TAIWAN - Taiwan has signed a free trade agreement with New Zealand in its first such deal with a country which is not one of its 23 diplomatic allies, amid increasingly close ties with China.
The deal, which promises to remove all bilateral trade tariffs over 12 years, is heralded by Taiwan President Ma Ying-jeou as a big step in his administration's effort to integrate Taiwan into regional free trade areas such as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP).
New Zealand, which diplomatically recognises Beijing rather than Taipei, is a member of both TPP and RCEP.
China sees Taiwan as a breakaway province to be retaken into its fold but ties have improved dramatically over the past five years under Mr Ma. The island's deal with New Zealand and an upcoming pact with Singapore, another TPP and RCEP member, are seen to have Beijing's blessings.
Still, yesterday's signing of the Taiwan-New Zealand deal was kept deliberately low-key.
Taipei Economic and Cultural Office Representative Elliot Charng and New Zealand Commerce and Industry Office in Taipei director Stephen Payton, the de facto ambassadors, signed the deal at a university in Wellington, witnessed by Taiwan's foreign and economic ministers via live video link in Taipei.
Under the pact, which took less than two years to seal, New Zealand exporters of kiwi fruit, beef and other agricultural products will save NZ$40 million (S$40 million) in tariffs in the first year and up to NZ$75 million when all tariffs are removed. Taiwan exporters in electronic components, machine tools and bicycles will enjoy similar savings. Services providers in urban planning and airlines, among others, will also gain.
But with bilateral trade at just US$1.28 billion (S$1.6 billion) last year, the political and economic symbolism of the deal to Taiwan outweighs export gains. Mr Ma told Taiwan's Next TV the pact signals "Taiwan's determination to pursue free trade".