Taiwan enters WTO

Consumers have been stocking up on local produce

Taiwan has officially entered the World Trade Organisation, only a few weeks after its giant neighbour China took the same path.

The island - which boasts the world's 14th largest trading economy - becomes the 144th member of the body that sets rules on international trade.

Taiwan had to agree to amend legislation, lower import tariffs in some areas and improve access to its markets for foreign companies.

For a long time, the people of Taiwan have hoped to be accepted by the international community. The wish will soon come true

Vice-President Annette Lu

Analysts say one of the most important consequences is likely to be a rapid increase in Taiwanese investment in China, with more Taiwanese companies setting up factories there.

The cabinet-level council which governs relations with the mainland said the WTO framework would lead to a relaxation of the terms of trade, and allow Chinese businesses to invest in Taiwanese service industries.

For Taiwanese, of course, the situation is reversed. While many younger Taiwanese see their home as a de facto nation of its own, official policy still backs reunification - but certainly not on Beijing's terms.

But some fear that while consumers in Taiwan will benefit from cheaper imports thanks to the mainland's much lower labour costs, the influx could put many Taiwanese producers out of business.

The agricultural sector could be most at risk, because the blanket ban on produce from across the Taiwan Strait will have to be lifted.

Customers have been stocking up on locally produced goods such as rice wine, widely used in Chinese cooking, which will jump from about $0.60 for a 600ml bottle to $3.45 under amended tariff legislation.

The wait is over

For Taiwan, entry into the WTO brings the hope that the island could finally come in from the cold.

It has long been isolated in economic diplomacy because of its fraught relationship with the mainland.

The People's Republic still sees Taiwan - which broke away soon after the Communist Party took power in 1949 - as a rebel province.

It has used its much greater muscle, and the promise of a 1.3bn person market, to make sure that countries do not have diplomatic relations with both itself and Taipei.

For Taiwanese, of course, the situation is reversed. While many younger Taiwanese see their home as a de facto nation of its own, official policy still backs reunification - but certainly not on Beijing's terms.

During a train ride to see in the New Year, Taiwan's vice president, Annette Lu, reflected the new mood.

"For a long time, the people of Taiwan have hoped to be accepted by the international community," she said. "The wish will soon come true."

But Taiwan's entry has predictably been long held up by the difficulties of the cross-strait relationship.

An understanding reached by WTO members in 1992 specified that that China would join first, which held up Taiwan's membership for years.

And China's claims of sovereignty over Taiwan mean that its entry is as a separate customs territory with different rules on importing goods, rather than as a separate country.