Taiwan will fully participate in the Free Trade Area of the Asia-Pacific (FTAAP) initiative highlighted at the 2014 Asia-Pacific Economic Cooperation (APEC) summit and create conditions facilitating Taiwan's integration with the regional economy, Premier Jiang Yi-huah said today after being briefed about Taiwan's participation at the event.
During the event in Beijing, which was held earlier this month with the theme "Shaping the Future through Asia-Pacific Partnership," delegations led by National Development Council (NDC) Minister Kuan Chung-ming and Ministry of Economic Affairs (MOEA) Minister Duh Tyzz-jiun shared Taiwan's experiences and ideas on such topics as the 25th anniversary of APEC; regional economic integration; innovative development, economic reform and economic growth; and APEC ties and infrastructure development.
The premier said that the FTAAP roadmap discussed at the meeting marks a significant stride forward, and that a collective strategic study conducted by APEC members will be critical to the realization of the FTAAP.
"Since the FTAAP will build on the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, Taiwan should stay on top of negotiations for the two agreements. We must work harder to lobby member states involved in the negotiations while narrowing the liberalization gap among our own industries."
The APEC summit also included an announcement that mainland China and South Korea had concluded negotiations on a free trade agreement (FTA) and expect to sign it by year's end. The two countries launched the first round of talks in May 2012 before wrapping up substantive negotiations this November.
This deal, covering 17 sectors such as investments and trade in goods and services, could cause Taiwan's gross domestic product to fall by 0.5 percent, the MOEA estimated. On the whole, 31 percent or US$49 billion worth of Taiwan's industrial exports to mainland China could be affected, with US$3.1 billion to US$8.4 billion of Taiwanese exports being replaced by Korean products. The MOEA will make further evaluations once the deal's contents and tariff-reduction schedules are released.
"South Korea has overtaken Taiwan in the race to conclude an FTA with mainland China, which signals a strong warning for Taiwan's economy and trade," Jiang said.
While some in the public and media are voicing concerns about Taiwan's eroding trade advantages, the premier finds two other types of opinions more worrisome. The first is that FTAs are unimportant and that Taiwan can do fine without them, and the second is that FTAs are important, but that Taiwan should first pursue FTAs with countries other than mainland China.
"If FTAs are unimportant, other Asian countries would not have been so rattled by South Korea's pact with the mainland," Jiang said of the first argument. "Many of Taiwan's business and industry leaders expect this FTA to have a significant impact on the country. This is not a scare tactic by the government but a widely held view among industries—one that cannot be ignored."
Jiang instructed the MOEA, the NDC and other agencies to convey the urgency of the situation to the public at every opportunity and to underscore the necessity of catching up to other countries.
On the second type of opinion, the premier remarked that Taiwan has penned economic cooperation pacts with New Zealand and Singapore and continues to pursue similar agreements with other countries.
"However, many important countries are waiting to see whether Taiwan will actually put into effect the trade services agreement it signed with mainland China in June 2013. This shows a nation's credibility in economic and trade negotiations as well as its determination to integrate into the regional economy."
MOEA negotiators for the proposed trade in goods agreement under the Cross-Straits Economic Cooperation Framework Agreement should study the details of South Korea's deal with mainland China and negotiate similarly favorable tariff and non-tariff treatments for Taiwan, the premier said.
The Mainland Affairs Council, MOEA and NDC were also instructed to communicate with and urge legislators to quickly pass supporting laws including the cross-strait agreement oversight bill, the cross-strait agreement on trade in services, and the special statute governing the Free Economic Pilot Zone program.
Regarding multilateral trade, Taiwan will support the World Trade Organization's (WTO) Trade Facilitation Agreement and push for it to take effect, Premier Jiang pledged. Though APEC is a regional organization, it supports the multilateral trading system of the WTO.
Also on the sidelines of the APEC summit, the U.S. and mainland China reached a consensus that will expand coverage of the Information Technology Agreement (ITA) and allow members to conclude broader negotiations on the pact. The expanded list of products includes many favorable to Taiwan but regrettably may not cover liquid crystal displays and machine tools. Premier Jiang asked the MOEA to push for products important to Taiwan at the ITA expansion negotiations and to continue advancing the interests of Taiwan's industries through bilateral trade pacts.
As for strengthening Taiwan's ties to the APEC community, Premier Jiang commented on ways to advance cross-border education. APEC members like the U.S., Japan and Australia offer higher education scholarships for students and researchers to study and intern in each other's economies. He asked the Ministry of Education to support this initiative by pooling Taiwan's public and private resources and studying the feasibility of offering more scholarships.
The premier also remarked on ways of improving women's economic potential. He directed the Executive Yuan's Department of Gender Equality to promote more programs to encourage women's innovative economic development, empowering female entrepreneurs with information and communications technology tools to start their own businesses or tap into bigger markets.