Wed, May 09, 2012 - Page 11 News List

Taiwan economy losing edge as trade deals bite

TRADING PLACES:Taiwan will soon feel the effects of the eight major free-trade deals secured by South Korea and must act now, economic conference is told

By Shih Hsiu-chuan  /  Staff reporter

Taiwan risks being marginalized as free-trade negotiations and deals among major economies leave the nation isolated, a conference organised at the Legislative Yuan and attended by Chinese Nationalist Party (KMT) lawmakers, academics and industrialists has heard.

The event comes as high-level talks aimed at establishing a free-trade deal between South Korea and China intensified and the US-South Korea Free-trade Agreement (FTA) — which took effect on March 15 — begins to impact Taiwan’s economy.

The conference — organized by KMT Legislators Liao Kuo-tung (廖國棟) and Johnny Chiang (江啟臣) — was told that since its accession to the WTO in 2002, the nation had failed to prepare for further international trade liberalization, resulting in it falling behind in the race to secure FTAs.

Secretary-General of the Chinese National Association of Industry and Commerce, Taiwan, John Chang (張炯昌), called for the establishment of a Cabinet-level task force to handle external trade negotiations. This aspect of foreign trade is currently undertaken by the Office of Trade Negotiation at the Ministry of Economic Affairs.

Having traveled with several official delegations to lobby the EU to prioritize free-trade between Taiwan and the 27-member economic bloc, Chang said that the government needed to “proactively take steps” to make the country into a desirable country to negotiate free-trade partnerships.

Jake Chia (賈大駿), an advisor to the General Chamber of Commerce of the Republic of China, reiterated Chang’s view, saying that “except for the Ministry of Economic Affairs, not all government agencies understand the importance of trade liberalization to Taiwan.”

Trade liberalization is not just an economic issue, but also involves problems that need coordination and the relaxation of trading rules to be resolved, Chia said.

Ku Ying-hua (顧瑩華), a research fellow at the Chung-Hua Institution for Economic Research, said that in terms of its ability to compete in the increasingly globalized market, Taiwan has been losing ground South Korea over the past 10 to 12 years.

Within that timeframe, Ku said, South Korea has signed eight free-trade deals with key economies, including the US, the EU, ASEAN and India, and currently these deals account for 35.3 percent of South Korea’s total foreign trade.

Taiwan has so far signed free-trade agreements with five of its allied Central American states, but the trade volume with these countries accounts for less than 0.2 percent of Taiwan’s total foreign trade, she said.

Ku added that Taiwan will face tougher challenges when China and South Korea conclude their free-trade agreement — expected in two years — and when China, Japan and South Korea establish an east Asia trading block.

Chiang lamented the slow progress in the country’s engagement with global trading partners over the past decade and said “marginalization is not only a worry, but a fact that has happened.”

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