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China-South Korea FTA to hurt Taiwan’s industries: official

Focus Taiwan News Channel, Taiwan

China-South Korea FTA to hurt Taiwan’s industries: official

10 November 2014

By Huang Chiao-wen and Lilian Wu

Taipei, Nov. 10 (CNA) Vice Economics Minister Cho Shih-chao said Monday that a free trade agreement to be signed in the near future between China and South Korea will have a major adverse impact on Taiwan’s industrial base.

Citing an assessment of the Industrial Technology Research Institute, Cho said that if Taiwan and China cannot complete a trade-in-goods agreement in three to five years, the pact between Seoul and Beijing would cost Taiwan between NT$260 billion (US$8.5 billion) and NT$650 billion over time.

Once the new FTA is signed, South Korea will become the first country to have completed free trade deals with the European Union. the United States and China, which account for 62.66 percent of Seoul’s foreign trade, Cho said.

Taiwan, in contrast, has free trade pacts with economies that account for only 9.68 percent of its total foreign trade.

Tsai Lien-sheng, the secretary-general of the Taipei-based Chinese National Federation of Industries, also expressed his anxiety over the completion of FTA talks between Beijing and Seoul.

He urged the government to speed up the pace of negotiations on the merchandise trade pact with China and also called on the Legislature to ratify the long-stalled cross-strait trade-in-services pact to facilitate negotiations on merchandise trade.

Tsai said South Korea has signed FTAs with more than 40 countries, leaving Taiwan far behind, but he believed the pact with Beijing is particularly threatening.

That’s because China is Taiwan’s biggest trading partner, and Taiwan and South Korea’s exports have a high degree of overlap.

When the Seoul-Beijing FTA pact takes effect, Tsai said, Korean products will gain big import tariff breaks, putting them at a competitive advantage over similar products from Taiwan.