Fri, Jan 14, 2005 - Page 10 News List

Trade exclusion poses minimal risk

By Joyce Huang  /  STAFF REPORTER

Should Taiwan be excluded in the emerging East Asian trade mechanism dominated by China, the local economy won't be marginalized, the nation's permanent representative to the WTO said yesterday.

"Based on the law of comparative advantage, as long as Taiwan's economic competitiveness remains strong, such worries are not necessary," Yen Ching-chang (顏慶章) said while giving a speech at the Financial Supervisory Commission yesterday.

Yen rebutted arguments that once China, Japan and South Korea join the regional economic association ASEAN, Taiwan will be left out of the Asian economic loop.

Calling the arguments "oversimplified," Yen said that he believes it is more likely for China alone to join the ASEAN -- or the so-called ASEAN plus one -- than for all three economies to join the ASEAN -- or the so-called ASEAN plus three.

The trade representative also called these proposed groupings into question, saying the mechanism will have a "pretty low degree of integration given the huge discrepancies in democratization, economic transparency, culture and per capita gross national product among ASEAN member countries."

Yen said the success of EU hinges upon the similarity and compatibility of the economic and political systems of its member countries, which Asian countries lack.

He further said that an EU-type economic integration, such as the idea of a common market, would not be easy to achieve in Asia.

Therefore, the threat of the establishment of ASEAN plus one is limited, he said.

"Taiwan may not be able to enjoy the benefits of commodity liberalization [that it would if it was included in the planned group], but this won't have too big an impact on our economy," Yen said.

The reason is that any commodity liberalization benefits that might be gained from being included in the proposed ASEAN grouping can be offset under the WTO framework, he said.

While recognizing the government's efforts in inking free trade agreements, despite a boycott from China, Yen, advised that Taiwan should place a higher priority on multi-lateral economic cooperation as its major economic strategy.

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