China-South Korea free trade pact to hurt Taiwan: business leader
Central News Agency
2014-07-04 07:54 PM
Taipei, July 4 (CNA) A bilateral free trade agreement (FTA) expected to be signed by China and South Korea at the end of the year could badly hurt Taiwanese companies, a business leader warned Friday, and he urged the Legislature to act quickly on pending bills to keep Taiwan competitive. Tsai Lian-sheng, secretary-general of the Taipei-based Chinese National Federation of Industries, raised the alarm after Chinese President Xi Jinping agreed with South Korean President Park Geun-hye in Seoul on Thursday to sign an FTA by the end of 2014. Tsai said China is Taiwan's most important market, and South Korea is Taiwan's biggest competitor in that market, and a free trade pact between Beijing and Seoul would eventually give most Korean exports to China zero-tariff treatment, a real competitive advantage. Should such a deal take effect before merchandise and services trade pacts between Taiwan and China are concluded, some Taiwanese businesses would be forced to abandon the Chinese market, especially in the flat panel, machinery and petrochemical sectors, Tsai said. Taiwan and China signed a trade-in-services agreement in June 2013, but it has been held up in the Legislative Yuan to this day amid strong resistance from opposition parties fearful that it would give China too much influence over Taiwan's economy. Student protesters who occupied the Legislature for three weeks starting on March 18 received a pledge from Legislative Speaker Wang Jin-pyng that a bill on overseeing cross-Taiwan Strait pacts would be passed before the services pact would be considered. Tsai urged the Legislature to move quickly on the oversight bill and then the services trade bill to keep Taiwan from losing its market share in China to South Korea. The business leader also believed that the Legislature should first pass the services pact which was already signed by the two sides last year before concluding a merchandise trade agreement.

In general, Tsai said, the government should move to create a more favorable business environment and work on signing more FTAs with other countries to remove trade barriers to help local industries embrace globalization. Taiwan-based China Steel Corp. said, meanwhile, that it would need to see the items covered, tariff-reduction timetables and other details to judge the impact of a China-South Korea free trade pact on Taiwan's steel industry in the Chinese market. China Steel's exports of flat steel products currently enjoy a competitive edge against Korean products in the Chinese market because of favorable tariff treatment obtained on the early harvest list under the Cross-Strait Economic Cooperation Framework Agreement (ECFA) signed in 2010. (By Milly Lin, Wei Shu and Evelyn Kao)

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