Taiwan yesterday formally signed a Free Trade Agreement (FTA) Negotiation Framework with Guatemala, expecting the move to help promote FTA talks with other Central American countries to extend Taiwan's economic power in American markets.
The two countries expect to sign a formal FTA pact in June right after wrapping up the bilateral negotiation procedure, with monthly talks slated to start in March.
"Signing a bilateral FTA with Guatemala will serve not only to promote bilateral trade but also help our businesses to extend themselves into the entire North and South American market," Minister of Economic Affairs Ho Mei-yueh (
Guatemala is a member of the Central American common market. It signed an FTA this year with four Central American countries, the Dominican Republic and the US, Ho said.
Guatemala is the fourth country to sign FTA-related protocols with Taiwan, following Panama, Paraguay and Nicaragua. Honduras could become the fifth next year.
Taiwan inked its first free-trade pact with Panama in August last year. The nation is currently conducting consultation talks with Nicaragua and the two countries are expected to ink a formal FTA in the first half of next year, according to the Bureau of Foreign Trade.
"We could sign the negotiation framework for an FTA with Honduras early next year," Ho said.
Bilateral trade between Taiwan and Guatemala amounted to US$92.1 million last year, according to the ministry. Taiwan exported US$90.9 million-worth industrial products to Guatemala last year while importing only US$1.2 million of goods, including coffee and timbers, from Guatemala over the same time, the ministry said.
As many as 41 Taiwanese companies have investments totaling around US$38 million in Guatemala.
Guatemala is the largest economy in Central America with GDP amounting to US$24.7 billion last year, which accounted for one-third of the GDP generated in Central American countries.
When asked about measures to counter China's alliance with Southeast Asian nations to foster a free-trade bloc, Ho said Taiwan, as one of the largest sources of foreign investment in Southeast Asian countries, will keep increasing investment to maintain its economic power in the region.
Ho, however, shied away from whether Taiwan would pursue FTA talks with Singapore or leverage the country to be a gateway to the growing Asian free trade zone.