President Tsai Ing-wen (蔡英文) yesterday spoke out against a proposal by Kaohsiung Mayor Han Kuo-yu (韓國瑜) to establish a free economic zone in the city, saying it could cause Chinese goods to be mistaken for Taiwanese goods.
If a free economic zone made it unclear whether US-bound goods were Taiwanese or Chinese, the effect on Taiwan from the US-China trade dispute would be greater than elsewhere, so the government is opposed to a free economic zone, Tsai said.
The US-China trade dispute could affect the entire global economy if not reined in, she said.
Trump on Sunday said that he was considering increasing tariffs on US$200 billion of Chinese goods in response to slow negotiations.
The government was constantly preparing response measures to changes in the global economy, Tsai said.
The most crucial task would be to encourage Taiwanese businesses to bring production back to the nation so that it could export more Taiwanese goods, not Chinese goods, she said.
This would be the best way to avoid high tariffs imposed on China by the US, she said.
Bringing Chinese goods into Taiwan through a free economic zone would tie Taiwan to China’s economy and turn Chinese goods into Taiwanese goods, she said.
“Just as the US-China trade dispute is heating up, there are actually politicians who want to import Chinese tea and process it here so that it becomes ‘Taiwanese tea,’” Tsai said.
Doing so would harm the good reputation that Taiwanese products have and invite retaliation from the US, she said.
Taiwanese would not accept such a scenario, she said.
Taiwan has expanded production and demand for local products domestically and globally, she said, adding that to set up a free economic zone would be a step backward.
Separately yesterday, Han said he was happy to see the issue of free economic zones being discussed.
If the Executive Yuan is planning to promote the idea, he hopes they would “prioritize Kaohsiung and give the city a chance,” Han said at a Kaohsiung City Government question-and-answer session.
His hope was to increase competitiveness by lowering tariffs, and easing restrictions would help accomplish this, he said.
Concerns about Chinese goods being confused for Taiwanese goods were just “one angle,” Han said, adding that the government should test the idea in Kaohsiung.
Although his comments regarding free economic zones might differ from the ideas of economists, hopefully the Executive Yuan would “give Kaohsiung a chance,” he said, adding that he hopes the city would “turn over a new leaf” economically by implementing the idea.
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