Bei­jing-Seoul FTA is ‘very big warn­ing’: Ma

The China Post - - LOCAL - BY ENRU LIN

Pres­i­dent Ma Ying- jeou said yes­ter­day the freshly inked Chi­naSouth Korea free trade agree­ment (FTA) is a “very big warn­ing” to Tai­wan about fu­ture eco­nomic com­pe­ti­tion.

Signed Mon­day af­ter three years of ne­go­ti­a­tions, the Chi­naSouth Korea FTA is set to elim­i­nate tar­iffs on over 90 per­cent of goods over the next 20 years.

The pact is ex­pected to come into force by year’s end, the pres­i­dent said yes­ter­day in pre­sid­ing re­marks at the 2015 COM­PU­TEX Taipei ( ).

Cur­rently, roughly 10 per­cent of Tai­wan’s ex­ports are shipped to FTA part­ners.

Mean­while, South Korea’s FTA cov­er­age rate is three times Tai­wan’s at ap­prox­i­mately 30 per­cent. Once the coun­try’s new­est FTA takes ef­fect, its cov­er­age rate will rise, Ma said.

South Korea’s FTA poses a par­tic­u­lar threat to Tai­wan due to the sim­i­lar­ity of their economies: Both de­rive GDP (gross do­mes­tic prod­uct) growth from for­eign trade and over 70 per­cent of their ex­port prod­ucts over­lap, ac­cord­ing to the Min­istry of Eco­nomic Af­fairs (MOEA).

“In terms of com­pe­ti­tion, (the China- South Korea FTA) is of course a very big warn­ing for us,” Ma said yes­ter­day.

“We hope that we can hurry and hon­estly face th­ese dif­fi­cul­ties so as to iden­tify a way out as soon as pos­si­ble, be­cause ex­ports are our life­line.”

Call for Leg­isla­tive Ac­tion

At the trade show, Ma made a public call for the Leg­isla­tive Yuan to ac­cel­er­ate its re­view of two acts gov­ern­ing cross-strait trade.

Tai­wan and China signed the Eco­nomic Co­op­er­a­tion Frame­work Agree­ment (ECFA) five years ago, prompt­ing then- South Korean Pres­i­dent Lee Myung-bak to call an emer­gency re­sponse meet­ing.

To­day, South Korean ef­forts have yielded a free-trade agree­ment with China, while Tai­wan’s trade-in-ser­vices pact un­der ECFA and the Cross-Strait Agree­ment Su­per­vi­sory Act (

) re­main stalled in the Leg­is­la­ture, he said.

Ma urged the Leg­isla­tive Yuan to ac­cel­er­ate its re­view of the two acts, as “Tai­wan can­not fall be­hind.”

The Cross-Strait Agree­ment Su­per­vi­sory Act, which es­tab­lishes a pro­to­col for leg­isla­tive su­per­vi­sion on Tai­wan-China pacts, has made lit­tle head­way in the Leg­is­la­ture since its in­tro­duc­tion last April.

The Ex­ec­u­tive Yuan sent the bill to the Leg­isla­tive Yuan last year, af­ter a stu­dent demon­stra­tion against Tai­wan’s trade- in- ser­vices pact with China.

Im­pact

The China- South Korea FTA cov­ers 22 ar­eas in­clud­ing e-com­merce, ac­cord­ing to an April re­port from the MOEA.

The Eco­nomics Min­istry fore­casts that Tai­wan’s real GDP will decline by 0.04 per­cent­age points one year af­ter the China-South Korea pact comes into force, and then drop by 0.13 and 0.15 per­cent­ages points 10 years and 20 years af­ter­ward.

Yes­ter­day at COM­PU­TEX Taipei, Ma said the brunt of the FTA’s im­pact will be on tra­di­tional in­dus­tries, tex­tiles, ma­chine tools and ma­chin­ery prod­ucts.

Be­cause Tai­wan’s in­for­ma­tion prod­ucts ben­e­fit from par­tic­i­pa­tion in the World Trade Or­ga­ni­za­tion’s In­for­ma­tion Tech­nol­ogy Agree­ment (ITA, ), they are less likely to see an im­pact, he said.

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