The creation of the ASEAN Economic Community (AEC) is expected to provide new business opportunities for Taiwan at a time when exporters have set their sights on the fast-growing ASEAN market, the Ministry of Economic Affairs’ Bureau of Foreign Trade said yesterday.
However, the establishment of the economic bloc is expected to bring ASEAN members closer together in trade and investment, which could raise competition against non-ASEAN members such as Taiwan, the bureau said.
The AEC made its debut yesterday with the aim of implementing economic integration initiatives and creating a single market across ASEAN. The goal of the AEC is to achieve the free flow of merchandise, services, investment, capital and labor by 2025 to make Southeast Asia a global production hub with its own supply chain.
The bureau said Taiwan is glad to see the formation of the AEC, which is expected to speed up the flow of goods between member nations, while the agency said the members of the economic bloc could further relax investment restrictions and improve their legal mechanism to make the group more international.
It said that the AEC boasts huge consumption power with its population of 600 million people, and that many young consumers in the region have been impressed by Taiwan-made products.
The AEC is expected to bring more business opportunities to Taiwan, which has many firms that have set up footholds in the ASEAN market, the government agency said, adding that Taiwanese investors should map out more strategies for investing in the AEC to seize opportunities.
However, further economic integration in the AEC is expected to attract more foreign investment, a move that could cultivate its own supply chain in a wide range of industries and hurt Taiwan’s competitiveness in the economic bloc.
According to the bureau, trade among the 10 ASEAN members accounts for 24 percent of the total trade in the bloc.
Taiwan and Singapore, an ASEAN member, signed the Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP) in November 2013 and the accord went into effect on April 19 the following year.
The bureau said that Taiwan will seek to sign similar agreements with other ASEAN members to penetrate the market.
Statistics compiled by the ministry show that bilateral trade between Taiwan and ASEAN totaled US$93.6 billion in 2014, accounting for 16 percent of the nation’s total trade in that year. ASEAN has become Taiwan’s second-largest trading partner.
The data indicates that Taiwan had invested US$84.12 billion in the ASEAN market as of 2014. Taiwan is the fourth-largest foreign investor in Vietnam and Malaysia and the third- largest foreign investor in Thailand.
The three countries are also ASEAN members.
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