March 23, 2012

Taiwan to resume trade talks with US on beef import issue

Taiwan President Ma Ying-jeou said Wednesday (Mar 21) that the country needs to resume trade agreement talks with the US soon to prevent the country from being economically marginalised and that solving the US beef import issue is key to resuming dialogue.

Despite this fact, the president reiterated that the health of Taiwanese citizens could not be compromised. Whether to overcome trade marginalisation, conquer the pressure of economic transformation, or restore the nation's credit, the health of citizens would never be a chip the government bargains with.

If the ractopamine in the imported US beef can cause damage to the health of citizens, "We would rather sacrifice the nation's trade relations and credit than allow such import," he said.

The impact the US-South Korea free trade agreement (FTA) that recently came into effect may reflect on Taiwan's exports, especially to the US, with the difference potentially reaching US$3 billion, Ma said.

In terms of investments, with South Korean products entering the US market tax-free for the next five years, foreign businesses' willingness to invest in Korea would be greater than that in Taiwan, the president asserted.

The potential of a domino effect on the signing of trade agreement between Taiwan and other nations is also worrisome. In 2000, only five FTA's existed in Asia, and now 67 have come into effect, Ma pointed out.

The only active trade agreement Taiwan has signed in Asia is the economic cooperation framework agreement (ECFA) with mainland China, which in effect has only been carried out one-fifth of the way, with the rest still requiring negotiation, Ma said. He added that in terms of Taiwan's second largest trade partner Japan, only an investment pact has been signed, while discussions on trade relations have yet to take place.

If Taiwan does not utilise the Trade and Investment Framework Agreement (TIFA) with the US as a platform on which to build trade connections, it is likely that we would be completely marginalised in future regional economic integration, the president reasoned.

The TIFA signing pressure is not from the US; rather, it is from within, according to the president. This is similar to the case of joining the World Trade Organisation, "If everyone is in but we are out, how do we thrive?" the pressure within is far greater than the external pressure, Ma said.

The signing of the TIFA is currently "stuck at the US beef problem," he said. Since the Democratic Progressive Party had promised Taiwan's trade partners in 2007 to allow the imports of US beef, the problem also lies in whether we keep our word, the president concluded.