Academic calls for Taiwan-Japan FTA
China Times | 07/08/2009
Academic calls for Taiwan-Japan FTA
A renowned Japanese scholar urged Tokyo to enhance bilateral trading ties with Taipei through inking a free trade agreement or establishing a multilateral economic cooperation framework that includes Taiwan.
Kwan Chi Hung, a senior fellow with Nomura Institute of Capital Markets Research, made the comments in a July 4 “Nihon Keizai Shimbun” editorial. The daily is Japan’s leading economic and financial publication.
“Given the deepening economic and trade relations across the Taiwan Strait, Japan should also strengthen its trading ties with Taiwan,” the China economic and industrial expert asserted.
In his editorial entitled “Improved cross-strait relations under the Ma Ying-jeou administration,” Kwan tackled the issue of why Taiwan should sign an economic cooperation framework agreement with China.
Kwan noted that Taiwan’s total investment in China between 1991 and 2008 reached US$75.6 billion, accounting for 57.1 percent of Taiwan’s foreign direct investment. He also highlighted that Taiwan faces economic marginalization in East Asia with the Association of Southeast Asian Nations plus one (China) pact beginning 2010.
In light of ASEAN plus one’s zero-tariff quotas on certain goods, Kwan said Taiwan’s products will face Chinese tariffs of 5-10 percent. This may drive the island’s industries out of business due to the high cost of their products compared with other Asian economies, he said. In his opinion, Taiwan has no choice but to ink an ECFA with the mainland.
Kwan also pointed out that Taiwan’s lifting of its ban on mainland investment has contributed to reducing cross-strait tensions and promoting economic interactions in Asia. He said with Taipei and Beijing looking to ink an ECFA in the latter half of this year, the economic interdependence of both sides will deepen.
But the scholar warned that Taiwan should be aware that strengthening economic ties with China might be part of Beijing’s united-front tactics. If so, the mainland might not only distort market principles but also undermine the well-being of Asia’s trading system.
Kwan called on the Japanese government to monitor this situation and assess how the country’s national security and industries will be affected once an ECFA between Taipei and Beijing is signed. He added that at the same time, strengthening Japan-Taiwan trade ties is equally important and should not be overlooked.
