Taiwan is focusing on Asian regional economic integration following its trade agreement with China, panelists in a forum agreed yesterday, but they had different opinions on Taiwan’s priorities in the process.
Vice Economics Minister Francis Liang (梁國新) said Taiwan is able to leverage the Economic Cooperation Framework Agreement (ECFA), which was signed in June to liberalize cross-Taiwan Strait trade ties with its largest trade partner, and prevent the country from being marginalized in Asia’s economic integration.
“This is the first step, but we know that it is not enough,” he said at a forum co-organized by the Ministry of Economic Affairs and the Chinese National Federation of Industries (CNFI) under the theme of Taiwan’s role in regional economic integration.
Taiwan is hoping that it will be able to sign free-trade agreements (FTA) with other trade partners after it liberalizes trade relations with China. It received a boost of confidence when Singapore announced last month that it would study the feasibility of signing a trade pact with Taiwan.
Southeast Asia should be the first region where Taiwan sets its sights now that the ECFA has been signed, said Yang Yung-ming (楊永明), a professor at National Taiwan University and a former consultant for the National Security Council, adding that Taiwan should seek to strengthen its relations with ASEAN countries.
ASEAN is Taiwan’s fifth-largest trading partner after China, the US, Japan and the EU.
With the WTO’s Doha talks stalled as they try to establish a multilateral free-trade mechanism, countries have been looking to establish a free-trade system bilaterally and regionally, Yang said.
The Free Trade Area of Asia Pacific (FTAAP) and the East Asia Summit — a forum held annually by the leaders of 16 countries in the East Asian region — are not likely to be the solution because there are too many differences between member states in terms of political systems, religions and the size of their economies, he said.
Despite a Chung-hua Institution for Economic Research study concluding that a Taiwan-Japan FTA would benefit Taiwan the most, a lot of factors would have to be taken into account in FTA negotiations, including social factors, the political situation and the impact on local industries, Yang said.
That appears to make the ASEAN market a realistic goal for Taiwan as the next target of regional economic integration, he added.
Yang’s remarks reflected a similar mentality to the government, which has stated that Southeast Asian countries will be at the top of its FTA-seeking agenda.
Many local businesspeople, however, still view the US and the EU as the preferred targets in the “FTA drive” because of the large trade volumes, said Rock Hsu (許勝雄), CNFI vice chairman and chairman of Kinpo Group, one of the largest electronics groups in Taiwan.
Most Chinese products end up being sold in the US and European markets, he said.
Hsu also urged the government to set out a vision and long-term plans so local industries will have a clearer view of the future.
“Do we want to be a ‘Free Trade Island’ in the future? If the answer is yes, what preparation should we be doing to achieve that goal?” he said.