Premier Jiang Yi-huah today reiterated the urgency of passing the Cross-Strait Agreement on Trade in Services, warning that Taiwan would face daunting and unprecedented challenges in external trade if the pact is not enacted soon.
Presiding over a joint meeting of Executive Yuan task forces on international trade alliances and the Trans-Pacific Partnership (TPP) / Regional Comprehensive Economic Partnership (RCEP), the premier noted that this year will be key to Taiwan's economic development and integration into the regional economy. Comparing Taiwan with trade rival South Korea, he said that the former has only signed economic cooperation pacts with Singapore and New Zealand while the latter has inked nine free trade agreements (FTAs) with 47 countries, all of which have taken effect.
"Taiwan has no time to waste. The country must reach a consensus to pass the services pact and other follow-up pacts on trade in goods. If South Korea and Japan sign and implement FTAs with mainland China first, Taiwan's export value could fall by as much as US$16.8 billion." Jiang stressed that Taiwan's determination to participate in global and regional economic integration has never wavered, and that it will continue devoting every effort to pursuing such integration.
South Korea has already implemented FTAs with Chile, Singapore, the European Free Trade Association, the Association of Southeast Asian Nations, India, the European Union, Peru, the United States and Turkey. Meanwhile, it is currently negotiating FTAs with Canada, Mexico, the Cooperation Council for the Arab State of the Gulf, New Zealand, Vietnam, Australia, Japan, Indonesia and Colombia.
According to a study by the Chung-Hua Institution for Economic Research, once the FTAs between mainland China, Japan and South Korea take effect, Taiwan's real GDP could fall by 1.15 percent or US$4.55 billion. Social resources allocated to technological advancement, capital formation, employment creation and trade expansion would also decrease by US$6.19 billion. Gross exports and imports are projected to drop by 2.75 percent (US$7.76 billion) and 4 percent (US$9.1 billion), respectively.
Executive Spokesperson Sun Lih-chyuan explained that the cross-strait services agreement is Taiwan's stepping stone to the TPP and RCEP, and gaining entry into these trade blocs is an unchanging goal of the ROC government. The Executive Yuan has formulated a comprehensive plan to promote TPP and RCEP memberships simultaneously, by liberalizing the domestic economy and gaining support from other countries. Domestically, the government will seek a national consensus, accelerate economic reforms and transform the industrial structure. Externally, Taiwan is working to strengthen economic and trade relations with TPP/RCEP members.
Government agencies have been proactively addressing issues that may arise from the opening of Taiwan's economy. For instance, some of the service industries to be liberalized, such as intelligent logistics, financial services and international health care services, have already been included in the free economic pilot zones in preparation for the future.
Premier Jiang ordered Executive Yuan agencies to strengthen communications with businesses and citizens, build a national consensus, and keep the public apprised of latest developments in trade liberalization and government efforts to join TPP/RCEP.