Efforts by President Ma Ying-jeou’s (馬英九) administration to sign free-trade agreements (FTA) with other nations has failed to show any concrete results thus far, a report from the Legislature’s Budgetary Research Center has said, adding that “it lacks clear strategic planning and negotiation mechanisms and is inefficient in forging domestic consensus.”
Taiwan’s economy is highly dependent on the import/export trade, the report said, and despite promoting the signing of FTAs with other countries, the results of government efforts to open up tariff-free trade are limited because the administration lacks a definitive strategic blueprint to guide it through negotiations and to make progress, the report said.
Every country looking to sign an FTA has its own strategic considerations, and economic, political and diplomatic objectives are all equally important in that process, the report said. As such, it is important to have an overall strategic plan when targeting countries for potential FTAs.
Citing South Korea as an example, the report said the country — with strategic planning and economic development in mind — signed FTAs with the EU, the US, ASEAN nations and India, among others, and these have helped the country boost its economy.
By comparison, the report said that although the Taiwanese government stressed the importance of signing FTAs, it has thus far not forged a clear strategic approach nor a blueprint plan that meet the nation’s economic development needs.
As a result, to this day, Taiwan has only signed FTAs with Panama, Guatemala, Nicaragua, El Salvador and Honduras alongside the Economic Cooperation Framework Agreement (ECFA) it signed with China and that no major progress has been made with other key trading partners.
The report also said that although the government has set up an office through which it can conduct negotiations, it has not been able to effectively utilize available resources.
The report suggests the government set up a high-level unit in charge of planning and delegation.
It points out that South Korea has a ministry-level agency with full responsibility for running all legal affairs, trade negotiations and economic issues in terms of dealing with other countries. Under this agency, there are sub-divisions that provide legal support, intelligence and advice. It also used outsourced private research centers and senior legal experts to undertake investigative reports, trade negotiation studies and to provide assistance on resolving trade disputes.
By contrast, the unit in charge of Taiwan’s trade negotiation is an ad-hoc body housed within the Ministry of Economic Affairs (MOEA) with its members made up of staff from other relevant ministries that lacked the authority to ensure effective coordination, communication and integration.
There is also a division of labor between the unit and the MOEA’s Bureau of Foreign Trade, the report said. As such, the lack of a mechanism for overall planning, delegation and resource usage make it unfavorable for Taiwan to progress with trade negotiations, the report said.