Although the possibility of a new APEC-wide free trade zone garnered wide support at the APEC leaders' summit in Hanoi, the government must heed the hidden political dangers of such a pact while working to secure Taiwan's inclusion, the president of the Taiwan Institute of Economic Research (TIER,
TIER president David Hong said that Taiwan had much to gain from participation in the so-called Free-Trade Area of the Asia-Pacific (FTAAP), as it would ensure the most effective allocation of economic resources in the region while counteracting the growing trend among local businesspeople to relocate to China.
Moreover, administrative costs related to trade can be greatly reduced and businesses can enjoy greater mobility in merchandise, capital and personnel, which would sharpen competitiveness, he added.
China could remain an adverse factor to Taiwan's future participation in the regional free trade pact. Blockaded by China, Taiwan has so far failed to ink any FTA within the Asia-Pacific region, although the nation has signed FTAs with Panama, Guatemala and Nicaragua, which have had diplomatic ties with Taiwan.
Hong warned that China has suggested that APEC be split into two groups, the Free Trade Area of the Americas (FTAA) and the East Asian Free Trade Area (EAFTA), to promote regional integration before being merged into the FTAAP.
"This would be the most disadvantageous to Taiwan, as Taiwan is still being shut out of ASEAN-plus-one, ASEAN-plus-three and even the ASEAN-plus-six proposed by Japan," he said.
The nation's chances of joining the FTAAP would be even worse if China's proposal is accepted, Hong added.
The government should closely track the preparation process before the multilateral structure takes shape, he said.
All free trade zones are binding in nature, which stands in contrast to organizations like APEC, whose policy-making mode is non-binding.
"Whether APEC's transformation into the FTAAP would bring good or bad changes to Taiwan, which is currently a full APEC member, requires further study," he said.
The president and minister of foreign affairs are still barred from APEC events, while China is gradually acquiring more clout in the organization.
"Considering the FTAAP's binding policymaking nature, it's highly likely that Taiwan's voice will be neglected or sacrificed as a result of China's marginalization efforts," Hong said.
He urged the government to keep close contact with the US and strive for fair treatment in signing an FTAAP, which would give Taiwan more economic benefits while members' rights are taken into consideration.
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Shin Kong Financial Holding Co (新光金控) yesterday said that its insurance unit would adjust its investment portfolio after being banned from buying new stocks a day earlier by the Financial Supervisory Commission (FSC). “We will research what we can do based on the commission’s specific instructions after we receive the regulator’s formal documents,” Shin Kong Financial spokesman Sunny Hsu (徐順鋆) told the Taipei Times by telephone. The commission on Tuesday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$941,722) for reckless investment, and demanded that the insurer reduce its overseas investment ratio from 43 percent to 39 percent. The fine would affect
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
EQUITIES TAIEX moves sharply higher The TAIEX moved sharply higher yesterday as buying focused on Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) after a strong showing by its American Depositary Receipts overnight. However, the gains were capped after the benchmark index breached 13,000 points and ran into technical hurdles, prompting investors to turn cautious, dealers said. At the end of the session, the TAIEX was up 131.11 points, or 1.02 percent, at 12,976.76. Turnover was NT$206.328 billion (US$7.04 billion), with foreign institutional investors buying a net NT$18.47 billion in shares, Taiwan Stock Exchange data showed. TSMC rose 2.92 percent to close at NT$458.