Posted on 28 May 2012
If there is no progress for the cross-Taiwan Strait Economic Cooperation Framework Agreement (ECFA) and China, Japan, and Korea sign free trade agreement, Taiwan’s gross domestic product will decrease by US$4.5 billion a year and economic growth rate will drop by 1.49 percentage points, said Liang Guoxin, vice economics minister, yesterday (May 24).
Liang noted that according to the study of Chung-Hua Institution for Economic Research, Korea is likely to sign FTA with China ahead of FTA among China, Japan, and Korea, due to the high difficulty for the opening of Japan’s agricultural-product market.
Yang Chin-tian, minister of foreign affairs, points out that there exist many conflicts among the three parties for FTA talk, since Japan and Korea are wary of agricultural and low-priced industrial products of China, while China worries about the threat of high-end products, such as autos and machinery, from Japan and Korea. Meanwhile, Japan is unwilling to make concession to Korea, in the aspects of agricultural products and technical cooperation.
Liang Kuo-hsin noted that under the aforementioned worst scenario, Taiwan’s foreign trade will decrease by 3-4%, and industrial output value will decrease by US$15.9 billion a year, including reduction of US$13.9 billion for chemical and rubber/plastics products, US$2.7 billion for petroleum and coal products, US$1.2 billion for textiles, and UT$142 million for foodstuff. Meanwhile, output value of garment will decrease by US$80 million and that of leather and products by US$50 million.
Liang Kuo-hsin also reported yesterday that Taiwan is negotiating FTA or economic cooperation agreement (ECA), with a number of trade partners, including Singapore, New Zealand, India, the Philippines, Israel, Indonesia, and Malaysia. During the trade talks, trade partners ask to sign a high-standard and comprehensive agreement, according to which both parties must open their markets at large scale in one fell swoop. They will have to remove great majority of market-entry barriers within a certain period, including cancellation of agricultural and industrial-product tariffs, opening of the service market, and removal of restrictions on foreign investments.
