The Ministry of Economic Affairs yesterday said it is considering negotiating with its Chinese counterpart on a broader range of products to be covered in the cross-strait agreement on trade in response to China and South Korea’s signing a bilateral trade agreement.
After a three-hour meeting in Seoul on Thursday, Chinese President Xi Jinping (習近平) and South Korean President Park Geun-hye issued a joint statement that Seoul and Beijing would work to complete a long-negotiated free-trade agreement by the end of the year.
In response, Vice Minister of Economic Affairs Woody Duh (杜紫軍) told a media briefing that he felt “highly agitated” about China and South Korea signing a free-trade agreement because the pact is likely to cause the nation’s businesses to lose competitiveness with their South Korean peers.
“We need to have a much better discussions about helping Taiwanese companies become more competitive with their South Korean counterparts, but the key is to let the already inked cross-strait service trade pact get ratification from the legislature first,” Duh said.
Duh said the ministry’s trade negotiation office is revising its strategies and considering negotiating a longer list of products to be covered in the cross-strait agreement on trade in goods.
The ministry said Taiwan’s panel, petrochemical and machinery industries would suffer the brunt of the new free-trade deal. Taiwan is competing with South Korea in those sectors.
Taiwanese academics have also expressed concern about the agreement between China and South Korea.
Chung-Hua Institution for Economic Research’s WTO and RTA center deputy executive director, Roy Lee (李淳) told CNA that after the signing of the agreement, Taiwan will suffer an impact in a short-time frame.
“Between 50 percent and 80 percent of Taiwan’s export items overlap with those of South Korea,” Lee said.
As China is also developing its own panel industry, it probably will not allow zero tariffs for South Korea, but even if China reduces tariffs in seven to 10 years, it will still curb Taiwan’s panel sector.
He said that Taiwan has enjoyed a trade surplus of between US$80 billion and US$90 billion with China over the past few years, while its trade surplus with the rest of the world has totaled US$30 billion.
“If Taiwan’s trade surplus with China is reduced, its trade surplus with the rest of the world will also be reduced,” he said. This, coupled with high tariffs, could induce an even faster exodus of domestic industries, according to Lee.
Taiwan Institute of Economic Research (台灣經濟研究院) Microeconomic Forecasting Center director Gordon Sun (孫明德), said that China is also the largest export destination for South Korea, accounting for 30 percent of its total exports.
“If China also completes the signing of a free-trade agreement with Japan, then Taiwan will be marginalized,” he said.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS