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WTO extends welcoming hand to Taiwan, China

The lines started forming all over Taiwan on Thursday. People mobbed supermarkets and corner stores to buy bottles of rice wine, a potent brew essential to Taiwanese cooking.

The price of the wine will increase five-fold after Taiwan enters the World Trade Organization, because under the terms of its membership the government must dismantle the monopoly that has controlled prices.

For Taiwan, the run on rice wine is a reminder that it, too, is on the verge of an economic milestone.

On Sunday, a day after China clears the final hurdle to membership in the WTO, Taiwan is scheduled to gain entry. The timing is deliberate _ part of an intricate dance that allows China and the island it views as a breakaway province to join the club of trading nations almost simultaneously.

With China's momentous entry and a raft of other big issues on the agenda at the WTO conference in Doha, Qatar, the approval of Taiwan may seem a bit of an after-thought. Yet it will have far-reaching consequences for Taiwan and its relationship with the Chinese mainland.

"For years, Taiwan has had no diplomatic recognition in the world, except from a few small countries," said Peter Kurz, the chief executive of Insight Pacific, a research firm in Taipei. "Now it will be a member of a key international body. That gives it a framework for dealing with China."

Kurz said Taiwan's membership would hasten the establishment of direct trading ties between Taipei and Beijing, which remain politically at odds despite their deepening economic integration.

Already this week, Taiwan scrapped 50-year-old restrictions on investment by Taiwanese companies in mainland China. The timing was linked to the future trade status of the island and its neighbor across the Taiwan Strait.

Once Taiwan and China are full members, probably by early next year, they can thrash out issues like opening direct shipping lanes and nonstop commercial flights. These have been difficult to tackle because China refuses to recognize the sovereignty of Taiwan's government.

But analysts say Taiwan and China both recognize the value of putting their commercial relationship on more solid footing. Taiwanese companies have invested more than $60-billion in China, and Taiwan is a ripe market for goods from the mainland.

Economists in Taiwan are projecting a sharp rise in unemployment, which is already running at historic highs as the island slogs through its worst economic slowdown in nearly half a century.

Still, optimists say the dislocation will be outweighed by fresh opportunities for Taiwan's exporters.

The main focus of the five-day meeting is on whether differences that sank the 1999 Seattle talks, such as farm subsidies in the rich West, and new ones, such as access to medicines for the poorest countries, can be overcome to reach consensus on launching new negotiations.

U.N. Secretary-General Kofi Annan, in a statement delivered to the conference, said a global recession would be devastating for the world's poor.

"To halt and reverse this trend we must restore market confidence, create new export opportunities and resume growth," he said. "Now, more than ever, we need to resist the siren voices of protectionism and work out multilateral solutions to our problems."

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