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ROC, Honduras, El Salvador sign trilateral FTA

Taiwan Journal, Vol XXIV, No.18

ROC, Honduras, El Salvador sign trilateral FTA

By Annie Huang

11 May 2007

Taiwan, El Salvador and Honduras signed a trilateral free trade agreement in San Salvador May 7. Taiwan’s fourth such agreement with Central American countries, the FTA was expected to boost trade among the three countries, ROC Minister of Economic Affairs Chen Ruey-long said in a May 5 report by Taiwan’s Central News Agency.

Government representatives signing the FTA were Chen, Salvadoran Minister of Economy Yolanda Mayora de Gavidia, and Honduran Minister of Industry and Commerce Elizabeth Azcona Bocock, a May 8 MOEA press release stated. Honduran President Jose Manuel Zelaya Rosales and Salvadoran President Elias Antonio Saca Gonzalez attended the signing ceremony as honorable guests.

The FTA, which was concluded after four rounds of negotiations starting May 2006, will reduce or exempt tariffs on goods traded among the three countries. Under the agreement, scheduled to go into effect as early as January 2008, 3,590 items exported from Taiwan to El Salvador and 3,881 items to Honduras would be tariff-free, figures that represent 57.1 percent and 61.9 percent of all goods exported to the two countries. Most of these items were agricultural and industrial products, the press release stated. In return, Taiwan would abolish custom duties for 5,688 items imported from El Salvador and 6,135 items from Honduras, representing 64.4 percent and 69.4 percent of their imported goods.

The MOEA explained that the trilateral FTA would be advantageous to the three countries’ agricultural, industrial, financial and telecommunications sectors. The ministry believed it would be especially beneficial to Taiwan’s export of agricultural products and processed agricultural products, the CNA reported, with market niches in sardines, medicinal herbs, mushrooms, peanut powder and instant noodles. Manufactured goods, such as sports equipment, electronic products and components, and rubber goods, would also see increased exports, the CNA indicated.

Taiwan signed FTAs with Panama, Guatemala and Nicaragua over the past four years, and launched the first round of FTA negotiation with the Dominican Republic in October 2006. After the Taiwan-Panama FTA went into effect in January 2004, bilateral trade grew by 112 percent in 2004 and 96 percent in 2005, the MOEA Web site stated.

In related news, five members of the U.S. House of Representatives jointly proposed a resolution May 1 in support of signing a U.S.-Taiwan FTA, Stanley Kao, deputy representative of the Taipei Economic and Cultural Representative Office in Washington, said in another May 5 CNA report. Although this was the third such resolution proposed in the House, it was the first to be endorsed by a pro-Taiwan alliance, the Congressional Taiwan Caucus, which included caucus chairpersons from both major parties, Kao said. He added that timing was ideal as the Bush administration had just completed FTA talks with South Korea, and the impact of the U.S.-South Korea FTA on Taiwan’s international trade was a matter of public concern.