The government is seeking to reduce the potential impact of a South Korea-EU free-trade agreement (FTA) on local industries by boosting product differentiation and market expansion, Minister of Economic Affairs Shih Yen-shiang (施顏祥) said yesterday.
In addition, Shih said his ministry had set up a task force with the Ministry of Foreign Affairs (MOFA) to lobby European countries to sign a Taiwan-EU FTA.
“The government will seek effective short-term means to either slow down the South Korea-EU FTA’s negative impact on Taiwanese industries or to promote the signing of FTAs between the EU and other countries [including Taiwan],” Shih said at a seminar held by the Chinese National Federation of Industries (工商協進會).
However, Shih said that compared with South Korea, it is very late for Taiwan to pursue free-trade deals with the world’s major markets and it is difficult to discuss, negotiate or sign an economic cooperation agreement (ECA) or FTA with another country in the absence of diplomatic relations.
After the South Korea-EU free-trade pact takes effect on July 1, Taiwan’s GDP growth could be knocked down by 0.017 percentage points per year, Bureau of Foreign Trade Director-General Bill Cho (卓士昭) said, quoting a report issued last month by the Chung-Hua Institution for Economic Research (中華經濟研究院).
Cho said a total of 1,500 products that Taiwan exports to the EU could suffer after the FTA comes into effect. The industries that will feel the impact most are plastics, textiles, mechanics, metals, transportation and flat panels.
“These exports are worth US$5.27 billion a year, which accounts for 16.8 percent of Taiwan’s total exports to the EU,” he said.
The ministry has set up three plans to cope with the potential impact of the FTA, Cho said.
These include increasing research and development subsidies for local companies, suggesting that the Ministry of Finance -expand tax rebates on exports for industrial raw materials and components, and assisting companies in export marketing and foreign investment, he said.
“These measures may help local companies manufacture differentiated products, increase their competitiveness and further extend their markets, while avoiding the marginalization of Taiwanese industries,” Cho said.
Tariffs of 81.71 percent for South Korean-made products being exported to the EU will drop to zero once the agreement takes effect. In five years, tariffs on all industrial products and 97.15 percent of agricultural products produced in South Korea will be reduced to zero.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS