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China's FTA sparks worry that Taiwan could get isolated

Lawmakers yesterday said they fear the nation could be further isolated in the region after China signed an agreement with 10 Southeast Asian nations to pursue a free trade pact.

With the countries agreeing to create a free-trade area with China, Taiwan could be ``marginalized'' in the region, said opposition lawmaker Pang Chien-kuo (龐建國).

China and the ASEAN agreed Monday on a timetable to bring down tariffs and stimulate investment. They said they will conclude their negotiations by mid-2004.

Minister of Economic Affairs Lin Yi-fu (林義夫) said Taiwan's efforts to bolster ties with countries in the region "have fallen behind schedule" because China has blocked the island from joining regional organizations.

China has also opposed Asian countries signing free-trade agreements with Taiwan.

"Given the current political environment, it would be difficult for us to pursue a similar agreement with the ASEAN as a block," Lin said. ``Our strategy is to pursue separate pacts with individual nations."

The minister said Taiwan is discussing signing free-trade pacts with Japan and Singapore, but declined to give details on the negotiations. Taiwan will continue to encourage its businesses to invest in Southeast Asia, he said.

Taiwanese officials said a free-trade agreement between China and ASEAN could hurt Taiwanese exports to the area. But they added that many Taiwanese companies have operations in both China and Southeast Asia and could benefit from the tariff reductions.

While pursuing free-trade deals, Taiwan has also sought to join regional forums.

Annual bilateral trade between ASEAN and Taiwan is about NT$1.25 trillion (US$36 billion) a year.
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