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Taiwan And International Trade

.. example, tariffs on semiconductors are now at less than one percent and scheduled to fall to zero.27 Tariffs on semiconductor manufacturing equipment are now just under six percent and scheduled to be cut by more than 50 percent.28 Tariffs on a number of consumer electronic products, such as cassette players, are sizeablemany in the low teensand also scheduled for substantial reduction.29 Tariff reductions on these and other consumer products will undoubtedly create substantial opportunities for Taiwans trading partners and more business opportunities for Taiwanese companies. Of course, tariffs are not the only barriers to trade. A number of products are also subject to various trade licensing and import permit restrictions in Taiwan. These restrictions affect several hundred product classifications and in cases ranging from pharmaceuticals to sport fishing boats, they constitute significant barriers to imports.30 Notable restrictions are also applied to a number of agricultural products, including sugar and rice.31 Foreign companies exporting to Taiwan have also raised issues regarding various arbitrarily enforced standards on products, such as air conditioners.32 Taiwans import system for alcohol and tobacco products has also been criticized as “cumbersome and costly.”33 Many of these non-tariff barriers are the subject of ongoing bilateral discussions with major trading partners and inconsistent with the WTO and would be reduced or eliminated by the WTO accession process.

As is the case with a number of countries, Taiwan also enforces substantial government procurement preferences and requirements that limit the importation of foreign goods and services. Taiwans technology transfer requirements have also drawn some criticism, particularly in the aerospace sector. Taiwan has, however, agreed to adhere to the WTO Government Procurement Agreement upon accession to the WTO and has voluntarily undertaken some reform in this area.34 Protection of intellectual property in Taiwan has been a long-standing trade issue between the United States and Taiwan. Piracy in various forms has been a significant problem in the past. Through several bilateral agreements with the United States and a number of legislative changes, Taiwan has brought intellectual property protection to a high-levelcomparable to that of most other developed countries.

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Concerns are sometimes raised, however, concerning some alleged connections between Taiwanese firms and piracy on the mainland. As a developed country, Taiwan would be bound to fully adhere to WTO provisions on Trade Related Intellectual Property (TRIPs) upon accession.35 In addition, as is the case in a number of countries, Taiwan maintains substantial restrictions with regard to a number of services. Financial services and telecommunications services are two sectors in which there is substantial potential for imports. Taiwan has voluntarily liberalized in both sectors and made particularly significant moves regarding telecommunications services. Taiwan has also agreed to fully participate in the General Agreement on Trade in Services (GATS) upon WTO accession.36 As noted, Taiwan has substantially reduced both tariff and non-tariff barriers and improved protection of intellectual property voluntarily over the years. In a number of sectors, however, WTO membership as a developed country would commit Taiwan to economically significant further liberalization. CONCLUSION Taiwan and the world trading system have a complex history. Even without formal membership in the trading system, Taiwan has developed into an important trading partner for many countries.

Despite the lingering impact of the Asian Economic Crisis, Taiwans total trade with the world has approached $250 billion in 1999; placing Taiwan in the top rank of trading powers. From the perspective of the WTO and its trading partners, Taiwan has proven itself a responsible trading power. In the last decade, Taiwan has greatly liberalized its trading system; tariffs and NTMs have come down and protection of intellectual property has improved to a level consistent with other developed countries. There are still areas in Taiwans trading regime which could be improved, but Taiwans economy is already more open than that of most of its Asian neighbors. Unlike the PRC and many current members of the WTO, Taiwans trading regime is already in compliance with the provisions of the WTO.

Upon accession to the WTO, Taiwan has agreed to undertake a series of additional trade liberalizing measures that will open billions of dollars in new trade opportunities annually for its trading partners and for Taiwan itself. Certainly, Taiwans largest trading partners, such as the United States and Japan, will enjoy a substantial share of these new opportunities, however, Taiwan is a diversified trader that maintains substantial trade relationships with many countries. All of these are likely to see some additional export opportunities and some countries that do not currently trade with Taiwan may also enjoy some benefits and in the end, Taiwans membership in the WTO will strengthen the WTO as an institution. The trade liberalization that results will benefit Taiwan, Taiwans trading partners, and the world trading system. The economy of Taiwan is undoubtedly affected and will continue to be affected by the loosening of trade restraints. Because of the relative small size of the island and lack of natural resources, many Taiwanese companies have already been forced to transfer to Mainland China where their operating expenses are significantly lower due to availability of space and cheaper labor.

With further liberalization of import tariffs, Taiwanese companies will be further challenged by the influx of cheaper foreign goods. Unless Taiwanese companies gear themselves to handle the changing market and competition, they will lose a significant share of their home and foreign markets and also be forced to move to mainland China or somewhere else that offers cheap labor. In addition, Taiwanese companies will have to invest in newer technologies to further compete with the ever-increasing number of foreign companies. Along with the negative effects of trade liberalization, there are also positive outcomes for the Taiwanese economy. With imports at lower tariff rates, the people of Taiwan will experience increased buying power. The standard of living will also increase since Taiwanese will have a wider range of products at cheaper prices from which to purchase.

Taiwanese companies will be forced to raise the quality of their products and services in order to compete with foreign companies thus affording the Taiwanese people more product for their money and ultimately increase spending leading to an even more robust economy. REFERENCES 1. “Taiwans Twenty Years of Economic Expansion.” Taiwan Almanac. 29 March 1999. Viewed on: 15 April 2000 *www.taiwaninformation.org/almanac/economy/essay4- 032999.html*. 2.

“Taiwans Twenty Years of Economic Expansion.” 3. “Taiwans Twenty Years of Economic Expansion.” 4. “Taiwans Twenty Years of Economic Expansion.” 5. “Taiwans Economy Remains on Track,” The Washington Times, 8 October 1999, Viewed on: 15 April 2000 *www.washtimes.com/internatlads/taiwan99/6.html*. 6. “Taiwans Economy Remains on Track.” 7.

“Taiwans Economy Remains on Track.” 8. “Taiwans Economy Remains on Track.” 9. “The Flexible Tiger,” The Economist 3 Jan. 1998: p. 73.

10. “The Flexible Tiger.” 11. “The Flexible Tiger.” 12. “The Flexible Tiger.” 13. Tanzer, Andrew.

“Tight Little Island,” Forbes 12 January 1998: p. 52-53. 14. “Tight Little Island.” 15. “Tight Little Island.” 16. “Tight Little Island.” 17.

Taiwanese Trade Statistics. Viewed on: 15 April 2000. *www.cetra.org.tw/english/statistics/indexset.htm* . 18. Taiwanese Trade Statistics. 19.

Taiwanese Trade Statistics. 20. U.S. Trade Statistics. Viewed on: 15 April 2000. *www.ita.doc.gov.*.

21. Dr. Mastel, Greg. Taiwan in the WTO: An Economic and Policy Analysis. 6 October 1999. Viewed on: 15 April 2000 *www.taipei.org/un/wto0223.htm*.

22. Taiwan in the WTO: An Economic and Policy Analysis. 23. Taiwan in the WTO: An Economic and Policy Analysis. 24. Taiwan in the WTO: An Economic and Policy Analysis.

25. Taiwan in the WTO: An Economic and Policy Analysis. 26. Taiwan in the WTO: An Economic and Policy Analysis. 27. Taiwan in the WTO: An Economic and Policy Analysis.

28. Taiwan in the WTO: An Economic and Policy Analysis. 29. Taiwan in the WTO: An Economic and Policy Analysis. 30.

United States Trade Representative. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. Washington D.C.: GPO, 1998. P.318. 31. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers.

32. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 319. 33. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers.

P. 326. 34. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P.

320-321 35. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 322. 36. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers.

P. 323-324. TABLE 1: Taiwans Top Trading Partners and Total Trade in 1997 & 1998 (in US$ Millions). Country 1997 1998 United States 52,785.6 49,067.7 Japan 40,712.7 36,350.2 Hong Kong 30,684.2 26,793.6 Germany 9,059.8 9,235.8 Korea 7,390.4 7,156.4 France 6,120.3 6,706.1 Netherlands 5,936.3 5,960.6 Singapore 8,045.0 5,956.0 Malaysia 7,263.7 5,909.8 United Kingdom 5,231.0 4,990.4 Australia 5,090.2 4,544.7 Thailand 4,489.0 3,893.8 Philippines 3,617.1 3,757.7 Indonesia 4,318.5 3,150.2 Italy 2,735.2 2,826.4 Canada 3,184.9 2,732.9 Saudi Arabia 2,395.4 1,622.5 Belgium 1,341.5 1,447.2 Switzerland 1,420.6 1,413.3 Brazil 1,673.3 1,259.4 Others 33,010.4 30,604.8 Total 236,505.1 215,379.8 Source: CETRA TABLE 2: Taiwans 10 Major Export Markets in 1997 & 1998 (in US$ Millions). Country 1997 1998 United States 29,551.8 29,386.0 Hong Kong 28,688.1 24,841.3 Japan 11,691.0 9,331.7 Netherlands 4,298.0 4,369.3 Germany 3,690.6 4,086.8 United Kingdom 3,278.2 3,280.2 Singapore 4,894.6 3,259.1 Malaysia 3,035.4 2,286.8 Philippines 2,242.5 1,934.7 Thailand 2,562.1 1,926.1 Others 28,148.3 25,938.0 Total 122,080.6 110,640.0 Source: CETRA. TABLE 3: Taiwans 10 Major Import Sources in 1997 & 1998 (in US$ Millions). Country 1997 1998 Japan 29021.7 27018.8 United States 23233.8 19681.7 Korea 5024.5 5670.2 France 4726 5328.5 Germany 5369.2 5149 Malaysia 4228.3 3623 Australia 3217.2 2912.9 Singapore 3150.4 2697 Thailand 1926.9 1967.7 Hong Kong 1996.1 1952.3 Others 32530.4 28738.7 Total 114424.5 104739.8 Source: CETRA TABLE 4: Taiwans Major Imports in 1997 & 1998 (in US$ Millions).

Commodities 1997 1998 Electronic Products 18,656.8 18,110.2 Machinery 11,475.1 12,050.2 Chemicals 11,440.1 9,550.7 Transport Equipment 5,360.7 5,595.7 Info. & Comm. Products 3,531.8 5,296.6 Precision Instruments 6,375.5 5,192.4 Iron & Steel 6,137.8 5,167.8 Metal Products 5,356.5 4,334.5 Minerals 5,217.7 4,279.8 Raw Materials 3,821.0 3,973.8 Others 30,788.1 46,049.1 Total 114,424.6 104,739.8 Source: CETRA TABLE 5: Taiwans Major Exports in 1997 & 1998 (in US$ Millions). Commodities 1997 1998 Electronic Products 18,024.0 16,911.6 Info. & Comm. Products 14,441.8 13,773.9 Fiber, Yarn, Linen & Fabric 11,741.5 10,246.8 Machinery 9,651.3 7,809.6 Plastic & Rubber 7,716.3 6,873.2 Iron & Steel 6,649.4 6,408.7 Transport Equipment 5,587.6 5,216.2 Metal Product 4,881.3 4,471.6 Electrical Machinery 4,767.8 4,354.7 Chemicals 3,277.6 2,858.1 Others 35,341.9 31,715.6 Total 122,080.5 110,640.0 Source: CETRA Bibliography 1.

“Taiwans Twenty Years of Economic Expansion.” Taiwan Almanac. 29 March 1999. Viewed on: 15 April 2000 . 2. “Taiwans Twenty Years of Economic Expansion.” 3. “Taiwans Twenty Years of Economic Expansion.” 4.

“Taiwans Twenty Years of Economic Expansion.” 5. “Taiwans Economy Remains on Track,” The Washington Times, 8 October 1999, Viewed on: 15 April 2000 . 6. “Taiwans Economy Remains on Track.” 7. “Taiwans Economy Remains on Track.” 8. “Taiwans Economy Remains on Track.” 9.

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326. 34. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 320-321 35.

1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P. 322. 36. 1998 National (U.S.) Trade Estimate Report on Foreign Trade Barriers. P.

323-324.

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