Taiwan's agricultural sector is expected to come under intense competition from China's low-labor cost products after WTO accession, possibly in November, but careful planning of export strategy can help Taiwan rise to the challenge, a Council of Agriculture official said yesterday.
Liu Fu-shan (
With WTO entry processes nearing completion for both Taiwan and China, Liu said that the council expects that Taiwan will open its market in accordance with WTO regulations next year.
With regards to the 22 agricultural items with quota limits that are slated to be allowed to enter Taiwan, Liu said that because Chinese products must compete with those from other countries for the quota limits, he does not expect the amount to cause a major impact on Taiwan's agricultural sector.
However, he pointed out that for other high-tariff import items without such quota restrictions, because of the lower production costs in China and its proximity to Taiwan, products made in China will have a distinct advantage over those from other nations and cause a greater impact locally.
According to the council's estimates, after entry into the WTO, Taiwan's agricultural production value will decrease by 9 percent -- or NT$34.5 billion (US$1 billion) to NT$54 billion (US$1.56 billion) -- after taking into consideration competition from imported products.
However, after also taking into consideration Chinese agricultural imports, the council estimates that the impact is likely to be so great that local agricultural production will decrease by 12 percent, equivalent to approximately NT$74 billion (US$2.14 billion).
Chiu Yi (邱毅), a researcher at the Chung-Hua Institute for Economic Research (中華經濟研究院), said that peanuts, garlic, red beans, mushrooms and dried lily flowers will be most adversely affected.
However, other scholars and experts believe that the local agricultural industry is not as weak as some believe, and that China does not have all the advantages.
These scholars believe Taiwan even has the potential to increase its agricultural exports to China -- a strategy espoused by agriculture council Chairman Chen Hsi-huang (
Chen has said that Taiwan should not be thinking about only how to brace itself for the influx of products and how to defend its market after WTO entry, but should also actively reach out toward international markets.
Figures compiled by the council show that its export promotion efforts have already begun to bear fruit, with the surprising result that one of the best export markets turned out to be the more economically developed coastal areas of China, where star fruits, mangos, guavas and apples have become popular, even with prices that sometimes rival or even exceed those set in Taiwan.