About 1,500 Taiwanese products face a growing threat from South Korean exports in the European market as a result of a comprehensive free-trade agreement (FTA) between the EU and South Korea, which took effect on Friday, economic officials said on Saturday.
In its FTA talks with other countries, the EU is expected to hold up its agreement with South Korea as a model because of its wide scope, Ministry of Economic Affairs officials said.
Fresh from the implementation of its FTA with South Korea, the EU is expected to begin talks with Japan soon on an economic partnership agreement, the officials added.
In addition, the EU is speeding up efforts to sign FTAs with other Asian countries such as Singapore, Malaysia and Vietnam to boost its bilateral ties with those countries, they said.
In light of this expanding economic integration, Taiwan has to reach an economic cooperation agreement with the EU as quickly as possible to hold on to its market share in Europe, the officials said.
According to the ministry, many of Taiwan’s exports to Europe are similar to South Korea’s, with 70 percent coming from the telecommunications, mechanical and automobile sectors.
It is fortunate that as a signatory to the WTO Information Technology Agreement, most of Taiwan’s IT exports to Europe are entitled to zero-tariff treatment, it said.
As such, local electronics products would not be squeezed by South Korean products in the European market, the ministry officials said.
However, there are about 1,500 export items, with a total value of US$5.265 billion, which would now face strong competition from Korean products with the implementation of the EU-Korea FTA, the officials said.
The industries most likely to be affected are those that manufacture textiles, plastics and chemicals, mechanical products, metals, transportation equipment and flat-screen monitors, the ministry said.
Deputy Minister of Economic Affairs Francis Liang (梁國新) is now in Europe trying to persuade the EU to sign an economic cooperation agreement with Taiwan as soon as possible, the ministry said.
On Thursday, Liang attended a discussion on the economic and trade ties between Taiwan and the EU at the European Parliament.
According to government statistics, the EU is Taiwan’s fourth largest trading partner and source of foreign investment, while Taiwan is the EU’s 14th largest trading partner.
Last year, the bilateral trade between Taiwan and the EU increased 31 percent to US$48.6 billion from the previous year.
EU exports to Taiwan surged to a historic high of US$17.6 billion in the first four months of this year, marking year-on-year growth of 19 percent, the statistics showed.
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