Industry upgrade needed for TPP: scholar
CNATAIPEI--A local economics scholar yesterday urged Taiwan to intensify efforts to upgrade its industrial structure in a bid to take on possible challenges once it is admitted into the proposed Trans-Pacific Partnership (TPP).
February 23, 2014, 12:06 am TWN
Chu Hao, deputy director of the commerce development policy division under the Taiwan-based think tank Commerce Development Research Institute, said the TPP supports further economic liberalization and advocates more market opening than any other free trade agreement.
Chu said the TPP has set an even higher bar for market liberalization than the Economic Cooperation Framework Agreement (ECFA) Taiwan and China signed in 2010.
Entry into the TPP will be crucial to Taiwan's economic future as the current negotiating parties account for about 30 percent of the country's total trade, Chu said.
But he raised concerns that Taiwan may be ill prepared for market opening after the post-TPP era, adding that both the public and private sectors need to do more to transform Taiwan's industrial structure and improve the country's global competitiveness.
Earlier this week, National Development Council Minister Kuan Chung-ming said in an interview that Taiwan will have a chance this year to join the second round of TPP negotiations.
The TPP currently is being negotiated by the U.S. and 11 Pacific Rim nations: Japan, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada, Mexico and Brunei. The first round of TPP talks is likely to be concluded by the end of the second quarter, upon which the second round could start.
President Ma Ying-jeou has reiterated his government's determination to join the TPP and the proposed Regional Comprehensive Economic Partnership (RCEP). He had indicated that Taiwan is earnestly seeking support from its trade partners for its bid into the trade blocs.
Chu said he expects the impact from the TPP's market opening on the local manufacturing sector will be relatively small as Taiwan's tariffs on computer and related products have been reduced substantially on the request of the Informational Technology Agreement under the World Trade Organization.
However, as companies in the local services and agriculture businesses have been more protected by the government than their high-tech counterparts, these two sectors are expected to face more pressing threats from market opening under the TPP, Chu said.
After taking into account the services sector's strong opposition to the trade-in-services agreement Taiwan and China inked in June 2013, the scholar said he expects resistance from the sector against the TPP's requested liberation will be particularly strong.
In addition, Chu said Taiwan should review its laws, in particular laws concerning investment and intellectual property rights, as several negotiating parties in the current TPP talks, such as the U.S. and Singapore, have more advanced regulations in these two areas. Otherwise, Chu said, it will be hard for Taiwan to play catch up in the global market.