Taiwan’s trade groups yesterday urged the government to establish a communication channel with China and help local firms expand their business overseas after China scraps favorable taxes on 12 chemical products to protest what it called unfair trade practices.
The groups’ pleas came after China yesterday announced it would end preferential tariffs from Jan. 1 on imports of propene, paraxylene and other chemicals from Taiwan to remove trade barriers in violation of the Economic Cooperation Framework Agreement (ECFA).
The Petrochemical Industry Association of Taiwan (石化公會) said the move would put local supplies in a disadvantaged position since competitors from other parts of the region enjoy free trade agreements.
Photo: CNA
The blow would prove more expansive than the 12 affected product items, as all firms taking part in supply chain would take a hit, the Taipei-based association said.
The petrochemical, machine tool and steel sectors would be the hardest hit if China ditches the ECFA altogether, Executive Yuan Secretary-General Li Men-yen (李孟諺) said earlier.
The Taipei-based Chinese National Federation of Industries (CNFI, 全國工業總會) said the government should seek to talk with China, as worsening cross-strait trade ties would hurt Taiwan’s own interests.
Large firms with global operation would respond by shrinking presence in Taiwan and increasing manufacturing capacity in places that enjoy free trade agreement to stay competitive, therefore weighing on the nation’s employment, CNFI said.
Likewise, small and medium-sized firms would move their manufacturing bases abroad to cut production costs and defend profit margin, the trade group said.
“Either solution will take a toll on the local job market,” CNFI said, pointing out that non-tech sectors remain labor intensive. The grade group urged the government to reach out and talk with China to iron out bilateral trade differences.
National Development Council Minister Kung Ming-hsin (龔明鑫) yesterday said that local firms should assign more importance to the effort to reduce carbon emissions.
Firms that fail to become carbon neutral would have difficulty winning any business orders in the future, let alone favorable tax terms, Kung said during a forum on industrial innovation and green transition.
Net zero emissions is the key to survival on the part of corporations, compared with an extra 2 to 6 percent of tariffs, he said.
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