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Push for Australia to talk trade with Taiwan

The Australian, Canberra

Push for Australia to talk trade with Taiwan

By Rowan Callick

30 August 2010

As hopes for free trade agreements with China and Japan fade, there is a push for Australia to start talks with Taiwan.

This follows China and Taiwan signing a World Trade Organisation-compliant Economic Co-operation Framework Agreement. Such deals are more comprehensive than many regional FTAs.

Singapore has moved first, launching a feasibility study into a Taiwan FTA, and the Australia Taiwan Business Council held a seminar in Sydney recently to consider whether Australia should follow.

Taiwan is Australia’s eighth-biggest export target, and the only non-European country among those eight with which Australia does not have an FTA or plans for one.

"We are at a historic turning point of a new era, with many opportunities as well as challenges," said Taiwan’s representative in Australia, Gary Lin.

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"Many countries in the Asia-Pacific region are watching closely the new situation, the creation of the economic entity that some people are already calling Chaiwan."

Dr Lin said although Taiwan was hardly on Australian radar screens, historically it was the hub for Western countries to do business with Asia.

"Signing the ECFA restores Taiwan’s historical status as a regional operational centre," he said.

This set up a win-win opportunity for China and Taiwan, and potentially a win-win-win for third countries such as Australia if they chose to involve themselves, he said.

"Many Australian friends misunderstand China when they do business there, and unfortunate situations result," Dr Lin said. "We know China."

The countries have been political adversaries for almost 60 years, but successful business partners for almost 30 years.

"With this new era, it is maybe time to consider a preliminary feasibility study into an FTA between us," he said. "We have the rule of law; we have strong telecommunications; we can form joint ventures to access capital; we are developing new green technologies; there’s a unique opportunity now to work together."

Dr Lin agreed with Australia Taiwan Business Council chairman Ross Maddock that Taiwan had missed great opportunities to buy into Australian companies, especially producers of resources Taiwan, like China and Japan, sought here. But if a comprehensive trade deal could be negotiated, "we won’t make the same mistake again".

ITS Global managing director Alan Oxley, who was Australian ambassador to the WTO’s predecessor, said trade agreements such as that between China and Taiwan, which acknowledge international rules, were often crucial steps in defusing broader animosities between countries.

He said this happened between Brazil and Argentina, which were military opponents until they liberalised trade.

Mr Oxley said it was inevitable the ECFA between China and Taiwan, negotiated in just three rounds, would have great strategic significance.

He said China had agreed to liberalisation of goods, services and investment, going further than any other bilateral agreement it had signed.

Chaw-Hsia Tu, of the Chung-Hua Institution for Economic Reform in Taipei, said Taiwan was benefiting from 539 "early harvest" provisions, including opening up China’s computer and financial services, and other professional expertise sectors. In return, Taiwan was providing immediate free access to 267 categories of goods and nine types of service.

The ECFA would boost Taiwan’s economy by about 1.7 per cent.

"We speak China’s language, and the West’s business language," Professor Tu said.

Monash University’s Taiwan Research Unit head Bruce Jacobs described the ECFA document as apolitical, simply referring to the "two sides", each of which had agreed to provide an English version of the document to the WTO.

He said Taiwan President Ma Ying-jeou had spoken of receiving assurances from China that it would not oppose Taiwan negotiating FTAs with other nations. The ECFA appeared to be "very progressive" on the part of China, he said.

Taiwan’s chief economic representative in Australia, I-Min Tong, described the agreement as "a bridge over troubled waters".

Mr Oxley said Australia, as a competitor in beef and other agricultural exports to Asia, needed an agreement with Taiwan, as it did with Korea. "It would be tense to negotiate agriculture, but the golden rule is that once you have significant market access, it’s relatively easy to open it wider," he said.

He said Australian businesses had not paid enough attention to the Taiwan market.