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[Page: S7604]

Mr. ROTH submitted the following resolution; which was referred to the Committee on Foreign Relations

S. Res. 296

Whereas on January 1, 1990, the Government of Taiwan formally requested the Secretariat of the General Agreement on Tariffs and Trade (GATT) to initiate the procedure necessary for its accession to the GATT;

Whereas the Government of Taiwan has applied for membership in the GATT as a separate customs territory under GATT Article XXXIII under the name `The Customs Territory of Taiwan, Penghu, Kinmen and Matsu', to ensure that its application includes only those areas where the Government of Taiwan currently possesses full autonomy in the conduct of its external commercial relations;

Whereas Taiwan is a significant participant in the global economy, being the thirteenth largest trading entity and maintaining the second largest foreign exchange reserves in the world, and is one of the last major market-based economies that is noticeably absent from the GATT;

Whereas the United States and Taiwan maintain an important bilateral trading relationship, with Taiwan being the fifth largest trading partner of the United States and the United States being the second largest exporter to Taiwan;

Whereas Taiwan has made substantial progress in its economic development, and has taken steps to open up its economy, including lowering its average tariff rates, reducing its barriers to foreign investment, and increasing its protection of intellectual property rights;

Whereas the United States supports additional action by Taiwan to provide full open market access to United States goods and services and to ensure that United States intellectual property rights are fully enforced, and the need for Taiwan to continue to make progress in these and other areas is to the mutual benefit of the United States and Taiwan;

Whereas the GATT is the premier multilateral body for regulating trade worldwide, and the United States and 96 other contracting parties of the GATT are in the final stages of the Uruguay Round of multilateral trade negotiations, which is the most ambitious effort ever undertaken by the GATT to expand, strengthen and revitalize multilateral trade rules and principles;

Whereas the successful conclusion of the Uruguay Round will establish multilateral and enforceable disciplines in key areas affecting the bilateral trade between the United States and Taiwan, including the areas of services, intellectual property rights, and agriculture;

Whereas Taiwan currently adheres to the guiding principles of the GATT on a de facto basis, is expressly committed to assuming greater international economic responsibility by its willingness to accede to the GATT as a developed economy, and has indicated its desire to join formally with other GATT contracting parties in implementing the final results of the Uruguay Round; and

Whereas Taiwan's memberhsip in the GATT will foster the further liberalization of Taiwan's economy along GATT lines, will serve as an exemplary model for other developing countries, will allow key United States-Taiwan trade issues to be addressed in the multilateral context, and will contribute to the overall strengthening of GATT rules of trade and of the GATT as an institution: Now, therefore, be it

Resolved, That it is the sense of the Senate that--

(1) the accession of Taiwan to the GATT is in the best economic interest of the United States and of the world trading system as a whole and should be achieved prior to the end of the Uruguay Round; and

(2) the Government of the United States should fully support Taiwan's accession to the GATT by calling for the favorable and immediate consideration of Taiwan's request for contracting party status at the next GATT Council meeting, and by taking any additional steps deemed necessary to assure Taiwan's prompt membership in the GATT.

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Just glancing at some basic economic facts offers a compelling case for Taiwan's GATT membership. For example, Taiwan is the 13th largest trading entity worldwide. Bilaterally, Taiwan ranks as the United States' fifth largest trading partner, representing our ninth largest export market, and our fourth largest source of imports. We are also Taiwan's primary foreign investor and trading partner--over 22 percent of Taiwan's imports originate in the United States. Clearly, such an important U.S. trading partner and key participant in the world economy should be part of our multilateral system of trade rules and principles.

Over the past few years, Taiwan has made remarkable progress in its economic development and has become, in many respects, an economic powerhouse. Central to Taiwan's economic growth and development has been its government's recognition of the critical role foreign trade plays in moving Taiwan up the scales of development toward a fully industrialized and competitive economy. While emphasis has been placed primarily on establishing health export sectors, over the recent past, there has been newly focused attention on greater liberalization of the domestic market. This has been accomplished through a variety of measures, such as lowering average tariff rates, reducing barriers to foreign investment, and improving the amount of protection afforded to intellectual property rights.

Opening up Taiwan's market is critical to enhancing United States export competitiveness, and, in fact, many of the steps Taiwan has taken so far on market access have been closely related to United States-Taiwanese bilateral trade talks and negotiations. Taiwan still has a ways to go in achieving a fully open market and its membership in the GATT would undoubtedly serve as a strong and positive force in propelling Taiwan in this direction.

Taiwan has recognized this, as well, as a fundamental reason for joining the GATT.

There should be no doubt in anyone's mind that Taiwan's membership in the GATT is in the best interests of the United States and the world economy. This would be significant to the GATT as an institution as it would bring into its ambit the last major market-based economy. The current Uruguay Round and its key goal of extending GATT rules to services, intellectual property rights, and agriculture--three areas where Taiwan's economy still remains relatively closed--further magnify the importance of Taiwan's accession to this critical multilateral trade body.

At issue here are commercial, not political concerns. National sovereignty is not, and should not be, a requirement or even a condition for joining the GATT. In fact, under article XXXIII, accession to the GATT can be premised on a government having `a separate customs territory possessing full autonomy in the conduct of its external commercial relations * * *.' To ensure this is absolutely clear, Taiwan has applied to the GATT under the name `The Customs Territory of Taiwan, Penghu, Kinmen and Matsu.'

It is high time we started paying greater attention to our commercial interests. Strongly supporting Taiwan's accession to the GATT would be a right step in that direction. Taiwan's GATT membership will foster a fully open economy along GATT lines, which will in turn lead to greater United States exports to Taiwan. Interjecting a serious dose of multilateralism to Taiwan's global trade responsibilities will only help improve United States-Taiwan trade relations.

In this regard, it should be noted that Taiwan has indicated that it would like to join the GATT as a developed economy. This will strongly benefit the GATT institutionally and all of its members economically in light of the fact that GATT rules provide sweeping GATT-rule exemptions for developing countries. Taiwan will be the first newly industrialized economy to adopt developed economic status under the GATT, which would set an exemplary precedent for other developing countries to follow.

The resolution I am introducing here today recognizes that Taiwan's accession to the GATT is in our national economic interest and in the best interest of the world trading system, and that it should be accomplished prior to the end of Uruguay Round. To this end, my resolution calls on our Government to fully support Taiwan's GATT membership by raising it at the next GATT council meeting and by taking any additional steps necessary to assuring favorable consideration of Taiwan's accession request. One such step would be, in my view, raising this matter with the G-7 countries at the upcoming July Economic Summit.

I urge all my Senate colleagues to support this resolution, which I believe will assist Taiwan in its positive and constructive quest for becoming a full-fledged member of the GATT.

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[Page: S7605]

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