Taiwan Wants to Join WTO Talks on China’s Protest Against US Chip Sanctions

(Bloomberg) -- Taiwan has asked to join discussions centered on China’s protest against US chip sanctions at the World Trade Organization, seeking a voice on a debate that could have ramifications for the global chip industry.

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The island has formally requested a seat at the table when consultations begin, based on the outsized role it plays in global chipmaking, Taiwan said in a statement filed at the WTO.

China filed a dispute with the WTO in an effort to overturn US-imposed export controls, which aim to limit the Asian nation’s ability to develop a domestic semiconductor industry and equip its military. Beijing accused Washington of economic protectionism, undermining trade rules and jeopardizing the global supply chain.

The US has pressured allies from Seoul to Tokyo to go along with the restrictions on China. Taipei’s goal in seeking to join the WTO negotiations is to better understand how the dispute may affect global semiconductors, Taiwan’s Office of Trade Negotiations said in a statement Friday.

Chips are the lifeblood of the island’s economy. It produces the vast majority of the world’s most advanced semiconductors, and its largest companies including Taiwan Semiconductor Manufacturing Co. have abided by the US curbs.

“Taiwan is requesting to join the consultation procedure to understand the supply-demand situation of chips,” the Taiwanese agency said. The island has no intention of supporting China’s complaint, nor does the move imply “any dissatisfaction with the United States’ measures.”

Read more: China Tries to Push Back on US Chip Sanctions With WTO Case

US trade officials are set to travel to Taipei for talks later this month. A spokesman for the US Trade Representative didn’t immediately respond to a request for comment.

Japan and the Netherlands have agreed in principle to join the US in tightening controls over the export of advanced chip tech to China, and they are likely to adopt at least some of the sweeping measures rolled out in October to restrict the sale of equipment to Chinese firms, Bloomberg News has reported.

Yet even if China is successful with its case, the WTO lacks the ability to force the US to reverse its actions. Coupled with domestic economic turmoil, the curbs have hobbled a plethora of the Asian nation’s biggest chip firms.

China’s semiconductor firms are facing new challenges at home with Beijing now shying away from lavishing colossal resources on them as before. It’s pausing massive chip investments as a nationwide Covid resurgence strains the world’s No. 2 economy and Beijing’s finances, and top officials are discussing alternatives to costly subsidies that have not rendered concrete results and instead encouraged both graft and the American sanctions.

Read more: China’s Giant Chip Ambitions Fall Prey to Covid Turmoil

(Updates with Taiwan’s comment from the fourth paragraph)

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