Taiwan's foreign trade impacted by a lack of FTAs: trade official

“The adverse effect would be little if Taiwan had only failed to ink FTAs with just a few countries, but it is 'very troublesome' that Taiwan is unable to clinch FTAs with all of its important trading partners,” Huang said. Taiwan's shrinking foreign trade volume is the consequence of this, while the positive effects of the FTAs enjoyed between other countries have begun paying off, Huang commented.

For instance, he said, Taiwan recorded an average growth of 20.1 percent in two-way trade with the Association of Southeast Asian Nations (ASEAN) during the 2004-2006 period, ahead of the 16.6 percent posted by South Korea in trade growth with ASEAN for the same period.

But for 2007, following the signing of a South Korea-ASEAN FTA, South Korea enjoyed a growth rate of 24 percent in exports to the ASEAN member states compared to an 11.8 percent export growth rate recorded by Taiwan in the same year, he said.

After a South Korea-Singapore FTA took effect in 2006, two-way trade between the two countries increased by 30.1 percent during the 2006-2007 period, well ahead of the 13.2 growth rate posted in bilateral trade between Taiwan and Singapore for the same period, Huang noted.

Similar findings can be seen in Taiwan's two-way trade with Malaysia and Thailand in recent years when compared with Japan's stronger performance in bilateral trade with those countries thanks to FTAs inked in 2006 and 2007, said the BOFT chief. Although Taiwan's failure to sign FTAs with its primary trade partners is not the only factor behind the contraction in international trade, Huang went on, the country is now at a juncture where it needs to overhaul its foreign trade policy.

To reverse the ongoing unfavorable trends, it is absolutely vital that Taiwan quickly clinches an economic cooperation accord with China to clear the way for the signing of FTAs with its other major trade partners, he stressed.

Taiwan will be even more gravely impacted if ASEAN signs FTAs with each country in the region — for instance, ASEAN plus Japan, ASEAN plus South Korea, or ASEAN plus Singapore, he said.

Such a scenario would deal a much bigger blow to Taiwan than just a trade block composed of ASEAN plus China, he pointed out.

“If a trade cooperation pact can be signed between Taiwan and China, it will be very helpful to Taiwan's efforts to pursue FTAs with other countries,” he said.

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