was cut to 5.79 percent in 2002 and will be reduced further to 4.15 percent by the end of 2004, when the scheduled tariff concessions (covering 3,470 industrial items) are completely phased in. In accordance with the Zero for Zero Program, Taiwan must reduce its duty rates to zero in selected sectors such as distilled spirits, pharmaceuticals, medical equipment, furniture, paper, agricultural equipment, toys, construction equipment, steel, and beer. The Chemical Harmonization Program requires that fixed tariff rates be applied at the following levels: finished products at 6.5 percent, intermediate goods at 5.5 percent, and raw material and pharmaceutical products at zero percent.

According to the WTO, Taiwan's tariff reductions following its entry will eventually create an additional market for imports of industrial and farm products worth approximately US$1 billion. In May 2002, Taiwan eliminated import controls on over 95 percent of 10,616 import product categories. Taiwan's WTO admission is expected to result in a reduction of Taiwan's trade surplus by approximately US$5.39 billion by the year 2004, as imports will increase faster than exports. According to Directorate-General of Budget, Accounting, and Statistics, in the first eleven months of 2002, industrial production increased 6.6 percent and exports increased 5 percent. It is hoped that Taiwan's entry to the WTO will add 1.72 percent to Taiwan's GDP growth by the year 2004.

The eleven sectors targeted in WTO negotiations include commercial; communications; construction and related engineering; distribution; education; environmental services; financial; health-related and social; tourism and travel-related; recreational, cultural, and sporting; and transportation services.

Imports have increased in previously protected industries including agriculture, automotives, tobacco, alcohol and consumer electronics. These industries were most vulnerable after WTO accession, because they target mainly domestic markets. In 2002, imports of household electrical appliances increased by 26 percent, up from US$449.1 million in 2001 to US$566.2 million in 2002, while exports in this category decreased. Taiwan's carmakers had adequately prepared for the loss of cost advantage following tariff cuts and the lifting of import quotas. In 2002, the production of locally made automobiles increased by 11 percent compared with the previous year, and the market share grew from 83.9 percent to a record 87 percent.

Here are some interesting article to read: