01 July 2010 06:19 [Source: ICIS news]
By Nurluqman Suratman and Judith Wang
SINGAPORE (ICIS news)--Taiwan hopes to catch up with its southeast Asian neighbours in competing for the China petrochemicals market, after losing out a year in the implementation of zero-tariffs on cross trades with the country, industry sources and analysts said on Thursday.
The China-Taiwan Economic Cooperation Framework Agreement (ECFA) signed on Tuesday came short of expectations, but was a victory nonetheless for Taiwanese petrochemical players.
A total of 88 petrochemical items, including aviation kerosene, lubricant oil, propylene, vinyl chloride monomer (VCM), polypropylene (PP), polystyrene (PS), xylene and polycarbonate (PC), were included in the “early-harvest list”, which would see a phased tariff reduction starting January 2011.
“Taiwanese producers were not entirely happy with some excluded products but they have moved on,” said Jack Shieh, executive manager at the Petrochemical Industry Association of Taiwan (PIAT).
“They are now more worried over the long term economic impact of the agreement,” he said, adding that there was still a chance that tariffs of certain products being re-imposed in future rounds of talks.
The ECFA was signed after five rounds of cross-strait talks on 29 June in ?xml:namespace>
A Taiwanese producer of VCM downplayed the potential impact of the ECFA on its operations.
“At the moment, most of our VCM production goes into making PVC (polyvinyl chloride) in our plant in Taiwan while the balance are exported into SE Asia, where the price is better,” the source said.
The exclusion of polyvinyl chloride (PVC) from the list of commodities scheduled for the phased tariff removal under the framework came under heavy criticism, as the material is one of the five major commodity plastics that
“The ‘door’ is open, but we hope it could open wider,” added Wang Hua, an analyst from Dalian-based Bohan Futures Broker Co said, citing new opportunities the ECFA now offers for Taiwanese producers.
Under the ECFA, a zero-tariff would apply next year on products that are currently charged with less than 5% duty, while the other products would be in for a phased tariff reduction over two years from 2011.
The new trade pact coming into force a year after
“The influx of chemicals from
“I doubt that
Under the ECFA,
Some Taiwanese players, however, could see clear benefit from the ECFA like the producers of polyester drawn texturised yarn that could see an increase in their market share in China, said Ho.
The inclusion of the material in the agreement was surprising given that
The eventual removal of tariffs for this type of yarn used in clothmaking would give Taiwanese producers superior cost advantage over its competitors in
Taiwan-based producers such as Lealea, Zig Sheng, Shingkong Synthetic Fiber, Yi Jinn, Hong Yi Industry and Lan Fa Textile would benefit, he said.
With additional reporting by Aaron Cheong
($1 = €0.82)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections