InterviewTaiwan needs zero-tariff agreement with China fast – TSRMA

04 March 2009 10:38  [Source: ICIS news]

By Judith Wang

SHANGHAI (ICIS news)--Taiwan should rush a trade pact with China to remove all existing tariff on its petrochemical exports into the mainland, an advantage that its ASEAN neighbours will have next year, a high-ranking official of the Taiwan Synthetic Resins Manufacturers Association (TSRMA) said on Wednesday.

"Once petrochemical cargoes from ASEAN members flow into China under free tariff next year, it will (be) a blow on Taiwan’s petrochemicals exports. And it is also my greatest worry," TSRMA secretary-general Wang Ching-Hua told ICIS news in an interview.

China has started implementing zero tariff on imports some petrochemical products like bisphenol-A (BPA) coming from the 10-member ASEAN (Association of Southeast Asian Nations) this year.

Come next year, these barriers to trade will either be substantially reduced if not completely eliminated under the China-ASEAN free trade agreement.

Taiwanese petrochemicals, plastics and textile products flowing into China are currently slapped with tariffs ranging from 6.5-14.9%.

Most of Taiwan’s petrochemical products are shipped to the mainland, particularly plastics, which account for half of the country exports.

"The zero tariff is extremely urgent for Taiwan’s petrochemical industry," Wang said.

The Taiwan government appears to be recognizing the necessity of speeding up a free trade deal with China.

According to a report from Taiwan Economic News, the Ministry of Economic Affairs (MOEA) had drafted the Comprehensive Economic Cooperation Agreement (CECA) with China, with plans to sign the framework agreement for mutual tariff exemption on goods traded between the two countries.

Taiwan fell into a technical recession in the fourth quarter, when its GDP fell 8% as exports plunged. Exports data in January continued to deteriorate, falling a record 42% from a year earlier due to the slump in global demand.

“The Taiwanese economy and the petrochemical industry will not recover in a short period,” said Wang, adding that the country will need more than a year to be on steady footing.

But at least the country’s petrochemical industry has not suffered any large-scale bankruptcies and massive job losses like its counterparts in the US and Europe, he said.

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By: Judith Wang
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