Asia's Financial Crisis

First, let me reassure you that the economic fundamentals in Taiwan are favorable and strong. The Republic of China has kept its level of international debt to a very manageable level of less than $100 million, and our foreign reserves of more than $82 billion are the second largest in the world. We have kept our level of inflation low--it is expected to be less than 3.0 percent this year, for example--even while maintaining a healthy level of economic growth.

Our per capita gross national product now stands at $12,838, a level that has allowed our population of just over 21 million to enjoy a strong and steadily improving standard of living. We estimate that our economic growth rate in 1997 was 6.7 percent, with inflation quite low at less than 1.0 percent. The net effect was to enable the income of consumers in Taiwan to grow significantly. This means that Taiwan, of course, will continue to be a good market for U.S. exports of goods and services. In 1998, we predict that our economy will grow once again at a pace between 6 percent and 7 percent, despite external uncertainties.

In comparison with some of the other countries in Asia that are experiencing economic difficulties, Taiwan is fortunate indeed. As a result of prudent management of our economy, today we have the economic flexibility to weather the current financial turmoil. We also have a strong entrepreneurial tradition in Taiwan. The backbone of our economy consists of thousands of small- and medium-sized businesses, which are highly flexible and can more easily adapt to changing market conditions. Another source of Taiwan's strength is our vibrant democracy. It keeps decision making in the open and allows many opportunities for public debate and discussion of nearly every aspect of our economic affairs.

Our good fortune has made it possible for us to offer assistance to our neighbors in resolving their liquidity problems. In December and January 1998, for example, Premier Vincent Siew held consultations with key decision makers in the Philippines, Singapore, Malaysia, and Indonesia to explore ways in which my government could be helpful, if needed. In addition, the government sponsored a number of trade missions to our neighbors in Southeast Asia to allow members of our business community to explore opportunities for future cooperation and investment. We were pleased to be able to fulfill this role during a difficult period.

Accession to the WTO

The WTO establishes the "rules of the road" for international trade. We are entering the WTO as a developed economy. As a result of our accession, which we hope will become final either late this year or early next year, we have agreed to undertake a wide range of important reforms in our economy. In general terms, these steps will guarantee foreign investors treatment in our market that is equal to that extended to our national companies.

The following examples illustrate some of the most important steps we have agreed to take as a result of the WTO accession negotiations:

• We will lower tariffs by more than 40 percent, from an average of 7.90 percent to an eventual average level of 3.26 percent. We are removing non-tariff barriers on agricultural products and opening up trade in industrial goods, like autos, where purchases previously were restricted to certain foreign markets.

• We were one of 14 original signatories to the International Technology Agreement (ITA) to eliminate tariffs on computers and computer products, telecommunications equipment, and other electronic goods accounting for more than $1 trillion in global trade. We are signing other "zero for zero" deals as part of our WTO accession, and will participate in "ITA II" to expand the list of electronics products
  qualifying for duty-free treatment.

• We are offering trading partners world-class protection for intellectual property rights, including such areas as trade secret protection and retroactive copyright protection.

• We will provide foreign providers of financial services with access to our securities, banking, and insurance sectors.

• We have liberalized significant portions of our telecommunications markets, and are putting into place the regulations that will privatize the monopoly that previously dominated the domestic market.

• We will open up our government procurement market to foreign competition
  In this area alone, we estimate that our government procurement offer, which takes effect once we become a WTO member, will provide U.S. companies with opportunities to bid on government purchases worth at least $15.4 billion annually.

Our negotiations with the United States are the last of the bilateral talks that are needed to bring this phase of our WTO accession negotiations to a close. Following these talks in Washington, D.C., we will need to finish only a few formalities with the European Union and Switzerland. We and our trading partners will then move the process to Geneva, Switzerland, to finish the legal drafting of the terms of our accession, which are contained in the formal protocol of accession.

Membership in the WTO will be a significant accomplishment for Taiwan. It acknowledges the role we already play in the world economy. It enables us to put our trading relations with the rest of the world on a firm and predictable footing. As a member of the WTO, Taiwan will enjoy all the rights and obligations of the organization, including access to the dispute-settlement process. Important, too, we will be able to work side-by-side with our trading partners in future negotiations to decide the new rules for expanding international trade. I am proud to be here today to share this moment with you, and I want to thank you for the long-standing friendship and support you have offered us as these negotiations have proceeded over the years.