Analysts see growing trade opportunities for Taiwan as the United Kingdom (UK) heads out of the European Union (EU) on Friday, dismissing fears of negative impact on Taiwan’s economy in the short term.
Brexit is happening at 11 p.m. (GMT), meaning that the UK will officially withdraw from the EU and enter into an 11-months transition period during which the two former partners will negotiate their future trade relationship.
“This creates an opportunity for Taiwan to sign free trade agreements (FTA) with both the UK and the EU,” Yeh Chi-jen (葉基仁), director of the Taiwan Institute of Economic Research’s (TIER, 台灣經濟研究院) Taiwan European Studies Centre (台灣歐洲研究中心) told The China Post on Friday.
The global economy has shifted greatly from the traditional multilateral trading system under the World Trade Organization (WTO, 世界貿易組織) to more bilateral and regional trade partnerships since the United State President Donald Trump took office, Yeh said.
While the verdict is still out regarding the outcome of the negotiations between the UK and the EU, it is expected that both entities “will race to find new partnerships with countries around the world, including Taiwan,” Yeh said.
Yeh said that Taiwan shouldn’t worry about its chances to sign an FTA with the UK or the EU once they sign one with China, which is highly anticipated to happen soon.
Echoing his point, Deputy Director Institute of European and American Studies, Academia Sinica Horng Der-chin (洪德欽) said that he thinks Brexit’s impact on Taiwan’s economy should be relatively low, and that “it is not impossible that the UK or the EU would want to sign an FTA with Taiwan.”
“But the government has to push really hard for it since the market is smaller compared to many other countries hence a smaller incentive,” Horng added.
As for concerns that Taiwanese businesses in Britain will be affected by Brexit, Yeh said that “many companies have begun moving their factories or service headquarters to other locations within the EU in the past two to three years,” Yeh said, which is why the formal Brexit won’t hit hard on them. “The most popular destinations Taiwanese businesses are heading are Ireland, France, Belgium and the Netherlands,” Yeh said.
UK is Taiwan’s third-largest trade partner in the European region, fifth-largest source of foreign investment, according to data compiled by the Bureau of Foreign Trade (國貿局) of the Ministry of Economic Affair’s (MOEA, 經濟部). In a statement released on Friday, the Ministry of Foreign Affairs (MOFA, 外交部) said that it has maintained close contact with the EU and Britain and that all trade agreements signed with the EU will be applicable for Britain during the transition period.