Scholars, businessmen welcome Taiwan-Singapore trade pact

Taipei/Singapore, May 17 (CNA) Scholars and Taiwanese businessmen responded positively Friday to news that Taiwan and Singapore had completed negotiations on an economic cooperation agreement.

Talks on the Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP), which began in May 2011, have substantively concluded, the Taipei Representative Office in Singapore said in a statement.

Kristy Tsun-tzu Hsu, an associate research fellow at the Chung-Hua Institution for Economic Research, said the agreement will help Taiwan’s determination to move forward on trade liberalization.

As the first trade pact Taiwan will sign since inking the Economic Cooperation Framework Agreement (ECFA) with China in June 2010, the agreement’s name will also set a precedent for agreements with other countries, she said.

The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu is the name under which Taiwan became a member of the World Trade Organization in 2002.

In addition, Hsu said, Singapore is a member of two planned regional trade blocs — the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) — and the pact between Taiwan and Singapore will help Taiwan’s bid to join them.

She said that several countries were closely watching the progress made on the ASTEP, and believed that if the deal is signed, “it will have a positive impact” on Taiwan reaching economic cooperation agreements with other Southeast Asian countries.

The ASTEP will be Taiwan’s first free trade agreement with a country with which it does not have diplomatic relations.

In Singapore, Chao Hong, a senior research fellow at National University of Singapore’s East Asian Institute, said the inking of the pact could be seen as a diplomatic breakthrough for Taiwan.

Other Southeast Asian countries that were afraid of offending China when dealing with Taiwan in the past could now follow the Singapore model to talk to Taiwan.

Chiang Min-hua, an associate research fellow at the East Asian Institute, cautioned, however, that the path forward for Taiwan was somewhat unclear because of the different development patterns and structures of Singapore’s Southeast Asian neighbors.

Those differences make it hard to predict which countries will be Taiwan’s next targets for free trade deals and how attractive Taiwan’s market will be to potential Southeast Asian free trade pact partners, Chiang said.

Hsu Ching Yuh, head of the Taiwan Business Association in Singapore, said Taiwanese businessmen there were happy to see the negotiations come to a conclusion because exports from Singapore to Taiwan could be subject to dramatically lower tariffs.

He also suggested that other Southeastern Asian nations could be induced to negotiate trade pacts with Taiwan to maintain their competitiveness against Singaporean products in Taiwan.

A Taiwanese businessman identified only by his surname Chang said that after the start of the ASEAN plus three, relations between ASEAN and China, Japan and South Korea will be even closer, and the ASTEP could help Taiwan avoid being marginalized in that environment.

Taiwan’s trade with Singapore amounted to US$28.2 billion, with Taiwan enjoying a surplus of nearly US$12 billion.

Taiwanese businesses made 59 investments worth a total of US$5.7 billion in Singapore in the last five years while 532 investments worth US$1.45 billion in all were made by Singapore companies in Taiwan during the same period.

(By Lin Hui-chun, Lu Hsin-hui, and Lilian Wu)
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Scholars, businessmen welcome Taiwan-Singapore trade pact