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Friday, May 14, 1999 Published at 11:35 GMT 12:35 UK

Business: The Economy

Taiwan ready for WTO

Taiwan is one the world's biggest exporters

While negotiations have stalled over China's bid to join the World Trade Organisation (WTO), Taiwan has been quietly concluding a series of agreements with its main trading partners to pave the way for membership.

But its application could still be blocked by objections from China, which insists that it must join the WTO first.

China has always argued that Taiwan is a rebellious province, and says that in 1992, at the start of negotiations, the world trade body agreed to admit China first.

The row could further sour relations at the WTO, which is already reeling from trade disputes between the EU and the US, and the inability to pick a new director-general.

Good progress

Taiwan's chief trade negotiator Lin Yi-fu said that his country had made a "big step forward" towards WTO membership, after 30 countries met in the island's capital Taipei this week to review its application.

Taiwan offered further trade concessions to ensure success, including opening up its agricultural sector to imports, a move its says will cost farmers some $900m.

Rice and livestock imports are to be liberalised, and motorbikes and small car imports allowed earlier than planned.

Exports make up 40% of Taiwan's economy, and completing a trade liberalisation deal is one of its top priorities.

"We have completed reviews of substantial issues. I'd say we've moved a big step forward towards our entry," said Mr Lin.

With agreements concluded with all but two countries - Canada and Hong Kong - Taiwan's application could be approved in principle as early as July.

Chinese anger

But that could anger China, whose own negotiations on WTO membership stalled even before the NATO bombing of its embassy in Belgrade.

China is now threatening to withdraw some of the trade concessions it made to Washington earlier in the year.

China could urge its supporters among developing countries to block Taiwan's admission to the WTO, or it could refuse to allow Hong Kong to negotiate a trade deal with Taiwan.

Under WTO rules, any country wishing to join must conclude a bilateral trade deal with any WTO member which seeks one.

Both Taiwan and the United States say that each application should be considered on its merits. Mr Lin said "our opinion has been that the two applications are dealt with separately."

Although China claims sovereignty over Taiwan, it says it will not oppose the island's entry to the WTO as a "non-sovereign customs territory" - the same status as Hong Kong.

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