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By QUINCY LIANG Most of Taiwan's major auto-parts makers say that they are ready for the intensified foreign competition that is certain to come following the island's accession to the World Trade Organization (WTO) at the beginning of this month. Those manufacturers with overseas production bases are especially confident
Membership in the WTO requires Taiwan to cut its average import tariff on over 130 auto parts from the present 13.45% to 8.93% in 2006. WTO rules also require the elimination of local-content ratios as well as the commodity-tax reduction of 3% each that carmakers have enjoyed in the past for locally developed chassis, bodies, and engines (for a maximum total tax reduction of 9%). All of this will likely reduce the demand for locally made auto parts
Most local manufacturers in the auto-parts line began preparing for WTO impact years ago by expanding their production overseas, especially in mainland China. For example, about 30 local …