The Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (ANZTEC) is the first free-trade agreement (FTA) that Taiwan has signed with a country with which we do not maintain diplomatic relations.
While this agreement will almost certainly have a stimulating effect on the depressed domestic economy, the joint efforts of the public will be the factor that decides whether it will meet the expected targets.
New Zealand is a great agricultural nation that possesses advanced agricultural production technology: Its quality control and cold process technologies are the best in the world.
The country’s agricultural production value exceeds US$25 billion and it exports the bulk of its farming products, which include meats, dairy products, fruit and wool to a total value of US$31.5 billion. This makes up as much as 71 percent of New Zealand’s total exports, which are well received around the world.
In recent years, the country has been even more active in its efforts to develop Asian markets, such as China, Japan and South Korea.
In contrast, Taiwanese farmers are small farmers, with limited tolerance and ability to adapt, making the prospect of such strong competition out of the ANZTEC agreement daunting.
Official data shows that New Zealand’s agricultural exports to Taiwan reached a total value of US$607 million last year.
The bulk of these exports, 105,253 metric tonnes, consisted of livestock products at a value of US$434 million, 55,981 tonnes of agricultural products at a value of US$111 million, 7,936 tonnes of aquatic products worth US$13 million and 155,635 tonnes of forestry products at a value of US$49 million.
On the other hand, Taiwanese agricultural exports to New Zealand only amounted to US$2.53 million. These exports included 1,063 tonnes of agricultural products worth US$2.25 million, 85 tonnes of aquatic products worth US$270,000, 12 tonnes of forestry products at a value of US$10,000 and no livestock products.
The domestic consumer market for agricultural products is limited, but when the import tax exemption for New Zealand agricultural products takes effect, its beef, mutton, deer antler, kiwifruit, apples, wine and dairy products will increase sharply.
With price drops, these products are likely to take an increasingly large share of the market.
Although there is complementarity with local agricultural products due to seasonal differences, there will be increased competition for apples and livestock products.
The reason for this is that domestic consumers focus on price, quality and brand name when making their purchasing decisions.
Since domestic agricultural production costs are high and there is a lack of economies of scale, a drop in the price of New Zealand kiwifruit, beef, mutton and dairy products while maintaining quality means that these products are likely to replace other local Taiwanese fruits and livestock products.
This is likely to create an even more difficult situation for the local industry.
To strengthen support for local products among consumers, the government should be quick to introduce a complete set of guidance measures to promote variety improvements, production technology advancements, added-value increases, food safety certification and marketing, which would all help farmers.
It also would not hurt to learn from the global marketing of New Zealand kiwifruit and Norwegian salmon.
In order to expand the export market for Taiwanese agricultural products, the government should use the agreement to implement a planned selling program directed at New Zealand for outstanding Taiwanese agricultural products such as mango, pineapple, wax apples, tea, Taiwanese tilapia, striped bass, mullet, Phalaenopsis orchids and Oncidium orchids.
It should take such concrete measures instead of relying on fuzzy slogans saying that the agreement will not have an impact on the Taiwanese market and farmers, that there is no need to fear competition and that it will help promote an upgrade of Taiwan’s agricultural industry.
There is research to show that by signing the ANZTEC, the total production value of Taiwan’s agricultural industry will shrink by about NT$4 billion and that livestock products will bear the brunt of the impact.
Using economic models to make deductions and estimates, making too many assumptions and leaving too much space for intervention, frequently produces results that differ greatly from the real world.
Since this is the case, it could well be that although losses don’t seem to be particularly high, they could be concentrated in a small number of industries.
In addition to its having a substantive effect, we also must not neglect the psychological impact of the ANZTEC agreement. It is natural for us to worry about or fear the unknown.
Half-deliberately, half-unintentionally, government agencies have lately created the impression that Taiwan’s agricultural industry is the main obstacle to international trade talks. It has not communicated sufficiently with farmers either before or after international trade talks have taken place.
In particular, officials have long focused on commercial industries at the cost of the agricultural industry.
This has made farmers feel that they are coming under pressure and it also makes them lose confidence and trust in the government.
As a result of this lack of mutual trust, farmers worry that the government will make compromises on agricultural issues just as easily as it did in connection to the deregulation of US beef imports, and that this will endanger their livelihoods and, by extension, have a negative impact on the implementation of government agricultural policy and on how the government plans it’s global trade strategies.
Looking at the controversy that has resulted from the recent signing of the cross-strait service trade agreement between Taiwan and China, the government should avoid reporting only positive effects of the agreement while keeping quiet about any negative impact it may have.
It should make a point of providing timely reports that give farmers full information about the actual situation, and it should also promise to provide concrete support measures to those farmers that are negatively affected to allow them to go on with their farming without worrying about the future since this would help facilitate future FTA talks with other countries.
Du Yu is chief executive officer of the Chen-Li Task Force for Agricultural Reform.
Translated by Perry Svensson
From the Iran war and nuclear weapons to tariffs and artificial intelligence, the agenda for this week’s Beijing summit between US President Donald Trump and Chinese President Xi Jinping (習近平) is packed. Xi would almost certainly bring up Taiwan, if only to demonstrate his inflexibility on the matter. However, no one needs to meet with Xi face-to-face to understand his stance. A visit to the National Museum of China in Beijing — in particular, the “Road to Rejuvenation” exhibition, which chronicles the rise and rule of the Chinese Communist Party — might be even more revealing. Xi took the members
The Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP) on Friday used their legislative majority to push their version of a special defense budget bill to fund the purchase of US military equipment, with the combined spending capped at NT$780 billion (US$24.78 billion). The bill, which fell short of the Executive Yuan’s NT$1.25 trillion request, was passed by a 59-0 margin with 48 abstentions in the 113-seat legislature. KMT Chairwoman Cheng Li-wun (鄭麗文), who reportedly met with TPP Chairman Huang Kuo-chang (黃國昌) for a private meeting before holding a joint post-vote news conference, was said to have mobilized her
The inter-Korean relationship, long defined by national division, offers the clearest mirror within East Asia for cross-strait relations. Yet even there, reunification language is breaking down. The South Korean government disclosed on Wednesday last week that North Korea’s constitutional revision in March had deleted references to reunification and added a territorial clause defining its border with South Korea. South Korea is also seriously debating whether national reunification with North Korea is still necessary. On April 27, South Korean President Lee Jae-myung marked the eighth anniversary of the Panmunjom Declaration, the 2018 inter-Korean agreement in which the two Koreas pledged to
The Chinese Nationalist Party (KMT) is often accused of getting close to, and even conspiring with, the Chinese Communist Party (CCP). There are certainly good reasons behind these accusations, yet the confounding truth is that it makes neither historical nor logical sense for it to do so. Whether one believes that the Chinese civil war fought between the KMT and CCP in the previous century has ended or has yet to be resolved, the KMT’s retreat to Taiwan in 1949 resulted in the CCP governing China and the KMT taking root in Taiwan. For years, the KMT refused to even
RSS