The accession of both China and Taiwan to the World Trade Organization (WTO) had important implications for relations across the Taiwan Strait and Taiwan’s position in the regional economy although it did not fundamentally change trade policies by either side towards the other. Accession strengthened China’s position in the world economy and the momentum of economic reform. China’s weight and importance in the regional and world economies has increased greatly. With the shift to regionalism and bilateral free trade agreements in East Asia and the Pacific, and China’s new freedom to join this game, Taiwan has become even more isolated diplomatically. Moreover, despite WTO accession, Taiwan maintains discrimination in its trade policy against key imports from the mainland. This damages Taiwanese trade and economic performance by truncating the capacity of the economy to generate higher value added in Taiwan on the base of China’s low-cost processing capacity. Because of these restrictions, Taiwan under-utilises trade potential with China and with the world at large compared with other economies in the region such as South Korea. The best strategy for Taiwan is to go global, promoting multilateral liberalisation globally and regionally as a deliberate strategy to strengthen and re-balance economic relations with the mainland.
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Publisher Info
Paper provided by East Asian Bureau of Economic Research in its series Trade Working Papers with number
373.
Length: 38 pages Date of creation: Jan 2003 Date of revision: Handle: RePEc:eab:tradew:373
Contact details of provider: Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200 Web page: http://www.eaber.org More information through EDIRC
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Find related papers by JEL classification: F14 - International Economics - - Trade - - - Country and Industry Studies of Trade F15 - International Economics - - Trade - - - Economic Integration F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
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