The 10 members of the Association of Southeast Asian Nations (ASEAN) and their six regional trade partners -- China, Japan, South Korea, Australia, New Zealand and India -- recently announced a decision to begin negotiations for the Regional Comprehensive Economic Partnership (RCEP) early next year.
The ASEAN-led trade bloc puts special emphasis on the spirit of openness and does not limit the number of participants. This is part of the effort to overcome hassles caused by other trade arrangements such as "ASEAN plus three" and "ASEAN plus six." In addition, the RCEP is also seen as competition for the U.S.-led Trans-Pacific Partnership (TPP) that incorporates 11 countries in the region, including several ASEAN members.
Obviously, Taiwan's exclusion from any of the trade blocs, whether it is "ASEAN plus three," the RCEP or the TPP, will severely affect its economy.
There are, however, two damaging weaknesses in Taiwan's efforts to join the regional economic integration. The first involves international politics. Most countries do not want to offend China because of Taiwan.
Under the "one China policy" set by Beijing, Taiwan's free trade partners are limited to those that have free trade agreements with China, such as Singapore and New Zealand. Although the negotiations between Taiwan and those two countries are near completion, the date for signing the agreements still depends on Beijing.
One way for Taiwan to overcome that problem is to consult with the mainland to reach an understanding on the issue.
The other weakness concerns a lack of preparation and domestic consensus in Taiwan on trade liberalization. If Taiwan does not work to enhance its industrial competitiveness, further opening of its market will cause more harm than good to Taiwan. (Editorial abstract -- Nov. 30, 2012)
(By Y.F. Low)