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Taiwan's GATT Membership - Fully Deserved, Yet Elusive

THE following are facts about Taiwan's economic achievements: Taiwan is one of the largest trading partners of the US. Taiwan is the 13th-largest trader in the world. Taiwan has the largest foreign-exchange reserves in the world ($70 billion). And Taiwan is one of the most successful ``newly industrialized countries.'' Still, Taiwan is not a member of the General Agreement on Tariffs and Trade (GATT) - the world's only multilateral trade regime. Early last year the Taiwanese government submitted an application to join GATT. The application was viewed dimly in the US for political reasons. Washington is afraid of offending the leaders of the People's Republic of China (PRC) by supporting Taiwan's application for GATT membership. Chinese officials maintain that to support Taiwan's application to join GATT is a violation of the ``one China'' policy. They are especially unwilling to see Taiwan receive a GATT membership before the PRC, whose applica tion has been stalled since the brutal massacre at Tiananmen Square in June, 1989.

The Bush administration's lack of support for Taiwan should be reconsidered.

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In order to sidestep the ``two Chinas'' issue, the Taiwan government has asked for membership in the name of the ``Separate Tariff Territories of Taiwan, Penghu, Kinmen and Matsu Islands'' - the names of the main islands under the Taiwan government's direct and effective control. Such an application should be seen as an honest effort to avoid ``two Chinas.''

Also, Taiwan's application to join GATT is legally justified. There is no doubt Taiwan has a ``separate customs territory'' over which the government possesses ``full autonomy in the conduct of its external commercial relations.'' This is consistent with the legal stipulation of Article 33 of GATT's membership application.

MOVEVER, while Taiwan is not a GATT member, the government in Taiwan has worked hard to liberalize its economy. The national currency has appreciated by about 40 percent against the US dollar since 1987. That decreases the protection on Taiwan's export sectors. Many tariff and non-tariff barriers on foreign goods, such as liquor, cigarettes, agricultural products and banking services have recently been reduced or eliminated. While more is yet to be done, these efforts should be recognized by the interna tional community.

Finally, Taiwan's GATT membership would be beneficial to the interests of the international community. During the past four decades, Taiwan took advantage of GATT's ``special treatment'' principle for developing countries and protected its market. With its economic success, many developed countries, including the US, have proposed that Taiwan should no longer enjoy the benefits from the GATT system without sharing the responsibilities. Currently, this has been carried out by bilateral negotiations. If T aiwan were to be admitted to GATT, it would have to abide by GATT regulations and the liberalization of its market would speed up.

Taiwan was a founding member of GATT in 1947. The seat was abandoned by the Nationalist party (Kuomintang or KMT), which was forced to flee to Taiwan before the Chinese Communists took over the mainland. Taiwan was later granted an observer's seat in 1965, but this status was lost in 1971 when the UN General Assembly voted to recognize the PRC as the only legitimate Chinese government. Under GATT rules, Taiwan needs a two-thirds majority to rejoin GATT. Although the US cannot singlehandedly determine th e outcome, its support would carry considerable weight among other the members.

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