II-B. INVESTMENT LEADING TRADE, AND CONSEQUENCES
4. Incoming Emergence of "Trade not Led by Investment"
However, Taiwan is now facing a challenge with respect to cross-strait economic relations since it has to comply with WTO obligation vis-à-vis China.
The importation ban on Chinese products has to be lifted. The lifting will see the emergence of a new type cross-strait trade: trade without investment stimuli, a trade driven completely by classical Smith-Ricardo theory of comparative advantage. Safeguard measure is an idea favorable to Taiwan Government, but such measure has to meet requirements of WTO rules, too.
Taiwan has to grant MFN treatment towards mainland service providers, too. Yet, no service industry in Taiwan has ever been open to Chinese. Unlike indirect trade in goods, trade in service brings Taiwan Government into a totally unknown battlefield with China. The next part examines legal revisions now contemplated by Taiwanese Government.