Taiwan had first applied to join the General Agreement on Tariffs and Trade (GATT) on January 1st, 1990, under the label of “the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu.” Under this label, Taiwan was applying to the World Trade Organization (WTO) as an independent member, a fresh new applicant with out any other nation sponsoring its’ membership. Therefore, in order to successfully gain membership into the WTO, Taiwan had to gain sponsorship via negotiation with some of the current WTO-members and strict adherence to the series of provisions outlined under the GATT. In the Uruguay Round Agreements of 1994, Taiwan held their negotiations with interested parties, such as the United States, the European Union, and Brazil, where Taiwan accepted the guidelines of the GATT and also considered additional conditions from 7 of the 26 countries interested in the Taiwanese region. The main point to the Uruguay Round Agreements and the guidelines of the GATT was the gradual reduction and elimination of any trade barriers, such as tariffs, quotas, to promote a more favorable trade environment for all members of the WTO.
One of the primary concessions that Taiwan agreed upon was the reduction of tariff rates. According to the sections within the Uruguay Round Protocol GATT 1994, a country seeking membership would have to “implement five equal year rate reductions”, where “the first such reduction would be made effective on the date of entry into force of the Agreement Establishing the WTO”. Each of the five tariff rate reductions would have to be made on the January 1st of each following year and the final rate would be fixed by the time of the country’s 5th year of WTO membership. Taiwan began to revise and reduce their current average tariff rates across different economic sectors. Before Taiwan’s accession of the WTO, the average tariff rate for industrial goods was 6.03%. Within the very first year of WTO membership, Taiwan reduced this further to 5.78% in 2002 and eventually reduced the rate even further to 4.15%. With the lowering of Taiwan’s average tariff rates, the country was faced with more competition from foreign imports and its export sector began to lose its competitiveness.
Aside from lowered tariffs, Taiwan would have to remove import quotas on the amount of goods and services imported to the country. Therefore, Taiwan began to gradually increase their quotas of imports, particularly for U.S. imported meat. After the very first year of signing the bilateral agreements with the United States, Taiwan had permitted 10,000 tons of chicken meat, raised the quota to 19,163 tons upon accession into the WTO, raised to 45,990 tons in 2004, and finally the quota system was completely removed in 2005. Without any restrictions on the import of agricultural goods from overseas, Taiwan had fulfilled its agreement accordingly to the GATT.
Yet another concession by Taiwan was the elimination of export subsidies. Under the GATT...