Recent comments by the Philippines’ trade and industry secretary cast doubt on the feasibility of Taiwan being able to sign free-trade agreements (FTA) with other economies in the region after it signs an economic cooperation framework agreement (ECFA) with China.
A major pillar of President Ma Ying-jeou’s (馬英九) rationale for signing the controversial trade pact has been that the ECFA would pave the way for such agreements.
“Our ‘one China’ policy stands. An FTA with Taiwan is still too early to say and … our commercial matters with Taiwan are being handled adequately through the JEC [Philippines-Taiwan Joint Economic Conference],” Philippine Trade and Industry Secretary Jesli A. Lapus was quoted by Manila Bulletin as saying on June 22.
Lapus said the JEC was working well and that the next meeting between Taiwanese and Philippine representatives — the 17th — would be held in Taiwan. The JEC was initially scheduled to be held in the first quarter, but was rescheduled to the fourth quarter to accommodate the entry of a new administration in the Philippines.
“Let the new administration call the shots” on the possibility of expanding the JEC to a full-fledged FTA between Taiwan and the Philippines, he said.
Lapus’ comments contrasted with earlier remarks, in which he voiced the possibility of exploring an FTA with Taiwan as relations between Taiwan and China improved.
“This might be the time to start talking. I see the benefits of this bilateral [FTA] because of [the] thousands of investors from Taiwan. This would even improve with an FTA,” Lapus had said in an earlier interview, also quoted by the Manila Bulletin.
Asked for comment on Lapus’ remarks, Bureau of Foreign Trade Director-General Huang Chih-peng (黃志鵬) told the Taipei Times on Friday that despite other regional economies’ stance of supporting a “one China” policy, an ECFA would nonetheless increase their willingness to sign FTAs with Taiwan.
“The political issues have to be resolved before other economies are willing to sign an FTA with us,” he said by telephone.
“The signing of an ECFA will be a ‘win-win’ for cross-strait relations in terms of economic ties, and through this, other countries have told us they would pay close attention to how the trade pact develops and explore the possibility of signing FTAs with Taiwan,” he said.
As a WTO member, Taiwan is free to sign FTAs with other economies as stipulated in the WTO clause, Huang said.
Taiwan has reportedly held several talks with Philippine authorities on the possibility of signing an FTA because the Subic-Clark-Kaoshiung Economic Corridor, established four years ago under former president Chen Shui-bian’s (陳水扁) administration, was no longer sufficient to realize the full benefits of an FTA, the paper said.
“This economic corridor involves only a small area, while an FTA would cover both countries in their entirety, so this will expand relations of the two countries,” Taiwanese Representative Donald Lee (李傳通) said to Manila.
“Taiwan and the Philippines have agreed to discuss how the proposed FTA could be signed,” Lee said, adding that an FTA would cover both investments and trade.
He said he hoped that the discussions would be continued under the new Philippine government.
Lee said that once an ECFA is signed, more Taiwanese investors are expected to relocate to China, which could lead to the displacement of some of the estimated 80,000 Filipino workers in Taiwan.
Aside from the displaced workers, the Philippines could also lose potential investors because it would be easier for those investors to enter a country that has an existing agreement with Taiwan, Lee said to the Philippine Star earlier this month.
Last month, Subic Bay Development Management Corp president Jeff Lin (林繼武) said that there were no indications that Taiwanese firms in the Subic Bay Freeport Zone were preparing to relocate to China once the trade agreement has been signed.
Lin was responding to a report by Philippines National Economic and Development Authority director-general Augusto Santos.
The report claimed that some of the 135 Taiwanese companies in the zone would move to China after the trade pact is signed, leaving thousands of Filipinos out of work.
Lin said that some of the Taiwanese firms already established in the zone were mulling over expansion plans.
He said the zone had become more attractive to Taiwanese investors because of the positive effects of the FTA between China and ASEAN, which came into force at the beginning of this year.
The incoming Philippine president Benigno Aquino III will be inaugurated on June 30.
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