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Taiwan Joins WTO - 2002-01-01

Tuesday marks the official entry of Taiwan into the World Trade Organization. Officials in Taipei are hoping that WTO membership will reduce Taiwan's international isolation and ease political differences with Beijing.

Taiwan becomes the newest member of the World Trade Organization on the first day of 2002, less than a month after China entered the organization.

Taiwan had long qualified for membership, but was held back for more than a decade by China's objections. Beijing claims the self-ruling island as part of its territory. In a compromise, Taipei joins the WTO classified as a "separate customs territory."

Taiwan's membership was granted late last year after China overcame its own final hurdles to joining the world trade body.

Officials in Taipei portray the long-awaited accession to the WTO as a boost to Taiwan's international status and the basis of a potential breakthrough in its frosty ties with Beijing.

Taiwan has long sought to overcome its diplomatic isolation through trade and investment, and is the world's 14th largest trading economy.

WTO membership comes at a price, however. Taipei has reduced tariffs on agricultural and industrial products and has started drafting regulations to improve market access for foreign companies. Taiwan's farmers and traditional industries are likely to be hurt the most by the more competitive environment.

For the average Taiwan consumer, the most immediate effect of WTO membership is a sudden jump in the price of rice wine, a staple of home cooking on the island. Before joining the WTO, the Taiwan government ran a monopoly on alcohol and tobacco, keeping the price of a bottle of domestic rice wine at less than $1. With the end of that monopoly, the price jumps to almost $4.

Government officials are playing down the problems, and point to the benefits of lower tariffs for potatoes, apples and other foreign farm produce.

Tariffs on goods from China, however, have not fallen. Taiwan hoped to discuss opening its market to Chinese goods with Beijing, but China refused to hold talks within the WTO forum, fearing that might appear to give the Taiwan government legitimacy.