Taiwan would suspend implementation of a free-trade agreement (FTA) with El Salvador from Monday following a decision by the former diplomatic ally to repeal it, the Executive Yuan said on Thursday.
The suspension of the deal with the Central American nation was proposed by the Ministry of Economic Affairs, the Ministry of Finance and the Ministry of Foreign Affairs, and was passed at the Cabinet’s weekly meeting that day.
The decision was to be sent to the legislature for deliberation, the government said in a statement.
Photo: AFP
Despite the limited effect on Taiwan’s overall trade, Premier Chen Chien-jen (陳建仁) instructed the ministries to help Taiwanese businesses explore other markets for their products and procure goods from other countries with which Taiwan has FTAs, Executive Yuan spokesman Lo Ping-cheng (羅秉成) said.
Diplomatic ties between Taipei and San Salvador ended on Aug. 21, 2018, and the Salvadoran Ministry of Foreign Affairs in December last year announced its plan to terminate the FTA it signed in May 2007 with Taiwan and Honduras, the Bureau of Foreign Trade said in a statement on April 6.
The 2018 announcement was challenged in El Salvador, but its government received a favorable final ruling on Nov. 7, 2022, and subsequently announced the end of favorable tariffs on Taiwanese goods.
Taiwan has not received formal notification from El Salvador about its exit from the FTA as stipulated in the deal, the bureau said on April 6, when it announced the plan to suspend the arrangements, 150 days after El Salvador’s unilateral repeal of the agreement.
Exports from Taiwan to El Salvador last year totaled US$81.58 million, or 0.02 percent of Taiwan’s overall exports, while imports from the Central American country totaled US$18.83 million, or 0.004 percent.
The suspension of the deal does not involve Honduras, which also cut diplomatic ties with Taiwan on March 26.
Minister of Finance Chuang Tsui-yun (莊翠雲) told lawmakers on March 29 that the trade agreement is not linked to diplomatic ties.
Minister of Economic Affairs Wang Mei-hua (王美花) told lawmakers the following day that the fate of the trade agreement would be discussed with Taiwan’s foreign ministry.
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