Mon, Sep 08, 2014 - Page 13 News List

Taiwan seeking tarriff reductions at trade-in-goods agreement talks: official

KEY INDUSTRIES:Taiwan wants decreases in flat-panel, machine tool, petrochemical and car tarriffs in an effort to offset the impact of a possible China and S Korea FTA

Staff writer, with CNA

Taiwan plans to seek tariff reductions in the flat-panel display, machine tool, petrochemical and automobile sectors during the next round of talks with China on a bilateral trade-in-goods agreement, according to an anonymous official with knowledge of the matter.

The three-day talks, scheduled to begin on Wednesday in Taiwan, are the first of their kind in about 10 months.

The meetings are to be attended by the Bureau of Foreign Trade Director-General Jenni Yang (楊珍妮), and Chen Xing (陳星), head of the Department of Taiwan, Hong Kong and Macau Affairs at the Chinese Ministry of Commerce.


Taiwan “must gain approval” from China to include the flat-panel display, machine tool, petrochemical and automobile sectors in the tariff reduction list, an official familiar with the negotiations said.

The inclusion of the automobile sector, for example, could help the nation’s small and medium-sized suppliers gain more access to China’s huge automobile market, where 13 million cars are sold per year, compared with only 300,000 vehicles sold annually in Taiwan, the official said.

A relaxation of Chinese import taxes on the nation’s petrochemical products would benefit Taiwanese businesspeople who have already invested in petrochemical production in China using materials sourced from Taiwan, the official said.


However, in the flat-panel display and machine tool sectors, it would be difficult to win approval from China to lower tariffs, because they are considered to be key industries to China’s economic development, the official added.

China is seeking openings in Taiwan’s agricultural market and also in consumer goods such as textiles and plastic products, but the Taiwanese negotiating team is expected to try to reduce the potential impact on these sectors through a non-zero tariff concession or by gaining a longer period in which to eliminate tariffs, the official said.

The progress of the bilateral trade-in-goods agreement has fallen far behind negotiations for a free-trade agreement (FTA) between China and South Korea, Minister of Economic Affairs Woody Duh (杜紫軍) said late last month.


As China and South Korea step up their FTA negotiations, there is growing concern in the ministry and among Taiwanese businesses that the nation might continue to lose ground to South Korea in key export areas once the FTA takes effect.

The FTA is expected to affect about 25 percent of the nation’s US$38.6 billion in industrial product exports, according to the ministry’s estimates.

Taiwanese companies could lose orders of between US$3.16 billion and US$8.42 billion to South Korean competitors, the ministry said.

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