Sat, Aug 19, 2006 - Page 12 News List

ASEAN move may have limited effect

By Jessie Ho  /  STAFF REPORTER

The decision by six ASEAN countries to scrap tariffs among themselves on 85 percent of electronic products by next January will have a slight influence on Taiwan's trade in the region, the Bureau of Foreign Trade said on Thursday.

Taiwan is a member of the WTO's Information Technology Agreement (ITA) -- which provides for participants to completely eliminate duties on information technology (IT) products covered by the ITA. All ASEAN countries, except for Brunei, are also ITA participants.

"Therefore, the new measure will have a very slight impact on Taiwan's exports to the region," Huang Chih-peng (黃志鵬), director-general of the bureau, said in a statement released on Thursday.

Taiwan exported information and hardware products worth NT$69.67 billion (US$2.13 billion) in 2004 with 11.4 percent of the amount going to the Asia-Pacific region, according to government statistics. That percentage increased to 12.8 percent last year, showing that the market is growing.

ASEAN is also seeking to liberalize other sectors including automotive, garments and textiles, e-commerce, healthcare, air travel, hospitality and tourism, logistics and others, industries that also pose opportunities to Taiwanese companies, a researcher at the Taiwan Institute of Economic Research's (TIER, 台經院) said.

Through the liberalization, ASEAN aims to integrate its industries to form a regional supply chain and boost competitiveness, attracting foreign investors that have invested heavily in China and India, Huang Chao-jen (黃兆仁), deputy director at the TIER Southeast Asia economics research division, said in a telephone interview.

"Even though those countries are not Taiwan's major trade partners, the market potential, with a population of 500 million, is still considerable," Huang said.

Taiwan also faces another threat, as Japan has proposed forming a 16-nation free trade bloc that includes Japan, China, South Korea, India, Australia, New Zealand and the 10-country ASEAN bloc.

The 16 nations held the East Asia Summit last year, which was deemed a precursor of an eventual free-trade community that covers half the world's population. The proposal has won the support of Australia and New Zealand.

Due to the strong opposition of China, Taiwan is excluded from the proposed free trade zone, despite many countries expressing hope that Taiwan could participate, said Shih Hsin (石心), director of the Bureau of Foreign Trade's first bilateral trade division.

Taiwan has discussed with Japan at several APEC meetings about the possibility of joining the East Asia free trade body under the APEC structure, but has not yet received any substantial feedback, Shih said.

To offset the negative effects, Shih suggested Taiwanese companies invest in ASEAN countries, which in turn will drive up exports to the region, Shih said.

Taiwanese firms can also seek to form strategic alliances with local partners to tap the market, TIER's Huang said.

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