TAIPEI–The birth of the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) is expected to provide new business opportunities for Taiwan at a time when Taiwanese exporters have set their sights on the fast-growing ASEAN market, the Bureau of Foreign Trade (BOFT) said Thursday.
However, the establishment of the economic bloc is expected to bring the ASEAN members closer together in trade and investment, which could raise competition against non-ASEAN member countries such as Taiwan, the BOFT said.
The AEC made its debut Thursday with the aim of implementing economic integration initiatives and creating a single market across ASEAN nations. Based on the foundation laid by ASEAN, the ambition behind the AEC is to achieve the free flow of merchandise, services, investment, capital and labor by 2025 to make ASEAN a global production hub with its own supply chain.
The BOFT, which is under the Ministry of Economic Affairs (MOEA), said Taiwan is glad to see the formation of the AEC, which is expected to speed up the pace of the flow of goods, while the agency said the members of the economic bloc could further relax investment restrictions and improve their legal mechanism to make the group more international.
The BOFT said that the AEC boasts huge consumption power with its population of 600 million, and that many young consumers in the region have been impressed by Taiwan-made products.
The AEC is expected to bring more business opportunities to Taiwan, which has many firms that have set up footholds in the ASEAN market, the government agency said, adding that Taiwanese investors should gear up to map out more strategies for investing in the AEC to seize the rising opportunities.
However, the further economic integration inside the AEC is expected to attract more foreign investment, a move that could cultivate its own supply chain in a wide range of industries and hurt Taiwan’s competitiveness in the economic bloc. According to the BOTF, trade among the 10 ASEAN members accounts for 24 percent of the total trade in the bloc.
Taiwan and Singapore, one of the ASEAN members, signed the Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP) in November 2013 and the accord went into effect April 19 the following year.
The BOFT said that Taiwan will seek to sign similar agreements with other ASEAN members to further penetrate the market.
Statistics compiled by the MOEA show that bilateral trade between Taiwan and ASEAN totaled US$93.6 billion in 2014, accounting for 16 percent of Taiwan’s total trade in that year. ASEAN has become Taiwan’s second-largest trading partner.
The data indicates that Taiwan had invested US$84.12 billion in the ASEAN market as of 2014. Taiwan is the fourth-largest foreign investor in Vietnam and Malaysia and the third-largest foreign investor in Thailand. The three countries are also ASEAN members.