In July of this year, the World Trade Organization (“WTO”) announced that the Separate Customs Territory of Taiwan, Phengu, Kinmen and Matsu (“Chinese Taipei”) formally became a full Party to the WTO Agreement on Government Procurement (“AGP”). The AGP makes government procurement contracts open to international competition. Opportunities to provide goods and services to government is important in terms of market access, because government is usually the largest purchaser of goods and services.
Chinese Taipei joins 41 WTO members which have signed the AGP, namely: Canada; the European Communities, with its 27 member states; Hong Kong, China; Iceland; Israel; Japan; Korea; Liechtenstein; the Kingdom of the Netherlands with respect to Aruba; Norway; Singapore; Switzerland; Chinese Taipei; and the United States.
Other WTO members that are in the process of negotiating their accession to the Agreement on Government Procurement are Albania, Armenia, China, Georgia, Jordan, the Kyrgyz Republic, Moldova, Oman and Panama. A further five WTO members, namely Croatia, the Former Yugoslav Republic of Macedonia, Mongolia, Saudi Arabia and the Ukraine, have provisions committing them eventually to seek accession to the Agreement in their respective Protocols of Accession to the WTO.
This is important to discuss for two reasons. First, in light of the “Buy America” restrictions, it is important to see countries willing to open their government procurement to other WTO members. Chinese Taipei may be a strategic thinker because the U.S. Buy America legislation is stated not to apply to countries which have signed the AGP. So, this would mean that companies from Chinese Taipei would have access to certain federal and state government procurements (based on the U.S. schedules to the AGP).
The China Post reports that as a result of joining the AGP, “Taiwanese computer makers Acer Inc. and Compal Electronics Inc. will have a leg up over Chinese and Indian competitors in winning U.S. economic stimulus contracts....” Three other sectors mentioned in the article are energy equipment, telecommunications parts, and flat screen televisions.
Chinese Taipei was ranked first in the world for research and development capacity in 2008 by the Economist Intelligence Unit and has long been one of the top suppliers of various high tech products for U.S. and global industries, accounting for about three-quarters of global PC production, half of the world’s flat panel displays, a quarter of the world’s semiconductors and about a fifth of the world’s mobile phones.
Secondly, the fact that Chinese Taipei has signed the AGP, and China has not, highlights that, for WTO purposes, Chinese Taipei has a separate identity from China. Within the WTO, the term “Chinese Taipei” is used and the words “separate customs territory” is used to accommodate Beijing’s view that Taiwan is part of China. It is also important to remember that Chinese Taipei agreed to its terms of accession to the WTO in 1999 and waited until September 2001 to receive final approval to join the WTO, the day after China’s WTO accession was cleared. Both China and the Separate Customs Territory of Taiwan, Phengu, Kinmen and Matsu acceded to the WTO in December 2001.
Chinese Taipei is the first signatory to the AGP since 2001.