Government officials are hopeful that Taiwan can join the recently signed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), but cautioned that businesses catering to the home market could be hurt.
Bureau of Foreign Trade Director-General Yang Jen-ni (楊珍妮) on Friday said that Taiwan would have to lower its import duties if it joined the CPTPP, which would increase price competition for businesses that sell mainly to domestic customers.
Taiwan’s import duties currently average 4.1 percent for manufactured goods and 12.84 percent for agricultural produce.
The Ministry of Economic Affairs projects that reducing tariffs and opening the domestic market to meet the terms of the CPTPP would affect the automotive and heavy industries, as well as household electrical appliance manufacturers, which have mostly national markets, Yang said.
Agricultural produce, such as dried mushrooms, garlic and red beans, would be similarly affected, she said.
However, on the agricultural side, Taiwan would benefit from liberalized access to export markets, including for such items as orchids, edamame, bananas, Malabar chestnuts, seedlings and agricultural machinery, Yang said.
Overall, if Taiwan were to join the agreement, the government would have to take measures to counteract adverse effects on domestic industries, Yang said.
While industries would welcome joining the trade bloc, they are also hoping that the government could help delay the timeline for lowering import duties on certain products and promote technology exchanges between domestic industrial supply chains, she said.
National Development Council Deputy Minister Chiou Jiunn-rong (邱俊榮) also expressed his support for the nation’s bid to join the CPTPP.
It would offer all Taiwanese companies greater business opportunities by enabling them to expand beyond the Chinese and US markets, Chiou said.
The CPTPP could also help spark industrial transformation and boost companies’ competitiveness in the free market, he added.
Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam on Thursday last week were the first to sign the trade agreement in Santiago, Chile.
The agreement is to take effect in 60 days, as long as at least six member nations have ratified it by that time, the bureau said, adding that Taiwan would seek to join the CPTPP as quickly as possible after that date.
The CPTPP’s 11 members account for 25 percent of Taiwan’s total foreign trade, with Japan, Singapore, Malaysia and Vietnam among the nation’s top 10 trading partners, while 30.42 percent of Taiwan’s outbound investment is in the 11 nations, the bureau added.
The CPTPP, which was salvaged out of the proposed Trans-Pacific Partnership free trade agreement after the US walked away from the pact in January last year, represents a market of about 500 million people and accounts for 13.5 percent of global trade.
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