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Talk of the day--ECFA effect:Taiwan begins FTA talks with Singapore

2010/08/05 11:05:16

Slightly more than a month after Taiwan signed a landmarkeconomic cooperation framework agreement (ECFA) with China, Singaporehas formally expressed its intention to follow suit in negotiating asimilar deal with Taiwan.

The two countries simultaneously announced their plan earlyThursday to begin exploration of the feasibility of signing aneconomic cooperation agreement similar to a free trade agreement(FTA) under the framework of the World Trade Organization (WTO).

Diplomatic officials said signing such an accord will benefitboth countries because their economies are more complementary to thancompetitive against each other.

More importantly, the officials said, Singapore can serve as astepping stone for Taiwan to strike similar free trade pacts withother major trade partners, including Japan and other Southeast Asiancountries.

A free trade agreement with Singapore will also mark a giant stepforward in Taiwan's quest for participation in regional economicintegration, the officials added.

The following are excerpts from the local media coverage of thenew development:

United Daily News:

Singapore's consent to start FTA talks with Taiwan in the wake ofTaiwan's signing of the ECFA with China is widely seen as anice-breaking achievement of President Ma Ying-jeou's modus vivendiapproach to break out of the country's diplomatic isolation caused byChina's sovereignty claim over Taiwan.

Although the agreement to be signed between Taiwan and Singaporemay not be called an FTA to avoid offending China -- which insistssuch a pact can only be struck between two sovereign states,diplomatic officials said -- the accord will offer Taiwanese businesspeople easier access to South Asian and Southeast Asian markets.Singapore has signed an encompassing economic cooperation pact withIndia and has been a key member of the Association of Southeast AsianNations (ASEAN).

The proposed Taiwan-Singapore economic agreement will also helpattract more foreign conglomerates to invest in Taiwan, the officialsadded.

As Singapore now only levies heavy tariffs on cigarettes, alcoholand other luxury goods, Vice Minister of Economic Affairs LinSheng-chung said Taiwan's manufacturing sector may not benefit muchfrom the planned FTA with the Southeast Asian city-state.

Lin said local financial service providers and the transportationsector will benefit most by securing better market access terms underan FTA with Singapore.

Singapore may ask Taiwan to exempt tariffs on its petrochemical,machinery and electronics products, Lin said, adding that as Taiwan'sduty rate on petrochemicals is only 2 percent, tariff cuts will nothave a great impact on local producers.

According to Lin, Taiwan is also seeking the possibility ofsigning FTAs or similar pacts with other ASEAN countries, includingMalaysia, Thailand and the Philippines. (Aug. 5, 2010).

China Times:

Christina Liu, chairwoman of the Council for Economic Planningand Development, said Singapore is the most active Asian country inseeking FTAs with its major trade partners.

"The city-state has long intended to sign such a pact withTaiwan, but such efforts were dampened by the special situation inthe Taiwan Strait in the past," Liu said.

"After China signed the economic cooperation framework agreementwith Taiwan, Singapore is willing to follow suit, " the government'stop economic planner said, adding she believes Singapore's move willinspire even more countries to negotiate similar deals with Taiwan.

While a Taiwan-Singapore free trade pact will contribute toTaiwan's overall development, Liu acknowledged that certainindustrial sectors may still be adversely impacted and needgovernment assistance to tide them over such challenges.

Kuo Cheng-liang, spokesman for the opposition DemocraticProgressive Party's ECFA response task force, said he sees nothingworthy of media hype for negotiating a trade pact with Singaporebecause the city-state is not a key export outlet for Taiwan. (Aug.5, 2010).

Liberty Times:

DPP spokesman Tsai Chi-chang said Taiwan and Singapore werealready nearing the satge of signing an FTA back in 2004 when the DPPwas in power.

"The deal was later dropped mainly because of China'sobstruction," Tsai contended, adding that the Ma administrationshould explain whether the new round of Taiwan-Singapore FTAnegotations would be conducted under the premise of Beijing'sconsent.

"If the talks would be held with the Ma adminsitration agreeingto Beijing's 'one China' principle, Taiwan's sovereign status wouldbe compromised," Tsai claimed. (Aug. 5, 2010).

(By Sofia Wu)