The Ministry of Economic Affairs (MOEA) yesterday said that it would do its best to safeguard the interests of Taiwanese investors and companies that conduct business with Panama, after the nation switched diplomatic recognition to Beijing.
The economics ministry said that it is closely watching how the Ministry of Foreign Affairs handles a 2003 bilateral free-trade agreement with Panama now that diplomatic ties have been severed.
The two ministries are to work closely together to deal with any fallout from Panama’s decision, the MOEA said, adding that it would seek to protect the interests of Taiwanese investors, businesspeople and Taiwan as a whole.
The Taiwan-Panama free-trade agreement took effect on Jan. 1, 2004, granting tariff-free status to 95 percent of Taiwan’s exports to Panama and 97 percent of Panama-made goods sold to Taiwan, the economic ministry said.
The agreement also focused on economic and technological cooperation between the two nations, it said.
Panamanian President Juan Carlos Varela yesterday announced that his nation had cut ties with Taiwan and was switching recognition to China.
Whatever the future of the bilateral trade agreement, its fate is likely to have little impact on Taiwan’s global trade, as Panama absorbs only a small percentage of the nation’s exports, Ministry of Finance Statistics Department Director Tsai Mei-na (蔡美娜) said.
Exports to Panama totaled US$51.54 million in the first five months of the year, accounting for only 0.042 percent of the nation’s global exports, the Ministry of Finance said.
Exports include information and communications devices, rubber and plastics goods, textiles and machinery, it said.
Panama was Taiwan’s 72nd-largest trading partner last year, government data showed.
Bilateral trade totaled US$160 million, a 7 percent annual drop, and accounted for only 0.031 percent of Taiwan’s total bilateral trade, the data showed.
Panama was the 61st-largest buyer of Taiwanese products last year, absorbing 0.047 percent of the nation’s exports at a value of US$133.04 million.
Taiwan does have a sizeable investment footprint in the Central American nation.
According to the Investment Commission, Taiwan’s aggregate investments in Panama are about US$1.6 billion.
Evergreen Marine Corp (長榮海運) and Mega International Commercial Bank (兆豐銀行) are the two biggest investors, with investments of US$850 million and US$20 million respectively, the MOEA said.
Evergreen Marine, which has shipping and terminal management operations in Panama, said the break in ties is unlikely to affect its operations.
The Ministry of Transportation and Communications said that the flag-of-convenience ships registered in Panama would not be affected by the change in relations.
Its statistics show that Taiwanese shipping firms have 452 ships, and 395 of them are flag-of-convenience ships.
Among the ships registered in foreign nations, 68 are registered in Panama and 45 of those belong to Evergreen Marine Corp.
Statistics also showed that most of Taiwan’s flag-of-convenience ships are registered in Liberia, followed by the Republic of Marshall Islands and Panama.
Additional reporting by Shelley Shan
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