ABSTRACT Papermaking is one of the four major inventions of our country, and is also the index for the cultural life level and economic development in one country. Trade is the main dependence for Taiwan to maintain survival, especially at the beginning of the 21st century. Our country has been listed as the 14th trade country globally, which shows the importance of international trade to Taiwan. WTO is the most important international trade organization at present. In 2002, there are 144 member countries covering 90% trade of the whole world; that is why it is called economic and trading United Nations. This study first gives a brief introduction to the history of WTO. Then it discusses the basic idea of WTO, i.e. there is non-discrimination trade, the market is opened through negotiation, fair competition is promoted, development and economic transformation are encouraged. It also introduces the four basic principles, i.e. the most preferential country treatment, national treatment, trade freedom, transparency and being predictable. Concerning the function of WTO, it also describes dispute solution rules, main organizations and responsibilities of WTO. It discusses the influence on our country and corresponding measures after entering WTO. The study analyzes the status quo of papermaking industry. First, it analyzes the status quo of papermaking industry worldwide. In 2000, the top five countries in the world paper pulp production are USA, Canada, China, Finland, and Sweden. The top five countries in paper and paper board production are USA, Japan, China, Canada, Germany, while Taiwan is listed as the top 16 production country. The annual paper usage amount per capita represents the level of culture, living standard and as an important index of economic development for a country. The top five countries are Finland, Belgium, USA, Sweden and Holland, while Taiwan is ranked as the 9th, a country with high cultural living standard and industrial development. This study gives a systematic description of Taiwan papermaking industry after analyze papermaking globally. Ever since Ching Dynasty, Taiwan papermaking has 130 years of history. During the initial stage, it used bamboo to make paper, and later cane dregs. As Taiwan is lacking of natural forest resources, which forced Taiwan papermaking industry to research and develop and become a country with the highest waste paper recovery rate and utilization rate worldwide. It made full use of waste paper as the raw material, to develop the unique papermaking core technique and competitiveness. As Taiwan has entered into WTO and become closely connected with the world, this study gives In-depth discussion and description about the strength, weakness, opportunities, and threats of Taiwan papermaking industry. It also provides corresponding measures for reference to papermaking industry and the government. Key Words: WTO¡BPAPERMAKING INDUSTRY¡BTAIWAN