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September 24, 2017

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Taiwan's competitiveness falls: trade association

TAIPEI, Taiwan -- Taiwan's overall export competitiveness ranking dropped from No. 8 in 2013 to No. 12 in 2014, according to a report released by the Importers and Exporters Association of Taipei (IEAT) yesterday.

The top ten countries or regions in relation to export competitiveness are, in order, Canada, Singapore, Germany, Hong Kong, Australia, the U.S., Britain, Japan, South Korea and France, according to the report.

The IEAT pointed out that Taiwan's ranking is the lowest among the Four Asian Tigers (South Korea, Singapore, Hong Kong and Taiwan), and that this was the first time Taiwan's ranking was lower than that of South Korea.

Taiwan's ranking of national competitiveness, trade liberalization, trade efficiency as well as trade risks have all become worse compared with the rankings last year.

Need to Establish Free Economic Island

In order to compete with global brand names and to rescue Taiwan's economy, local businesses need to restructure and formulate new strategies based on their competitive advantages, the report says.

It is the government's responsibility to loosen regulations to liberate the market and turn Taiwan into a "free economic island," the report says, adding that Taiwan must be integrated into the international community. The number one priority for Taiwan is to participate in regional economic integration to avoid being marginalized, the IEAT said.

For the past decade, Taiwan has only signed free trade agreements (FTA) with five relatively small nations in Central and South America. However, Taiwan's trade volumes with these countries comprise less than one percent of its total exports, IEAT said, adding that Taiwan must actively engage in establishing FTAs with other trade partners.

The Need to Join the Big Leagues

The IEAT called on the Legislature to pass the Cross-Strait Trade in Services Agreement as soon as possible. Cabinet advisor Liang Kuo-hsin (梁國新) concurred, saying that only by normalizing cross-strait trade relations can Taiwan participate in regional economic integration.

Using professional sports as an analogy, Liang said that Taiwan has to play ball at home without joining "international leagues" such as the Trans-Pacific Partnership or Regional Comprehensive Economic Partnership, adding that Taiwan's only chance of becoming a "big player" is to join the big leagues.

Sources say once the FTA between mainland China and South Korea takes effect, there will no tariffs between the two countries. Taiwanese businesses, on the other hand, will still need to pay an 8-percent tariff to export to mainland China. This is why Taiwan needs to sign the cross-strait service and good pacts so urgently, local businesses said.

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