TAIPEI–Taiwan’s industries must prepare themselves for the impact of an upcoming free trade agreement (FTA) between the U.S. and South Korea that might hurt their business opportunities in the U.S. market, the Bureau of Foreign Trade (BOFT) under the Ministry of Economic Affairs has urged. Taiwan’s businesses, particularly the textile, plastics and machinery sectors that are more vulnerable to the U.S.-South Korea FTA, should fully prepare themselves, given that South Korean goods will be able to enter the U.S. market tariff free once the agreement goes into effect, BOFT officials told the CNA Friday.
The U.S. levies tariff rates ranging from 3 to 40 percent on foreign imports of garments, shoes and bags. The U.S.-South Korea FTA is likely to be implemented by the end of this year after the two countries conclude their current negotiations. To fend off possible implications of the U.S.-South Korea FTA, the Executive Yuan agreed Thursday to a Finance Ministry proposal to grant exporters tax rebates for their outbound shipments as a means of helping them raise their competitiveness abroad. More than 1,200 farm and industrial products could benefit from the measure.
BOFT Deputy Director-General Chang Chun-fu said that according to an analysis by the bureau, the impact of the U.S.-South Korea FTA will be much smaller than that of the E.U.-South Korea FTA that has taken effect since July 2011, as the U.S. already allows 60 percent of foreign products to enter the country with zero tariffs. From Chang’s view, the U.S.-South Korea FTA will impact China the most, as the U.S. is China’s largest export market. Taiwan’s textile exports to the U.S. are mainly products for special purposes, such as those made of carbon or PET bottles, he noted.