TAIPEI–The economic effect of the Taiwan-China trade pact remains to be seen, although the pact is an incentive to attract foreign companies to set up business in Taiwan, according to an official from the France Taiwan Chamber of Commerce and Industry (CCIFT).
“Right now, the ECFA (economic cooperation framework agreement) is only a framework,” Denis Forman, vice chairman of the CCIFT, told CNA recently on the sidelines of the chamber’s annual general assembly.
“It gives an extra incentive for companies to come here. But in reality, it is difficult to assess the outcome of the ECFA because it is just beginning,” he said. “For foreign companies, it will take more time.”
Asked if the signing of the ECFA in June 2010 will have an impact on Taiwan-France trade, Forman said it will take one or two more years for French companies to assess the effect from enacting the “early harvest list.”
The early harvest list of the ECFA has, beginning in January 2011, provided preferential tariff status, or easier market access, to 539 products and services from Taiwan, including agricultural products, machine tools, bicycles and auto parts.
Established in 1991 as a non-profit organization, the CCIFT is the third largest chamber of commerce in Taiwan, with more than 135 members, including Taiwanese, French and other foreign-owned companies, the chamber said.
According to the French Office in Taipei, the total trade value between Taiwan and France amounted to 4.2 billion euros (US$5.57 billion) in 2011, making France the 24th largest trade partner of Taiwan.
Further, French imports from Taiwan totaled 2.3 billion euros last year, down 19 percent from one year earlier, while French exports to Taiwan grew 36 percent year-on-year to 1.9 billion euros, indicating a trade surplus of 446 million euros for Taiwan, the office said.
Meanwhile, Pierre Moussy, head of the office’s economic department, said at the CCIFT annual general assembly that Taiwan’s trade with China is “both a strength and a weakness” because Taiwan has become too dependent upon a single market.
This trade dependence on China could lead to the risk of an increasing loss of jobs to China, he warned.
In addition, Moussy mentioned that Taiwan’s economic strength also includes its highly educated workforce, flexible and responsive companies, and the significant growth opportunities in its domestic market.
Unlike French companies, however, Taiwan’s manufacturing sector has a focus on original design manufacturers (ODM) and original equipment manufacturers (OEM), which have done little in promoting themselves as global brands, Mossy said.
The country’s best-known global brands include HTC Corp., Asustek Computers Inc., Acer Inc. and Giant Manufacturing Co., he said, while other Taiwanese manufacturers’ products are nearly “unknown” in Western countries.
According to the Ministry of Economic Affairs, China was Taiwan’s largest export destination market in 2011, totaling US$112.9 billion and accounting for 26 percent of Taiwan’s total export orders last year.
The United States ranked as Taiwan’s second largest export market with US$100.5 billion, taking 23 percent of Taiwan’s total export orders in 2011, ministry officials said.