Taiwan had officially joined the World Trade Organization, also called WTO, on January 1st 2002. The member of the WTO can get the benefit and guarantee from the country which is in the membership. However, there are a few industry will definitely facing the shocking crash. Before Taiwan had joined WTO, the government had promised that the tariffs of agriculture will cut down from 20.02% to 12.90%, the rate of manufacturing will fell from 6.03% to 4.15%. Therefore, removing the tariffs protection, the industry is bound to be affected.
This paper is exploring the impact on Taiwan manufacturing since joined the WTO, and discover the most benefit industries and the. Through the data of Taiwan and the global trade, the study found that after joining the WTO, the most laborious industries is textiles. Therefore, the paper will analysis the impact of Taiwan textile after joining the WTO.
The paper takes differences-in-differences in use to understand the textile industry. The experimental group uses the data of the member of the WTO, such as China, Japan, South Korea, the United States. Vietnam's trade data is used as the control group. The next step is using the gravity model to analyze and calculate the price elasticity of import and export of textile industry. The study found that the elasticity of the price from imports and exports has reduces after Taiwan joined the WTO. The impact of GDP export value is as expected; GDP is a positive relationship while distance is a reverse relationship.
