A government department is preparing to study the impact of the new ASEAN Plus One free trade agreement (FTA) on Taiwan’s exports to neighboring markets.
The free-trade area comprising China and six of the 10 members of ASEAN took effect on Jan. 1 and will offer tariff-free treatment to the vast majority of products shipped within the bloc.
Questionnaires designed by the Ministry of Economic Affairs’ (MOEA) Statistics Department will be distributed together with the department’s regular export order survey late next month and in early March, the ministry said.
WHAT TO DO?
Exporters will be asked what they will do to deal with the possible impact of the ASEAN Plus One free trade zone and what they want to see in the government’s economic cooperation framework agreement (ECFA) with China to help offset the impact on the regional economic zone.
Official talks on the proposed ECFA are expected to begin later this month. MOEA officials said that negotiations on the agreement had begun late and therefore, the pact would not take effect until next year at the earliest.
The ministry is concerned that during the one-year window, the country’s petroleum and machinery exports to China will be supplanted by cheaper ASEAN exports, the officials said.
BOOKED
The concern may not be warranted in the near future, however, because in the ministry’s latest survey on the petroleum sector’s export orders, most respondents said they were fully booked for the first half of the year.
The strong order volume can be attributed to global economic recovery, which has led to an increase in demand for plastic materials, MOEA Statistics Department Director-General Huang Ji-shih (黃吉實) said.
Citing the ministry’s latest statistics, Huang said that the prices of five major general purpose plastics have all surged to between US$140 and US$160 per tonne.
MUTED
The positive outlook was muted, however, by expectations among local petroleum refiners that the market share of ASEAN petroleum products in China will increase from 30 percent last year to 50 percent to 60 percent this year thanks to the ASEAN Plus One free trade zone, industry representatives said.
They said at a public hearing held by the ministry to discuss an ECFA a few days ago that ASEAN exporters pose a substantial threat to Taiwanese businesses in China’s market.
MOEA Industrial Development Bureau Director-General Woody Duh (杜紫軍) said that talks on the proposed Taiwan-China trade pack had started too late to help offset the immediate impact of the new free-trade zone.
Asked what could be done to fix the problem, Duh said that there was “no way to fix it.”
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