TAIPEI - China and South Korea reached consensus on a free trade agreement (FTA) at the Asia-Pacific Economic Cooperation (APEC) forum in Beijing yesterday, which according to the Industrial Technology Research Institute will negatively impact Taiwan's industry by NT$260 billion (S$11 billion) to NT$650 billion unless Taiwan and China can agree on a cross-strait trade pact.
Executive Yuan spokesman Hsun Li-chun said the FTA is a critical concern for Taiwan and that the nation has always had higher export numbers than South Korea. However, South Korea has been steadily improving, said Hsun, by signing FTAs with more than 50 countries and is looking into the Trans-Pacific Partnership, a regional FTA that more than 14 countries have expressed interest in.
Vice Minister of the Ministry of Economic Affairs (MOEA) Cho Shih-chao said that with all the FTAs South Korea has signed, the country's current trade coverage is 62.66 per cent compared to Taiwan's 9.68 per cent.
According to reports, the China-South Korea agreement covers a total of 19 areas of trade, including electronics, clothing, e-commerce and investments.
As 77 per cent of South Korea's exports are similar to those of Taiwan, the country has diminished Taiwan's competitive edge by utilizing their massive reach through FTAs with the United States, China and Europe, said Hsun.
MOEA minister Tu Tzu-chun said that negotiations over cross-strait trade have been ongoing since 2011, but South Korea was able to close the deal yesterday.
According to a member of the Presidential Office, the signing of the FTA was expected. However, due to the effect it will have on the Taiwanese exports industry, Taiwan needs to be diligent in catching up.
Kuomintang spokesman Chen I-hsin urged the Democratic Progressive Party (DPP) to be unbiased when voting on cross-strait bills in order for Taiwan to avoid falling behind other countries. The DPP's repeated boycotting of cross-strait laws, said Chen, is the reason these agreements linger in political purgatory. If the boycott continues, the DPP will become an accomplice to Taiwan's imminent weakness and crippled economy, Chen said.
The DPP needs to take responsibility for Taiwan's economy falling behind South Korea, said Chen, now that South Korea has an advantage.
DPP convener Ko Chien-ming responded by saying that the FTA details need to be closely examined before any laws and trade agreements are rushed into being.
Ko said the urgency is due to the fact the China-South Korea FTA has affected the progress of the KMT favoured "one country, two systems" policy. President Ma Ying-jeo's cross-straight policy has failed so the relationship between the two countries needs to be reassessed, said Ko. Whether signing trade agreements with China will solve Taiwan's economic dilemma still needs to be thoroughly discussed, said Ko.