Taiwan yesterday signed a far-reaching free-trade agreement (FTA) with Singapore — the first of its kind with a Southeast Asian country — in a move the government said would boost the nation’s efforts to pursue further economic engagement with trading partners bilaterally and multilaterally.
“This is a milestone achievement for Taiwan’s progress toward economic liberalization and our participation in regional economic integration,” Minister of Economic Affairs Chang Chia-juch (張家祝) told a press conference at 11am in Taipei.
Minister of Foreign Affairs David Lin (林永樂) said the agreement demonstrated Taiwan’s commitment to trade and investment liberalization to the global community.
Photo: Pichi Chuang, Reuters
The agreement “serves as an example” for Taiwan’s negotiation with other countries to sign economic cooperation agreements, Lin said.
“It could also trigger a domino effect” by encouraging other countries to open talks with Taiwan on similar trade accords, Lin added.
The pact — called the Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP) — was signed by Representative to Singapore Fadah Hsieh (謝發達) and Singaporean Trade Representative to Taiwan Calvin Eu at a ceremony held at 9:30am in Singapore.
With Beijing’s insistence that FTAs can only be concluded among sovereign states, Taiwan has to conclude FTA-like agreements under a different name, such as the Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation signed in August.
The exceptions are the four FTAs that Taiwan has with five diplomatic allies in Central America — Panama, Guatemala, Nicaragua, El Salvador and Honduras.
Billed by the government as a comprehensive, “high-standard” and “high-quality” trade agreement, the ASTEP contains 17 chapters, covering market access conditions for trade in goods, cross-border trade in services, government procurement and e-commerce; issues related to trade rules — technical barriers to trade, rules of origin, foreign investment, competition policies, trade remedies, customs procedures, sanitary and phytosanitary measures, and transparency; cooperation in intellectual property protection; and dispute settlement provisions.
Taiwan will remove 99.48 percent of its tariff lines within 15 years at the latest, with the exception of 40 agricultural products, including rice, mangoes, garlic, shiitake mushrooms, red beans, shelled ground-nuts and liquid milk.
Once the agreement takes effect, expected early next year, Taiwan will provide Singapore immediate tariff-free access to 65.97 percent of its agricultural products and 87.39 percent of its industrial products, while duties on the rest of the products will be reduced in three stages over a 15-year period.
The tariff cuts will have a limited impact on Taiwan’s agricultural sector because Singapore is not an agriculture-based economy, he said.
Chang added that throughout the two-and-a-half years of negotiations, Taiwan pressed for a longer tariff phase-out period to give less-competitive, domestic-oriented industries, such as auto parts, engines, motorcycles, towels and cotton clothing, time to adjust.
In return, Singapore, which has a very open trading regime that levies tariffs on only six beverage products, extended zero tariffs to all imports from Taiwan.
Both countries also agreed to adopt a “negative list” — as opposed to the “positive list” used in the WTO’s General Agreement on Trade in Services — to provide greater market access to investors from the other country. Under this set-up, the two countries agreed to open all their service sectors, unless specifically excluded by each country in an annex to the agreement.
Taiwan’s negative investment list covers 30 sectors in transportation, telecommunication and professional services, while Singapore has 35 sectors on its list related to healthcare and transportation, among others.
Both countries agreed to go beyond their respective WTO commitments in certain service sectors, including research and development service, general engineering and Type I telecommunications enterprises, while applying their commitments under the WTO to the finance industry under the bilateral agreement.
The agreement is expected to add US$701 million to Taiwan’s GDP over the next 15 years, boosting domestic output by NT$42.1 billion (US$1.43 billion) and creating 6,154 jobs, Chang said, citing a study conducted by the Chung-Hua Institution for Economic Research (中華經濟研究院).
Lin said that aside from signing FTAs with its main trade partners, Taiwan’s ultimate goal is to participate in regional economic integration through agreements such as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) — both possible pathways to the formation of an Asia-Pacific free-trade area.
“We will contact each member involved in TPP and RCEP negotiations and conclude agreements with them one by one,” Lin said.
Taiwan has completed feasibility studies on signing FTA-like pacts with India and Indonesia. Another one on trade with the Philippines is expected to be completed in the near future, Lin said.
EUROPEAN TARGETS: The planned Munich center would support TSMC’s European customers to design high-performance, energy-efficient chips, an executive said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said that it plans to launch a new research-and-development (R&D) center in Munich, Germany, next quarter to assist customers with chip design. TSMC Europe president Paul de Bot made the announcement during a technology symposium in Amsterdam on Tuesday, the chipmaker said. The new Munich center would be the firm’s first chip designing center in Europe, it said. The chipmaker has set up a major R&D center at its base of operations in Hsinchu and plans to create a new one in the US to provide services for major US customers,
‘ABUSE OF POWER’: Lee Chun-yi allegedly used a Control Yuan vehicle to transport his dog to a pet grooming salon and take his wife to restaurants, media reports said Control Yuan Secretary-General Lee Chun-yi (李俊俋) resigned on Sunday night, admitting that he had misused a government vehicle, as reported by the media. Control Yuan Vice President Lee Hung-chun (李鴻鈞) yesterday apologized to the public over the issue. The watchdog body would follow up on similar accusations made by the Chinese Nationalist Party (KMT) and would investigate the alleged misuse of government vehicles by three other Control Yuan members: Su Li-chiung (蘇麗瓊), Lin Yu-jung (林郁容) and Wang Jung-chang (王榮璋), Lee Hung-chun said. Lee Chun-yi in a statement apologized for using a Control Yuan vehicle to transport his dog to a
BEIJING’S ‘PAWN’: ‘We, as Chinese, should never forget our roots, history, culture,’ Want Want Holdings general manager Tsai Wang-ting said at a summit in China The Mainland Affairs Council (MAC) yesterday condemned Want Want China Times Media Group (旺旺中時媒體集團) for making comments at the Cross-Strait Chinese Culture Summit that it said have damaged Taiwan’s sovereignty, adding that it would investigate if the group had colluded with China in the matter and contravened cross-strait regulations. The council issued a statement after Want Want Holdings (旺旺集團有限公司) general manager Tsai Wang-ting (蔡旺庭), the third son of the group’s founder, Tsai Eng-meng (蔡衍明), said at the summit last week that the group originated in “Chinese Taiwan,” and has developed and prospered in “the motherland.” “We, as Chinese, should never
‘A SURVIVAL QUESTION’: US officials have been urging the opposition KMT and TPP not to block defense spending, especially the special defense budget, an official said The US plans to ramp up weapons sales to Taiwan to a level exceeding US President Donald Trump’s first term as part of an effort to deter China as it intensifies military pressure on the nation, two US officials said on condition of anonymity. If US arms sales do accelerate, it could ease worries about the extent of Trump’s commitment to Taiwan. It would also add new friction to the tense US-China relationship. The officials said they expect US approvals for weapons sales to Taiwan over the next four years to surpass those in Trump’s first term, with one of them saying