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Taiwan's FTA Strategy Under Discussion

by Mary Swire,, Hong Kong

28 December 2010

There have been questions in parliament as to the efficacy of Taiwan’s free trade agreement (FTA) strategy following the signing in June this year of the Economic Cooperation Framework Agreement (ECFA) with China.

Following its signing, it had been said the ECFA had ended Taiwan’s isolation from the rest of the world, and that Taiwan should try to diversify its external trade alliances as much as possible, as it could not afford to remain regionally marginalized. It was considered that, as a World Trade Organisation member, Taiwan now has the right to form FTAs with other members without having to defer to China for approval.

Taiwan’s President Ma Ying-jeou had also stressed that the improvement in relations between Taiwan and China had “brought positive changes in Taiwan's ties with the United States, Japan, the European Union, the Association of Southeast Asian Nations (ASEAN), New Zealand, and Australia, all of whom are now more willing to enhance ties with Taiwan.”

However, it was pointed out that little had been achieved, and parliamentary members questioned the government’s strategy which had, to date, led only to the announcement of FTA negotiations with Singapore among its ASEAN trading partners. It was felt that Taiwan was falling further behind its rival, South Korea.

However, the government has reiterated that its bilateral and multilateral FTA priorities remained as laid down by the President. In addition, while it was considered that the advantage gained by South Korea over Taiwan by its FTAs with the US and EU was not as great as had been imagined, South Korea itself was also concerned by Taiwan’s foothold in China.

Furthermore, Taiwan’s Deputy Foreign Minister, Shen Lyu-hsun, is reported to have confirmed that the trade and investment framework agreement (TIFA) talks between Taiwan and the US would re-commence next month, and could play a part in further easing Taiwan's free trade discussions with its other major trading partners.

It has also been suggested that Taiwan should attempt to join the Trans-Pacific Partnership negotiations that are being led by the US with an increasing group of countries. It is believed that such a course of action could lead to a quicker outcome than attempting to sign an FTA with the US directly.

TAGS: tax | free trade agreement (FTA) | law | tariffs | Taiwan | agreements | trade

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