Minister of Economic Affairs Shih Yen-shiang (施顏祥) yesterday told lawmakers that the US-South Korea free-trade agreement (FTA) would have a “limited” impact on Taiwan after it takes effect early next year.
“There will definitely be some impact from the FTA. The key is to launch contingency plans to help ensure that impact is minimized,” Shih said during a legislative question-and-answer session.
In response to a question from Democratic Progressive Party (DPP) Legislator Huang Wei-cher (黃偉哲), Shih said the pact, set to take effect in January, would affect “less than 1 percent of Taiwan’s GDP growth.”
“That is because electronic products, which account for 66 percent of the country’s exports to the US, enjoy zero tariff rates, while Taiwanese exporters of textiles, plastics and mechanical products and their South Korean counterparts target different consumers in the US market,” Shih said.
Overall, the impact of the FTA could cost Taiwan as much as US$6 billion in trade, he said.
The ministry’s data show that products that enjoy zero duties accounted for 65.9 percent, or US$22.58 billion, of Taiwan’s total exports to the US last year. Products that are not duty exempt accounted for 34.1 percent, or US$11.84 billion, of exports to the US last year.
However, on Thursday, the ministry was more forceful in warning Taiwanese manufacturers of plastics, textiles, garments, chemicals, machinery and panels that they could be hurt by the US-South Korean pact, telling them to brace themselves for the impact.
Also on Thursday, the Bureau of Foreign Trade said the ministry would launch seven plans devised to help local firms weather the impact, including assisting them to research and develop products different from those produced by South Korea, encouraging them to move into own-brand business to increase the value and international profile of their products, as well as enhancing cross-industry cooperation to devise innovative products.
The bureau said it would also work to push Taiwan’s FTA talks with other countries.
Citigroup chief economist Cheng Cheng-mount (鄭貞茂) yesterday said the pact posed a long-term threat to Taiwan in terms of losing foreign investors to South Korea.
The FTA would boost South Korea’s investment environment because foreign companies would find it easier to export their products from there to more countries, Cheng said.
However, the deal would have a limited impact on Taiwan’s exports because only certain companies in the traditional sector would be under pressure from South Korean competitors — and they account for a very small portion of overall exports, he said.
Electronics companies, the biggest contributor to exports, would stay competitive since a large chunk of their products are exempt from US tariffs, Cheng said.
In related news, central bank Governor Perng Fai-nan (彭淮南) yesterday criticized the Currency Exchange Rate Oversight Reform Act of 2011 passed by the US Senate on Tuesday. Perng said the act, aimed at penalizing China and other countries for undervaluing their currencies, would not be good for the US, China or other countries.
Additional reporting by Shih Hsiu-chuan
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a
IN BEIJING’S FAVOR: A China Coast Guard spokesperson said that the Chinese maritime police would continue to carry out law enforcement activities in waters it claims The Philippines withdrew its coast guard vessel from a South China Sea shoal that has recently been at the center of tensions with Beijing. BRP Teresa Magbanua “was compelled to return to port” from Sabina Shoal (Xianbin Shoal, 仙濱暗沙) due to bad weather, depleted supplies and the need to evacuate personnel requiring medical care, the Philippine Coast Guard (PCG) spokesman Jay Tarriela said yesterday in a post on X. The Philippine vessel “will be in tiptop shape to resume her mission” after it has been resupplied and repaired, Philippine Executive Secretary Lucas Bersamin, who heads the nation’s maritime council, said
CHINA POLICY: At the seventh US-EU Dialogue on China, the two sides issued strong support for Taiwan and condemned China’s actions in the South China Sea The US and EU issued a joint statement on Wednesday supporting Taiwan’s international participation, notably omitting the “one China” policy in a departure from previous similar statements, following high-level talks on China and the Indo-Pacific region. The statement also urged China to show restraint in the Taiwan Strait. US Deputy Secretary of State Kurt Campbell and European External Action Service Secretary-General Stefano Sannino cochaired the seventh US-EU Dialogue on China and the sixth US-EU Indo-Pacific Consultations from Monday to Tuesday. Since the Indo-Pacific consultations were launched in 2021, references to the “one China” policy have appeared in every statement apart from the
More than 500 people on Saturday marched in New York in support of Taiwan’s entry to the UN, significantly more people than previous years. The march, coinciding with the ongoing 79th session of the UN General Assembly, comes close on the heels of growing international discourse regarding the meaning of UN Resolution 2758. Resolution 2758, adopted by the UN General Assembly in 1971, recognizes the People’s Republic of China (PRC) as the “only lawful representative of China.” It resulted in the Republic of China (ROC) losing its seat at the UN to the PRC. Taiwan has since been excluded from