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FTAs vital to Taiwan's economy: WSJ op-ed
Publication Date : 08-12-2013
In order to achieve economic prosperity, Taiwan must establish free-trade agreements with as many countries as possible, as well as relaxing its stringent rules that restrain business growth, according to an op-ed piece recently published in The Wall Street Journal.
The relationship between Taiwan and mainland China is very unique in the global geopolitics. China regards Taiwan as a renegade province, and aims to include Taiwan as part of its territory. The democratic Taiwan, at this stage, does not want to be re-united with mainland China, yet its economy is heavily dependent on China.
While exports contribute to more than 60 per cent of Taiwan's GDP, the Chinese market absorbs a very large portion of Taiwan's exports. In addition, 80 per cent of Taiwan's foreign investment goes to China, compared with less than 50 per cent a decade ago.
According to the Journal's op-ed, In order to lessen its dependence on mainland China, the government of Taiwan recognises that it needs to establish trade relationships with more countries. Taiwan's newly signed free-trade agreement with New Zealand went into effect on December 1. Taiwan also signed a free trade agreement with Singapore last month.
Taiwan has entered trade talks with India and Indonesia, and is studying the feasibility of singing deals with Philippines and Israel.
The Chinese Communist Party has been compromising Taiwan's efforts in establishing diplomatic ties with other nations and joining international organisations in the global community, the opinion piece states. New Zealand and Singapore are Taiwan's first two trade deals with non-ally countries. The two countries are also members of the Trans-Pacific Partnership, a free trade agreement among 12 national that Taiwan is eager to join.
Equally important is the need to reform Taiwan's economic environment, where the protectionism policies and red tapes abound. It needs to liberate investment regulations and make foreign-approval processes more transparent. The recently launched Free Economic Pilot Zones are part of the government's efforts to realise this objective of establishing an open business environment.