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High tariffs on exports cause Taiwan foreign access ranking to slip

TAIPEI, Taiwan -- Due to the high tariffs imposed on Taiwanese exports, Taiwan's foreign market access ranking sank to next to last among 138 countries in the 2014 Global Enabling Trade Report, Minister of Economic Affairs Duh Tyzz-jiun (杜紫軍) said.

Economic Daily News on Thursday reported that Taiwan 's foreign market access index slid six notches to No.137 despite the island's 2014 enabling trade index ranking highly at 24th place.

World Economic Forum's (WEF) Enabling Trade Index 2014 report showed that Taiwan ranked 24th among 138 countries in the index, rising five notches from its last listing two years ago.

The foreign market access index measures ease of entry into overseas market for Taiwanese exports.

Duh Tyzz-jiun told local media that the poor result of the sub-index corresponds with the fact that Taiwan has been losing overseas markets to rival South Korea in recent years.

Duh explained the unpleasant outcome as the result of the low percentage of Taiwanese exports covered by free trade agreements (FTAs), indicating that the coverage rate for Taiwan and South Korea are 9.69 percent and 36.81 percent, respectively.

The huge difference in FTA-coverage between Taiwan and South Korea means that when some Taiwanese exporter save only about US$10 in tariffs, its South Korean competitor saves US$36.

According to the WEF's report, the trade-weighted average tariff faced in destination markets for Taiwan posted 6 percent, ranking No.136 among 138 countries. This indicator is calculated as the trade-weighted average of the applied tariff rates, including preferential rates that the rest of the world applies to each country.

The value of Taiwan's margin of preference in destination markets in 2014 is only 2.3, ranking 134 among 138 countries. This indicator measures the percentage by which particular imports from one country are subject to lower tariffs than the most-favored nation (MFN) rate.

Premier Jiang Yi-huah (江宜樺) said South Korea has inked nine FTAs with 47 countries, adding that the ball is not in Taiwan's court. He warned that if the free trade area between Korea, Japan and China comes into effect before Taiwan's pact with the latter two, Taiwan's total trade volume is expected to shrink US$16.8 billion, amounting to 3 percent of last years total trade volume.

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