Name of the game

PUBLISHED : Thursday, 03 July, 2003, 12:00am
UPDATED : Thursday, 03 July, 2003, 12:00am

Taiwan is hoping that it will finally put the seal next month on a long-awaited and largely forgotten deal made at the time of its WTO accession.

It could also pave the way for some creativity in defining the island's status with respect to the mainland's 'one China' policy.

The Government Procurement Agreement (GPA) is a little-known sidebar to the World Trade Organisation, signed by some WTO members, and Taiwan is hoping to join their ranks. As a GPA signatory, Taiwan would fall in line with international standards of non-discrimination, across national boundaries, in the awarding of government contracts.

So far, the final hurdles for signing are the mainland's objections to Taiwan's use of certain nomenclature. A contract from the office of Taiwan's president, for example, could not mention the 'president's' office, as that would imply national sovereignty. Given that the GPA specifically looks at government contracts, calling Taiwan's government a government is problematic, yet necessary.

The GPA is a 'plurilateral' group administered under the World Trade Organisation, and not all WTO members are signatories. Currently, 29 countries, including the US, Canada, the European Community and Hong Kong have joined, while Taiwan is listed as negotiating accession.

According to the explanatory notes posted on the WTO website, 'governments [which are] parties to the agreement are required to give the products, services and suppliers of any other party to the agreement treatment [that is] 'no less favourable' than that which they give to their domestic products, services and suppliers'.

Put simply, a government cannot give local contractors favourable treatment, or exclusivity, when compared to the other signatory nations.

One problem likely to cause a stir within the central government is the three levels of government used to define different thresholds for GPA compliance.

At the Taiwan central government level, any construction project worth NT$300 million (HK$67.5 million), or services contract worth NT$5 million, falls under the GPA.

Naturally, the term 'central government' doesn't sit well with mainland officials.

The next level, however, seems to give at least a nod to the mainland's concerns. That level groups Taipei city, Kaohsiung city and the Taiwan provincial governments, noting that the construction budget threshold for compliance under GPA rules is NT$600 million in the first year of the project, NT$400 million in the second and NT$300 million in the third.

That the provincial government is mentioned at all is interesting given that the office, while still alive, is barely breathing and no longer exerts any significant power. Few Taiwanese could even name the Taiwan provincial governor (K.C. Fan), and the province's status next to the two major city governments highlights its lowly status.

The final level is state-owned enterprises (SOEs) - any enterprise that is majority-owned by the government, such as Chunghwa Telecom. The construction threshold is the same for the second level of government, while the supply threshold is NT$10 million.

With the timeline for accession already pushed back three times due to the nomenclature issue, observers are cautious about its prospects next month.

If it does eventually get through, political analysts will be looking very closely at the wording to see how much ground each side gave up and how they managed to define the Taiwan government's status.