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Taiwan, Singapore
sign free-trade pact
‘DOMINO EFFECT’: Officials are hoping that the
agreement could encourage other nations to ink similar pacts, aiding Taiwan’s
goal of joining regional economic bodies
By Shih Hsiu-chuan / Staff reporter
Minister of Economic Affairs
Chang Chia-juch, second left, and Minister of Foreign Affairs David Lin, right,
hold a news conference in Taipei after Taiwan and Singapore signed a free-trade
agreement in Singapore earlier yesterday.
Photo: Pichi Chuang, Reuters
Taiwan yesterday signed a far-reaching
free-trade agreement (FTA) with Singapore — the first of its kind with a
Southeast Asian country — in a move the government said would boost the nation’s
efforts to pursue further economic engagement with trading partners bilaterally
and multilaterally.
“This is a milestone achievement for Taiwan’s progress toward economic
liberalization and our participation in regional economic integration,” Minister
of Economic Affairs Chang Chia-juch (張家祝) told a press conference at 11am in
Taipei.
Minister of Foreign Affairs David Lin (林永樂) said the agreement demonstrated
Taiwan’s commitment to trade and investment liberalization to the global
community.
The agreement “serves as an example” for Taiwan’s negotiation with other
countries to sign economic cooperation agreements, Lin said.
“It could also trigger a domino effect” by encouraging other countries to open
talks with Taiwan on similar trade accords, Lin added.
The pact — called the Agreement between Singapore and the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP) —
was signed by Representative to Singapore Fadah Hsieh (謝發達) and Singaporean
Trade Representative to Taiwan Calvin Eu at a ceremony held at 9:30am in
Singapore.
With Beijing’s insistence that FTAs can only be concluded among sovereign
states, Taiwan has to conclude FTA-like agreements under a different name, such
as the Agreement between New Zealand and the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation signed in August.
The exceptions are the four FTAs that Taiwan has with five diplomatic allies in
Central America — Panama, Guatemala, Nicaragua, El Salvador and Honduras.
Billed by the government as a comprehensive, “high-standard” and “high-quality”
trade agreement, the ASTEP contains 17 chapters, covering market access
conditions for trade in goods, cross-border trade in services, government
procurement and e-commerce; issues related to trade rules — technical barriers
to trade, rules of origin, foreign investment, competition policies, trade
remedies, customs procedures, sanitary and phytosanitary measures, and
transparency; cooperation in intellectual property protection; and dispute
settlement provisions.
Taiwan will remove 99.48 percent of its tariff lines within 15 years at the
latest, with the exception of 40 agricultural products, including rice, mangoes,
garlic, shiitake mushrooms, red beans, shelled ground-nuts and liquid milk.
Once the agreement takes effect, expected early next year, Taiwan will provide
Singapore immediate tariff-free access to 65.97 percent of its agricultural
products and 87.39 percent of its industrial products, while duties on the rest
of the products will be reduced in three stages over a 15-year period.
The tariff cuts will have a limited impact on Taiwan’s agricultural sector
because Singapore is not an agriculture-based economy, he said.
Chang added that throughout the two-and-a-half years of negotiations, Taiwan
pressed for a longer tariff phase-out period to give less-competitive,
domestic-oriented industries, such as auto parts, engines, motorcycles, towels
and cotton clothing, time to adjust.
In return, Singapore, which has a very open trading regime that levies tariffs
on only six beverage products, extended zero tariffs to all imports from Taiwan.
Both countries also agreed to adopt a “negative list” — as opposed to the
“positive list” used in the WTO’s General Agreement on Trade in Services — to
provide greater market access to investors from the other country. Under this
set-up, the two countries agreed to open all their service sectors, unless
specifically excluded by each country in an annex to the agreement.
Taiwan’s negative investment list covers 30 sectors in transportation,
telecommunication and professional services, while Singapore has 35 sectors on
its list related to healthcare and transportation, among others.
Both countries agreed to go beyond their respective WTO commitments in certain
service sectors, including research and development service, general engineering
and Type I telecommunications enterprises, while applying their commitments
under the WTO to the finance industry under the bilateral agreement.
The agreement is expected to add US$701 million to Taiwan’s GDP over the next 15
years, boosting domestic output by NT$42.1 billion (US$1.43 billion) and
creating 6,154 jobs, Chang said, citing a study conducted by the Chung-Hua
Institution for Economic Research (中華經濟研究院).
Lin said that aside from signing FTAs with its main trade partners, Taiwan’s
ultimate goal is to participate in regional economic integration through
agreements such as the Trans-Pacific Partnership (TPP) and the Regional
Comprehensive Economic Partnership (RCEP) — both possible pathways to the
formation of an Asia-Pacific free-trade area.
“We will contact each member involved in TPP and RCEP negotiations and conclude
agreements with them one by one,” Lin said.
Taiwan has completed feasibility studies on signing FTA-like pacts with India
and Indonesia. Another one on trade with the Philippines is expected to be
completed in the near future, Lin said.
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