Taipei, July 2 (CNA) Around 1,500 Taiwanese products are facing a growing threat from South Korean exports in the European market as a result of a comprehensive free trade agreement (FTA) between the European Union and South Korea, which took effect July 1, economic officials said Saturday.
In its FTA talks with other countries, the EU is expected to hold up its agreement with South Korea as a model because of its wide scope, officials of the Ministry of Economic Affairs (MOEA) said.
Fresh from the implementation of its FTA with South Korea, the EU is expected to begin talks with Japan soon on an economic partnership agreement, the officials said.
Moreover, the European economic bloc is speeding up efforts to sign FTAs with other Asian countries such as Singapore, Malaysia and Vietnam in order to boost its bilateral ties with those countries, they added.
In light of the expanding economic integration, Taiwan has to make haste to achieve an economic cooperation agreement with the EU in order to hold on to its market share in Europe, the officials said.
According to the MOEA, many of Taiwan’s exports to Europe are similar to South Korea’s, with 70 percent being from the telecommunications, mechanical and automobile sectors.
Fortunately for Taiwan, as a signatory to the World Trade Organization Information Technology Agreement, most of its IT exports to Europe are entitled zero-tariff treatment, it noted.
Therefore, Taiwan electronics products would not be squeezed by South Korea’s in the European market, MOEA officials said.
However, there are some 1,500 export items, with a total value of US$5.265 billion, which will now face strong competition from Korean products with the implementation of the EU-Korea FTA, the officials said.
The Taiwanese industries most likely to be affected are those that manufacture textiles, plastics and chemicals, mechanical products, metals, transportation equipment, and flat-screen monitors, according to the MOEA.
Taiwan’s Vice Economics Minister Francis Liang is now in Europe trying to persuade the EU to sign an economic cooperation agreement with Taiwan as soon as possible, the MOEA said.
On June 30, Liang attended a discussion of the economic and trade ties between Taiwan and the EU in the European Parliament.
According to government statistics, the EU is Taiwan’s fourth largest trading partner and source of foreign investors, while Taiwan is the EU’s 14th largest trading partner.
In 2010, the bilateral trade between Taiwan and the EU increased 31 percent to US$48.6 billion from the previous year.
EU exports to Taiwan surged to a historic high of US$17.6 billion in the first four months of this year, marking a year-on-year growth of 19 percent, the statistics show.
July 2, 2011
Source: Focus Taiwan News Channel, Taiwan