Taiwan’s economy will greatly benefit from the inking of a free trade agreement (FTA) with China or the nation’s participation in the ASEAN, pundits said yesterday.
“The nation’s real GDP could get a maximum boost of 0.58 percentage points should Taiwan be allowed to join the ASEAN plus three [China, Japan and Korea], or 0.5 points if a cross-strait FTA were inked,” Johnny Chiang (江啟臣), deputy director general of the Chinese Taipei Pacific Economic Cooperation Committee told a seminar yesterday.
Chiang made the estimates based on his global trade analysis project, which took into consideration the 2006 bilateral trade statistics of member and potential member countries to simulate their impact on Taiwan.
However, if Taiwan fails to soon join the east Asian economic bloc before it expands into ASEAN plus six — with India, Australia and New Zealand also joining — the local economy could experience a negative impact of 0.26 percent, he said.
He said that the inking of FTAs among the region’s economies was less time-consuming and could have a more immediate impact on boosting the economies of the signatories.
However, FTAs are not a panacea. The competition in the textile, clothing and machinery and electronic equipment industries, in which many of the countries in the region, including Taiwan, excel, may intensify once they open borders and remove all trade barriers, Chiang said.
A Taiwanese executive also warned that Chinese intervention had made it very hard for Taiwan to seek FTA partners in the region and around the world.
Citing the nation’s FTA talks with Singapore as an example, I-Mei Foods Co (義美食品) vice chairman Henry Kao (高志尚) said that politics had stalled the inking of an agreement between the two countries.
He urged China to show its goodwill during this week’s talks by allowing Taiwan to take part in international trade bodies.
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