Lee Kuan-yew of Singapore to visit Taiwan this week

Singapore Senior Minister Lee Kuan-yew (李光耀) is scheduled to visit Taiwan tomorrow to discuss the forging of a free trade agreement (FTA) between the two sides, Chinese-language media reported yesterday.

Lee plans to meet with Taiwan President Chen Shui-bian (陳水扁), Premier Yu Shyi-kun, China policy decision-maker Tsai Ing-wen (蔡英文) and Taiwan's envoy to China, Koo Chen-fu (辜振甫), the report said.

The talks were expected to center on the signing of an FTA, Taiwan's role in the 10-nation Association of the Southeast Asian Nations, and the two countries' investments in China, it said.

Lee may also meet with KMT Chairman Lien Chan (連戰) and PFP Chairman James Soong (宋楚瑜). No Presidential Office representatives were available to comment on the report.

Singapore recognizes Beijing, but maintains friendly relations with Taiwan. Sources said Taiwan has proposed that some 800 products are not subject to the duty-free favorable treatment under any FTA with Singapore. A majority of the items would be textiles and ready-made garments.

Taiwanese authorities fear Vietnam, Thailand and Indonesia, where labor costs are relatively low, could dump their textile products in Taiwan by taking advantage of the planned FTA with Singapore.

For this reason, products under the agreement would have to be produced in Singapore or be at least 30 percent reprocessed there, with an additional value increase of 30 percent, the report said.

Taiwan currently levies an average 10 percent tariff on textile imports.