Like Taiwan's first free trade agreement (FTA) with Panama its second free trade pact, with Guatemala, will have more significance politically than economically, economists said yesterday.
President Chen Shui-bian (
"The pact shows that Taiwan is willing to strengthen its relationship with its allies in Central America," said Tu Chiao-hsia (
"But the economic benefits of the FTA will be limited, as Guatemala's market is too small, and language and geographic difficulties make it difficult to improve bilateral economic ties," Tu said, adding that increased exports to Guatemala are the most likely outcome.
Following the signing of an FTA with Taiwan in August 2003, exports to Panama amounted to NT$246.73 million last year, more than double the figure in the previous year, according to government statistics.
Guatemala is the largest economy in Central America, with a GDP of US$59.47 billion last year. Its main economic activity is agriculture. Guatemala is well-known for its sugar exports, as well as coffee, petroleum, apparel and bananas.
Guatemala is Taiwan's 75th largest trade partner, with a trade volume of NT$114.75 million last year.
Guatemala agreed to drop tariffs on 447 agricultural products and 3,509 industrial goods imported from Taiwan as soon as the FTA goes into effect on Jan. 1 next year.
Taiwan will cancel tariffs on 5,003 agricultural and industrial imports from Guatemala, as well as allowing the country to export 60,000 tonnes of sugar to Taiwan every year, said James Wu (
Although the Guatemalan market is relatively small, the FTA could result in Taiwanese products gaining entry to the much larger US market, as Guatemala is a member of the Central American Free Trade Agreement (CAFTA), under which exports from the member countries to the US enjoy either zero tariffs or tax breaks, Wu said.
This would mean that Taiwanese goods can be processed in Guatemala and then shipped to the massive US market, Wu said.
But the effect would still be limited, as CAFTA has strict requirements on the origin of goods, Tu said.
After Panama and Guatemala, Taiwan's third free-trade partner will likely be Nicaragua, another diplomatic ally of Taiwan in Central America.
Wu estimates that negotiations on a Taiwan-Nicaragua FTA will be concluded by the end of the year.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by