Premier Yu Shyi-kun may sign a free-trade agreement (FTA) with Panama during his 13-day trip to Central America with the hope of strengthening bilateral economic and trade relations with its diplomatic ally, an official at Taiwan's embassy in Panama said yesterday.
"It would be to the advantage of Panama to sign the free-trade accord because it would not only make it easier for Panama to export goods to Taiwan but also attract Taiwanese businesspeople to invest in Panama," said Chen Ming-shih (陳銘師), an economic counselor at Taiwan's embassy in Panama.
Panama would become the first country among Taiwan's Central American and South American allies to sign such a pact in the wake of Taiwan's accession to the WTO on Jan. 1 this year.
Taiwan's ambassador to Panama, David C.Y. Hu (胡正堯), said that the signing of a free-trade pact with Panama would reduce the differences between the two countries' industries.
"Panama's trade superiority lies in financial services, wharf facilities and free-trade zones, while Taiwan's lies in exports of industrial and information-technology products," he said.
That Taiwan and Panama will forge a FTA does not come as a surprise because the two countries have been holding a series of consultations to discuss the matter for the past few months.
The negotiations reached a climax on June 17 when Meliton Arrocha, vice minister of foreign trade in Panama, arrived in Taiwan for a five-day visit to hold talks with officials from the Ministry of Economic Affairs on the possibilities of forging such an accord.
It was the first negotiation on free-trade-zone issues for the two countries since May 1999. Talks were put on hold while Taiwan sought entry into the WTO.
During his visit, Arrocha said that signing a free-trade accord would not only contribute to bettering business and trade between Panama and Taiwan, but would also help reduce Panama's trade deficit with Taiwan.
Taiwan exported US$24.2 million worth of products to Panama last year, while Panama sold some US$11.6 million worth of goods to Taiwan, according to Arrocha.
"The trade imbalance in favor of Taiwan is even larger when trade from the Colon Free Trade Zone are counted," he said.
Taiwan's exports to the Colon Zone exceeded US$500 million last year.
Yu is scheduled to lead a 60-strong delegation -- that will include government officials, business and cultural leaders and the media -- to Haiti, Panama, Costa Rica and Belize between Aug. 5 and Aug. 17.
The delegation will have a two-day stopover in New York en route to Haiti and a one-day stopover in Los Angeles on its return trip.
The journey, which is being billed as culture-oriented, will be Yu's first official visit since he took office on Feb. 1.
It is also part of Taiwan's effort to consolidate relationships with its diplomatic allies, especially following the recent defection of Nauru.
Taiwan terminated its 22-year-old diplomatic ties with Nauru on Wednesday after the tiny South Pacific island state established formal relations with China.
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