Term Paper on "Taiwan, My Home-Country, Joined the World Trade"

Term Paper 5 pages (1680 words) Sources: 1+

[EXCERPT] . . . .

Taiwan, my home-country, joined the World Trade Organization only in 2002, after 12 years of expectancy. The main reason for this was considered to be the fact that China insisted to join WTO first and its negotiations with the organization lasted around 15 years. The results have been atypical as well, on the one hand because China could not obtain a transition period and, on the other hand, it had to counter-balance some discriminations against it: the statute of "non-market-economy" in the framework of the anti-dumping and anti-subventions procedures for 15 years, the possibility of the application of some selective quantitative restrictions to the Chinese exports on different markets and the possibility of application of some quantitative restrictions fore another 3 years, after the complete liberalization on January 1, 2005.

Do you think that Taiwan had to wait so long to become a WTO member because of China? Why did the other WTO members accept China to become member first, even though the process of integration in the case of Taiwan would have been completed in a shorter period of time? Can we speak about corruption at a very high level in this case?

Possible answer: No, it is not about any form of corruption. It was normal for China to be the first to become a WTO member, since its negotiations with the organization started three years earlier than those with Taiwan. Therefore, it has been respected the principle of "first arrived, first served."

2. Even though it is a WTO member for 4 years, Taiwan had not yet the chance to sign any Commercial Regional Preferential Arrangement. There have been two main periods of commercial regionalism in the history: one in the 60s and one in the 70s. Nowadays, 97% of the world trade is developed by countries which have signed at least an agreement of this type. Even though, Taiwan and other 3 WTO members (Hong Kong, Macao and Mongolia) are not part of any Commercial Regional Preferential Agreement. Only now, in 2007, it has been announced that my country will sign a Free Trade Agreement with the United States. When do you think this stage would be fulfilled by Taiwan and what form would its first agreement take: commercial preferential agreement, free trade area, customs union, common market or monetary and economic union? What country do you think would be the next partner of Taiwan, since at the international level the greatest part of the countries which sign preferential trade agreements are those having a population around 12 million people and a GDP per capita of 7200 U.S. dollars per year?

Could China be the chosen country by Taiwan, taking into consideration that the relationships between the two countries have been improved - for example, Taiwan has opened its agricultural and service markets towards China - after they joined WTO? Since 72% of the agreements have taken the form of a free trade agreement, is there any possibility for the two countries to decide to join a similar one, or would they choose a preferential commercial agreement, having in mind their economic history?

Possible answer: I think Taiwan would become a part of such an agreement in the near future, since almost all the WTO members have concluded Commercial Regional Preferential Agreements. Moreover, Taiwan might choose China to be the one of the countries to sign an agreement with. There are several reasons for which such an action might occur: first of all, because the image of the two countries at the international level would substantially be improved, and the conflict between the two countries would be able to be left aside. Secondly, Taiwan would have a lot of economic benefits from an agreement of this type

3. It has been easily noticed that at the international level there is a strong tendency to follow the U.S. model: EU is the most concluding example in this case, since it is supposed to adopt the form of a huge federal state, if the EU Constitution would in the end be adopted. It has bean thought that the main reason for such an action would be the counter-balance of the United States' economic power.

There have been many speculations concerning the statute of ASEAN in this perspective. Practically, it has been contended that there are two many similarities between the two organizations in order for them not to have the same purpose: the European Community was founded in 1958, whileas ASEAN in 1867; EU had six founding members, ASEAN had five - Philippines, Singapore, Malaysia, Thailand and Indonesia, and nowadays it has ten, after Brunei, Cambodia, Laos, Myanmar and Vietnam have joined the union. Moreover, both of them have been created for economic purposes - after the Bali Summit, the ASEAN representatives publicly declared that the main aim of the organization is economic cooperation. The declaration was followed in 1991 by the Thai proposal for a free trade area.

What possibilities do you think there are for ASEAN to achieve a similar statute to that of the EU? Will the ASEAN members arrive at the point in which they would be internationally represented at the economic level as a single unity? Would ASEAN adopt a common currency, just as EU did?

Possible answer: Yes, I consider that there is a strong possibility for ASEAN to achieve a similar statute to that of the EU in the next few decades. EU has indeed a great economic power at the international level, but this is mainly because it acts as a unitary political body: it has its own executive, legislative and judicial bodies. Therefore, I think that these steps should be firstly fulfilled by ASEAN and afterwards it might gain the title of a unitary economic power and it might even adopt a common currency.

4. Due to their special statute, the degree of real and financial integration of China, Hong Kong and Taiwan is controlled each month using the data provided by interbank rates, exchange rates and prices. Moreover, the degree of integration is fixed within the framework of a strict connection with the real interest parity, uncovered interest parity and relative purchase power parity. It has been proved that these parity conditions tend to be appropriate for longer periods of time, even though the magnitude of deviations from their conditions might deviate. In addition, it seems that the integration criteria in the case of China and Hong Kong have started to be fulfilled step-by-step. Their exchange rate variability has as well been proved to favor small deviations from the parity conditions, which. In the case of China, this fact, together with its recent accession to WTO has determined the country to improve its economic relations with the rest of the world.

Has this change made itself felt in its economic relationship with U.S. As well?

Do you think that China's promise to respect the international norms regarding the trade of goods and services will bring a change into the economic policy of this country?

Possible answer: Undoubtedly yes. Moreover, in recent time, China seems to have left aside many of the communist norms. As a follow-up, its economic relationships with the capitalist countries have been substantially improved. In addition, the export of its cheap workforce has been beneficial for the entire world and, the Chinese people have been able in the end to build hopes for a better life. China is definitely on the good way and I am sure that, if its government would decide to enter into a transition period towards capitalism, the country would benefit from the support of all the democratic states.

5. The whole world and the Taiwanese people have assisted to the "Taiwan Miracle" during the second half of the 20th century; everything started with a land reform law, inspired similar to… READ MORE

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