Pact important to Taiwan's economic future: academics
March 24, 2014, 12:32 am TWN
TAIPEI, Taiwan -- A service trade agreement with China is important to Taiwan, as economic integration through bilateral and regional accords has become a growing trend in the world, according to foreign academics.
For Taiwan, the service trade agreement will foster its efforts to move higher in the value-added chain, said Dan Steinbock, research director of the International Business, India, China and American Institute in Georgia, United States, in a recent interview with CNA.
The accord is also "critical to protect Taiwan's current sources of competitive advantage and to build new sources of advantage," since the country's economic model relies on export-led growth, he added.
Steinbock said Taiwan needs to embrace new trade agreements and broaden, as well as deepen, economic ties with advanced and emerging economies, particularly with China, which is Asia's growth engine.
He pointed out that most nations have opted for regional trade pacts, and regional integration is set to escalate with the ongoing talks over the U.S.-led Trans-Pacific Partnership, and the Regional Comprehensive Economic Partnership, which includes China.
In addition, greater integration will foster peace and security, and subsequently boost growth and prosperity, he said.
If Taiwan chooses not to integrate regionally, Steinbock said, it will not be able to maintain its high living standards over time.
"Why should one choose stagnation when one can win prosperity?" he asked.
Meanwhile, Duncan Freeman, a senior research fellow at the Brussels Institute of Contemporary China Study in Belgium, said in a separate interview that services are set to become the source of growth for the future, and a service trade pact will create opportunities for both Taiwan and China.
Increased access to service markets in China, Freeman said, will benefit Taiwanese companies, although it may also increase dependence on the mainland market.
A global agreement through the World Trade Organization would be more effective than a bilateral pact in developing trade but that is a remote possibility at the moment, he said.