China's suspension of select ECFA tariff reductions 'regrettable': MOEA

Taipei, Dec. 21 (CNA) The Chinese government's announcement that it will suspend tariff relief on imports of 12 Taiwanese petrochemical products from Jan. 1 is "regrettable," the Ministry of Economic Affairs (MOEA) said Thursday.

In a statement, the MOEA slammed the move as the latest example of Beijing "politicizing trade," this time in the run-up to Taiwan's Jan. 13 presidential and legislative elections.

Taiwan continues to urge that any trade disputes be handled through the World Trade Organization, of which both sides are members, the ministry said.

The MOEA's comments came after the China's Customs Tariff Commission announced sanctions on 12 petrochemical products, including propylene and paraxylene, which currently enjoy reduced tariffs under the Economic Cooperation Framework Agreement (ECFA) the two sides signed in 2010.

The measures come in response to "unilateral, discriminatory trade restrictions" by Taiwan on imports of Chinese products in violation of the ECFA, the commission said, referring to the results of a trade probe that Beijing announced last week.

In Taiwan, deputy trade representative at the Cabinet's Office of Trade Negotiations Jenni Yang (楊珍妮) described China's announcement as "classic economic coercion" and out of step with international norms.

Meanwhile, Zhu Fenglian (朱鳳蓮), spokesperson for China's Taiwan Affairs Office, cast blame for the tariffs on trade restrictions enacted by Taiwan's Democratic Progressive Party (DPP) government.

Beijing is hopeful that cross-strait relations can "return to the right track of peaceful development," Zhu said, adding that negotiations to resolve any trade disputes could begin "immediately" on the basis of the 1992 consensus.

In terms of economic fallout, the Petrochemical Industry Association of Taiwan said that because much of the petroleum sector consists of joint products -- those generated within a single production process -- the effects of the reinstated tariffs are likely to be felt up and down the industry's supply chains.

Another group, Taiwan's Chinese National Federation of Industries, suggested that the government set up channels to communicate with China on the issue, while also expediting efforts to help local companies diversify into other international markets.

According to MOEA data, around US$1.8 billion of the 12 products affected by the policy were exported to China from January through November this year, accounting for 1.3 percent of Taiwan's total exports to China.

The vast majority of those products -- equal to US$1.6 billion -- will now be subject to an import tax of 1-2 percent, the ministry said.

Through November, China has accounted for around 35 percent of Taiwan's total 2023 exports, down from 40 percent in recent years, the ministry said.