A3-0092/93

Resolution on the inclusion of China and Taiwan in the General Agreement on Tariffs and Trade (GATT)

The European Parliament,

-having regard to its resolution of 9 September 1986 on the new round of multilateral trade negotiations in GATT, especially paragraph 2O,

-having regard to its resolution of 17 March 1989 on economic and trade relations between the EC and the People's Republic of China,

-having regard to the motions for resolutions by:

(a)Mr DE CLERCQ and others on the inclusion of China and Taiwan in the General Agreement on Tariffs and Trade (GATT) (B3-O613/92),

(b)Mr PASTY on strengthening links between the EC and Taiwan (B3-1315/92),

-having regard to the report of the Committee on External Economic Relations (A3-OO92/93),

A.whereas China was one of the original founding contracting parties of the GATT in 1947,

B.whereas the government of the Republic of China (ROC), having been expelled from the mainland in 1949, withdrew from the GATT in 195O - a withdrawal which the People's Republic of China (PRC) has not accepted as having validity regarding the PRC's status in GATT,

C.whereas Taiwan had been granted observer status in GATT from 1965 to 1971, which was then revoked due to a UN Resolution recognizing the PRC as the sole lawful representative of China,

D.whereas the PRC embarked in the early 8O's on major economic reforms in the context of its "open-doors-policy" during which it demonstrated a growing interest in the work of GATT and subsequently obtained a special observer status in the GATT in 1984,

E.whereas the PRC in 1986 formally notified to the GATT its intention to resume its status as a contracting party; whereas a working party to examine this request was established in 1987,

F.whereas the PRC participates fully in the multilateral trade negotiations of the Uruguay Round,

G.whereas the GATT provides for the possibility for separate customs territories to become a contracting party whether they are sovereign states or not,

H.whereas Hong Kong and Macao have become Contracting Parties of the GATT as separate customs territories under Article XXVI(5c) of the GATT,

I.whereas in 199O the government of Taiwan applied for GATT membership, under Article XXXIII of the GATT, as the separate customs territory of Taiwan, Penghu, Kinmen and Matsu; whereas a working party to examine this application was established in 1992,

J.whereas Taiwan's economy has been restructured - in 1992, Taiwan achieved a per capita GNP of US$ 10 000, giving it industrialized country status - and trade reforms implemented in such a way as to remove all objective barriers to immediate accession by Taiwan to the GATT,

1.Is in favour of a resumption of China's status as a Contracting Party of GATT by the PRC but points out that this resumption will necessitate extraordinary transitional arrangements;

2.Believes, therefore, that the re-integration of China into the GATT system will only formally be a resumption, but substantially a new accession with the result that the PRC will have to enter into negotiations on new tariff concessions and that the Contracting Parties will remain entitled to invoke the non-application clause under Article XXXV of the GATT, if they are not satisfied with the concessions offered by the PRC for its new accession;

3.Accepts that for the resumption of the PRC's rights and obligations in the GATT a gradual approach, which allows a balance of advantages to be maintained between China and the Contracting Parties, will be the most appropriate;

4.Suggests that according to such an approach the formal resumption of GATT membership could come into effect quite soon, whereas for the actual integration a transitional period should be instituted, during which neither the PRC nor the other contracting parties would be obliged mutually to apply the Most-Favoured-Nation Treatment;

5.Stresses the importance of the economic reforms undertaken by the PRC for its resumption of GATT membership, which will be easier the more market-oriented these reforms are;

6.Regards the extent of the PRC state's involvement in economic affairs, particularly trade, as highly problematic; the degree to which the PRC can still be regarded as a state trading nation will have to be more fully clarified before the PRC's exact GATT arrangements can be defined;

7.Takes the view that during the transitional period the contracting parties should be entitled to take specific safeguard measures against Chinese exports if these create or threaten to create a serious injury for their economies;

8.Points out that one of the major comparative advantages of China in an open multilateral trade system will be its abundance of cheap labour, which will make it highly competitive with regard to labour-intensive products on the world markets;

9.Insists that the PRC and Taiwan, like all the other industrialized and developing countries, must respect the minimum labour standards worked out by the International Labour Organization (ILO) as for instance the ban on child or slave labour and respect for the right to establish free trade unions;

10.Points to the interdependence between economic reforms seeking to introduce certain market economy elements into the Chinese economic system and political reforms designed to ensure greater respect for human and democratic rights, which if neglected could lead to problems similar to those which culminated in the Tiananmen events;

11.Welcomes the fact that Hong Kong and Macao have become Contracting Parties of GATT and takes the view that they should keep their GATT status after 1997 and 1999 respectively, when both territories will be handed over to the PRC;

12.Will support the request of the government of Taiwan to become a GATT member only when appreciable improvements have been registered in the field of human, civil and political rights;

13.Is aware of the political implications of Taiwan's application for GATT membership, but realizes that the GATT has at its disposal the appropriate instruments to accept Taiwan as a contracting party without prejudging the main political issue;

14.Believes that the pertinent legal base for Taiwan's accession to the GATT is to be found in Article XXXIII, and not Article XXVI(5c), of the GATT, since the latter requires the sponsorship of an existing Contracting Party which, in the case of China and Taiwan, would mean touching upon the main political problem between both;

15.Supports both applications, which should be examined strictly on their own respective merits;

16.Underlines that the application of Taiwan does not pose major difficulties in economic terms for it has long enjoyed a market economy system;

17.Recalls that Taiwan belongs to the newly industrialized economies (NIE) and to the so-called "five Tigers" of the Far East, which precludes Taiwan being given developing country status in GATT;

18.Believes that the integration of Taiwan's economy into the multilateral trading system will not only reflect its importance as one of the major trading entities of the region but will be to the advantage of all other GATT members including the PRC;

19.Firmly believes that the membership of both China (PRC) and Taiwan in GATT is manifestly in the European Community's interests and will stabilise further trading relations in East Asia and between East Asia and Europe;

20.Strongly recommends that GATT pay particular attention to the delicate political issue of the timing of the entry of the PRC and Taiwan to GATT;

21.Instructs its President to forward this resolution to the Commission, the Council, the Governments of Member States and of the PRC and Taiwan and the GATT Secretariat.