MOEA pushes for duty-free panels in China

The IDB under the Ministry of Economic Affairs (MOEA) has been proceeding with the ongoing trade talks with their counterparts in China under the economic cooperation framework agreement (ECFA) across the Taiwan Strait, they said.

The goal is to get Taiwan-based display panel manufacturers exempted from customs duties on shipments to mainland China, they explained.

There were market reports that Beijing plans to raise the customs duty rates on imported display panels from overseas sources in a bid to promote the development of the industry in China.

The reports have drawn growing concerns from major suppliers in Taiwan, including Chimei Innolux. The companies have sought assistance from the MOEA to help defuse the possible obstacle that could affect their competitiveness on the Chinese market.

Beijing currently sets the customs duty rates at 3 percent for display panels 32 inches or larger, and at 5 percent for those under 32 inches.

China may raise the duty rates, although it cannot boost the rates to over 10 percent in accordance with an agreement with the World Trade Organization (WTO).

But IDB officials said they have drawn a preliminary conclusion that it is unlikely for Beijing to increase the duty rates for now because companies on the mainland still rely heavily on imports as the yield rates at China's eighth-generation panel plants are still unsatisfactory.

Another factor was that the Samsung and LGD groups of South Korea have temporarily suspended their investment plans in setting up manufacturing plants for 7.5- and 8th-generation panels in China.

This means that China will still have to import the display panels from overseas to meet market demand, said the officials.

Yet IDB officials emphasized that the MOEA will continue the efforts of winning duty-free status for Taiwan-made flat panels via the trade negotiations under the ECFA reached with Beijing.

The ECFA enables Taiwan and mainland China to offer exclusively special and preferential treatment to products and services from each other.

The trade agreement has helped to continue expanding trade transactions between the two sides of the Taiwan Strait.

Terms of the trade pact are subject to updates and revisions depending on new rounds of trade talks being held by officials of the two sides.

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