Suspended cross-strait trade talks worry industry sectors

By John Liu, The China Post

TAIPEI, Taiwan — The industry voiced concerns over suspended cross-strait talk on the trade-in-good agreement, fearing that the free trade agreement (FTA) between South Korea and China will soon erode Taiwan’s competitiveness. The fear rose after Premier Mao Chi-kuo (毛治國) tendered his resignation, which may result in a limbo for the Cabinet possibly lasting until May when the new government is sworn in.

Economics Minister John Deng (鄧振中) declared on Monday that all talks on the agreement on trade in goods — from sit-down negotiation to smaller-scale exchanges —would be halted. The statement was met with pessimistic responses from industry groups yesterday. The panel, petrochemical, car and machinery industries are expected to bear the brunt of the impact if the trade agreement does not pan out. AU Optronics (AUO, 友達光電), a major panel maker in Taiwan, called on the government to expedite the negotiation to win favorable tariff treatment for local companies. With relatively low profit margins, China’s 5-percent tariff can weigh down the panel business, AUO said. The panel industry employs more than 100,000 people, and to protect their livelihood, the government should aim for 0-percent tariff, AUO suggested. Government Official Disappointed Wu Ming-ji (吳明機), director general of the Industrial Development Bureau at the Economics Ministry as well as the head of Taiwan’s negotiation team, said in an interview that it is “certainly a pity” that the trade talks are now halted. The government had hoped to continue the conversation after the election, while Beijing also had the intention to conduct talk after the Chinese New Year. But everything is being held off, Wu said, adding that there is no schedule to resume talks. The trade pact is of critical importance to Taiwan, Wu pointed out, adding that once the government has a clear mandate, his delegation will proceed as instructed. Industry Groups Urge Action Tsai Lian-sheng (蔡練生), Secretary-General of Chinese National Federation of Industries (全國工業總會), is not upbeat about the talks progress, saying that there is a slim chance that the trade pact be signed in 2016. According to Tsai, Beijing will be studying Tsai Ing-wen’s China policy after she assumes office, before deciding if it wants to return to the negotiation table. This will further delay the timetable to strike a deal that has potentially high impact on Taiwan’s businesses. If the government doesn’t act fast, there will be more companies moving overseas to evade high tariffs, Tsai warned. Lin Po-feng (林伯豐), head of the Chinese National Association of Industry and Commerce (工商協進會), suggested that Tsai’s Cabinet be composed of members across party lines, as President Ma Ying-jeou recently recommended to the president-elect. The Petrochemical Industry Association of Taiwan (石化工會), advised that while critical decisions may not be made at this stage, the government should not stop regular or preparation work.