El Salvador approves FTA with Taiwan

Taipei Times | 26 August 2007

El Salvador approves FTA with Taiwan

SWEET DEAL: Under the FTA, the minister of economic affairs said that El Salvador could eventually export up to 60,000 tonnes of sugar tariff-free to Taiwan each year

By Ko Shu-ling


El Salvador’s approval on Friday of a free-trade agreement (FTA) with Taiwan means the Central American country will eventually enjoy tariff-free privileges for sugar exports of up to 60,000 tonnes to Taiwan.

The FTA is expected to take effect on Jan. 1 next year if the Legislative Yuan approves it by the end of the year.

In addition to the deal with El Salvador, Taiwan has signed FTAs with Paraguay, Guatemala, Nicaragua and Honduras, with some pending legislative approval.

Since the FTA with Paraguay took effect, Minister of Economic Affairs Steve Chen said bilateral trade had grown by 112 percent during its first year.

Trade with Guatemala has grown by 25 percent since the pact took effect six months ago, he said.

He said he expected trade with El Salvador to grow substantially after the FTA becomes effective.

El Salvadoran President Antonio Saca and President Chen Shui-bian, at the Presidential Office of El Salvador, announced the FTA’s approval by El Salvador’s legislature on Aug. 10.

Chen Shui-bian, visiting El Salvador on the second leg of his three-nation trip to Central America, said at the press conference he hoped the legislature would review the FTA as soon as possible in the next legislative session.

Describing Taiwan as a "good friend" and "brother," Saca said the FTA was a testimony to the two countries’ firm ties.

Under the FTA’s framework, Steve Chen said that El Salvador would enjoy tariff-free privileges for sugar exports up to 35,000 tonnes for the first year.

The amount will increase to 50,000 tonnes of sugar for the second year and 60,000 tonnes for the third.

Taiwan’s consumes 500,000 tonnes to 600,000 tonnes of sugar per year, with approximately 60,000 tonnes coming from local suppliers and the rest mostly from Thailand and Australia.

Steve Chen said tariff-free sugar imports from El Salvador would not jeopardize local sugar cane farmers because the government has a purchasing system in place to protect their interests.

Because El Salvador is a member of the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), which took effect in El Salvador in March last year, Steven Chen said that Taiwanese businesses operating in El Salvador were entitled to trade benefits with the US.

DR-CAFTA includes the US, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

Signing FTAs helps lower prices and increase trade volume, Steve Chen said.

In addition to sugar, he said there was plenty of room for imports of El Salvadoran coffee. Taiwan’s coffee imports totaled US$32 million last year, with US$3 million, or 11 percent coming from Central American countries.

The Taiwan-El Salvador FTA covers agriculture, manufacturing and the service sector.

source : Taipei Times

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